Exhibit 10.56
LEASE AGREEMENT
MPT OF BUCKS COUNTY, L.P.,
A Delaware limited partnership
Lessor
AND
BUCKS COUNTY ONCOPLASTIC INSTITUTE, LLC,
a Delaware limited liability company
Lessee
Property: Twenty-four (24)-Bed Hospital Facility and
incorporated Medical Office Building
Bensalem, Bucks County, Pennsylvania
September 16, 2005
Table of Contents
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LEASE AGREEMENT ....................................................... i
LEASE ....................................................... 1
ARTICLE I LEASED PROPERTY; TERM.................................. 1
ARTICLE II DEFINITIONS............................................ 2
ARTICLE III RENT................................................... 11
3.1 Construction Period Rent; Base Rent; Percentage Rent... 11
3.2 Additional Charges..................................... 12
3.3 Absolute Net Lease..................................... 12
ARTICLE IV IMPOSITIONS............................................ 13
4.1 Payment of Impositions................................. 13
4.2 Adjustment of Impositions.............................. 13
4.3 Utility Charges........................................ 13
4.4 Insurance Premiums..................................... 14
ARTICLE V NO TERMINATION......................................... 14
5.1 Acknowledgment......................................... 13
ARTICLE VI OWNERSHIP OF LAND AND PERSONAL PROPERTY................ 14
6.1 Ownership of the Land.................................. 14
6.2 Lessee's Personal Property............................. 14
ARTICLE VII CONDITION AND USE OF LEASED PROPERTY................... 15
7.1 Condition of the Leased Property....................... 15
7.2 Use of the Leased Property............................. 15
7.3 Lessor to Grant Easements.............................. 16
ARTICLE VIII LEGAL AND INSURANCE REQUIREMENTS....................... 16
8.1 Compliance with Legal and Insurance Requirements....... 16
8.2 Legal Requirement Covenants............................ 17
8.3 Hazardous Materials.................................... 17
8.4 Healthcare Laws........................................ 18
8.5 Representations and Warranties......................... 16
ARTICLE IX REPAIRS; RESTRICTIONS.................................. 19
9.1 Maintenance and Repair................................. 19
9.2 Encroachments; Restrictions............................ 20
ARTICLE X CAPITAL ADDITIONS...................................... 21
10.1 Construction of Capital Additions to the Leased
Property............................................ 21
10.2 Capital Additions Financed by Lessee................... 21
10.3 Capital Additions Financed by Lessor................... 22
10.4 Salvage................................................ 24
ARTICLE XI LIENS.................................................. 24
ARTICLE XII PERMITTED CONTESTS..................................... 24
ARTICLE XIII INSURANCE.............................................. 25
13.1 General Insurance Requirements......................... 25
13.2 Additional Insurance................................... 27
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13.3 Waiver of Subrogation.................................. 27
13.4 Form of Insurance...................................... 27
13.5 Increase in Limits..................................... 28
13.6 Blanket Policy......................................... 28
13.7 No Separate Insurance.................................. 28
ARTICLE XIV FIRE AND CASUALTY...................................... 28
14.1 Insurance Proceeds..................................... 28
14.2 Reconstruction in the Event of Damage
or Destruction Covered by Insurance.................... 29
14.3 Reconstruction in the Event of Damage
or Destruction Not Covered by Insurance................ 30
14.4 Lessee's Personal Property............................. 30
14.5 Restoration of Lessee's Property....................... 30
14.6 No Abatement of Rent................................... 30
14.7 Damage Near End of Term................................ 30
14.8 Termination of Right to Purchase and Substitution...... 30
14.9 Waiver................................................. 30
14.10 Purchase Option Subordinate to Facility Instrument..... 30
ARTICLE XV CONDEMNATION........................................... 31
15.1 Definitions............................................ 31
15.2 Parties' Rights and Obligations........................ 31
15.3 Total Taking........................................... 31
15.4 Partial Taking......................................... 31
15.5 Restoration............................................ 31
15.6 Award Distribution..................................... 31
15.7 Temporary Taking....................................... 32
15.8 Purchase Option Subordinate to Facility Instrument..... 32
ARTICLE XVI DEFAULT................................................ 32
16.1 Events of Default...................................... 32
16.2 Events of Default in Financial Covenants............... 37
16.3 Additional Expenses.................................... 39
16.4 Waiver................................................. 39
16.5 Application of Funds................................... 39
16.6 Notices by Lessor...................................... 39
16.7 Lessor's Contractual Security Interest................. 39
ARTICLE XVII LESSOR'S RIGHT TO CURE................................. 39
ARTICLE XVIII PURCHASE OF THE LEASED PROPERTY........................ 40
ARTICLE XIX HOLDING OVER........................................... 40
ARTICLE XX INTENTIONALLY OMITTED.................................. 34
ARTICLE XXI RISK OF LOSS........................................... 41
ARTICLE XXII INDEMNIFICATION........................................ 41
ARTICLE XXIII ASSIGNMENT, SUBLETTING AND SUBLEASE SUBORDINATION...... 41
23.1 Assignment and Subletting.............................. 38
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23.2 Sublease Limitations................................... 38
23.3 Sublease Subordination and Non-Disturbance............. 39
ARTICLE XXIV OFFICER'S CERTIFICATES; FINANCIAL
STATEMENTS; NOTICES AND OTHER CERTIFICATES............. 43
ARTICLE XXV INSPECTION AND FEES.................................... 44
ARTICLE XXVI NO WAIVER.............................................. 45
ARTICLE XXVII REMEDIES CUMULATIVE.................................... 45
ARTICLE XXVIII SURRENDER.............................................. 45
ARTICLE XXIX NO MERGER OF TITLE..................................... 45
ARTICLE XXX TRANSFERS BY LESSOR.................................... 46
ARTICLE XXXI QUIET ENJOYMENT........................................ 46
ARTICLE XXXII NOTICES................................................ 46
ARTICLE XXXIII APPRAISAL.............................................. 47
ARTICLE XXXIV PURCHASE RIGHTS........................................ 48
34.1 Lessee's Option to Purchase............................ 48
34.2 Lessor's Option to Purchase Lessee's Personal Property. 49
34.3 Limitation on Lessee's Option to Purchase.............. 44
34.4 Survival............................................... 49
ARTICLE XXXV INTENTIONALLY OMITTED.................................. 44
ARTICLE XXXVI INTENTIONALLY OMITTED.................................. 44
ARTICLE XXXVII FINANCING OF THE LEASED PROPERTY....................... 49
37.1 Financing by Lessor.................................... 49
ARTICLE XXXVIII SUBORDINATION AND NON-DISTURBANCE...................... 49
ARTICLE XXXIX LICENSES............................................... 50
ARTICLE XL COMPLIANCE WITH HEALTHCARE LAWS........................ 51
ARTICLE XLI MISCELLANEOUS.......................................... 52
41.1 General................................................ 48
41.2 Lessor's Expenses...................................... 48
41.3 Entire Agreement; Modifications........................ 52
41.4 Lease Guaranty......................................... 52
41.5 Lessor's Right to Sell................................. 53
41.6 Future Financing....................................... 53
41.7 Cash Deposit; Letter of Credit......................... 53
41.8 Intentionally Omitted.................................. 53
41.9 Cash Injection......................................... 53
41.10 Additional Letter of Credit............................ 53
41.11 Change in Ownership/Control............................ 53
41.12 Lessor Securities Offering and Filings................. 54
41.13 Non-Recourse as to Lessor.............................. 54
41.14 Subdivision, Covenants, Restrictions and Reciprocal
Easements........................................... 54
41.15 Force Majeure.......................................... 54
41.16 Management Agreements.................................. 54
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41.17 Governing Law.......................................... 54
41.18 Jurisdiction and Venue................................. 54
41.19 Counterparts........................................... 54
ARTICLE XLII MEMORANDUM OF LEASE.................................... 56
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is dated as of the 16th day of
September, 2005, and is between MPT OF BUCKS COUNTY, L.P., a Delaware limited
partnership ("Lessor"), having its principal office at 0000 Xxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, and BUCKS COUNTY ONCOPLASTIC INSTITUTE,
LLC, a Delaware limited liability company ("Lessee"), having its principal
office at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000.
WITNESSETH:
WHEREAS, Lessor owns that certain real property located in Bensalem, Bucks
County, Pennsylvania, which real property is more particularly described on
EXHIBIT A attached hereto and incorporated herein by reference (the "Land");
WHEREAS, Lessor plans to develop a hospital facility and a medical office
building on the Land;
WHEREAS, Lessor wishes to lease the Land and Leased Improvements (as
hereinafter defined) to the Lessee and the Lessee desires to lease the Land and
Leased Improvements from the Lessor; and
WHEREAS, the parties desire to enter into this Lease on the terms and
conditions hereinafter provided.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
LEASED PROPERTY; TERM
Upon and subject to the terms and conditions hereinafter set forth, and
subject to the rights of any tenants, subtenants, lessees or sublessees under
any Existing Subleases as described in Section 24.1 below, Lessor leases to
Lessee and Lessee rents from Lessor all of Lessor's rights and interest in and
to the following property (collectively, the "Leased Property"):
(a) the Land;
(b) the Facility (including the Connector) to be constructed on the
Land as provided in the Development Agreement (as herein defined), all
Fixtures (as hereinafter defined) and other improvements of every kind
including, but not limited to, alleyways and connecting tunnels, sidewalks,
utility pipes, conduits and lines (on-site and off-site), parking areas and
roadways appurtenant to such buildings and structures presently or
hereafter situated upon the Land and related to the Facility, and Capital
Additions (hereinafter defined) financed by Lessor (collectively, the
"Leased Improvements");
(c) all easements, rights and appurtenances relating to the Land and
the Leased Improvements; and
(d) all permanently affixed non-medical equipment, machinery,
fixtures, and other items of real and/or personal property, including all
components thereof, now and hereafter located in, on or used in connection
with, and permanently affixed to or incorporated into the Leased
Improvements, including, without limitation, all furnaces, boilers,
heaters, electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, and built-in oxygen and
vacuum systems, all of which, to the greatest extent permitted by law, are
hereby deemed by the parties hereto to constitute real estate, together
with all replacements, modifications, alterations and
additions thereto, but specifically excluding all items included within the
category of Lessee's Personal Property as defined in Article II below
(collectively the "Fixtures").
SUBJECT, HOWEVER, to the matters set forth on EXHIBIT B attached hereto (the
"Permitted Exceptions"); Lessee shall have and hold the Leased Property for a
fixed term (the "Fixed Term") commencing on the date hereof (the "Commencement
Date") and ending at midnight on the last day of the one hundred and eightieth
(180th) month period following the Completion Date (as hereinafter defined).
Notwithstanding anything contained herein to the contrary, in the event the
certificate of occupancy is not issued within ninety (90) days from the date of
the Completion of the construction of the Facility or if Lessee fails to obtain
its Medicare billing number within one hundred eighty (180) days from the date
of Completion of the construction of the Facility, Lessor shall have the option
to terminate this Lease upon fifteen (15) days prior written notice to the
Lessee.
So long as no Default or Event of Default then exists, Lessee shall have
the option to extend the Fixed Term of this Lease on the same terms and
conditions set forth herein for two (2) additional periods of five (5) years
each, and one (1) additional period that expires on August 15, 2035 (each an
"Extension Term"). Lessee may exercise each such option by giving written notice
to the Lessor at least six (6) months prior to the expiration of the Fixed Term
or Extension Term, as applicable (the "Extension Notice"). If during the period
following the delivery of the Extension Notice to Lessor, a Default shall occur
and the same is not cured within the applicable cure period, at Lessor's option,
Lessee shall be deemed to have forfeited all Extension Options. If Lessee elects
not to exercise its option to extend, all subsequent options to extend and all
rights of the Lessee to purchase as provided herein shall be deemed to have
lapsed and be of no further force or effect.
ARTICLE II
DEFINITIONS
For all purposes of this Lease, except as otherwise expressly provided or
unless the context otherwise requires, (a) the terms defined in this Article
have the meanings assigned to them in this Article and include the plural as
well as the singular, (b) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with GAAP as at the time applicable,
(c) all references in this Lease to designated "Articles", "Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Lease, and (d) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Lease as a whole and not to any particular
Article, Section or other subdivision:
Additional Charges: As defined in Section 3.2.
Adjustment Date: January 1 of each year commencing on January 1, 2006.
Affiliate: When used with respect to any corporation, limited liability
company, or partnership, the term "Affiliate" shall mean any person,
corporation, limited liability company, partnership or other legal entity,
which, directly or indirectly, controls or is controlled by or is under common
control with such corporation, limited liability company, or partnership. For
the purposes of this definition, "control" (including the correlative meanings
of the terms "controlled by" and "under common control with"), as used with
respect to any person, corporation, limited liability company, partnership or
other legal entity, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
person, corporation, limited liability company, partnership or other legal
entity, through the ownership of voting securities, partnership interests or
other equity interests.
Applicable Law: As defined in Section 41.16.
Award: As defined in Section 15.1.
Base Rent: As defined in Section 3.1.
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Business: The operation of the Facility and the engagement in and pursuit
and conduct of any business venture or activity related thereto.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which money centers in the City of New York, New York are
authorized, or obligated, by law or executive order, to close.
Capital Additions: One or more new buildings or one or more additional
structures annexed to any portion of any of the Leased Improvements, which are
constructed after the Completion Date on any parcel or portion of the Land
during the Term, including a new wing or new story.
Capital Addition Cost: The cost of any Capital Additions proposed to be
made by Lessee whether or not paid for by Lessee or Lessor. Such cost shall
include (a) the cost of construction of such Capital Additions, including site
preparation and improvement, materials, labor, supervision and certain related
design, engineering and architectural services, the cost of any fixtures
included in such Capital Addition, the cost of construction financing and
miscellaneous costs approved by Lessor, (b) if agreed to by Lessor in writing in
advance, the cost of any land contiguous to the Leased Property purchased for
the purpose of placing thereon such Capital Additions or any portion thereof or
for providing means of access thereto, or parking facilities therefor, including
the cost of surveying the same, (c) the cost of insurance, real estate taxes,
water and sewage charges and other carrying charges for such Capital Additions
during construction, (d) the cost of title insurance, (e) reasonable fees and
expenses of legal counsel, (f) filing, registration and recording taxes and
fees, (g) documentary stamp taxes, if any, and (h) all reasonable costs and
expenses of Lessor and any Lending Institution which has committed to finance
the Capital Additions, including, but not limited to, (i) the reasonable fees
and expenses of their respective legal counsel, (ii) all printing expenses,
(iii) the amount of any filing, registration and recording taxes and fees, (iv)
documentary stamp taxes, if any, (v) title insurance charges, appraisal fees, if
any, (vi) rating agency fees, if any, and (vii) commitment fees, if any, charged
by any Lending Institution advancing or offering to advance any portion of the
financing for such Capital Additions.
Cash Deposit: As defined in Section 41.7.
Code: The Internal Revenue Code of 1986, as amended.
Collateral: Lessee's accounts receivable and Lessee's machinery, equipment
(including medical equipment whether or not affixed to the Leased Property),
furniture, furnishings, tools, movable walls or partitions, computers, signage,
trade fixtures, supplies, inventory and any other tangible personal property
placed on the Leased Property and used or useful in Lessee's business conducted
at or on the Leased Property.
Commencement Date: The date hereof.
Commitment Letter: The commitment letter between Lessor and Lessee (or
their Affiliates) dated October 21, 2004, as amended by letter dated December
23, 2004, and as further amended, modified and supplemented by the Purchase
Agreement.
Completion: The terms "completion," "complete construction," "completion of
construction" and similar phrases means such time as Lessor receives from the
architect that the construction of the Leased Improvements has been
substantially completed in accordance with the plans and specifications
therefor, which certificate shall be in form and substance satisfactory to
Lessor and shall include the written approval of Lessor's, construction
inspector noted thereon.
Completion Date: As defined in Section 3.3(e) of the Development Agreement.
Condemnation, Condemnor: As defined in Section 15.1.
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Connector: Those two (2) hallways containing in the aggregate approximately
750 square feet, which connect to the hospital to be constructed on the Land on
either side of the medical office building to be constructed on the Land.
Consolidated Net Worth: At any time, the sum of the following for Lessee
and its respective consolidated subsidiaries on a consolidated basis determined
in accordance with GAAP.
(a) the amount of capital or stated capital (after deducting the cost
of any treasury shares), plus
(b) the amount of capital surplus and retained earnings (or, in the
case of a capital surplus or retained earnings deficit, minus the amount of
such deficit), minus
(c) the sum of the following (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings): (i) unamortized debt discount and expense and (ii) any write-up
in book value of assets resulting from a revaluation thereof pursuant to
GAAP subsequent to the most recent Statements of Cash Flow prior to the
date thereof.
Construction Period: That period of time from the date hereof and ending on
the Completion Date.
Construction Period Rent: As defined in Section 3.1(a).
Consumer Price Index: The Consumer Price Index, all urban consumers, all
items, U.S. City Average, published by the United States Department of Labor,
Bureau of Labor Statistics, in which 1982-1984 equals one hundred (100). If the
Consumer Price Index is discontinued or revised during the term of this Lease,
such other governmental index or computation with which it is replaced shall be
used in order to obtain substantially the same result as would be obtained if
the Index had not been discontinued or revised.
CPI: The Consumer Price Index.
Credit Enhancements: All security deposits, security interests, letters of
credit, pledges, guaranties, prepaid rent or other sums, deposits or interests
held by Lessee, if any, with respect to the Leased Property, the Tenant Leases
or the Tenants.
Date of Taking: As defined in Section 15.1.
Default: Any event, act or condition that with the giving of notice or the
passage of time or both would constitute an Event of Default.
Developer: DSI Facility Development, LLC, a Delaware limited liability
company.
Development Agreement: That certain Development Agreement of even date
herewith among Developer, Lessor and Lessee, as the same may be amended,
modified, supplemented and/or restated from time to time.
EBITDAR: Net earnings calculated in accordance with GAAP, less actual
management fees paid by Lessee, plus management fees calculated at five percent
(5%) of Lessee's net revenue, plus interest, taxes, depreciation, amortization
and rent (including any equipment lease or rent expense).
Encumbrances: As defined in Article XXXVII.
Event of Default: As defined in Section 16.1 and Section 16.2.
Extension Notice: As defined in Article I.
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Extension Term: As defined in Article I.
Extraordinary Repairs: All repairs to the Facility (including, without
limitation, all parking decks and parking lots), whether interior or exterior,
structural or non-structural, which are not consistent in nature, scope and
magnitude with, and that would not reasonably be expected to result from, the
normal use, operation and wear of the Facility, as Lessee and/or Lessor may
determine to be necessary or appropriate from time to time during the Term.
Facility: The licensed twenty-four (24)-bed hospital facility and
incorporated medical office building and all improvements constructed in
connection therewith to be constructed and operated on the Land.
Facility Instrument: A note (whether secured or unsecured), loan agreement,
credit agreement, guaranty, security agreement, mortgage, deed of trust or other
security agreement pursuant to which a Facility Lender has provided financing to
Lessor, or pursuant to which Lessor or an Affiliate of Lessor has provided
financing to Lessee, in connection with the Leased Property or any part thereof,
and any and all renewals, replacements, modifications, supplements,
consolidations, spreaders and extensions thereof.
Facility Lender: A holder (which may include any Affiliate of Lessor) of
any Facility Instrument.
Fair Market Value: The amount that a willing buyer would pay a willing
seller, neither being under a particular compulsion to buy or sell, each fully
aware of all applicable facts, assuming a reasonable marketing period, taking
into account general economic conditions as of the date fair market value is
being determined and taking into account all other conditions in effect on such
date that may reasonably be considered in determining fair market value, and
otherwise determined in accordance with prevailing standards of appraisal
practice at the time of determination. Fair Market Value (a) shall be determined
in accordance with the appraisal procedures set forth in Article XXXIII or in
such other manner as shall be mutually acceptable to Lessor and Lessee, and (b)
shall not take into account any reduction in value resulting from any
indebtedness to which the Leased Property is subject and which encumbrance
Lessee or Lessor is otherwise required to remove pursuant to any provision of
this Lease or agrees to remove at or prior to the closing of the transaction as
to which such Fair Market Value determination is being made. The positive or
negative effect on the value of the Leased Property attributable to the interest
rate, amortization schedule, maturity date, prepayment penalty and other terms
and conditions of any Encumbrance on the Leased Property, which is not so
required or agreed to be removed shall be taken into account in determining such
Fair Market Value. Notwithstanding anything contained herein to the contrary,
any appraisal of the Leased Property shall assume the Lease is in place for a
term of fifteen (15) years, and shall not take into account any purchase options
contained herein.
Fair Market Added Value: The Fair Market Value of the Leased Property
(including all Capital Additions) less the Fair Market Value of the Leased
Property determined as if no Capital Additions paid for by Lessee had been
constructed.
Fair Market Value Purchase Price: The Fair Market Value of the Leased
Property less the Fair Market Added Value.
Fiscal Year: The fiscal year for this Lease shall be the twelve (12) month
period from January 1 to December 31.
Fixed Charges: The sum of the Lease Payments and required principal and
interest payments with respect to the Total Debt.
Fixed Term: As defined in Article I.
Fixtures: As defined in Article I.
Funding Agreement: That certain Funding Agreement of even date herewith
among Lessor, Lessee and Developer, as the same may be amended, modified,
supplemented and/or restated from time to time.
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GAAP: Generally accepted accounting principles in the United States,
consistently applied.
Governmental Entity: Any national, federal, regional, state, local,
provincial, municipal, foreign or multinational court or other governmental or
regulatory authority, administrative body or government, department, board,
body, tribunal, instrumentality or commission of competent jurisdiction.
Ground Contract: That certain Agreement of Sale dated April 14, 2005,
between Glenview Land Holdings, L.P., as Seller, and Lessee, which was assigned
by Lessee to Lessor by that certain Assignment and Assumption Agreement of even
date herewith.
Guarantors: Shall mean those parties identified on Exhibit A of that
certain Lease Guaranty of even date herewith.
Hazardous Materials: Any substance, including without limitation, asbestos
or any substance containing asbestos and deemed hazardous under any Hazardous
Materials Law, the group of organic compounds known as polychlorinated
biphenyls, flammable explosives, radioactive materials, infectious wastes,
biomedical and medical wastes, chemicals known to cause cancer or reproductive
toxicity, pollutants, effluents, contaminants, emissions or related materials
and any items included in the definition of hazardous or toxic wastes, materials
or substances under any Hazardous Materials Laws.
Hazardous Materials Laws: All local, state and federal laws relating to
environmental conditions and industrial hygiene, including, without limitation,
the Resource Conservation and Recovery Act of 1976 ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as
amended by the Superfund Amendments and Reauthorization Act of 1986 ("XXXX"),
the Hazardous Materials Transportation Act, the Federal Water Pollution Control
Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act,
the Safe Drinking Water Act, and all similar federal, state and local
environmental statutes, ordinances and the regulations, orders, or decrees now
or hereafter promulgated thereunder.
Healthcare Laws: All rules and regulations under the False Claims Act (31
U.S.C. Section 3729 et seq.), the Federal Health Care Programs Anti-Kickback
statute (42 U.S.C. Section 1320a-7a(b)), the Ethics in Patient Referrals Act of
1989, as amended (Xxxxx Law) (42 U.S.C. 1395nn), the Civil Money Penalties Law
(42 U.S.C. Section 1320a-7a), Health Care Fraud (18 U.S.C. 1347), Wire Fraud (18
U.S.C. 1343), Theft or Embezzlement (18 U.S.C. 669), False Statements (18 U.S.C.
1001), False Statements (19 U.S.C. 1035), and Patient Inducement Statute (42
U.S.C. 1320a-7a(a)(5)), and equivalent state statutes and any and all rules or
regulations promulgated by governmental entities with respect to any of the
foregoing.
Impositions: Collectively, all civil monetary penalties, fines and
overpayments imposed by state and federal regulatory authorities, all Real
Estate Taxes, all capital stock and franchise taxes of Lessor, all sales and use
taxes, all single business, gross receipts, transaction privilege, rent or
similar taxes and assessments, all assessments, charges and costs imposed under
the Permitted Exceptions (including, without limitation, all penalties, fines,
damages, costs and expenses for any violation of or a default under any of the
Permitted Exceptions), all assessments for public improvements or benefits,
whether or not commenced or completed prior to the date hereof and whether or
not to be completed within the Term, ground rents, water, sewer or other rents
and charges, excises, tax levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees), and all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Leased Property
and/or the Rent (including all interest and penalties thereon due to any failure
in payment by Lessee), and all other fees, costs and expenses which at any time
prior to, during or in respect of the Term hereof may be charged, assessed or
imposed on or in respect of or be a lien upon (a) Lessor or Lessor's interest in
the Leased Property, (b) the Leased Property or any part thereof or any rent
therefrom or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, sales from, or activity conducted on, or in
connection with, the Leased Property or the leasing or use of the Leased
Property or any part thereof; provided, however, nothing contained in this Lease
shall be construed to require Lessee to pay (1) any tax based on net income
(whether denominated as a franchise or capital stock, financial institutions or
other tax)
6
imposed on Lessor, or (2) any transfer or net revenue tax of Lessor, or (3) any
tax imposed with respect to the sale, exchange or other disposition by Lessor of
any portion of the Leased Property or the proceeds thereof, or (4) except as
expressly provided elsewhere in this Lease, any principal or interest on any
Encumbrance on the Leased Property, except to the extent that any tax,
assessment, tax levy or charge which Lessee is obligated to pay pursuant to the
first sentence of this definition and which is in effect at any time during the
Term hereof is totally or partially repealed, and a tax, assessment, tax levy or
charge set forth in clause (1) or (2) is levied, assessed or imposed expressly
in lieu thereof, in which case Lessee shall pay.
Initial Purchase Price: A price equal to the purchase price paid by Lessor
(and its Affiliates, including, without limitation, MPT Operating Partnership,
L.P.) contemporaneously herewith for the Leased Property pursuant to the Ground
Contract, which the parties acknowledge is Five Million Three Hundred
Ninety-Five Thousand Four Hundred Ninety-Seven and 21/100 Dollars
($5,395,497.21).
Inspection Fee: As defined in Article XXV.
Insurance Premiums: As defined in Section 4.4.
Insurance Requirements: All terms of any insurance policy required by this
Lease.
Land: As defined in the Recitals.
Lease: As defined in the Preamble.
Lease Assignment: That certain Assignment of Rents and Leases to be
effective on the Commencement Date executed and delivered by Lessee to Lessor,
pursuant to which Lessee has assigned to Lessor each of the Tenant Leases and
Credit Enhancements (subject to Tenant's rights as expressly set forth in the
Lease Assignment), if any, as security for the obligations of Lessee under this
Lease (as this Lease may be amended, modified and/or restated from time to time)
and all other obligations of Lessee to Lessor, or any Affiliate of Lessee to
Lessor or to any Affiliate of Lessor.
Lease Guaranty: As defined in Section 41.4 hereof.
Lease Payments: The Construction Period Rent and Base Rent as required
under this Lease.
Lease Year: A twelve (12) month period commencing on the Commencement Date
or on each anniversary date thereof, as the case may be.
Leased Improvements; Leased Property: Each as defined in Article I.
Legal Requirements: All federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting the Lessee's operation of its business on the
Leased Property, along with the Leased Property or the construction, use or
alteration thereof (including, without limitation, the Americans With
Disabilities Act and Section 504 of the Rehabilitation Act of 1973) whether now
or hereafter enacted and in force, including any which may (a) require repairs,
modifications, or alterations in or to the Leased Property, or (b) in any way
adversely affect the use and enjoyment thereof, and all permits, licenses,
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or
known to Lessee (other than encumbrances created by Lessor without the consent
of Lessee), at any time in force affecting the Leased Property.
Lender: As defined in Section 35.1.
Lending Institution: Any insurance company, federally insured commercial or
savings bank, national banking association, savings and loan association,
employees' welfare, pension or retirement fund or system, corporate
profit-sharing or pension trust, college or university, or real estate
investment trust, including any
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corporation qualified to be treated for federal tax purposes as a real estate
investment trust, having a net worth of at least Fifty Million Dollars
($50,000,000).
Lessee: Bucks County Oncoplastic Institute, LLC, a Delaware limited
liability company, and its successors and permitted assigns, which, if required
by Lessor, shall at all times during the term of this Lease be a Single Purpose
Entity created and to remain in good standing as required hereunder for the sole
purpose of leasing and operating the Facility.
Lessee's Personal Property: All of Lessee's machinery, medical equipment,
furniture, furnishings, movable walls or partitions, computers, trade fixtures
or other personal property (including all such items affixed to the Leased
Property), and consumable inventory and supplies, currently owned and acquired
after the execution of this Lease, used or useful in the operation of the
Facility, including without limitation, all operating licenses, but excluding
Lessee's accounts receivable, subject to a lien in favor of Lessee's Primary
Lender as expressly allowed hereunder, and any items included within the
definition of Fixtures.
Lessor: MPT of Bucks County, L.P., a Delaware limited partnership, and its
successors and assigns.
Letter of Credit: As defined in Section 41.7 hereof.
Licenses: As defined in Article XXXIX.
Management Agreement: Any contracts and agreements for the management of
any part of the Leased Property, including, without limitation, the real estate
and the Leased Improvements and the operations of the Facility.
Management Company: Any person, firm, corporation or other entity or
individual who or which will manage any part of the Leased Property.
Medicaid: The medical assistance program established by Title XIX of the
Social Security Act (42 U.S.C. Sections 1396 et seq.) and any statute succeeding
thereto.
Medicare: The health insurance program for the aged and disabled
established by Title XVIII of the Social Security Act (42 U.S.C. Sections 1395
et seq.) and any statute succeeding thereto.
Mortgage: As defined in Section 35.1.
MPT: Medical Properties Trust, Inc., an Affiliate of Lessor.
MPT Development Services: MPT Development Services, Inc., an Affiliate of
Lessor.
Officer's Certificate: A certificate of Lessee signed by the officer(s) or
representative(s) authorized to so sign by the governing body of Lessee, or any
other person whose power and authority to act has been authorized by delegation
in writing by any of the persons holding the foregoing offices.
Other Leases: All other leases entered into between Lessor or any Affiliate
of Lessor, on the one hand, and Lessee, or any of its Affiliates, on the other
hand.
Overdue Rate: On any date, a rate per annum equal to four percent (4%).
Percentage Rent: As defined in Section 3.2(d).
Permitted Exceptions: As defined in Article I.
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Person: An individual, a corporation, a limited liability company, a
general or limited partnership, an unincorporated association, a joint venture,
a Governmental Entity or another entity or group.
Primary Intended Use: As defined in Article VII.
Primary Lender. A lender providing financing for Lessee to purchase items
of Collateral or in connection with the refinancing of any items of Collateral.
Primary Lien of Lessee's Primary Lender: Any first priority lien granted by
Lessee in any of the Collateral which may be given in connection with Lessee's
Primary Lender providing equipment and working capital financing for Lessee, as
such term "Primary Lender" is more particularly defined in the Security
Agreement.
Prime Rate: The annual rate announced by Citibank in New York, New York, to
be the prime rate for 90-day unsecured loans to its United States corporate
borrowers of the highest credit standing, as in effect from time to time.
Principals: Collectively, Xxxxxx X. Xxxxxxxxxx, M.D., M. Xxxxxxx Xxxxxxxx
and G. Xxxxxxx Xxxxxxx, M.D.
Promissory Note: That certain Promissory Note of even date herewith made by
Lessee in favor of MPT Development Services (as may be hereafter amended,
modified and/or restated from time to time).
Purchase Agreement: The Purchase and Sale Agreement dated as of March 3,
2005, as amended by that certain letter amendment dated April 29, 2005, and as
further amended by that certain letter amendment dated June 21, 2005, by and
among MPT Operating Partnership, L.P., MPT Bucks County, Lessee, Xxxxxx X.
Xxxxxxxxxx, M.D., M. Xxxxxxx Xxxxxxxx, G. Xxxxxxx Xxxxxxx, M.D. and Developer.
Real Estate Taxes: All real estate taxes, assessments and special
assessments and dues which shall be levied, or imposed upon the Leased Property
during the Term.
Removal Notice: As defined in Section 16.2.
Rent: Collectively, the Base Rent (as increased in accordance with the
provisions of Section 3.1 hereof), the Construction Period Rent, the Percentage
Rent and the Additional Charges.
Reserve: As defined in Section 9.2.
Revenues: Collectively, all revenues generated by reason of the operation
of the Facility, whether or not directly received or to be received by the
Lessee, including, without limitation, all patient and/or resident revenues
received or receivable for the use of, or otherwise by reason of, all rooms,
beds, units and other facilities provided, meals served, services performed,
space or facilities subleased or goods sold on or from the Facility; provided,
however, that Revenues shall not include non-operating revenues such as interest
income or gain from the sale of assets not sold in the ordinary course of
business; and provided, further, that there shall be excluded or deducted (as
the case may be) from such revenues; (i) contractual allowances for xxxxxxxx not
paid by or received from the governmental authorities or third party payors,
(ii) allowances according to GAAP for uncollectible accounts, (iii) all proper
patient or resident billing credits and adjustments according to GAAP related to
health care accounting, (iv) deposits refundable to patients/residents of the
Facility and (v) provider discounts for hospital or other medical facility
utilization contracts.
Security Agreement: That certain Security Agreement to be effective on the
Commencement Date executed and delivered by Lessee to Lessor, pursuant to the
terms of which Lessee has granted to Lessor a first lien and security interest
in all of Lessee's rights under this Lease (as this Lease may be amended,
modified and/or restated from time to time), to all of Lessee's Personal
Property (excluding Lessee's accounts receivable) and to all of the Licenses.
9
Single Purpose Entity: An entity which (i) exists solely for the purpose of
owning and/or leasing all or any portion of the Leased Property and conducting
the operation of the Business, (ii) conducts business only in its own name or in
fictitious or d/b/a names previously disclosed to Lessor, (iii) does not engage
in any business other than the Business or the operation of that certain
stand-alone imaging center previously disclosed to Lessor, (iv) does not hold,
directly or indirectly, any ownership interest (legal or equitable) in any
entity or any real or personal property other than the interest in the Leased
Property and the other assets incident to the operation of the Business, (v)
does not have any debt other than as permitted by this Lease or arising in the
ordinary course of the Business and does not guarantee or otherwise obligate
itself with respect to the debts of any other person or entity, other than as
approved by Lessor, (vi) has its own separate books, records, accounts,
financial statements and tax returns (with no commingling of funds or assets),
(vii) holds itself out as being a company separate and apart from any other
entity, and (viii) maintains all corporate formalities independent of any other
entity.
Statements of Cash Flow: For any fiscal year or other accounting period for
Lessee or Guarantors and their respective consolidated subsidiaries, statements
of earnings and retained earnings and of changes in financial position for such
period and for the period from the beginning of the respective Fiscal Year to
the end of such period and the related balance sheet as at the end of such
period, together with the notes thereto, all in reasonable detail and setting
forth in comparative form the corresponding figures for the corresponding period
in the preceding fiscal year, and prepared in accordance with GAAP.
Taking: A taking or voluntary conveyance during the Term hereof of all or
part of the Leased Property, or any interest therein or right accruing thereto
or use thereof, as the result of, or in settlement of, any Condemnation or other
eminent domain proceeding affecting the Leased Property whether or not the same
shall have actually been commenced.
Tangible Net Worth: The members' equity of the Lessee determined in
accordance with GAAP, minus the value of all intangible assets used in such
calculation.
Xxxxxxxxxx: Xxxxxx X. Xxxxxxxxxx, M.D.
Tenant: The lessees/sublessees or tenants/subtenants under the Tenant
Leases, if any.
Tenant Improvements: The interior partitions, finishes and other tenant
improvement work in and for each suite of space in the Building leased to a
Tenant as required under the Tenant Leases.
Tenant Leases: All leases, subleases and other rental agreements (written
or verbal, now or hereafter in effect), if any, pursuant to which Lessee grants
or has granted a possessory interest in and to any space in or any part of the
Leased Property, including the Existing Subleases, and all Credit Enhancements,
if any, held in connection therewith.
Term: The actual duration of this Lease, including the Fixed Term and the
Extension Terms (if exercised by the Lessee) and taking into account any
termination.
Total Debt: All indebtedness which, in accordance with GAAP, will be
included in determining total liabilities of Lessee, as shown on the liability
side of a balance sheet, including any such indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, excluding any nonrecourse
indebtedness and excluding any current liabilities.
Total Development Costs: The (i) Initial Purchase Price, plus any
additional purchase price amounts paid for the Leased Property by Lessor or its
Affiliates pursuant to the Purchase Agreement, plus all reasonable costs and
expenses not included in the Initial Purchase Price incurred or paid in
connection with the purchase and lease of the Leased Property, including, but
not limited to, legal, appraisal, title, survey, environmental, seismic,
engineering and other fees and expenses paid in connection with the inspection
of the Leased Property and site visits, and fees paid to advisors and brokers,
except to the extent such items are paid by Lessee, (ii) costs of Capital
Additions financed by
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Lessor (and Lessor's Affiliates) as provided in Section 10.3 of this Lease,
(iii) all amounts advanced or paid pursuant to the Development Agreement and the
Funding Agreement, (iii) Construction Period Rent, as provided in Section
3.1(a); (iv) interest on advances made by Lessor prior to the date hereof in the
amount of Ninety-Seven Thousand, One Hundred Sixty and 12/100 Dollars
($97,160.12) which shall be deemed incurred as of the date hereof; (v) any
amounts paid by Lessor in connection with the posting of a development bond
required by the township of Bensalem, Pennsylvania (it being understood that
Total Development Costs and the Base Rent shall be adjusted accordingly for any
amounts returned to Lessor with respect to such bond) and (vi) all fees and
expenses paid or advanced by Lessor and its Affiliates in connection with the
construction and development of the Leased Property, except to the extent such
items are paid by Lessee. Notwithstanding the foregoing, Total Development Costs
shall not include any Additional Charges.
Unsuitable for Its Use or Unsuitable for Its Primary Intended Use: As used
anywhere in this Lease, the terms "Unsuitable for Its Use" or "Unsuitable for
Its Primary Intended Use" shall mean that, by reason of damage or destruction,
or a partial Taking by Condemnation, the Facility cannot be operated on a
commercially practicable basis for its Primary Intended Use, taking into
account, all relevant factors, and the effect of such damage or destruction or
partial Taking.
ARTICLE III
RENT
3.1 CONSTRUCTION PERIOD RENT; BASE RENT; PERCENTAGE RENT. During the Term,
Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in
lawful money of the United States of America, at Lessor's address set forth
herein or at such other place or to such other person, firm or entity as Lessor
from time to time may designate in writing, Construction Period Rent, Base Rent
and Percentage Rent, as follows:
(a) CONSTRUCTION PERIOD RENT: During the Construction Period, the rent
payable by Lessee to Lessor shall accrue but be deferred as provided
herein. The amount of such accrual shall be calculated each month during
the Construction Period as follows: beginning October 1, 2005, and on the
first (1st) day of each month during the Construction Period thereafter,
Lessee shall be obligated to pay, on a deferred basis as provided herein,
an amount equal to the product of (i) ten and 75/100 percent (10.75%)
(subject to adjustment as provided in Section 3.1(c) below) multiplied by
(ii) the amount of Total Development Costs which have been incurred as of
the last day of the immediately preceding month, divided by (iii) twelve
(12), it being understood and agreed that, beginning November 1, 2005, and
on the first (1st) day of each month thereafter during the Construction
Period, any amounts of previously deferred Construction Period rent are to
be included within Total Development Costs for purposes of the calculation
of Construction Period rent under this Section 3.1(a) (such construction
period rent calculated as herein provided being referred to herein as the
"Construction Period Rent"). The Construction Period Rent will be deferred
and added to Total Development Costs but will not be paid until the
Completion Date at which time the Construction Period Rent amount will be
amortized and paid over the Fixed Term beginning with the Completion Date,
in equal monthly installments as part of the payments of Base Rent. Lessee
shall be entitled to prepay all or any portion of Construction Period Rent,
without penalty. As the amortized Construction Period Rent is paid, the
Total Development Costs and Base Rent will be adjusted and reduced
accordingly.
(b) BASE RENT: Subject to adjustments as expressly set forth herein
(including as provided in Section 3.1(c) below), Lessee shall pay Lessor
base rent (the "Base Rent") following the Construction Period in an amount
equal to ten and 75/100 percent (10.75%) per annum (subject to adjustment
as provided in Section 3.1(c) below) of the Total Development Costs, which
Base Rent shall be payable in advance in equal, consecutive monthly
installments. Base Rent shall be payable on the first (1st) day of each
calendar month of the Term, commencing on the first (1st) day of the month
immediately following the Completion Date (prorated as to any partial
month).
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(c) ADJUSTMENT OF BASE RENT: Commencing on January 1, 2007, and on
each January 1 thereafter (each an "Adjustment Date") during the term of
this Lease, the Base Rent shall be increased, if any, by an amount equal to
the greater of (A) two and one-half percent (2.5%) per annum of the prior
year's Base Rent, or (B) the percentage by which the CPI in effect on the
Adjustment Date shall have increased over the CPI figure in effect on the
then just previous Adjustment Date. If the previous year's Base Rent is for
a partial year, it shall be annualized. In the event the Total Development
Costs are adjusted and increased by the Total Development Costs Adjustment,
then all calculations of Base Rent shall be adjusted accordingly.
(d) PERCENTAGE RENT: Commencing with the first calendar month next
succeeding the Completion Date and thereafter throughout the Term, in
addition to the Base Rent, Lessee shall pay to Lessor, percentage rent in
an amount equal to one and 75/100 percent (1.75%) (the "Percentage Rent")
of Revenues for the preceding month. Percentage Rent shall be payable at
the same time as Base Rent is payable hereunder.
(e) SCHEDULE OF TOTAL DEVELOPMENT COSTS AND RENT ADJUSTMENTS: At the
end of the Construction Period, the Lessor shall, in its reasonable
discretion, calculate the Total Development Costs, Construction Period Rent
and Base Rent to be paid hereunder (the "Schedule"), and provide a copy of
such Schedule to the Lessee, which Schedule will become a part of this
Lease and incorporated herein by reference, and shall be substituted,
amended and adjusted by Lessor from time to time in its reasonable
discretion as the Total Development Costs, rent payments and rent
adjustments are calculated during the Term as provided herein, and, when
delivered to the Lessee, such substituted, amended and adjusted Schedule
shall become a part of this Lease and incorporated herein by reference.
3.2 ADDITIONAL CHARGES. In addition to the Construction Period Rent, Base
Rent and the Percentage Rent, and except as expressly otherwise provided herein
(a) Lessee will also pay and discharge as and when due and payable all costs of
owning and operating the Facility, all Impositions, all Real Estate Taxes,
Insurance Premiums, maintenance and capital improvements, all violations and
defaults under any of the Permitted Exceptions, all licensure violations, civil
monetary penalties and fines, and (b) in the event of any failure on the part of
Lessee to pay any of those items referred to in clause (a) above, Lessee will
also promptly pay and reimburse Lessor and/or its Affiliates for all such
amounts paid by Lessor and promptly pay and discharge every fine, penalty,
interest and cost which may be added for non-payment or late payment of such
items (the items referred to in clauses (a) and (b) above being referred to
herein collectively as the "Additional Charges"), and Lessor shall have all
legal, equitable and contractual rights, powers and remedies provided in this
Lease, by statute or otherwise, in the case of non-payment of the Additional
Charges, as in the case of the Base Rent. If any installment of Base Rent,
Construction Period Rent, Percentage Rent or Additional Charges (but only as to
those Additional Charges which are payable directly to Lessor) shall not be paid
within seven (7) days after its due date, Lessee will pay Lessor on demand, as
Additional Charges, a late charge (to the extent permitted by law) computed at
the Overdue Rate (or at the maximum rate permitted by law, whichever is less) on
the amount of such installment, from the due date of such installment to the
date of payment thereof. To the extent that Lessee pays any Additional Charges
to Lessor pursuant to any requirement of this Lease, Lessee shall be relieved of
its obligation to pay such Additional Charges to the entity to which they would
otherwise be due. At any time during the Term, Lessor may require Lessee to pay
into escrow or make deposits to Lessor (or to a Facility Lender if requested by
Lessor) relating to any part of the Impositions, Real Estate Taxes and/or
Insurance Premiums and Lessee shall pay to Lessor (or directly to a Facility
Lender if requested by Lessor), upon written request from Lessor, such amounts
as and when required by Lessor (or the Facility Lender). All sums paid into
escrow or deposits shall not bear interest, may be commingled with Lessor's (or
Facility Lender's) books and accounts, and may be applied by the Lessor (or the
Facility Lender) to all sums owed by Lessee to Lessor (or to sums owed to
Facility Lender).
3.3 ABSOLUTE NET LEASE. The Rent shall be paid absolutely net to Lessor, so
that this Lease shall yield to Lessor the full amount of the installments of
Base Rent, Construction Period Rent, Percentage Rent and the payments of
Additional Charges throughout the Term, but subject to any other provisions of
this Lease which
12
expressly provide for adjustment of Rent or other charges. Lessee further
acknowledges and agrees that all charges, assessments or payments of any kind
due and payable without notice, demand, set off or counterclaim under the
Permitted Exceptions shall be paid by Lessee as they become due and payable.
ARTICLE IV
IMPOSITIONS
4.1 PAYMENT OF IMPOSITIONS. Subject to Article XII relating to permitted
contests, Lessee will pay, or cause to be paid, all Impositions before any fine,
penalty, interest or cost may be added for non-payment, such payments to be made
directly to the taxing or assessing authorities, unless, in the case of the
escrows and deposits required to be paid to Lessor or Facility Lender as
provided in Section 3.2 herein, and Lessee will promptly, upon request, furnish
to Lessor copies of official receipts or other satisfactory proof evidencing
such payments. Lessee's obligation to pay such Impositions shall be deemed
absolutely fixed upon the date such Impositions become a lien upon the Leased
Property or any part thereof. If any such Imposition may, at the option of the
Lessor, lawfully be paid in installments (whether or not interest shall accrue
on the unpaid balance of such Imposition), Lessee may exercise the option to pay
the same (and any accrued interest on the unpaid balance of such Imposition) in
installments and, in such event, shall pay such installments during the Term
hereof (subject to Lessee's right of contest pursuant to the provisions of
Article XII); and, subject to the requirement to pay escrows and deposits as
required in Section 3.2 herein) as the same respectively become due and before
any fine, penalty, premium, further interest or cost may be added thereto.
Lessor, at its expense, shall, to the extent permitted by applicable law,
prepare and file all tax returns and reports as may be required by governmental
authorities in respect of Lessor's net income, gross receipts, franchise taxes
and taxes on its capital stock, and Lessee, at its expense, shall, to the extent
permitted by applicable laws and regulations, prepare and file all other tax
returns and reports in respect of any Imposition as may be required by
governmental authorities. If any refund shall be due from any taxing authority
in respect of any Imposition paid by Lessee, the same shall be paid over to or
retained by Lessee if no Default or Event of Default shall have occurred
hereunder and be continuing at the time Lessor receives such refund. Any such
funds retained by Lessor due to a Default shall be applied as provided in
Article XVI. Lessor and Lessee shall, upon request of the other, provide such
data as is maintained by the party to whom the request is made with respect to
the Leased Property as may be necessary to prepare any required returns and
reports. In the event governmental authorities classify any property covered by
this Lease as personal property, Lessee shall file all personal property tax
returns in such jurisdictions where it may legally so file. Lessor, to the
extent it possesses the same, and Lessee, to the extent it possesses the same,
will provide the other party, upon request, with cost and depreciation records
necessary for filing returns for any property so classified as personal
property. Where Lessor is legally required to file personal property tax
returns, Lessee will be provided with copies of assessment notices indicating a
value in excess of the reported value in sufficient time for Lessee to file a
protest. After consultation with Lessor, Lessee may, at Lessee's sole cost and
expense, protest, appeal, or institute such other proceedings as Lessee may deem
appropriate to effect a reduction of real estate or personal property
assessments and Lessor, at Lessee's expense as aforesaid, shall fully cooperate
with Lessee in such protest, appeal, or other action. Xxxxxxxx for reimbursement
by Lessee to Lessor of personal property taxes shall be accompanied by copies of
a xxxx therefor and payments thereof which identify the personal property with
respect to which such payments are made.
4.2 ADJUSTMENT OF IMPOSITIONS. Impositions imposed in respect of the
tax-fiscal period during which the Term terminates, unless Lessee purchases the
Leased Property pursuant to the purchase options expressly provided herein,
shall be adjusted and prorated between Lessor and Lessee as of the date on which
this Lease terminates. Lessee shall be responsible for a pro rata share of any
such Impositions attributable to the period before the date on which this Lease
terminates, whether or not such Imposition is imposed before or after such
termination, and Lessee's obligation to pay its prorated share thereof shall
survive such termination.
4.3 UTILITY CHARGES. Lessee will contract for, in its own name, and will
pay or cause to be paid all charges for electricity, power, gas, oil, sewer,
water and other utilities used in connection with the Leased Property
13
during the Term, including, without limitation, unless paid as part of the Total
Development Costs, all connection, impact and tap fees necessary for the
development and operation of the Facility.
4.4 INSURANCE PREMIUMS. Lessee will contract for in its own name and will
pay or cause to be paid all premiums for the insurance coverage required to be
maintained pursuant to Article XIII during the Term; provided, however, if
required by Lessor pursuant to Section 3.2 of this Lease, such premiums shall be
paid as required under Section 3.2 herein. At Lessor's option, Lessor may obtain
such coverages and, in such event, shall be entitlted to obtain reimbursement
from Lessee for the costs of such coverages.
ARTICLE V
NO TERMINATION
5.1 ACKNOWLEDGEMENT. The parties hereto understand, acknowledge and agree
that this is an absolute net lease. Lessee shall remain bound by this Lease in
accordance with its terms and shall neither take any action without the consent
of Lessor to modify, surrender or terminate the same, nor seek nor be entitled
to any abatement, deduction, deferment or reduction of Rent, or set-off against
the Rent, nor shall the respective obligations of Lessor and Lessee be otherwise
affected by reason of (a) any damage to, or destruction of, any Leased Property
or any portion thereof from whatever cause or any Taking of the Leased Property
or any portion thereof, (b) the lawful or unlawful prohibition of, or
restriction upon, Lessee's use of the Leased Property, or any portion thereof,
or the interference with such use by any person, corporation, partnership or
other entity, or by reason of eviction by paramount title; (c) any claim which
Lessee has or might have against Lessor or by reason of any default or breach of
any warranty by Lessor under this Lease or any other agreement between Lessor
and Lessee, or to which Lessor and Lessee are parties, (d) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding up or other proceedings affecting Lessor or any assignee or transferee
of Lessor, or (e) for any other cause whether similar or dissimilar to any of
the foregoing other than a discharge of Lessee from any such obligations as a
matter of law. Lessee hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law to
(i) modify, surrender or terminate this Lease or quit or surrender the Leased
Property or any portion thereof, or (ii) entitle Lessee to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Lessee
hereunder, except as otherwise specifically provided in this Lease. The
obligations of Lessor and Lessee hereunder shall be separate and independent
covenants and agreements and the Rent and all other sums payable by Lessee
hereunder shall continue to be payable in all events unless the obligations to
pay the same shall be terminated pursuant to the express provisions of this
Lease or by termination of this Lease other than by reason of an Event of
Default.
ARTICLE VI
OWNERSHIP OF LEASED PROPERTY AND PERSONAL PROPERTY
6.1 OWNERSHIP OF THE LEASED PROPERTY. Lessee acknowledges that the Land is
the property of Lessor, that upon the construction of the Leased Improvements
the Lessor will own all of the Leased Property, and that Lessee has only the
right to the possession and use of the Leased Property and the right to purchase
the Leased Property, subject to the terms, provisions and conditions set forth
in this Lease.
6.2 LESSEE'S PERSONAL PROPERTY. Upon the occurrence and during the
continuation of any Default hereunder, Lessee shall not, without the prior
written consent of Lessor, remove any of the Lessee's Personal Property from the
Leased Property. Lessee shall provide and maintain during the entire Term all
such Lessee's Personal Property as shall be necessary in order to operate the
Facility in compliance with all licensure and certification requirements, in
compliance with all applicable Legal Requirements and Insurance Requirements and
otherwise in accordance with customary practice in the industry for the Primary
Intended Use. All of Lessee's Personal Property not removed by Lessee within
fifteen (15) Business Days following the expiration or earlier termination of
this Lease shall be considered abandoned by Lessee and may be appropriated,
sold, destroyed or
14
otherwise disposed of by Lessor without first giving notice thereof to Lessee,
without any payment to Lessee and without any obligation to Lessee to account
therefor. Lessee will, at its expense, restore the Leased Property and repair
all damage to the Leased Property caused by the removal of Lessee's Personal
Property, whether effected by Lessee, Lessor, any Lessee lender, or any Lessor
lender.
ARTICLE VII
CONDITION AND USE OF LEASED PROPERTY
7.1 CONDITION OF THE LEASED PROPERTY. Lessee acknowledges receipt and
delivery of possession of the Leased Property and that Lessee has examined and
otherwise has acquired knowledge of the condition of the Leased Property prior
to the execution and delivery of this Lease and has found the same to be in good
order and satisfactory for its purpose hereunder and under the Development
Agreement. Lessee is leasing the Leased Property "as is" in its present
condition and as shall be improved pursuant to the Development Agreement. Lessee
warrants and represents that it has obtained, or will obtain, or will cause to
be obtained, within the time periods required in the Development Agreement and
the Funding Agreement, all approvals, variances, permits, licenses and
certificates required by all Governmental Entities for the construction and
development of the Facility. Lessee waives any claim or action against Lessor in
respect of the condition of the Leased Property. LESSOR MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY
PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, SUITABILITY, DESIGN OR CONDITION
FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE
TO BE BORNE BY LESSEE.
7.2 USE OF THE LEASED PROPERTY.
(a) If not obtained on or prior to the Completion Date, Lessee
covenants that it will use its best efforts to obtain as soon as
practicable following the Completion Date, and shall maintain throughout
the entire Term all approvals needed to use and operate the Leased Property
and the Facility for the Primary Intended Use, as defined below, under
applicable local, state and federal law, including but not limited to
licensure approvals and Medicare and a Medicaid certifications, provider
numbers, certificates of need, governmental approvals, and full
accreditation from all applicable governmental authorities, if any, that
are necessary for the operation of the Facility as an acute care hospital
facility and incorporated medical office building.
(b) Beginning on the Completion Date and during the entire Term, after
the completion of the construction of the Leased Improvements, Lessee shall
use or cause to be used the Leased Property and the improvements thereon as
an acute care hospital facility and incorporated medical office building
and for such other legal ancillary uses as may be necessary in connection
with or incidental to such use, subject to all covenants, restrictions and
easements (including those set forth in the Permitted Exceptions) relating
to the Facility (the "Primary Intended Use"). Lessee shall not use the
Leased Property or any portion thereof for any other use, nor change the
number of type of beds within the Facility, nor reconfigure or rearrange
any portion of the Leased Property or the Facility without the prior
written consent of Lessor, which consent Lessee agrees may be withheld in
Lessor's sole discretion; provided, however, that Lessee may decrease the
number of beds by ten percent (10%) or less without Lessor's consent and
may increase the number of beds without Lessor's consent provided such
increase consists of additional licensed acute care beds. No use shall be
made or permitted to be made of the Leased Property and no acts shall be
done which will cause the cancellation of any insurance policy covering the
Leased Property or any part thereof, nor shall Lessee sell or otherwise
provide to residents or patients therein, or permit to be kept, used or
sold in or about the Leased Property any article which may be prohibited by
law or by the standard form of fire insurance policies, any other insurance
policies required to be carried hereunder, or fire underwriters
regulations. Lessee shall, at its sole cost, comply with all of the
requirements, covenants and restrictions
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pertaining to the Leased Property, including, without limitation, all of
the Permitted Exceptions, and other requirements of any insurance board,
association, organization or company necessary for the maintenance of the
insurance, as herein provided, covering the Leased Property and Lessee's
Personal Property.
(c) Lessee covenants and agrees that during the Term it will
continuously operate the Leased Property only as a provider of healthcare
services in accordance with the Primary Intended Use and Lessee shall
maintain its certifications for reimbursement and licensure and all
accreditations.
(d) Lessee shall not commit or suffer to be committed any waste on the
Leased Property, or in the Facility, nor shall Lessee cause or permit any
nuisance thereon.
(e) Lessee shall neither suffer nor permit the Leased Property or any
portion thereof, including any Capital Addition whether or not financed by
Lessor, or Lessee's Personal Property, to be used in such a manner as (i)
might reasonably tend to impair Lessor's (or Lessee's, as the case may be)
title thereto or to any portion thereof, or (ii) may reasonably make
possible a claim or claims of adverse usage or adverse possession by the
public, as such, or of implied dedication of the Leased Property or any
portion thereof.
(f) Lessee agrees that during the Term, Lessor shall have the right
and option to erect a sign or signs on the Leased Property stating that the
Leased Property is owned by the Lessor (and, if applicable, that Lessor or
its Affiliates is the funding source for the construction and development
of the Facility). Such signs shall be in sizes, and shall be erected in a
location approved by Lessee, which approval shall not be unreasonably
withheld, conditioned or delayed. Lessor agrees that Lessee shall have the
right during the Term to erect a sign or signs on the Leased Property
stating that the Leased Property is operated by the Lessee.
7.3 LESSOR TO GRANT EASEMENTS. Provided no Default or Event of Default then
exists, Lessor will, at the request of Lessee and at Lessee's cost and expense,
but subject to the reasonable approval of Lessor (a) grant easements and other
rights in the nature of easements, (b) release existing easements or other
rights in the nature of easements which are for the benefit of the Leased
Property, (c) dedicate or transfer unimproved portions of the Leased Property
for road, highway or other public purposes, (d) execute petitions to have the
Leased Property annexed to any municipal corporation or utility district, (e)
execute amendments to any covenants and restrictions affecting the Leased
Property and (f) execute and deliver to any person any instrument appropriate to
confirm or effect such grants, releases, dedications and transfers, but only
upon delivery to Lessor of an Officer's Certificate stating (and such other
information as Lessor may reasonably require confirming) that such grant,
release, dedication, transfer, petition or amendment is required for and not
detrimental to the proper conduct of the Primary Intended Use on the Leased
Property and does not reduce the value of the Leased Property. Any such grants,
releases, dedications, transfers, petitions or amendments executed by Lessor as
provided in this Section 7.3 shall be recorded or filed by Lessee or Lessor, at
Lessee's sole cost and expense, in the proper recording/filing office where the
Land is located.
ARTICLE VIII
LEGAL AND INSURANCE REQUIREMENTS
8.1 COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS. Subject to Article
XII relating to permitted contests, Lessee, at its expense, will promptly (a)
comply with all Legal Requirements and Insurance Requirements applicable to
Lessee and its use, operation, maintenance, repair and restoration of the Leased
Property, whether or not compliance therewith shall require structural change in
any of the Leased Improvements or interfere with the use and enjoyment of the
Leased Property, and (b) procure, maintain and comply with all licenses,
certificates of need, provider agreements, accreditations and other
authorizations required for any use of the Leased Property and Lessee's Personal
Property then being made, and for the proper erection, installation, operation
and
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maintenance of the Leased Property or any part thereof, including without
limitation, any Capital Additions. Upon Lessor's request, Lessee shall deliver
copies of all such licenses, certificates of need agreements and other
authorizations. Lessee hereby agrees to indemnify and defend, at Lessee's sole
cost and expense, and hold Lessor, its successors and assigns harmless from and
against and to reimburse Lessor and its successors and assigns with respect to
any and all claims, demands, actions, causes of action, losses, damages,
liabilities, costs and expenses (including, without limitation, reasonable
attorneys' fees and court costs) of any and every kind and character, known or
unknown, fixed or contingent, asserted against or incurred by Lessor, its
successors and assigns, at any time and from time to time by reason or arising
out of any breach by Lessee of any of the representations and warranties set
forth in this Section 8.1.
8.2 LEGAL REQUIREMENT COVENANTS. Lessee covenants and agrees that the
Leased Property and Lessee's Personal Property shall not be used for any
unlawful purpose. Lessee shall use its commercially reasonable efforts to have
tenants acquire and maintain all licenses, certificates, permits, provider
agreements and other authorizations and approvals needed to operate the Leased
Property and all equipment and machinery used in or in connection with the
Leased Property in its customary manner for the Primary Intended Use and any
other use conducted on the Leased Property as may be permitted from time to time
hereunder. Lessee further covenants and agrees that Lessee's use of the Leased
Property, the use of all equipment and machinery used in connection with the
Leased Property and the maintenance, alteration, and operation of the same, and
all parts thereof, shall at all times conform to all applicable local, state and
federal laws, ordinances, rules and regulations.
8.3 HAZARDOUS MATERIALS. Except for Hazardous Materials generated, used
and/or handled in the normal course of business regarding the Primary Intended
Use (which Hazardous Materials shall be handled and disposed of in compliance
with all Hazardous Materials Laws), no Hazardous Materials shall be installed,
used, generated, manufactured, treated, handled, refined, produced, processed,
stored or disposed of, or otherwise present in, on or under the Leased Property.
No activity shall be undertaken on the Leased Property which would cause (i) the
Leased Property to become a treatment, storage or disposal facility of hazardous
waste, infectious waste, biomedical or medical waste, within the meaning of, or
otherwise bring the Leased Property within the ambit of RCRA or any Hazardous
Materials Laws, (ii) a release or threatened release of Hazardous Materials from
the Leased Property within the meaning of, or otherwise bring the Leased
Property within the ambit of, CERCLA or XXXX or any Hazardous Materials Laws or
(iii) the discharge of Hazardous Materials into any watercourse, surface or
subsurface of body of water or wetland, or the discharge into the atmosphere of
any Hazardous Materials which would require a permit under any Hazardous
Materials Laws. No activity shall be undertaken with respect to the Leased
Property which would cause a violation or support a claim under RCRA, CERCLA,
XXXX or any Hazardous Materials Laws. No investigation, administrative order,
litigation or settlement with respect to any Hazardous Materials is, to the best
of the Lessee's knowledge, threatened or in existence with respect to the Leased
Property. No notice has been served on Lessee from any entity, governmental body
or individual claiming any violation of any Hazardous Materials Laws, or
requiring compliance with any Hazardous Materials Laws, or demanding payment or
contribution for environmental damage or injury to natural resources. Lessee has
not obtained and Lessee has no knowledge of any reason Lessee will be required
to obtain any permits, licenses, or similar authorizations to occupy, operate or
use the Improvements or any part of the Leased Property by reason of any
Hazardous Materials Laws. Lessee hereby agrees to indemnify and defend, at its
sole cost and expense, and hold Lessor, its successors and assigns, harmless
from and against and to reimburse Lessor with respect to any and all claims,
demands, actions, causes of action, losses, damages, liabilities, costs and
expenses (including without limitation, reasonable attorney's fees and court
costs) of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by Lessor at any time and from time to
time by reason or arising out of any breach or violation of any Hazardous
Materials Laws by Lessee, its agents, representatives, employees, contractors,
subtenants and/or sublessees. Lessee shall, at its sole cost, expense, risk and
liability, remove or cause to be removed from the Leased Property all Hazardous
Materials generated in connection with the Primary Intended Use, including,
without limitation, all infectious waste materials, syringes, needles and any
materials contaminated with bodily fluids of any type, character or description
of whatsoever nature in accordance with all Hazardous Materials Laws. Lessee
shall not dispose of any such infectious waste and Hazardous Materials in any
receptacles used for the disposal of normal refuse.
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8.4 HEALTHCARE LAWS. Lessee warrants and represents that this Lease and all
subleases are, and at all times during the term of this Lease will be, in
compliance with all Healthcare Laws. Lessee agrees to add to all subleases, that
in the event it is determined that such agreement and/or sublease is in
violation of the Healthcare Laws, such agreement and/or sublease shall be
renegotiated so that same are in compliance with all Healthcare Laws. Lessee
agrees promptly to notify Lessor in writing of receipt of any notice of
investigation of any alleged Healthcare Law violations. Lessee hereby agrees to
indemnify and defend, at Lessee's sole cost and expense, and hold Lessor and its
successors and assigns, harmless from and against and to reimburse Lessor and
its successors and assigns with respect to any and all claims, demands, actions,
causes of action, losses, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' fees and court costs) of any and every
kind or character, known or unknown, fixed or contingent, asserted against or
incurred by Lessor and its successors and assigns at any time and from time to
time by reason or arising out of any breach by Lessee of the provisions set
forth in this Section 8.4 or any violation of any Healthcare Laws.
8.5 REPRESENTATIONS AND WARRANTIES. Lessee represents, warrants and
covenants to Lessor that as of the date hereof: (i) Lessee is a limited
liability company duly organized and validly existing under the laws of the
State of Delaware, has duly qualified to do business in the State of
Pennsylvania, and is duly authorized to enter into, deliver and perform this
Lease and the other documents referred to herein and such agreements constitute
the valid and binding obligations of Lessee, enforceable in accordance with
their terms, (ii) neither the entering into of this Lease or the other documents
referred to herein nor the performance by Lessee of its obligations hereunder or
under the other documents referred to herein will violate any provision of law
or any agreement, indenture, note or other instrument binding upon Lessee, (iii)
no authority from or approval by any governmental body, commission or agency or
consent of any third party is required in connection with the making or validity
of and the execution, delivery and performance of this Lease or the other
documents referred to herein, (iv) there are no actions, suits or proceedings
pending against or, to the knowledge of Lessee, threatened against or affecting
Lessee or any of its Affiliates, in any court or before or by any governmental
department, agency or instrumentality, an adverse decision in which could
materially and adversely affect the financial condition, business or operations
of Lessee or the ability of Lessee to perform its obligations under this Lease
or the other documents referred to herein, (v) Lessee and each of its Affiliates
is in compliance with all applicable laws, ordinances, rules, regulations and
requirements of governmental authorities, and (vi) Lessee has obtained and
delivered copies thereof to Lessor on the Commencement Date all certificates of
need, Medicare billing numbers, other licenses and agreements required for the
operation of the Facility and all medical equipment used in connection with the
Facility, or will use its best efforts to obtain the same as soon as practicable
and shall deliver evidence of such documentation to Lessor within ten (10)
Business Days after obtaining same.
8.6 SINGLE PURPOSE ENTITY. Lessee represents, warrants, covenants and
agrees that Lessee is, at the time of the execution of this Lease, and shall
remain at all times during the term of this Lease, a Single Purpose Entity
created and to remain in good standing for the sole purpose of leasing and
operating the Facility in accordance with the terms of this Lease.
Simultaneously with the execution of this Lease, and as requested by Lessor at
other times during the term of this Lease, Lessee shall provide Lessor evidence
that Lessee is a Single Purpose Entity and is in good standing in the state of
its organization and in the state in which the Leased Property is located.
8.7 ORGANIZATIONAL DOCUMENTS. Lessee shall not permit or suffer, without
the prior written consent of Lessor (i) any material and adverse amendment or
modification of its Organizational Documents (as defined below) (including any
amendment or modification which changes Lessee's status as a Single Purpose
Entity), (ii) any dissolution or termination of its existence, or (iii) change
in its state of formation or organization or its name. Lessee has,
simultaneously with the execution of this Lease, delivered to Lessor a true and
complete copy of the articles of organization and certificate of formation and
limited liability company operating agreement creating Lessee, and all other
documents creating and governing the Lessee (collectively, the "Organizational
Documents"). Lessee warrants and represents that the Organizational Documents
(i) were duly executed and delivered, (ii) are in full force and effect, and
binding upon and enforceable in accordance with their terms, (iii) constitute
the entire understanding among the partners and members or equity owners of
Lessee, and (iv) no breach exists under the
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Organizational Documents and no act has occurred and no condition exists which,
with the giving of notice or the passage of time would constitute such a breach
under the Organizational Documents.
ARTICLE IX
REPAIRS; RESERVE; RESTRICTIONS
9.1 MAINTENANCE AND REPAIR.
(a) Lessee, at its expense, will keep the Leased Property and all
private roadways, sidewalks and curbs appurtenant thereto (and Lessee's
Personal Property) in good first class order and repair (whether or not the
need for such repairs occurs as a result of Lessee's use, any prior use,
the elements, the age of the Leased Property or any portion thereof) and,
except as otherwise provided in Articles XIV and XV, with reasonable
promptness, will make all necessary and appropriate repairs thereto of
every kind and nature, whether interior or exterior, structural or
non-structural, ordinary or extraordinary, foreseen or unforeseen or
arising by reason of a condition existing prior to the commencement of the
Term of this Lease (concealed or otherwise). All repairs shall, to the
extent reasonably achievable, be at least equivalent in quality to the
original work. Lessee will not take or omit to take any action the taking
or omission of which would be reasonably expected to materially impair the
value or the usefulness of the Leased Property or any part thereof for the
Primary Intended Use. Notwithstanding anything contained herein to the
contrary, Lessee may make additions, modifications and remodeling to the
Leased Property which are not Capital Additions from time to time which are
necessary for the Primary Intended Use and which permit the Lessee to
comply fully with its obligations set forth in this Lease, provided that
any such action will be undertaken expeditiously, in a workmanlike manner
and will not significantly alter the character or purpose or detract from
the value or operating efficiency of the Leased Property and will not
significantly impair the revenue producing capability of the Leased
Property or adversely affect the ability of the Lessee to comply with the
provisions of this Lease. Such additions, modifications and remodeling
shall, without payment by Lessor at any time, be included under the terms
of this Lease and shall be the property of Lessor. Lessee shall notify the
Lessor of any and all repairs, improvements, additions, modifications and
remodeling made to the Leased Property in excess of Fifty Thousand and
00/100 Dollars ($50,000.00) and obtain consent from Lessor prior to making
such repairs, improvements, additions, modifications and remodeling;
provided, however, that if in the reasonable judgment of Lessee emergency
repairs are needed, Lessee may make such repairs and shall notify Lessor
that such repairs have been made as soon as practicable.
(b) Lessor shall not under any circumstances be required to build or
rebuild any improvements on the Leased Property, or to make any repairs,
replacements, alterations, restorations, or renewals of any nature or
description to the Leased Property, whether ordinary or extraordinary or
capital in nature, structural or non-structural, foreseen or unforeseen, or
to make any expenditure whatsoever with respect thereto in connection with
this Lease, or to maintain the Leased Property in any way.
(c) Nothing contained in this Lease and no action or inaction by
Lessor shall be construed as (i) constituting the consent or request of
Lessor, expressed or implied, to any contractor, subcontractor, laborer,
materialmen or vendor to or for the performance of any labor or services or
the furnishing of any materials or other property for the construction,
alteration, addition, repair or demolition of or to the Leased Property or
any part thereof, or (ii) giving Lessee any right, power or permission to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would
permit the making of any claim against Lessor in respect thereof or to make
any agreement that may create, or in any way be the basis for, any right,
title, interest, lien, claim or other encumbrance upon the estate of Lessor
in the Leased Property or any portion thereof.
(d) Unless Lessor shall convey any of the Leased Property to Lessee
pursuant to the provisions of this Lease, Lessee will, upon the expiration
or prior termination of the Term, vacate and
19
surrender the Leased Property to Lessor in the condition in which the
Leased Property was originally received from Lessor, except as improved,
constructed, repaired, rebuilt, restored, altered or added to as permitted
or required by the provisions of this Lease and except for ordinary wear
and tear (subject to the obligation of Lessee to maintain the Leased
Property in good order and repair during the entire Term of the Lease),
damage caused by the gross negligence or willful acts of Lessor and damage
or destruction described in Article XIV or resulting from a Taking
described in Article XV which Lessee is not required by the terms of this
Lease to repair or restore.
9.2 RESERVES FOR EXTRAORDINARY REPAIRS. Commencing on the date of
Completion of the construction of the Facility, and on each January 1
thereafter, Lessee shall make annual deposits to a reserve account for
Extraordinary Repairs (the "Reserve") in an interest bearing account jointly
held by Lessor and Lessee at a financial institution of Lessor's choosing. The
first annual deposit shall be equal to the sum of Two Thousand Five Hundred and
00/100 Dollars ($2,500.00) per bed per annum (the number of beds to be
determined by the actual number of beds certified to be available for use in the
Facility). Beginning on the first January 1 after the Completion Date, and on
each January 1 thereafter, the number of beds shall be determined by the actual
number of beds placed in service or certified to be available for use in the
Facility, which number of beds shall not be reduced without the prior written
consent of Lessor. The Reserve account shall require the signature of an officer
of Lessee and an officer of Lessor to make withdrawals. On each January 1
thereafter during the entire Term, such payment into the Reserve shall be
increased by two and one-half percent (2.5%) per annum. The amounts in the
Reserve shall be used to pay for Extraordinary Repairs on the Facility or, in
the event Lessee fails to make any required non-Extraordinary Repairs hereunder,
Lessor may use funds in the Reserve for that purpose as well, without the
necessity of obtaining the signature of an officer of Lessee. Lessee shall
replenish amounts drawn from the Reserve at the rate of one-twelfth (1/12th) of
the total amount withdrawn per month, until completely replenished. Lessee
hereby grants to Lessor a security interest in all monies deposited into the
Reserve and Lessee shall, within fifteen (15) days from the Commencement Date,
execute all documents necessary for Lessor to perfect its security interest in
the Reserve. Lessor and Lessee agree that the first dollars of all expenditures
for Extraordinary Repairs made in each year during the Term shall be funded from
the Reserve account to the full extent of such account; provided, however, that
if Lessor, in its reasonable discretion, determines at any time that the balance
then remaining in the Reserve account is insufficient to pay in full for the
present and future anticipated Extraordinary Repairs on the Facility, Lessor
shall retain funds in the Reserve account in an amount sufficient to pay in full
for Extraordinary Repairs and Lessee will deposit additional sums in the Reserve
account from time to time, upon the written request of Lessor, in amounts equal
to the difference between the then balance in the Reserve account and the cost
to complete the present and future Extraordinary Repairs so that at all times
there is adequate amounts in the Reserve account to pay for such items on a
going forward basis. So long as no Default or Event of Default has then occurred
under any of the terms hereof, any amounts remaining in the Reserve, after the
payment of and the reimbursement for the Extraordinary Repairs on the Facility
shall be returned to Lessee at the expiration of this Lease. Lessee consents to
Lessor's pledge of the Reserve to any Facility Lender.
9.3 ENCROACHMENTS; RESTRICTIONS. If any of the Leased Improvements shall,
at any time, encroach upon any property, street or right-of-way adjacent to the
Leased Property, or shall violate the agreements or conditions contained in any
federal, state or local law, restrictive covenant or other agreement affecting
the Leased Property, or any part thereof, or shall impair the rights of others
under any easement or right-of-way to which the Leased Property is subject, then
promptly upon the request of Lessor and provided a third party has delivered a
notice, demand or complaint regarding any such matter, Lessee shall, at its
expense, subject to its right to contest the existence of any encroachment,
violation or impairment, (a) obtain valid and effective waivers or settlements
of all claims, liabilities and damages resulting from each such encroachment,
violation or impairment, whether the same shall affect Lessor or Lessee or (b)
make such changes in the Leased Improvements, and take such other actions, as
Lessor in the good faith exercise of its judgment deems reasonably practicable,
to remove such encroachment, or to end such violation or impairment, including,
if necessary, the alteration of any of the Leased Improvements, and in any event
take all such actions as may be necessary in order to be able to continue the
operation of the Facility without such violation, encroachment or impairment.
Any such alteration shall be made in conformity with the applicable requirements
of Article X. Lessee's obligations under this Section 9.3 shall be in addition
to and shall in
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no way discharge or diminish any obligation of any insurer under any policy of
title or other insurance and Lessee shall be entitled to a credit for any sums
paid by Lessee and recovered by Lessor under any such policy of title or other
insurance.
ARTICLE X
CAPITAL ADDITIONS
10.1 CONSTRUCTION OF CAPITAL ADDITIONS TO THE LEASED PROPERTY.
(a) After the completion of the construction of the Leased
Improvements under the Development Agreement, and provided no Default or
Event of Default, Lessee shall have the right, upon and subject to the
terms and conditions set forth below, to construct or install Capital
Additions on the Leased Property without the prior written consent of
Lessor, provided, however, except as expressly provided in Section 10.2(d)
hereof, Lessee shall not be permitted to create any Encumbrance on the
Leased Property in connection with such Capital Addition. Prior to
commencing construction of any Capital Addition, Lessee shall, at Lessee's
sole cost and expense (i) submit to Lessor in writing a proposal setting
forth in reasonable detail any proposed Capital Addition, (ii) submit to
Lessor such plans and specifications, certificates of need and other
approvals, permits, licenses, contracts and other information concerning
the proposed Capital Addition as Lessor may reasonably request, and (iii)
obtain all necessary certificates of need, state licensure surveys and all
regulatory approvals of architectural plans. Without limiting the
generality of the foregoing, such proposal shall indicate the approximate
projected cost of constructing such Capital Addition, and the use or uses
to which it will be put.
(b) Prior to commencing construction of any Capital Addition, Lessee
shall first request Lessor to provide funds to pay for such Capital
Addition in accordance with the provisions of Section 10.3. If Lessor
declines or is unable to provide such financing on terms acceptable to
Lessee, the provisions of Section 10.2 shall apply. Notwithstanding any
other provision of this Article X to the contrary, no Capital Additions
shall be made without the consent of Lessor, which consent shall not be
unreasonably withheld or delayed, if the Capital Addition Cost of such
proposed Capital Addition, when aggregated with the costs of all Capital
Additions made by Lessee, would exceed twenty-five percent (25%) of the
then Fair Market Value of the Leased Property or would diminish the value
of the Leased Property. Furthermore, no Capital Addition shall be made
which would tie in or connect the Leased Property and/or any Leased
Improvements on the Leased Property with any other improvements on property
adjacent to the Leased Property (and not part of the Land covered by this
Lease) including, without limitation, tie-ins of buildings or other
structures or utilities, unless Lessee shall have obtained the prior
written approval of Lessor, which approval in Lessor's sole discretion may
be granted or withheld. All proposed Capital Additions shall be
architecturally integrated and consistent with the Leased Property.
10.2 CAPITAL ADDITIONS FINANCED BY LESSEE. If Lessee provides or arranges
to finance any Capital Addition, this Lease shall be and hereby is amended to
provide as follows:
(a) There shall be no adjustment in the Base Rent by reason of any
such Capital Addition.
(b) Upon the expiration or earlier termination of this Lease, except
by reason of a Default or an Event of Default by Lessee hereunder, Lessor
shall, if Lessee does not purchase the Leased Property as provided herein,
compensate Lessee for all Capital Additions paid for or financed by Lessee
in any of the following ways, determined in the sole discretion of Lessor:
(i) By purchasing all Capital Additions paid for by Lessee from
Lessee for cash in the amount of the Fair Market Added Value,
determined as of the date of expiration or termination of this Lease,
of all such Capital Additions paid for or financed by Lessee; or
21
(ii) By purchasing such Capital Additions from Lessee by
delivering to Lessee Lessor's purchase money promissory note in the
amount of said Fair Market Added Value, due and payable not later than
eighteen (18) months after the date of expiration or other termination
of this Lease, bearing interest at the test rate applicable under
Section 1272 of the Code or any successor section thereto ("Test
Rate") or, if no such Test Rate exists, at the Prime Rate, which
interest shall be payable monthly, and which note shall be secured by
a mortgage on the Leased Property, subject to all mortgages and
encumbrances on the Leased Property at the time of such purchase; or
(iii) Such other arrangement regarding such compensation as shall
be mutually acceptable to Lessor and Lessee.
(c) Lessor and Lessee agree that Lessee's construction lender for
Capital Additions shall have the right to secure its loan by a mortgage
upon the Leased Property provided such mortgage (i) shall not exceed the
cost of the Capital Additions, (ii) shall be subordinate to the mortgage(s)
or other security documents, if any, securing the repayment of money
borrowed by Lessor to acquire the Land or to pay for Capital Additions,
(iii) shall be subordinate to any mortgage or encumbrance now existing or
hereinafter created including, without limitation, Facility Instruments,
(iv) the term of the loan shall not extend beyond the term of this Lease,
(v) such lender executes all subordination and other documents and
certificates required by the Facility Lenders, and (vi) shall be limited
solely to Lessee's interest in the Leased Property.
10.3 CAPITAL ADDITIONS FINANCED BY LESSOR.
(a) Lessee shall request that Lessor provide or arrange financing for
a Capital Addition by providing to Lessor such information about the
Capital Addition as Lessor may request (a "Request"), including without
limitation, all information referred to in Section 10.1 above. Lessor may,
but shall be under no obligation to, obtain the funds necessary to meet the
Request. Within thirty (30) days of receipt of a Request, Lessor shall
notify Lessee as to whether it will finance the proposed Capital Addition
and, if so, the terms and conditions upon which it would do so, including
the terms of any amendment to this Lease. In no event shall the portion of
the projected Capital Addition Cost comprised of land, if any, materials,
labor charges and fixtures be less than ninety percent (90%) of the total
amount of such cost. Lessee may withdraw its Request by notice to Lessor at
any time before or after receipt of Lessor's terms and conditions.
(b) If Lessor agrees to finance the proposed Capital Addition on terms
and conditions that are acceptable to Lessee in Lessee's discretion, Lessee
shall provide Lessor with the following prior to any advance of funds:
(i) all customary or other required loan documentation (if the
Capital Addition is to be financed through the incurrence of debt);
(ii) any information, certificates of need, regulatory approvals
of architectural plans and other certificates, licenses, permits or
documents requested by either Lessor or any lender with whom Lessor
has agreed or may agree to provide financing which are necessary to
confirm that Lessee will be able to use the Capital Addition upon
completion thereof in accordance with the Primary Intended Use,
including all required federal, state or local government licenses and
approvals;
(iii) an Officer's Certificate and, if requested, a certificate
from Lessee's architect, setting forth in reasonable detail the
projected (or actual, if available) cost of the proposed Capital
Addition;
22
(iv) an amendment to this Lease, duly executed and acknowledged,
in form and substance satisfactory to Lessor (the "Lease Amendment"),
and containing such provisions as may be necessary or appropriate,
including without limitation, any appropriate changes in the legal
description of the Land, the Fair Market Value and the Rent, which
shall be increased to take into account an adjustment to the Total
Development Costs in an amount equal to the equity contributed by
Lessor to finance the Capital Addition, or, in the case of debt
financing, the principal and interest on the debt incurred by Lessor
to finance the Capital Addition;
(v) a warranty deed conveying title to Lessor to any land
acquired for the purpose of constructing the Capital Addition, free
and clear of any liens or encumbrances except those approved by Lessor
and, both prior to and following completion of the Capital Addition,
an as-built survey thereof satisfactory to Lessor;
(vi) endorsements to any outstanding policy of title insurance
covering the Leased Property and any additional land referred to in
Section 10.3(b)(v) above, or a supplemental policy of title insurance
covering the Leased Property and any additional land referred to in
Section 10.3(b)(v) above, satisfactory in form and substance to Lessor
(A) updating the same without any additional exceptions, except as may
be permitted by Lessor; and (B) increasing the coverage thereof by an
amount equal to the Fair Market Value of the Capital Addition (except
to the extent covered by the owner's policy of title insurance
referred to in subparagraph (vii) below);
(vii) if required by Lessor, (A) an owner's policy of title
insurance insuring fee simple title to any land conveyed to Lessor
pursuant to subparagraph (v), free and clear of all liens and
encumbrances except those approved by Lessor and (B) a lender's policy
of title insurance satisfactory in form and substance to Lessor and
the Lending Institution advancing any portion of the Capital Addition
Cost;
(viii) if required by Lessor, prior to commencing the Capital
Addition, an M.A.I. appraisal of the Leased Property indicating that
the value of the Leased Property upon completion of the Capital
Addition will exceed the Fair Market Value of the Leased Property
prior thereto by an amount not less than one hundred percent (100%) of
the Capital Addition Costs; and
(ix) such other certificates (including, but not limited to,
endorsements increasing the insurance coverage, if any, at the time
required by Section 13.1), documents, contracts, opinions of counsel,
appraisals, surveys, certified copies of duly adopted resolutions of
the governing body of Lessee authorizing the execution and delivery of
the Lease Amendment and any other instruments as may be reasonably
required by Lessor and any Lending Institution advancing or
reimbursing Lessee for any portion of the Capital Addition Cost.
(c) With respect to Capital Additions financed by Lessee, Lessor and
Lessee agree that Lessee shall have the right to designate the general
contractor, developer, architect, construction company, engineer and other
parties which will participate in the development of the Capital Addition,
subject to Lessor's approval not to be unreasonably withheld, conditioned
or delayed. In such event, Lessee shall control the preparation and
negotiation of the definitive agreements with such parties and Lessee will
give Lessor an opportunity to review and approve such definitive agreements
prior to their execution, such approval not to be unreasonably withheld,
conditioned or delayed. With respect to Capital Additions financed by
Lessor, Lessor and Lessee shall jointly designate the general contractor,
developer, architect, construction company, engineer and other parties
which will participate in the development of the Capital Addition and, in
such event, the parties shall jointly control the preparation and
negotiation of the definitive agreements with such parties.
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(d) Upon making a Request to finance a Capital Addition, whether or
not such financing is actually consummated, Lessee shall pay or agree to
pay, upon demand, all reasonable costs and expenses of Lessor and any
Lending Institution which has committed to finance such Capital Addition
which have been paid or incurred by them in connection with the financing
of the Capital Addition, including, but not limited to, (i) the fees and
expenses of their respective counsel, (ii) all printing expenses, (iii) the
amount of any filing, registration and recording taxes and fees, (iv)
documentary stamp taxes, if any, (v) title insurance charges, appraisal
fees, if any, rating agency fees, if any, and (vi) commitment fees, if any,
and (vii) costs of obtaining regulatory and governmental approvals,
including but not limited to any required certificates of need, for the
construction, operation, use or occupancy of the Capital Addition.
10.4 SALVAGE. All materials which are scrapped or removed in connection
with the making of either Capital Additions financed by Lessee or repairs made
by Lessee pursuant to this Lease shall be or become the property of Lessee. All
materials which are scrapped or removed in connection with the making of either
Capital Additions financed by Lessor pursuant to Section 10.3 or repairs made by
Lessor pursuant to this Lease shall be or become the property of Lessee and
Lessee may remove same at its sole cost and expense.
ARTICLE XI
LIENS
Subject to the provisions of Article XII relating to permitted contests,
Lessee will not directly or indirectly create or allow to remain and will
promptly discharge at its expense any lien, encumbrance, attachment, title
retention agreement or claim upon the Leased Property or any attachment, levy,
claim or encumbrance in respect of the Rent, not including, however, (a) this
Lease, (b) the matters, if any, set forth in EXHIBIT B, (c) restrictions, liens
and other encumbrances which are consented to in writing by Lessor, or any
easements granted pursuant to the provisions of Section 7.3 of this Lease, (d)
liens for those taxes of Lessor which Lessee is not required to pay hereunder,
(e) liens for Impositions or for sums resulting from noncompliance with Legal
Requirements so long as (1) the same are not yet payable or are payable without
the addition of any fine or penalty or (2) such liens are in the process of
being contested as permitted by Article XII, (f) liens of mechanics, laborers,
materialmen, suppliers or vendors for sums either disputed or not yet due,
provided that (1) the payment of such sums shall not be postponed for more than
sixty (60) days after the completion of the action giving rise to such lien and
such reserve or other appropriate provisions as shall be required by law or
generally accepted accounting principles shall have been made therefor or (2)
any such liens are in the process of being contested as permitted by Article
XII, and (g) any liens which are the responsibility of Lessor pursuant to this
Lease. Unless otherwise expressly provided herein, Lessee shall not mortgage or
grant any interest or security interest in, or otherwise assign, any part of
Lessee's rights and interests in this Lease, the Leased Property, Lessee's
Personal Property, or any permits, licenses, certificates of need (if any) or
any other approvals required to operate the Leased Property during the Term
without the prior written consent of the Lessor, which may be withheld at
Lessor's sole discretion.
ARTICLE XII
PERMITTED CONTESTS
So long as no Default or an Event of Defaults then exits, Lessee, at
Lessee's expense, may contest, after consultation with Lessor at least ten (10)
Business Days prior to such contest, by appropriate legal proceedings conducted
in good faith and with due diligence, the amount, validity or application, in
whole or in part, of any Imposition, Legal Requirement, Insurance Requirement,
lien, attachment, levy, encumbrance, charge or claim not otherwise permitted by
Article XI, provided that (a) in the case of an unpaid Imposition, lien,
attachment, levy, encumbrance, charge or claim, the commencement and
continuation of such proceedings shall suspend the collection thereof from
Lessor and from the Leased Property, (b) neither the Leased Property nor any
Rent therefrom nor any part thereof or interest therein would be in any
immediate danger of being sold, forfeited, attached or lost, (c) in the case of
a Legal Requirement, Lessor would not be in any immediate danger of civil or
criminal
24
liability for failure to comply therewith pending the outcome of such
proceedings, (d) in the event that any such contest shall involve a sum of money
or potential loss in excess of Fifty Thousand Dollars ($50,000), then, in any
such event, (i) provided the Consolidated Net Worth of Lessee is then in excess
of Fifty Million Dollars ($50,000,000), Lessee shall deliver to Lessor an
Officer's Certificate to the effect set forth in clauses (a), (b) and (c), to
the extent applicable, or (ii) in the event the Consolidated Net Worth of Lessee
is not then in excess of Fifty Million Dollars ($50,000,000), then Lessee shall
deliver to Lessor and its counsel an opinion of Lessee's counsel to the effect
set forth in clauses (a), (b) and (c), to the extent applicable, (e) in the case
of a Legal Requirement and/or an Imposition, lien, encumbrance or charge, Lessee
shall give such reasonable security as may be demanded by Lessor to insure
ultimate payment of the same and to prevent any sale or forfeiture of the
affected portion of the Leased Property or the Rent by reason of such
non-payment or non-compliance; provided, however, the provisions of this Article
XII shall not be construed to permit Lessee to contest the payment of Rent
(except as to contests concerning the method of computation or the basis of levy
of any Imposition or the basis for the assertion of any other claim) or any
other sums payable by Lessee to Lessor hereunder, (f) in the case of an
Insurance Requirement, the coverage required by Article XIII shall be
maintained, and (g) if such contest be finally resolved against Lessor or
Lessee, Lessee shall, as Additional Charges due hereunder, promptly pay the
amount required to be paid, together with all interest and penalties accrued
thereon, or comply with the applicable Legal Requirement or Insurance
Requirement. Lessor, at Lessee's expense, shall execute and deliver to Lessee
such authorizations and other documents as may reasonably be required in any
such contest and, if reasonably requested by Lessee or if Lessor so desires,
Lessor shall join as a party therein. Lessee shall indemnify and save Lessor
harmless against any liability, cost or expense of any kind that may be imposed
upon Lessor in connection with any such contest and any loss resulting
therefrom.
ARTICLE XIII
INSURANCE
13.1 GENERAL INSURANCE REQUIREMENTS. During the Term of this Lease (except
that the coverages in Sections 13.1(a), and 13.1(c) and those relating to
professional liability referenced in Sections 13.1(g) and 13.1(h) below shall be
required from and after the Completion Date), Lessee shall at all times keep the
Leased Property and all property located in or on the Leased Property, including
Lessee's Personal Property, insured against loss or damage from such causes as
are customarily insured against, by prudent owners of similar facilities.
Without limiting the generality of the foregoing, Lessee shall obtain and
maintain in effect throughout the Lease Term, the kinds and amounts of insurance
deemed necessary by the Lessor and as described below. At Lessor's option,
Lessor may obtain such coverages and, in such event, shall be entitled to obtain
reimbursement from Lessee for the costs of such coverages. This insurance shall
be written by insurance companies (i) acceptable to the Lessor, (ii) that are
rated at least an "A-VIII" or better by Best's Insurance Guide and Key Ratings
and a claim payment rating by Standard & Poor's Corporation of A or better, and
(iii) authorized, licensed and qualified to do insurance business in the state
in which the Leased Property is located. The aggregate amount of coverage by a
single company must not exceed five percent (5%) of the insurance company's
policyholders' surplus. The policies must name Lessor (and any other entities as
Lessor may deem necessary) as an additional insured and losses shall be payable
to Lessor and/or Lessee as provided in Article XIV. Each insurance policy
required hereunder must (i) provide primary insurance without right of
contribution from any other insurance carried by Lessor, (ii) permit Lessor to
pay premiums at Lessor's discretion, and (iii) as respects any third party
liability claim brought against Lessor, obligate the insurer to defend Lessor as
an additional insured thereunder. In addition, the policies shall name as an
additional insured all Facility Lenders, if any, by way of a standard form of
mortgagee's loss payable endorsement. Any loss adjustment shall require the
written consent of Lessor and each affected Facility Lender. Evidence of
insurance and/or Impositions shall be deposited with Lessor and, if requested,
with any Facility Lender. If any provision of any Facility Instrument requires
deposits of insurance to be made with such Facility Lender, Lessee shall either
pay to Lessor monthly the amounts required and Lessor shall transfer such
amounts to such Facility Lender or, pursuant to written direction by Lessor,
Lessee shall make such deposits directly with such Facility Lender. The policies
on the Leased Property, including the Leased Improvements, the Fixtures and
Lessee's Personal Property, shall insure against the following risks:
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(a) All Risks or Special Form Property insurance against loss or
damage to the building and improvements, including but not limited to,
perils of fire, lightning, water, wind, theft, vandalism and malicious
mischief, plate glass breakage, and perils typically provided under an
Extended Coverage Endorsement and other forms of broadened risk perils, and
insured on a "replacement cost" value basis to the extent of the full
replacement value of the Leased Property. The policy shall include coverage
for subsidence. The deductible amount thereunder shall be borne by the
Lessee in the event of a loss and the deductible must not exceed Ten
Thousand and 00/100 Dollars ($10,000.00) per occurrence. Further, in the
event of a loss, Lessee shall abide by all provisions of the insurance
contract, including proper and timely notice of the loss to the insurer,
and Lessee further agrees that it will notify the Lessor of any loss in the
amount of Twenty-Five Thousand and 00/100 Dollars ($25,000.00) or greater
and that no claim at or in excess of Twenty-Five Thousand and 00/100
Dollars ($25,000.00) shall be settled without the prior written consent of
Lessor, which consent shall not be unreasonably withheld or delayed.
(b) Intentionally Deleted
(c) Insurance against loss of earnings in an amount sufficient to
cover not less than twelve (12) months' lost earnings and written in an
"all risks" form, either as an endorsement to the insurance required under
subparagraph 13.1(a) above, or under a separate policy.
(d) Worker's compensation insurance covering all employees in amounts
that are customary for the Lessee's industry.
(e) Commercial General Liability in a primary amount of at least One
Million and 00/100 Dollars ($1,000,000.00) per occurrence, bodily injury
for injury or death of any one person or property damage for damage to or
loss of property of others, subject to a Three Million and 00/100 Dollars
($3,000,000.00) annual aggregate policy limit for all bodily injury and
property damage claims, occurring on or about the Leased Property or in any
way related to the Leased Property, including but not limited to, any
swimming pools or other rehabilitation and recreational facilities or areas
that are located on the Leased Property otherwise related to the Leased
Property. Such policy shall include coverages of a Broad Form nature,
including, but not limited to, Explosion, Collapse and Underground (XCU),
Products Liability, Completed Operations, Broad Form Contractual Liability,
Broad Form Property Damage, Personal Injury, Incidental Malpractice
Liability, and Host Liquor Liability.
(f) Automobile and vehicle liability insurance coverage for all owned,
non-owned, leased or hired automobiles and vehicles in a primary limit
amount of One Million and 00/100 Dollars ($1,000,000.00) per occurrence for
bodily injury or per occurrence for property damage.
(g) Umbrella liability insurance in the minimum amount of Five Million
and 00/100 Dollars ($5,000,000.00) for each occurrence, subject to an
aggregate liability amount of Five Million and 00/100 Dollars
($5,000,000.00), with a Ten Thousand and 00/100 Dollars ($10,000.00)
self-insured retention for exposure not covered in underlying primary
policies. The umbrella liability policy shall name in its underlying
schedule the policies of professional liability (the coverages of which
shall be subject to subparagraph (h) below), commercial general liability,
garage keepers liability, automobile/vehicle liability and employer's
liability under the Worker's Compensation Policy.
(h) Subject to the feasibility of obtaining such coverages, with
respect to costs and availability, from carriers in the State of
Pennsylvania, Lessee shall use its best efforts to procure Professional
liability insurance for Lessee and any physician employed by Lessee or
other employee or agent of the Lessee providing services at the Leased
Property in an amount not less than Five Million and 00/100 Dollars
($5,000,000.00) per individual claim and Ten Million and 00/100 Dollars
($10,000,000.00) annual aggregate; it being understood and agreed that
until such coverages become feasible, if ever, Lessee
26
shall be required to maintain such coverages in limits of One Million and
00/100 Dollars ($1,000,000.00) per individual claim and Four Million and
00/100 Dollars ($4,000,000.00) annual aggregate.
(i) A commercial blanket bond covering all employees of the Lessee,
including its officers and the individual owners of the insured business
entity, whether a joint-venture, partnership, proprietorship or
incorporated entity, against loss as a result of their dishonesty. Policy
limit shall be in an amount of at least One Million and 00/100 Dollars
($1,000,000.00) subject to a deductible of no more than Ten Thousand and
00/100 Dollars ($10,000.00) per occurrence.
The term "Full Replacement Cost" as used herein, shall mean the actual
replacement cost thereof from time to time, including increased cost of
construction endorsement, less exclusions provided in the normal fire
insurance policy. In the event either Lessor or Lessee believes that the
Full Replacement Cost has increased or decreased at any time during the
Term, it shall have the right to have such Full Replacement Cost
re-determined by the fire insurance company which is then providing the
largest amount of fire insurance carried on the Leased Property,
hereinafter referred to as the "impartial appraiser". The party desiring to
have the Full Replacement Cost so re-determined shall forthwith, on receipt
of such determination by such impartial appraiser, give written notice
thereof to the other party hereto. The determination of such impartial
appraiser shall be final and binding on the parties hereto, and Lessee
shall forthwith increase, or may decrease, the amount of the insurance
carried pursuant to this Section 13.1, as the case may be, to the amount so
determined by the impartial appraiser. Lessee shall pay the fee, if any, of
the impartial appraiser.
13.2 ADDITIONAL INSURANCE. In addition to the insurance described above,
Lessee shall maintain at all times adequate worker's compensation insurance
coverage for all persons employed by Lessee on the Leased Property, in
accordance with the requirements of applicable local, state and federal law.
13.3 WAIVER OF SUBROGATION. All insurance policies to be obtained by Lessee
as required hereunder, including, without limitation, insurance policies
covering the Leased Property, the Fixtures, the Facility and/or Lessee's
Personal Property, including without limitation, contents, fire and casualty
insurance, shall, expressly waive any right of subrogation on the part of the
insurer against Lessor. Lessee shall obtain insurance policies which include
such a waiver clause or endorsement regardless of whether same is obtainable
without extra cost, and in the event of such an extra charge Lessee shall pay
the same, unless it is impossible for Lessee to obtain such clause or
endorsement from the insurance company approved by Lessor as provided in Section
13.1 hereof.
13.4 FORM OF INSURANCE. All of the policies of insurance referred to in
this Section 13.4 shall be written in form satisfactory to Lessor and by
insurance companies satisfactory to Lessor. Lessee shall pay all of the premiums
therefor, and shall deliver such original policies, or in the case of a blanket
policy, a copy of the original policy certified in writing by a duly authorized
agent for the insurance company as a "true and certified" copy of the policy to
the Lessor effective with the Commencement Date and furnished annually
thereafter (and, with respect to any renewal policy no later than the expiration
of the existing policy) and in the event of the failure of Lessee either to
obtain such insurance in the names herein called for or to pay the premiums
therefor, or to deliver such policies or certified copies of such policies (if
allowed hereunder) to Lessor at the times required, Lessor shall be entitled,
but shall have no obligation, to obtain such insurance and pay the premiums
therefor, which premiums shall be repayable to Lessor upon written demand
therefor, and failure to repay the same shall constitute an Event of Default
within the meaning of Section 16.1(c). Each insurer mentioned in this Section
13.4 shall agree, by endorsement on the policy or policies issued by it, or by
independent instrument furnished to Lessor, that it will give to Lessor sixty
(60) days' prior written notice (at Lessor's notice address as specified in this
Lease (the "Lessor's Notice Address")) before the policy or policies in question
shall be altered, allowed to expire or canceled. The parties hereto agree that
all insurance policies, endorsements and certificates which provide that the
insurer will "endeavor to" give notice before same may be altered, allowed to
expire or canceled will not be acceptable to Lessor. Notwithstanding anything
contained herein to the contrary, all policies of insurance required to be
obtained by the Lessee hereunder shall provide (i) that such policies will not
lapse, terminate, be canceled, or be amended or modified to reduce limits
27
or coverage terms unless and until Lessor has received not less than sixty (60)
days' prior written notice at the Lessor's Notice Address, with a simultaneous
copy to MPT Operating Partnership, L.P., Attention: Its President, 0000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, and (ii) that in the event
of cancellation due to non-payment of premium, the insurer will provide not less
than ten (10) days' prior written notice to the Lessor at the Lessor's Notice
Address, with a simultaneous copy to MPT Operating Partnership, L.P., Attention:
Its President, 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000.
13.5 INCREASE IN LIMITS. In the event that Lessor shall at any time deem
the limits of the personal injury, property damage or general public liability
insurance then carried to be insufficient, the parties shall endeavor to agree
on the proper and reasonable limits for such insurance to be carried and such
insurance shall thereafter be carried with the limits thus agreed on until
further change pursuant to the provisions of this Section 13.5. If the parties
shall be unable to agree thereon, the proper and reasonable limits for such
insurance to be carried shall be determined by an impartial third party selected
by the parties. Nothing herein shall permit the amount of insurance to be
reduced below the amount or amounts required by any of the Facility Instruments.
13.6 BLANKET POLICY. Notwithstanding anything to the contrary contained in
this Section 13.6, Lessee's obligations to carry the insurance provided for
herein may be brought within the coverage of a so-called blanket policy or
policies of insurance carried and maintained by Lessee provided that
(a) Any such blanket policy or policies are acceptable to and have
been approved by the Lessor;
(b) Any such blanket policy or policies shall not be changed, altered
or modified without the prior written consent of the Lessor; and
(c) Any such blanket policy or policies shall otherwise satisfy the
insurance requirements of this Article XIII (including the requirement of
thirty (30) days' written notice before the expiration or cancellation of
such policies as required by Section 13.4 hereof) and shall provide for
deductibles in amounts acceptable to Lessor.
13.7 NO SEPARATE INSURANCE. Lessee shall not, on Lessee's own initiative or
pursuant to the request or requirement of any third party, take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article to be furnished by, or which may reasonably be required
to be furnished by, Lessee, 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 in all cases Lessor and all Facility Lenders, are included therein as
additional insureds and the loss is payable under said insurance in the same
manner as losses are required to be payable under this Lease. Lessee shall
immediately notify Lessor of the taking out of any such separate insurance or of
the increasing of any of the amounts of the then existing insurance by securing
an additional policy or additional policies.
ARTICLE XIV
FIRE AND CASUALTY
14.1 INSURANCE PROCEEDS. All proceeds payable by reason of any loss or
damage to the Leased Property, or any portion thereof, and insured under any
policy of insurance required by Article XIII of this Lease shall be paid to
Lessor and held by Lessor in trust (subject to the provisions of Section 14.7)
and shall be made available for reconstruction or repair, as the case may be, of
any damage to or destruction of the Leased Property, or any portion thereof, and
shall be paid out by Lessor from time to time for the reasonable cost of such
reconstruction or repair. Any excess proceeds of insurance remaining after the
completion of the restoration or reconstruction of the Leased Property (or in
the event neither Lessor nor Lessee is required or elects to repair and restore,
all such insurance proceeds) shall be retained by Lessor free and clear upon
completion of any such repair and restoration
28
except as otherwise specifically provided below in this Article XIV. All salvage
resulting from any risk covered by insurance shall belong to Lessor except that
any salvage relating to Capital Additions paid for by Lessee or to Lessee's
Personal Property shall belong to Lessee.
14.2 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION COVERED BY
INSURANCE.
(a) Except as provided in Section 14.7, if during the Term the Leased
Property is totally or partially destroyed from a risk covered by the
insurance described in Article XIII and the Facility is thereby rendered
Unsuitable for its Use, Lessee shall have the option, by giving written
notice to Lessor within sixty (60) days following the date of such
destruction, to (i) restore the Facility to substantially the same
condition as existed immediately before the damage or destruction, or (ii)
so long as no Default or Event of Default then exists, and so long as no
such Default or Event of Default exists at the time of the closing of such
purchase, purchase the Leased Property from Lessor for a purchase price
equal to the Fair Market Value Purchase Price of the Leased Property
immediately prior to such damage or destruction, or (iii) so long as the
damage or destruction was not caused by the negligence of Lessee, its
agents, servants, employees or contractors, terminate this Lease and, in
this event, Lessor shall be entitled to retain the insurance proceeds, and
Lessee shall pay to Lessor on demand the amount of any deductible or
uninsured loss arising in connection therewith. In the event Lessee
purchases the Leased Property pursuant to this Section 14.2(a), the terms
set forth in Article XVIII shall apply and the sale/purchase must be closed
within ninety (90) days after the date of the written notice from Lessee to
Lessor of Lessee's intent to purchase, unless a different closing date is
agreed upon in writing by Lessor and Lessee.
(b) Except as provided in Section 14.7, if during the Term the Leased
Improvements and/or the Fixtures are totally or partially destroyed from a
risk covered by the insurance described in Article XIII, but the Facility
is not thereby rendered Unsuitable for its Primary Intended Use, Lessee
shall restore the Facility to substantially the same condition as existed
immediately before the damage or destruction. Such damage or destruction
shall not terminate this Lease; provided, however, if Lessee cannot within
a reasonable time obtain all necessary governmental approvals, including
building permits, licenses, conditional use permits and any certificates of
need, after good faith diligent efforts to do so, in order to be able to
perform all required repair and restoration work and to operate the
Facility for its Primary Intended Use in substantially the same manner as
immediately prior to such damage or destruction, so long as no Default or
Event of Default then exists and so long as no such Default or Event of
Default exists at the time of the closing of such purchase, Lessee shall
have the option, by giving written notice to Lessor within sixty (60) days
following the date of such damage or destruction, to purchase the Leased
Property for a purchase price equal to the Fair Market Value Purchase Price
of the Leased Property immediately prior to such damage or destruction. In
the event Lessee purchases the Leased Property pursuant to this Section
14.2(b), the terms set forth in Article XVIII shall apply and the
sale/purchase must be closed within ninety (90) days after the date of the
written notice from Lessee to Lessor of Lessee's intent to purchase, unless
a different closing date is agreed upon in writing by Lessor and Lessee.
(c) If the cost of the repair or restoration exceeds the amount of
proceeds received by Lessor from the insurance required under Article XIII,
Lessee shall be obligated to contribute any excess amount needed to restore
the Facility prior to use of the insurance proceeds. Such amount shall be
paid by Lessee to Lessor (or a Facility Lender if required) to be held in
trust together with any other insurance proceeds for application to the
cost of repair and restoration.
(d) In the event Lessee elects to purchase the Leased Property as
provided in this Section 14.1, and no Default or Event of Default exists at
the time of the closing of such purchase, this Lease shall terminate upon
payment of the purchase price and transfer of title to the Leased Property
to Lessee, and Lessor shall remit to Lessee all insurance proceeds being
held in trust by Lessor or the Facility Lender on or prior to the closing
of Lessee's purchase of the Leased Property.
29
14.3 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION NOT COVERED BY
INSURANCE. Except as provided in Section 14.7 below, if during the Term, the
Facility is totally or materially destroyed from a risk not covered by the
insurance described in Article XIII but that would have been covered if Lessee
carried the insurance required pursuant to the terms of this Lease, then whether
or not such damage or destruction renders the Facility Unsuitable for its Use,
Lessee shall, at Lessee's sole cost and expense, restore the Facility to
substantially the same condition it was in immediately before such damage or
destruction and such damage or destruction shall not terminate this Lease. If
such damage or destruction is not material, Lessee shall restore the Leased
Property at Lessee's expense.
14.4 LESSEE'S PERSONAL PROPERTY. Intentionally Omitted.
14.5 RESTORATION OF LESSEE'S PROPERTY. If Lessee is required or elects to
restore the Facility as provided in Section 14.2 or Section 14.3, Lessee shall
also restore all alterations and improvements made by Lessee, Lessee's Personal
Property and all Capital Additions paid for by Lessee.
14.6 NO ABATEMENT OF RENT. This Lease shall remain in full force and effect
and Lessee's obligation to make rental payments and to pay all other charges
required by this Lease shall remain unabated during any period required for
repair and restoration.
14.7 DAMAGE NEAR END OF TERM. Notwithstanding any provisions of Section
14.2 or Section 14.3 to the contrary, if damage to or destruction of the
Facility occurs during the last twenty-four (24) months of the Term, and if such
damage or destruction cannot be fully repaired and restored within six (6)
months immediately following the date of loss, either party shall have the right
to terminate this Lease by giving notice to the other within thirty (30) days
after the date of damage or destruction, in which event Lessor shall be entitled
to retain the insurance proceeds and Lessee shall pay to Lessor on demand the
amount of any deductible or uninsured loss arising in connection therewith;
provided, however, that any such notice given by Lessor shall be void and of no
force and effect if Lessee exercises an available option to extend the Term for
one Extended Term within thirty (30) days following receipt of such termination
notice.
14.8 TERMINATION OF RIGHT TO PURCHASE AND SUBSTITUTION. Any termination of
this Lease pursuant to this Article XIV shall cause any right to purchase
granted to Lessee under any other provisions of this Lease to be terminated and
to be without further force and effect.
14.9 WAIVER. Lessee hereby waives any statutory or common law rights of
termination which may arise by reason of any damage or destruction of the
Facility.
14.10 PURCHASE OPTION SUBORDINATE TO FACILITY INSTRUMENT. Notwithstanding
any provision set forth in this Article XIV to the contrary, Lessee's purchase
rights as set forth in this Article XIV are and shall be subject, subordinate
and inferior to any Facility Instrument. This provision shall be self-operative.
However, any Facility Lender may from time to time request that such
subordination be evidenced by a separate written agreement. Within ten (10) days
following written request by Lessor or any Facility Lender, the Lessee shall
execute and deliver to Lessor or such Facility Lender a written agreement in
form and substance satisfactory to such Facility Lender and any applicable
rating agency. In the event Lessee fails or refuses to execute and deliver such
written agreement within such ten (10) day period, then, in addition to all
other remedies available at law or in equity, the Lessor shall be entitled to
terminate Lessee's purchase rights under this Article XIV upon delivery of five
(5) days' written notice to Lessee. In the event Lessee has not executed and
delivered to such Facility Lender and any applicable rating agency, if any, the
written agreement requested within such five (5) day period, then in such event,
Lessee's purchase rights under this Article XIV shall be deemed forfeited and of
no further force or effect.
30
ARTICLE XV
CONDEMNATION
15.1 DEFINITIONS.
(a) "Condemnation" means (i) the exercise of any governmental power,
whether by legal proceedings or otherwise, by a Condemnor or (ii) a
voluntary sale or transfer by Lessor to any Condemnor, either under threat
of Condemnation or while legal proceedings for Condemnation are pending.
(b) "Date of Taking" means the date the Condemnor has the right to
possession of the property being condemned.
(c) "Award" means all compensation, sums or anything of value awarded,
paid or received on a total or partial Condemnation.
(d) "Condemnor" means any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation.
15.2 PARTIES' RIGHTS AND OBLIGATIONS. If during the Term there is any
Taking of all or any part of the Leased Property or any interest in this Lease
by Condemnation, the rights and obligations of the parties shall be determined
by this Article XV.
15.3 TOTAL TAKING. If there is a Taking of all of the Leased Property by
Condemnation, this Lease shall terminate on the Date of Taking.
15.4 PARTIAL TAKING. If there is a Taking of a portion of the Leased
Property by Condemnation, this Lease shall remain in effect if the Facility is
not thereby rendered Unsuitable for its Primary Intended Use. If, however, the
Facility is thereby rendered Unsuitable for its Primary Intended Use, Lessee
shall have the option (a) to restore the Facility, at its own expense, to the
extent possible, to substantially the same condition as existed immediately
before the partial Taking, or (b) so long as no Default or Event of Default then
exists and so long as no such Default or Event of Default exists at the time of
the closing of such purchase, to acquire the Leased Property from Lessor for a
purchase price equal to the Fair Market Value Purchase Price of the Leased
Property immediately prior to such partial Taking, in which event this Lease
shall terminate upon payment of the purchase price. Lessee shall exercise its
option by giving Lessor notice thereof within sixty (60) days after Lessee
receives notice of the Taking. In the event Lessee exercises the option to
purchase the Leased Property pursuant to this Section 15.4, the terms set forth
in Article XVIII shall apply and the sale/purchase must be closed within thirty
(30) days after the date of the written notice from Lessee to Lessor of Lessee's
intent to purchase, unless a different closing date is agreed upon in writing by
Lessor and Lessee.
15.5 RESTORATION. If there is a partial Taking of the Leased Property and
this Lease remains in full force and effect pursuant to Section 15.4, Lessee
shall accomplish all necessary restoration.
15.6 AWARD DISTRIBUTION. In the event Lessee exercises the purchase option
as described in clause (b) of Section 15.4, the entire Award shall belong to
Lessee provided no Default or Event of Default then exists and so long as no
such Default or Event of Default exists at the time of the closing of such
purchase, and Lessor agrees to assign to Lessee all of its rights thereto. In
any other event, the entire Award shall belong to and be paid to Lessor, except
that, if this Lease is terminated, and subject to the rights of the Facility
Lender, Lessee shall be entitled to receive from the Award, if and to the extent
such Award specifically includes such items, the following:
31
(a) A sum attributable to the Capital Additions for which Lessee would
be entitled to reimbursement at the end of the Term pursuant to the
provisions of Section 10.2(c) and the value, if any, of the leasehold
interest of Lessee under this Lease; and
(b) A sum attributable to Lessee's Personal Property and any
reasonable removal and relocation costs included in the Award.
If Lessee is required or elects to restore the Facility, Lessor agrees that,
subject to the rights of the Facility Lenders, its portion of the Award shall be
used for such restoration and it shall hold such portion of the Award in trust,
for application to the cost of the restoration.
15.7 TEMPORARY TAKING. The Taking of the Leased Property, or any part
thereof, by military or other public authority shall constitute a Taking by
Condemnation only when the use and occupancy by the Taking authority has
continued for longer than six (6) months. During any such six (6) month period
all the provisions of this Lease shall remain in full force and effect and the
Base Rent shall not be abated or reduced during such period of Taking.
15.8 PURCHASE OPTION SUBORDINATE TO FACILITY INSTRUMENT. Notwithstanding
any provision set forth in this Article XV to the contrary, Lessee's purchase
rights as set forth in this Article XV, are and shall be subject, subordinate
and inferior to any Facility Instrument. This provision shall be self-operative.
However, any Facility Lender may from time to time request that such
subordination be evidenced by a separate written agreement. Within ten (10) days
following written request by Lessor or any Facility Lender, the Lessee shall
execute and deliver to Lessor or such Facility Lender a written agreement, in
form and substance satisfactory to such Facility Lender and any applicable
rating agency. In the event Lessee fails or refuses to execute and deliver such
written agreement within such ten (10) day period, then, in addition to all
other remedies available at law or in equity, the Lessor shall be entitled to
terminate Lessee's purchase rights under this Article XV upon delivery of five
(5) days' written notice to Lessee. In the event Lessee has not executed and
delivered to Lessor or such Facility Lender and any applicable rating agency, if
any, the written agreement requested within such five (5) day period, then in
such event, Lessee's purchase rights under this Article XV shall be deemed
forfeited and of no further force or effect.
ARTICLE XVI
DEFAULT
16.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following
events (individually, an "Event of Default") shall constitute Events of Default
hereunder:
(a) a default or event of default by Lessee shall occur under any of
the Other Leases that is not cured within the applicable cure period as
provided therein, or
(b) if Lessee shall fail to make a payment of the Rent or any other
monetary payment due and payable by Lessee under this Lease within seven
(7) days from the date same becomes due and payable, or
(c) if Lessee shall fail to observe or perform any other term,
covenant or condition of this Lease and such failure is not cured by Lessee
within a period of thirty (30) days after receipt by Lessee of written
notice thereof from Lessor unless such failure cannot with due diligence be
cured within a period of thirty (30) days, in which case such failure shall
not be deemed to continue if Lessee proceeds promptly and with due
diligence to cure the failure and diligently completes the curing thereof
within sixty (60) days after receipt by Lessee of Lessor's notice of
default provided, however, that such extended cure period may be extended
upon Lessee's request for additional sixty (60) day periods if Lessee
provides evidence that is diligently pursuing the curing of such failure,
or
32
(d) if Lessee shall:
(i) admit in writing its inability to pay its debts generally as
they become due,
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act,
(iii) make an assignment for the benefit of its creditors,
(iv) consent to the appointment of a receiver of itself or of the
whole or any substantial part of its property, or
(v) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any other applicable
law or statute of the United States of America or any state thereof,
or
(e) if Lessee's license as defined in Article XXXIX or participation
or certification in Medicare, Medicaid or other governmental payor programs
is terminated, or
(f) if Lessee admits in writing that it cannot meet its obligations as
they become due; or is declared insolvent according to any law; or
assignment of Lessee's property is made for the benefit of creditors; or a
receiver or trustee is appointed for Lessee or its property; or the
interest of Lessee under this Lease is levied on under execution or other
legal process; or any petition is filed by or against Lessee to declare
Lessee bankrupt or to delay, reduce or modify Lessee's capital structure if
Lessee be a corporation or other entity (provided that no such levy,
execution, legal process or petition filed against Lessee shall constitute
a breach of this Lease if Lessee shall vigorously contest the same by
appropriate proceedings and shall remove or vacate the same within thirty
(30) days from the date of its creation, service or filing); or the real or
personal property of Lessee shall be sold or levied upon by any sheriff,
xxxxxxxx or constable, or
(g) if Lessee abandons or vacates the Leased Property (Lessee's
absence from the Leased Property for thirty (30) consecutive days shall
constitute abandonment), or Lessee fails to continuously operate the
Facility in accordance with the terms of this Lease, or
(h) if the Lessee shall, after a petition in bankruptcy is filed
against it, be adjudicated a bankrupt or if a court of competent
jurisdiction shall enter an order or decree appointing, without the consent
of Lessee, a receiver of Lessee or of the whole or substantially all of its
property, or approving a petition filed against it seeking reorganization
or arrangement of Lessee under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
thereof, and such judgment, order or decree shall not be vacated or set
aside or stayed within ninety (90) days from the date of the entry thereof,
or
(i) if Lessee shall be liquidated or dissolved, or shall begin
proceedings toward such liquidation or dissolution, or shall, in any
manner, permit the sale or divestiture of substantially all of its assets
other than in connection with a merger or consolidation of Lessee into, or
a sale of substantially all of Lessee's assets to, another corporation,
provided that if the survivor of such merger or the purchaser of such
assets shall assume all of Lessee's obligations under this Lease by a
written instrument, in form and substance reasonably satisfactory to
Lessor, accompanied by an opinion of counsel, reasonably satisfactory to
Lessor and addressed to Lessor stating that such instrument of assumption
is valid, binding and enforceable against the parties thereto in accordance
with its terms (subject to usual bankruptcy and other creditors' rights
exceptions), and provided, further, that if, immediately after giving
effect to any such merger, consolidation or sale, Lessee or such other
corporation (if not the Lessee) surviving the same, shall have a
Consolidated Net Worth not less than the Consolidated Net Worth of Lessee
immediately prior to
33
such merger, consolidation or sale, all as to be set forth in an Officer's
Certificate delivered to Lessor within thirty (30) days of such merger,
consolidation or sale, an Event of Default shall not be deemed to have
occurred, or
(j) if the estate or interest of Lessee in the Leased Property or any
part thereof shall be levied upon or attached in any proceeding and the
same shall not be vacated or discharged within the later of ninety (90)
days after commencement thereof or thirty (30) days after receipt by Lessee
of written notice thereof from Lessor (unless Lessee shall be contesting
such lien or attachment in good faith in accordance with Article XII
hereof), or
(k) if, except as a result of damage, destruction or a partial or
complete Condemnation, Lessee voluntarily ceases operations on the Leased
Property for a period in excess of ninety (90) days, or
(l) a default or event of default shall occur under the Funding
Agreement, Development Agreement, Promissory Note, Lease Guaranty, Lease
Assignment, Purchase Agreement, Assignment of Rents and Leases, Security
Agreement or any other agreement between Lessor or any Affiliate of Lessor,
on the one hand, and Lessee or any Affiliate of Lessee, on the other hand,
which is not cured within the cure period as provided therein, or
(m) if Lessee defaults under the Tenant Leases or fails or refuses to
enforce the terms and conditions of the Tenant Leases.
If an Event of Default shall have occurred, Lessor shall have the right at its
election, then or at any time thereafter, to pursue any one or more of the
following remedies, in addition to any remedies which may be permitted by law or
by other provisions of this Lease, without notice or demand, except as
hereinafter provided:
A. Lessor may enter upon and take possession of such Leased Property in
order to protect it from deterioration and continue to demand from Lessee the
monthly rentals and other charges provided in this Lease, without any obligation
to relet (unless otherwise required by Applicable Law); but that if Lessor does,
at its sole discretion, elect to relet the Leased Property, such action by
Lessor shall not be deemed as an acceptance of Lessee's surrender of the Leased
Property unless Lessor expressly notifies Lessee of such acceptance in writing
pursuant to subsection B of this Section 16.1, Lessee hereby acknowledging that
Lessor shall otherwise be reletting as Lessee's agent and Lessee furthermore
hereby agreeing to pay to Lessor on demand any deficiency that may arise between
the monthly rentals and other charges provided in this Lease and that are
actually collected by Lessor. It is further agreed in this regard that in the
event of an Event of Default, Lessor shall have the right to enter upon the
Leased Property by force, if necessary, without being liable for prosecution or
any claim for damages therefor, and do whatever Lessee is obligated to do under
the terms of this Lease; and Lessee agrees to reimburse Lessor on demand for any
expenses which Lessor may incur in thus effecting compliance with Lessee's
obligations under this Lease, and Lessee further agrees that Lessor shall not be
liable for any damages resulting to the Lessee from such action.
X. Xxxxxx may terminate this Lease by written notice to Lessee, in which
event Lessee shall immediately surrender the Leased Property to Lessor, and if
Lessee fails to do so, Lessor may, without prejudice to any other remedy which
Lessor may have for possession or arrearages in rent (including any interest
which may have accrued pursuant to Section 3.4 of this Lease), enter upon and
take possession of the Leased Property and expel or remove Lessee and any other
person who may be occupying said premises or any part thereof, by force, if
necessary, without being liable of prosecution or any claim for damages
therefor. Lessee hereby waives any statutory requirement of prior written notice
for filing eviction or damage suits for nonpayment of rent. In addition, Lessee
agrees to pay to Lessor on demand the amount of all loss and damage which Lessor
may suffer by reason of any termination effected pursuant to this subsection B,
said loss and damage to be determined, at Lessor's option, by either of the
following alternative measures of damages:
34
(i) Until Lessor is able to relet the Leased Property (provided
that Lessor shall be obligated to diligently attempt to relet the
Leased Property, whether or not required pursuant to Applicable Law),
Lessee shall pay to Lessor on or before the first day of each calendar
month, the monthly rentals and other charges provided in this Lease.
After the Leased Property has been relet by Lessor, Lessee shall pay
to Lessor on the 10th day of each calendar month the difference
between the monthly rentals and other charges provided in this Lease
for the preceding calendar month and that actually collected by Lessor
for such month. If it is necessary for Lessor to bring suit in order
to collect any deficiency, Lessor shall have a right to allow such
deficiencies to accumulate and to bring an action on several or all of
the accrued deficiencies at one time. Any such suit shall not
prejudice in any way the right of Lessor to bring a similar action for
any subsequent deficiency or deficiencies. Any amount collected by
Lessor from subsequent tenants for any calendar month, in excess of
the monthly rentals and other charges provided in this Lease, shall be
credited to Lessee in reduction of Lessee's liability for any calendar
month for which the amount collected by Lessor will be less than the
monthly rentals and other charges provided in this Lease; but Lessee
shall have no right to such excess other than the above-described
credit.
(ii) When Lessor desires, Lessor may demand a final settlement.
Upon demand for a final settlement, Lessor shall have a right to, and
Lessee hereby agrees to pay, the difference between the total of all
monthly rentals and other charges provided in this Lease for the
remainder of the Lease Term and the fair market rental value of the
Leased Property for such period, such difference to be discounted to
present value at a rate equal to the lowest rate of capitalization
(highest present worth) reasonably applicable at the time of such
determination and allowed by applicable law. If Lessor elects to
exercise the remedy prescribed in subsection A above, this election
shall in no way prejudice Lessor's right at any time thereafter to
cancel said election in favor of the remedy prescribed in subsection B
above. Similarly, if Lessor elects to compute damages in the manner
prescribed by subsection B(i) above, this election shall in no way
prejudice Lessor's right at any time thereafter to demand a final
settlement in accordance with this subsection B(ii) above. Pursuit of
any of the above remedies shall not preclude pursuit of any other
remedies prescribed in other sections of this Lease and any other
remedies provided by law or equity. Forbearance by Lessor to enforce
one or more of the remedies herein provided upon an Event of Default
shall not be deemed or construed to constitute a waiver of such Event
of Default.
C. In addition to other rights and remedies Lessor may have hereunder and
at law and in equity, if an Event of Default occurs under this Lease, (i) Lessee
is deemed to have assigned to Lessor, at Lessor's sole option, all service
agreements (including, without limitation, all medical director agreements), and
(ii) to the extent permitted by law, Lessee is deemed, at Lessor's sole
discretion, to have transferred and assigned to Lessor all Licenses and
agreements, including, without limitation, all Medicare and Medicaid provider
numbers. In the event there are legal limitations on any of the foregoing
remedies, Lessee further hereby covenants and agrees that it will take all
actions necessary to orderly transfer the operations and occupancy of the Leased
Property to the Lessor, including cooperating with respect to the transfer to
Lessor or its nominee or designee of all Licenses, provider numbers and other
agreements.
D. Without entry onto the Leased Property, or any other action, Lessor may
declare due and payable, the Rent for the remaining Term of this Lease,
including all Additional Charges related or necessary to operate the Leased
Property and the Facility for the Primary Intended Use, including without
limitation, the five percent (5%) chargeable by Act of Assembly to the Lessor,
together with any Rents, charges, expenses or costs already in arrears. If this
Lease or any part hereof is assigned, or if the Leased Property, or any part
thereof is relet, Lessee hereby irrevocably constitutes and appoints Lessor as
Lessee's agent to collect the rents due by such assignee or sub-lessee and apply
the same to the Rent due hereunder without in any way affecting Lessee's
obligation to pay any unpaid balance of Rent due hereunder.
35
E. Without entry onto the Leased Property or any other action by Lessor,
this Lease and the Term hereby created shall terminate and become absolutely
void without any right on the part of the Lessee to save the forfeiture by
payment of any sum due or by other performance of any condition, term or
covenant broken; whereupon, Lessor shall be entitled to recover damages for such
breach in an amount equal to the amount of Rent reserved for the balance of the
Term of this Lease, less the fair rental value of the Leased Property, for the
residue of said Term.
X. Xxxxxx, or anyone acting on Lessor's behalf, may without notice or
demand to Lessee, enter the Leased Property, by force, if necessary, without
liability to action for prosecution or damages for such entry or for the manner
thereof, to distrain, levy, take possession of and sell all goods and chattels
at auction, and pay all sums owing to Lessor out of the proceeds, including
without limitation, the Rents and Additional Charges related or necessary to
operate the Leased Property and the Facility for the Primary Intended Use, as
well as a sum equal to five percent (5%) of the amount of the levy as
commissions to the constable or other person making the levy. Lessee hereby
releases and discharges the Lessor and its agents from all claims, actions,
suits, damages and penalties for or by reason of any entry, distraint, levy,
appraisement or sale. Lessee expressly waives in favor of Lessor the benefit of
all laws now made or which may hereafter be made limiting goods or chattels upon
which, or the time within which, distress is to be made after removal of such
goods and chattels, and further relieves the Lessor of the obligations of
proving or identifying such goods and chattels, it being the purpose and intent
of this provision that all goods and chattels of Lessee, whether upon the Leased
Property or not, shall be liable to distress for Rent under this Lease. Lessee
further waives in favor of Lessor, all rights under the Act of Assembly of April
6, 1951, P.L. 69, and all supplements and amendments thereto that have been or
may hereafter be passed, and authorizes the sale of any goods and chattels
distrained for Rent at any time after five (5) days from said distraint without
any appraisement or condemnation thereof.
G. Upon an Event of Default, Lessee hereby empowers any Prothonotary, Clerk
of Court or attorney of any Court of Record to appear for Lessee in any and all
actions which may be brought for Rent and/or the charges, payments, costs and
expenses reserved as rent, or agreed to be paid by the Lessee and/or to sign for
Lessee an agreement for entering in any competent court an amicable action or
actions for the recovery of rent or other charges, payments, costs and expenses,
and in said suits or in said amicable action or actions to confess judgment
against Lessee for all or any part of the rent specified in this Lease and then
unpaid including, at Lessor's option, the rent for the entire unexpired balance
of the Term of this Lease, and/or other charges, payments, costs and expenses
reserved as rent or agreed to be paid by the Lessee, and for interest and costs
together with any attorneys' commissions of five percent (5%). Such authority
shall not be exhausted by one exercise thereof, but judgment may be confessed as
aforesaid from time to time as often as any of said rent and/or other charges,
payments, costs and expenses, reserved as rent shall fall due or be in arrears,
and such powers may be exercised as well after the expiration of the Fixed Term
and/or during any Extension Term of this Lease.
H. Upon an Event of Default, either during the Fixed Term or any Extension
Term, it shall be lawful for any attorney as attorney for Lessee to file an
agreement for entering in any competent court an amicable action and judgment in
ejectment against Lessee and all persons claiming under Lessee for the recovery
by Lessor of the possession of the Leased Property, for which this Lease shall
be his sufficient warrant, whereupon, if Lessor so desires, a writ of Execution
or of Possession may issue forthwith, without any prior writ or proceedings
whatsoever, and provided that if for any reason after such action shall have
been commenced the same shall be determined and the possession of the Leased
Property remain in or be restored to Lessee, Lessor shall have the right upon
any subsequent Event of Default, or upon the termination of this Lease as
hereinbefore set forth, to bring one or more amicable action or actions as
hereinbefore set forth to recover possession of the Leased Property.
I. In any amicable action of ejectment and/or for rent in arrears, Lessor
shall first cause to be filed in such action an affidavit made by Lessor or
someone acting for Lessor setting forth the facts necessary to authorize the
entry of judgment, of which facts such affidavit shall be conclusive evidence
and if a true copy of this Lease (and of the truth of the copy such affidavit
shall be sufficient evidence) be filed in such action, it shall not be necessary
to file the original as a warrant of attorney, any rule of Court, custom or
practice to the contrary notwithstanding.
36
J. Lessee waives the right to issue a Writ of Replevin under the
Pennsylvania Rules of Civil Procedure, No. 1071 &c. and Laws of the Commonwealth
of Pennsylvania, or under any other law previously enacted and now in force, or
which may be hereafter enacted, for the recovery of any articles, household
goods, furniture, etc., seized under a distress for rent or levy upon an
execution for rent, damages or otherwise. All waivers hereinbefore mentioned are
hereby extended to apply to any such action.
16.2 EVENTS OF DEFAULT IN FINANCIAL COVENANTS.
(a) The occurrence of any one or more of the following shall constitute a
default and breach of this Section 16.2(a) and the Lessor shall have the rights
and remedies provided for herein:
(i) Based on the trailing twelve (12) month results tested at the end
of each calendar quarter during the periods set forth below (except that with
respect to Year 2, the tests will be based upon the year to date results of Year
2 only), if EBITDAR shall be less than the amount calculated during the
applicable testing period as provided below:
Testing Periods: Calculation:
---------------- ------------
Year 1: 1-12 months, beginning with the first Deferred
calendar quarter after the Completion Date
Year 2: 13-24 months after the first calendar quarter 1.50 times Lease Payments
after the Completion Date
Year 3: 25-36 months after the first calendar quarter 1.75 times Lease Payments
after the Completion Date
Year 4: 37-180 months after the first calendar quarter 2.00 times Lease Payments
after the Completion Date
(and thereafter)
(ii) Based on the trailing twelve (12) month results tested at the end
of each calendar quarter during the periods set forth below (except that with
respect to Year 2, the tests will be based upon the year to date results of Year
2 only), if EBITDAR shall be less than the amount calculated during the
applicable testing period as provided below:
Testing Periods: Calculation:
--------------- ------------
Year 1: 1-12 months, beginning with the first Deferred
calendar quarter after the Completion Date
Year 2: 13-24 months after the first calendar quarter 1.00 times Fixed Charges
after the Completion Date
Year 3: 25-36 months after the first calendar quarter 1.25 times Fixed Charges
after the Completion Date
Year 4: 37-180 months after the first calendar quarter 1.50 times Fixed Charges
after the Completion Date
(and thereafter)
Upon the occurrence of any of the items set forth in Section 16.1 or in
this Section 16.2(a), Lessor may, at its option, upon five (5) days' written
notice to Lessee (any such notice requiring such termination being herein
37
referred to as the "Removal Notice"), require Lessee to terminate the engagement
of any Management Company managing the Facility and replace such Management
Company with a manager chosen by Lessor (or, if there is no Management Company
managing the Facility at that time, Lessor may require the Lessee to engage a
Management Company acceptable to Lessor and enter into a contract with such
Management Company upon terms and conditions acceptable to Lessor).
(b) The occurrence of any one or more of the following shall constitute a
default and breach of this Section 16.2(b) and the Lessor shall have the rights
and remedies provided for herein:
(i) Based on the trailing twelve (12) month results tested at the end
of each calendar quarter during the periods set forth below (except that with
respect to Year 2, the tests will be based upon the year to date results of Year
2 only), if EBITDAR shall be less than the amount calculated during the
applicable testing period as provided below:
Testing Periods: Calculation:
---------------- ------------
Year 1: 1-12 months, beginning with the first Deferred
calendar quarter after the Completion Date
Year 2: 13-24 months after the first calendar quarter 1.20 times Lease Payments
after the Completion Date
Year 3: 25-36 months after the first calendar quarter 1.35 times Lease Payments
after the Completion Date
Year 4: 37-180 months after the first calendar quarter 1.50 times Lease Payments
after the Completion Date
(and thereafter)
(ii) Based on the trailing twelve (12) month results tested at the end
of each calendar quarter during the periods set forth below (except that with
respect to Year 2, the tests will be based upon the year to date results of Year
2 only), if EBITDAR shall be less than the amount calculated during the
applicable testing period as provided below:
Testing Periods: Calculation:
---------------- ------------
Year 1-2: 1-24 months, beginning with the first Deferred
calendar quarter after the Completion Date
Year 3: 25-36 months after the first calendar quarter 1.20 times Fixed charges
after the Completion Date
Year 4: 37-180 months after the first calendar quarter 1.35 times Fixed Charges
after the Completion Date
(and thereafter)
Upon the occurrence of any of the items set forth in Section 16.1 or in
this Section 16.2(b), Lessor may, at its option, upon delivery of the Removal
Notice, require Lessee to terminate the engagement of the Management Company
managing the Facility and replace such Management Company with manager chosen by
Lessor (or, if there is no Management Company managing the Facility at that
time, Lessor may require the Lessee to engage a Management Company acceptable to
Lessor and enter into a contract with such Management Company upon terms and
conditions acceptable to Lessor), and Lessor may, at its option, proceed with
all other remedies Lessor deems
38
necessary, including, without limitation, terminating this Lease and pursuing
all other provided for herein as well as any other customary remedies available
at law or in equity.
16.3 ADDITIONAL EXPENSES. It is further agreed that, in addition to
payments required pursuant to subsections A and B of Section 16.1 above, Lessee
shall compensate Lessor for (i) all administrative expenses, (ii) all expenses
incurred by Lessor in repossessing the Leased Property (including among other
expenses, any increase in insurance premiums caused by the vacancy of the Leased
Property), (iii) all expenses incurred by Lessor in reletting (including among
other expenses, repairs, remodeling, replacements, advertisements and brokerage
fees), (iv) all concessions granted to a new tenant or tenants upon reletting
(including among other concessions, renewal options), (v) Lessor's reasonable
attorneys' fees and expenses, (vi) all losses incurred by Lessor as a direct or
indirect result of Lessee's Default or an Event of Default (including among
other losses any adverse action by mortgagees), and (vii) a reasonable allowance
for Lessor's administrative efforts, salaries and overhead attributable directly
or indirectly to Lessee's Default or an Event of Default and Lessor's pursuing
the rights and remedies provided herein and under applicable law.
16.4 WAIVER. If this Lease is terminated pursuant to Section 16.1 or 16.2,
Lessee waives, to the extent permitted by applicable law, (a) any right of
redemption, re-entry or repossession, (b) any right to a trial by jury in the
event of summary proceedings to enforce the remedies set forth in this Article
XVI, and (c) the benefit of any laws now or hereafter in force exempting
property from liability for rent or for debt.
16.5 APPLICATION OF FUNDS. Any payments otherwise payable to Lessee which
are received by Lessor under any of the provisions of this Lease during the
existence or continuance of any Event of Default shall be applied to Lessee's
obligations in the order which Lessor may reasonably determine or as may be
prescribed by the laws of the state in which the Facility is located.
16.6 NOTICES BY LESSOR. The provisions of this Article XVI concerning
notices shall be liberally construed insofar as the contents of such notices are
concerned, and any such notice shall be sufficient if reasonably designed to
apprise Lessee of the nature and approximate extent of any default, it being
agreed that Lessee is in good or better position than Lessor to ascertain the
exact extent of any default by Lessee hereunder.
16.7 LESSOR'S CONTRACTUAL SECURITY INTEREST. Subject to the Prior Lien of
Lessee's Primary Lender (as such terms are defined herein), to secure the
payment of all Rent due and to become due hereunder and the faithful performance
of this Lease and to secure all other obligations, indebtedness and liabilities
of Lessee to Lessor, now existing or hereafter incurred, and all Obligations (as
defined in the Security Agreement), Lessee has executed and delivered to Lessor
the Security Agreement.
ARTICLE XVII
LESSOR'S RIGHT TO CURE
If Lessee shall fail to make any payment, or to perform any act required to
be made or performed under this Lease and to cure the same within the relevant
time periods provided in Section 16.1, Lessor, without waiving or releasing any
obligation or Event of Default, may (but shall be under no obligation to) at any
time thereafter make such payment or perform such act for the account and at the
expense of Lessee, and may, to the extent permitted by law, enter upon the
Leased Property for such purpose and take all such action thereon as, in
Lessor's opinion, may be necessary or appropriate therefor. No such entry shall
be deemed an eviction of Lessee. All sums so paid by Lessor and all costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses, in each case, to the extent permitted by law) so incurred, together
with a late charge thereon (to the extent permitted by law) at the Overdue Rate
from the date on which such sums or expenses are paid or incurred by Lessor,
shall be paid by
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Lessee to Lessor on demand. The obligations of Lessee and rights of Lessor
contained in this Article shall survive the expiration or earlier termination of
this Lease.
ARTICLE XVIII
PURCHASE OF THE LEASED PROPERTY
In the event Lessee purchases the Leased Property from Lessor pursuant to
any of the terms of this Lease, including, without limitation Article XXXIV,
Lessor shall, upon receipt from Lessee of the applicable purchase price,
together with full payment of any unpaid Rent due and payable with respect to
any period ending on or before the date of the purchase, deliver to Lessee an
appropriate special warranty deed or other instrument of conveyance conveying
the entire interest of Lessor in and to the Leased Property to Lessee in the
condition as received from Lessee, free and clear of all encumbrances other than
(a) those that Lessee has agreed hereunder to pay or discharge, (b) those
mortgage liens, if any, which Lessee has agreed in writing to accept and to take
title subject to, (c) any other Encumbrances permitted to be imposed on the
Leased Property under the provisions of Article XXXVII which are assumable at no
cost to Lessee or to which Lessee may take subject without cost to Lessee, and
(d) any matters affecting the Leased Property on or as of the Commencement Date.
The difference between the applicable purchase price and the total of the
encumbrances assigned or taken subject to shall be paid in cash to Lessor, or as
Lessor may direct, in federal or other immediately available funds except as
otherwise mutually agreed by Lessor and Lessee. The closing of any such sale
shall be contingent upon and subject to Lessee obtaining all required
governmental consents and approvals for such transfer (so long as Lessee
immediately applies for, seeks in good faith and, diligently pursues to obtain,
such consents and approvals) and if such sale shall fail to be consummated by
reason of the inability of Lessee to obtain all such approvals and consents
prior to the closing date, any options to extend the Term of this Lease which
otherwise would have expired during the period from the date when Lessee elected
or became obligated to purchase the Leased Property until Lessee's inability to
obtain the approvals and consents is confirmed shall be deemed to remain in
effect for thirty (30) days after the end of such period. All expenses of such
conveyance, including, without limitation, the cost of title examination or
standard coverage title insurance, survey, attorneys' fees incurred by Lessor in
connection with such conveyance, transfer taxes, recording fees and similar
charges shall be paid for by Lessee.
ARTICLE XIX
HOLDING OVER
If Lessee shall for any reason remain in possession of the Leased Property
after the expiration of the Term or any earlier termination of the Term hereof,
such possession shall be as a tenancy at will during which time Lessee shall pay
as rental each month, one and one-half times the aggregate of (a) one-twelfth of
the aggregate Base Rent payable with respect to the last complete Lease Year
prior to the expiration of the Term; (b) all Additional Charges accruing during
the month and (c) all other sums, if any, payable by Lessee pursuant to the
provisions of this Lease with respect to the Leased Property. During such period
of tenancy, Lessee shall be obligated to perform and observe all of the terms,
covenants and conditions of this Lease, but shall have no rights hereunder other
than the right, to the extent given by law to tenancies at will, to continue its
occupancy and use of the Leased Property. Nothing contained herein shall
constitute the consent, express or implied, of Lessor to the holding over of
Lessee after the expiration or earlier termination of this Lease.
ARTICLE XX
INTENTIONALLY OMITTED
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ARTICLE XXI
RISK OF LOSS
During the Term of this Lease, the risk of loss or of decrease in the
enjoyment and beneficial use of the Leased Property in consequence of the damage
or destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise, or in consequence of foreclosures, attachments, levies or executions
(other than by Lessor and those claiming from, through or under Lessor) is
assumed by Lessee and, Lessor shall in no event be answerable or accountable
therefor nor shall any of the events mentioned in this Article XXI entitle
Lessee to any abatement of Rent except as specifically provided in this Lease.
ARTICLE XXII
INDEMNIFICATION
NOTWITHSTANDING THE EXISTENCE OF ANY INSURANCE OR SELF INSURANCE PROVIDED
FOR IN ARTICLE XIII, AND WITHOUT REGARD TO THE POLICY LIMITS OF ANY SUCH
INSURANCE OR SELF INSURANCE, LESSEE WILL PROTECT, INDEMNIFY, SAVE HARMLESS AND
DEFEND LESSOR FROM AND AGAINST ALL LIABILITIES, OBLIGATIONS, CLAIMS, DAMAGES,
PENALTIES, CAUSES OF ACTION, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS' FEES AND EXPENSES AND EXPERT WITNESS FEES), TO THE EXTENT
PERMITTED BY LAW, IMPOSED UPON OR INCURRED BY OR ASSERTED AGAINST LESSOR BY
REASON OF: (A) ANY ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OF PERSONAL
PROPERTY OCCURRING ON OR ABOUT THE LEASED PROPERTY OR ADJOINING SIDEWALKS,
INCLUDING WITHOUT LIMITATION ANY CLAIMS OF MALPRACTICE, (B) ANY USE, MISUSE, NO
USE, CONDITION, MAINTENANCE OR REPAIR BY LESSEE OF THE LEASED PROPERTY, (C) ANY
IMPOSITIONS (WHICH ARE THE OBLIGATIONS OF LESSEE TO PAY PURSUANT TO APPLICABLE
PROVISIONS OF THIS LEASE), (D) ANY FAILURE ON THE PART OF LESSEE TO PERFORM OR
COMPLY WITH ANY OF THE TERMS OF THIS LEASE, AND (E) THE NON-PERFORMANCE OF ANY
OF THE TERMS AND PROVISIONS OF ANY AND ALL EXISTING AND FUTURE SUBLEASES OF THE
LEASED PROPERTY TO BE PERFORMED BY THE LANDLORD (LESSEE) THEREUNDER. ANY AMOUNTS
WHICH BECOME PAYABLE BY LESSEE UNDER THIS ARTICLE XXII SHALL BE PAID WITHIN TEN
(10) DAYS AFTER LIABILITY THEREFOR ON THE PART OF LESSOR IS DETERMINED BY
LITIGATION OR OTHERWISE AND, IF NOT TIMELY PAID, SHALL BEAR A LATE CHARGE (TO
THE EXTENT PERMITTED BY LAW) AT THE OVERDUE RATE FROM THE DATE OF SUCH
DETERMINATION TO THE DATE OF PAYMENT. LESSEE, AT ITS EXPENSE, SHALL CONTEST,
RESIST AND DEFEND ANY SUCH CLAIM, ACTION OR PROCEEDING ASSERTED OR INSTITUTED
AGAINST LESSOR OR MAY COMPROMISE OR OTHERWISE DISPOSE OF THE SAME AS LESSEE AND
LESSOR SEE FIT. NOTHING HEREIN SHALL BE CONSTRUED AS INDEMNIFYING LESSOR AGAINST
ITS OWN NEGLIGENCE OR OMISSIONS OR WILLFUL MISCONDUCT. LESSEE'S LIABILITY FOR A
BREACH OF THE PROVISIONS OF THIS ARTICLE SHALL SURVIVE ANY TERMINATION AND THE
EXPIRATION OF THIS LEASE.
ARTICLE XXIII
ASSIGNMENT, SUBLETTING; AND SUBLEASE SUBORDINATION
23.1 ASSIGNMENT AND SUBLETTING. Lessee shall not assign this Lease or
sublease any portion of the Leased Property without Lessor's prior written
consent. Lessor shall not unreasonably withhold its consent to any subletting or
assignment, provided that (a) in the case of a subletting, the sublease and the
sublessee shall comply with the provisions of this Article XXIII, (b) in the
case of an assignment, the assignee shall assume in writing and
41
agree to keep and perform all of the terms of this Lease on the part of Lessee
to be kept and performed and shall be and become jointly and severally liable
with Lessee for the performance thereof, (c) an original counterpart of each
such sublease and assignment and assumption, duly executed by Lessee and such
sublessee or assignee, as the case may be, in form and substance satisfactory to
Lessor, shall be delivered promptly to Lessor, and (d) in case of either an
assignment or subletting, Lessee shall remain primarily liable, as principal
rather than as surety, for the prompt payment of the Rent and for the
performance and observance of all of the obligations, covenants and conditions
to be performed by Lessee hereunder and under all of the other documents
executed in connection herewith. Notwithstanding anything contained herein to
the contrary, Lessor and Lessee acknowledge that there currently exists certain
leases or subleases on the Leased Property as described on EXHIBIT C attached
hereto (collectively the "Existing Subleases"). Any modifications, amendments
and restatements of the Existing Subleases must be approved by Lessor in
accordance with this Article XXIII. Notwithstanding anything contained herein to
the contrary, any proposed assignee of Lessee and any proposed sublessee or
subtenant must each have an equal or stronger credit rating than the Lessee on
the Commencement Date. Lessor's failure or refusal to approve an assignment to
an assignee or a subletting to a sublessee or subtenant without the required
credit rating shall be reasonable.
23.2 SUBLEASE LIMITATIONS. (a) In addition to the sublease limitations as
set forth in Section 23.1 above, Lessee shall not enter into any Tenant Lease
the terms of which Lessee actually knows (acting in good faith) would or could
result in (i) Rent payable under this Lease not qualifying as "rents from real
property" as defined in Section 856(d) of the Code, or any similar or successor
provision thereto; provided, however, that notwithstanding anything herein to
the contrary, (a) Lessee shall not be responsible for any act or omission of
Lessor, and (b) any action taken by Lessee in compliance with the express terms
of this Lease shall not be deemed to create an Event of Default under this
Section 23.2(a).
(b) Lessee shall not sublet any portion of the Leased Property for a term
extending beyond the Fixed Term hereof without the express consent of Lessor. In
addition, all subleases shall comply with the Healthcare Laws. Lessor and Lessee
acknowledge and agree that all subleases entered into relating to the Leased
Property, whether or not approved by Lessor, shall not, without the prior
written consent of Lessor, be deemed to be a direct lease between Lessor and any
sublessee or subtenant. Lessee agrees that all subleases submitted for Lessor
approval as provided herein (other than the Existing Sublease executed by Xx.
Xxxx Xxxxxx and any future sublease to be entered into with Xx. Xxx Xxxxxxxx or
Dr. Xxxxxx Xxxxx which, provided such individual executes a sublease
substantially similar to Xx. Xxxxxx'x, shall not be subject to any of the
succeeding requirements to the extent Xx. Xxxxxx'x Existing Sublease was not
subject to such requirements) must include provisions to the effect that (a)
such sublease is subject and subordinate to all of the terms and provisions of
this Lease, to the rights of Lessor hereunder, and to all matters to which this
Lease is or shall be subject or subordinate, (b) in the event this Lease shall
terminate or be terminated before the expiration of the sublease, the sublessee
or subtenant will, at Lessor's option, attorn to Lessor and waive any right the
sublessee or subtenant may have to terminate the sublease or to surrender
possession thereunder, as a result of the termination of this Lease, (c) in the
event this Lease is terminated and Lessor succeeds to the interest of Lessee
under the sublease, sublessee shall comply with all provisions of this Lease
that address the payment of taxes, insurance, utilities, and all costs of
maintenance and repair of the premises subleased under the sublease, including,
without limitation, extraordinary repairs, capital improvements and other
repairs, it being understood that Lessor leases its facilities on an absolute
net basis with subtenants or sublessees responsible for all such payments and
costs of such maintenance and repair, (d) sublessee or subtenant shall from time
to time upon request of Lessee or Lessor furnish within ten (10) days from
request an estoppel certificate in form and content acceptable to Lessor or its
lender relating to the sublease, (e) in the event the sublessee or subtenant
receives a written notice from Lessor or Lessor's assignees, if any, stating
that a Default or an Event of Default has occurred under this Lease, the
sublessee or subtenant shall thereafter be obligated to pay all rentals accruing
under said sublease directly to the party giving such notice, or as such party
may direct (all rentals received from the sublessee by Lessor or Lessor's
assignees, if any, as the case may be, shall be credited against the amounts
owing by Lessee under this Lease), (g) and that such sublease shall at all times
be subject to the obligations and requirements as set forth in this Article
XXIII, (h) sublessee or subtenant shall provide to Lessor upon written request
such officer's
42
certificates and financial statements as Lessor may request from time to time,
and (i) sublessee will execute and deliver the subordination agreement as
required in Section 23.3 hereof.
23.3 SUBLEASE SUBORDINATION AND NON-DISTURBANCE. Within twenty (20) days
after request by Lessor, Lessee shall use commercially reasonable efforts to
cause the subtenants or sublessees to execute and deliver to Lessor a
subordination agreement relating to the sublease, which subordination agreement
shall be in such form and content as is acceptable to Lessor. At the request
from time to time by one or more Facility Lender, within twenty (20) days from
the date of request, Lessee shall use commercially reasonable efforts to cause
the subtenants or sublessees of the Leased Property to execute and deliver
within such twenty (20) day period, to such Facility Lender a written agreement
in a form reasonably acceptable to such Facility Lender whereby such subtenants
and sublessees subordinate the sublease and all of their rights and estate
thereunder to each such mortgage or deed of trust that encumbers the Leased
Property or any part thereof and agree with each such Facility Lender that such
subtenants and sublessees will attorn to and recognize such Facility Lender or
the purchaser at any foreclosure sale or any sale under a power of sale
contained in any such mortgage or deed of trust, as the case may be, as Lessor
under this Lease for the balance of the Term then remaining, subject to all of
the terms and provisions of the sublease.
ARTICLE XXIV
OFFICER'S CERTIFICATES; FINANCIAL STATEMENTS; NOTICES AND OTHER CERTIFICATES
(a) At any time and from time to time within twenty (20) days
following written request by Lessor, Lessee will furnish to Lessor an
Officer's Certificate certifying that this Lease is unmodified and in full
force and effect (or that this Lease is in full force and effect as
modified and setting forth the modifications) and the dates to which the
Rent has been paid. Any such Officer's Certificate furnished pursuant to
this Article may be relied upon by Lessor and any prospective purchaser of
the Leased Property.
(b) Lessee will furnish, or cause to be furnished, the following
statements to Lessor, which must be in such form and detail as Lessor may
from time to time, but not unreasonably, request:
(i) within ninety (90) days after the end of each fiscal year of
Lessee, a copy of the Statements of Cash Flow for the Lessee for the
preceding fiscal year and an Officer's Certificate stating that to the
best of the signer's knowledge and belief after making due inquiry, no
Default or Event of Default then exists, or, if a Default or Event of
Default exists, specifying all such defaults, the nature thereof and
the steps being taken to remedy the same, and
(ii) within ninety (90) days after the end of each year, audited
financial statements of Lessee and the operations performed in the
Facility, prepared by a nationally recognized accounting firm or an
independent certified public accounting firm acceptable to Lessor,
which statements shall include a balance sheet and statement of income
and expenses and changes in cash flow all in accordance with GAAP for
the year then ended, and
(iii) within forty-five (45) days after the end of each quarter,
current financial statements of Lessee and the operations performed in
the Facility, certified to be true and correct by an officer of
Lessee, and
(iv) within thirty (30) days after the end of each month, current
operating statements of the Facility, including, but not limited to
operating statistics, certified to be true and correct by an officer
of the Lessee, and
43
(v) within ten (10) days of receipt, any and all notices
(regardless of form) from any and all licensing and/or certifying
agencies that any license or certification, including without
limitation, the Medicare and Medicaid certification and/or managed
care contract of the Facility is being downgraded to a substandard
category, revoked, or suspended, or that action is pending or being
considered to downgrade to a substandard category, revoke, or suspend
such Facility's license or certification, and
(vi) with reasonable promptness, such other information
respecting the financial condition and affairs of Lessee as Lessor may
reasonably request from time to time.
(c) Upon Lessor's request, Lessee will furnish to Lessor a certificate
in form acceptable to Lessor certifying that no Event of Default, or
similar term, as defined herein or in any of the Tenant Leases and the
Other Leases, then exists and no event has occurred (that has not been
cured) and no condition currently exists that would, but for the giving of
any required notice or expiration of any applicable cure period, constitute
a default hereunder.
(d) Within two (2) business days of receipt, Lessee shall furnish to
Lessor copies of all notices and demands from any third party payor,
including, without limitation, Medicare and Medicaid, concerning
overpayment which will or may result in a repayment or a refund in excess
of One Million Dollars ($1,000,000). Lessee hereby agrees that in the event
of receipt of such notices or demands Lessor shall have the right, at
Lessor's option, to participate in the appeal of such notices and demands.
(e) Lessee shall furnish to Lessor on a monthly basis ongoing status
reports (in form and content acceptable to Lessor) of any governmental
investigations of the Lessee and any of its Affiliates, or the Facility,
conducted by the United States Attorney, State Attorney General, the Office
of the Inspector General of the Department of Health and Human Services, or
any other Governmental Entity.
(f) Lessee shall furnish to Lessor immediately upon receipt thereof
copies of all notices of adverse events or deficiencies as defined by
regulations or standards of the Joint Commission on the Accreditation of
Healthcare Organizations ("JCAHO"), or the equivalent of the accrediting
body relied upon by the Lessee in the operation of the Facility or any part
thereof.
(g) Lessee shall furnish to Lessor immediately upon receipt thereof
copies of all written notices that the Lessee is not in compliance with the
Standards for Privacy of Individually Identifiable Health Information and
the Transaction and Code Set Standards which were promulgated pursuant to
the Health Insurance Portability and Accountability Act of 1996 ("HIPAA").
(h) Provided that no such requirement of additional information shall
place an undue hardship on Lessee, Lessor reserves the right to require
such other financial information from Lessee at such other times as it
shall deem reasonably necessary. All financial statements and information
must be in such form and detail as Lessor shall from time to time, but not
unreasonably, request.
Subject to the rights of Lessor as provided in Section 41.11 of this
Lease, Lessor and Lessee agree that all financial information disclosed
pursuant to this Article XXV shall be kept in strictest confidence and
shall not be disclosed to any person or entity.
ARTICLE XXV
INSPECTION AND FEES
Lessee shall permit Lessor, MPT Development Services and their respective
authorized representatives to inspect the Leased Property during usual business
hours subject to any security, health, safety or confidentiality
44
requirements of Lessee, any governmental agency, any Insurance Requirements
relating to the Leased Property, or imposed by law or applicable regulations. On
January 1, 2006, Lessee shall pay to MPT Development Services an amount equal to
Seven Thousand Five Hundred and 00/100 Dollars ($7,500.00) (the "Inspection
Fee") to cover the cost of the physical inspections of the Leased Property.
Commencing on January 1, 2007, and continuing on January 1 of each year
thereafter throughout the Term of this Lease, the Inspection Fee to be paid by
Lessee shall be increased by an amount equal to two and one-half percent (2.5%)
per annum.
In addition to the Inspection Fee, on the Commencement Date, Lessee shall
also pay to Lessor (or, at Lessor's election, its designated Affiliate) a fee in
the amount of Seventy-Five Thousand and No/100 Dollars ($75,000.00) to cover the
inspection of the Facility during the Construction Period.
ARTICLE XXVI
NO WAIVER
No failure by Lessor or Lessee to insist upon the strict performance of any
term hereof or to exercise any right, power or remedy consequent upon a breach
thereof, and no acceptance of full or partial payment of Rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
any such term. To the extent permitted by law, no waiver of any breach shall
affect or alter this Lease, which shall continue in full force and effect with
respect to any other then existing or subsequent breach.
ARTICLE XXVII
REMEDIES CUMULATIVE
To the extent permitted by law, each legal, equitable or contractual right,
power and remedy of Lessor or Lessee now or hereafter provided either in this
Lease or by statute or otherwise shall be cumulative and concurrent and shall be
in addition to every other right, power and remedy and the exercise or beginning
of the exercise by Lessor or Lessee of any one or more of such rights, powers
and remedies shall not preclude the simultaneous or subsequent exercise by
Lessor or Lessee of any or all of such other rights, powers and remedies.
ARTICLE XXVIII
SURRENDER
No surrender to Lessor of this Lease or of the Leased Property or any part
of any thereof, or of any interest therein, prior to the expiration of the Term
hereof, shall be valid or effective unless agreed to and accepted in writing by
Lessor and no act by Lessor or any representative or agent of Lessor, other than
such a written acceptance by Lessor, shall constitute an acceptance of any such
surrender.
ARTICLE XXIX
NO MERGER OF TITLE
There shall be no merger of this Lease or of the leasehold estate created
hereby by reason of the fact that the same person, firm, corporation or other
entity may acquire, own or hold, directly or indirectly, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate and (b) the fee estate in the Leased Property.
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ARTICLE XXX
TRANSFERS BY LESSOR
If Lessor or any successor owner of the Leased Property shall convey the
Leased Property in accordance with the terms hereof, other than as security for
a debt, and the grantee or transferee of the Leased Property shall expressly
assume all obligations of Lessor hereunder arising or accruing from and after
the date of such conveyance or transfer, and shall be reasonably capable of
performing the obligations of Lessor hereunder, Lessor or such successor owner,
as the case may be, shall thereupon be released from all future liabilities and
obligations of the Lessor under this Lease arising or accruing from and after
the date of such conveyance or other transfer as to the Leased Property and all
such future liabilities and obligations shall thereupon be binding upon the new
owner.
ARTICLE XXXI
QUIET ENJOYMENT
So long as Lessee shall pay all Rent as the same becomes due and shall
fully comply with all of the terms of this Lease and fully perform its
obligations hereunder and under the Other Leases, Lessee shall peaceably and
quietly have, hold and enjoy the Leased Property for the Term hereof, free of
any claim or other action by Lessor or anyone claiming by, through or under
Lessor, but subject to all liens and encumbrances of record as of the date
hereof or hereafter consented to by Lessee. No failure by Lessor to comply with
the foregoing covenant shall give Lessee any right to cancel or terminate this
Lease, or to fail to pay any other sum payable under this Lease, or to fail to
perform any other obligation of Lessee hereunder. Notwithstanding the foregoing,
Lessee shall have the right by separate and independent action to pursue any
claim it may have against Lessor as a result of a breach by Lessor of the
covenant of quiet enjoyment contained in this Article XXXI.
ARTICLE XXXII
NOTICES
All notices, demands, consents, approvals, requests and other
communications under this Lease shall be in writing and shall be either (a)
delivered in person, (b) sent by certified mail, return receipt requested, (c)
delivered by a recognized delivery service or (d) sent by facsimile transmission
and addressed as follows:
(a) if to Lessee: Bucks County Oncoplastic Institute, LLC
c/o Diversified Specialty Institutes, Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
46
with a copy to: Xxxxxx & Xxxxxxx, LLP
000 00xx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) if to Lessor: MPT of Bucks County Hospital, L.P.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Xxxxxx X. Xxxx, Esq.
Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx
0000 XxxxxXxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other address as either party may hereafter designate, and shall be
effective upon receipt. A notice, demand, consent, approval, request and other
communication shall be deemed to be duly received if delivered in person or by a
recognized delivery service, when left at the address of the recipient and if
sent by facsimile, upon receipt by the sender of an acknowledgment or
transmission report generated by the machine from which the facsimile was sent
indicating that the facsimile was sent in its entirety to the recipient's
facsimile number; provided that if a notice, demand, consent, approval, request
or other communication is served by hand or is received by facsimile on a day
which is not a Business Day, or after 5:00 p.m. on any Business Day at the
addressee's location, such notice or communication shall be deemed to be duly
received by the recipient at 9:00 a.m. on the first Business Day thereafter.
ARTICLE XXXIII
APPRAISAL
In the event that it becomes necessary to determine the Fair Market Value
of the Leased Property, the Fair Market Value Purchase Price or the Fair Market
Added Value for any purpose of this Lease, the party required or permitted to
give notice of such required determination shall include in the notice the name
of a person selected to act as an appraiser on its behalf. Lessor and Lessee
agree that any appraisal of the Leased Property shall be without regard to the
termination of this Lease or any purchase options contained herein and shall
assume the Lease is in place for a term of fifteen (15) years, and shall not
take into account any purchase options contained herein. Within ten (10) days
after receipt of any such notice, Lessor (or Lessee, as the case may be) shall
by notice to Lessee (or Lessor, as the case may be) appoint a second person as
an appraiser on its behalf. The appraisers thus appointed (each of whom must be
a member of the American Institute of Real Estate Appraisers or any successor
organization thereto) shall, within forty-five (45) days after the date of the
notice appointing the first (1st) appraiser, proceed to determine the Fair
Market Value of the Leased Property, the Fair Market Value Purchase Price or the
Fair Market Added Value thereof as of the relevant date (giving effect to the
impact, if any, of inflation from the date of their decision to the relevant
date); provided, however, that if only one (1) appraiser shall have been so
appointed, or if two (2) appraisers shall have been so appointed but only one
(1) such appraiser shall have made such determination within fifty (50) days
after the making of Lessee's or Lessor's request, then the determination of such
appraiser shall be final and binding upon the parties. If two (2) appraisers
shall have been appointed and shall have made their
47
determinations within the respective requisite periods set forth above and if
the difference between the amounts so determined shall not exceed ten percent
(10%) of the lesser of such amounts, then the Fair Market Value of the Leased
Property, the Fair Market Value Purchase Price or the Fair Market Added Value
shall be an amount equal to fifty percent (50%) of the sum of the amounts so
determined. If the difference between the amounts so determined shall exceed ten
percent (10%) of the lesser of such amounts, then such two (2) appraisers shall
have twenty (20) days to appoint a third (3rd) appraiser, but if such appraisers
fail to do so, then either party may request the American Arbitration
Association or any successor organization thereto to appoint an appraiser within
twenty (20) days of such request, and both parties shall be bound by any
appointment so made within such 20-day period. If no such appraiser shall have
been appointed within such twenty (20) days or within ninety (90) days of the
original request for a determination of Fair Market Value of the Leased
Property, the Fair Market Value Purchase Price or the Fair Market Added Value,
whichever is earlier, either Lessor or Lessee may apply to any court having
jurisdiction to have appointment made by such court. Any appraiser appointed, by
the American Arbitrator Association or by such court shall be instructed to
determine the Fair Market Value of the Leased Property, the Fair Market Value
Purchase Price or the Fair Market Added Value within thirty (30) days after
appointment of such appraiser. The determination of the appraiser which differs
most in terms of dollar amount from the determinations of the other two (2)
appraisers shall be excluded, and fifty percent (50%) of the sum of the
remaining two (2) determinations shall be final and binding upon Lessor and
Lessee as the Fair Market Value of the Leased Property, the Fair Market Value
Purchase Price or the Fair Market Added Value for such interest. This provision
for determination by appraisal shall be specifically enforceable to the extent
such remedy is available under applicable law, and any determination hereunder
shall be final and binding upon the parties except as otherwise provided by
applicable law. Lessor and Lessee shall each pay the fees and expenses of the
appraiser appointed by it and each shall pay one-half of the fees and expenses
of the third appraiser and one-half of all other costs and expenses incurred in
connection with each appraisal.
ARTICLE XXXIV
PURCHASE RIGHTS
34.1 LESSEE'S OPTION TO PURCHASE. So long as no Default or Event of Default
then exists, and so long as no such Default or Event of Default exists at the
time of the closing of the purchase, at the expiration of the Fixed Term and at
the expiration of each Extension Term of this Lease, the Lessee shall have the
option, to be exercised by written notice to the Lessor at least sixty (60) days
prior to the expiration of the Fixed Term or the Extension Term, as applicable,
to purchase the Leased Property at a purchase price equal to the greater of (i)
the Fair Market Value of the Leased Property, or (ii) the Total Development
Costs (including any Capital Additions funded by the Lessor, but excluding any
Capital Additions funded by the Lessee), as increased by an amount equal to the
greater of (A) two and one-half percent (2.5%) per annum from the date hereof,
or (B) the rate of increase in the CPI on each Adjustment Date. Notwithstanding
anything contained herein to the contrary, in no event shall the purchase price
be less than the Fair Market Value of the Leased Property. Unless expressly
otherwise provided in this Section 34.1, in the event the Lessee exercises such
option to purchase the Leased Property, (i) the terms set forth in Article XVIII
shall apply, (ii) Lessee shall continue paying Rent as required under this Lease
until the purchase is closed, and (iii) the sale/purchase must be closed within
ninety (90) days after the date of the written notice from Lessee to Lessor.
Notwithstanding any provision herein to the contrary, this Lease, and
specifically Lessee's rights as set forth in this Section 34.1, are and shall be
subject, subordinate and inferior to any Facility Instrument. This provision
shall be self-operative. However, any Facility Lender may from time to time
request that such subordination be evidenced by a separate written agreement.
Within ten (10) days following written request by any Facility Lender, the
Lessee shall execute and deliver to such Facility Lender a written agreement, in
form and substance satisfactory to such Facility Lender and any applicable
rating agency. In the event Lessee fails or refuses to execute and deliver such
written agreement within such ten (10) day period, then, in addition to all
other remedies available at law or in equity, the Lessor shall be entitled to
terminate Lessee's rights under this Section 34.1 upon delivery of five (5)
days' written notice to Lessee. In the event Lessee has not executed and
delivered to such Facility Lender and any applicable rating agency, if any, the
written agreement requested within such five (5) day period, then in such event,
Lessee's rights under this Section 34.1 shall be deemed forfeited and of no
further force or effect.
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34.2 LESSOR'S OPTION TO PURCHASE LESSEE'S PERSONAL PROPERTY. Lessor shall
have the option to purchase all (but not less than all) of Lessee's tangible
Personal Property, if any, at the expiration or termination of this Lease due to
the occurrence of an Event of Default, for an amount equal to the net sound
insurable value thereof (current replacement cost less accumulated depreciation
on the books of Lessee pertaining thereto), subject to, and with appropriate
price adjustments for, all equipment leases, conditional sale contracts,
security interests and other encumbrances to which Lessee's tangible Personal
Property is subject. Lessor shall exercise the foregoing option by giving Lessee
notice within thirty (30) days following the date of such termination and the
closing of such purchase and sale shall occur within fifteen (15) days following
delivery of such exercise notice..
34.3 SURVIVAL. Lessee's purchase rights under this Article XXXIV or
elsewhere in this Lease shall survive the sale or conveyance of the Facility and
shall run with this Lease in favor of Lessee's successors and permitted assigns,
subject to the terms hereof.
ARTICLE XXXV
[INTENTIONALLY OMITTED]
ARTICLE XXXVI
[INTENTIONALLY OMITTED]
ARTICLE XXXVII
FINANCING OF THE LEASED PROPERTY
Lessor agrees that, if it grants or creates any mortgage, lien, encumbrance
or other title retention agreement ("Encumbrances") upon the Leased Property,
Lessor will use reasonable efforts to obtain an agreement from the holder of
each such Encumbrance whereby such holder agrees (a) to give Lessee the same
notice, if any, given to Lessor of any default or acceleration of any obligation
underlying any such Encumbrance or any sale in foreclosure of such Encumbrance,
(b) to permit Lessee, after twenty (20) days prior written notice, to cure any
such default on Lessor's behalf within any applicable cure period, in which
event Lessor agrees to reimburse Lessee for any and all reasonable out-of-pocket
costs and expenses incurred to effect any such cure (including reasonable
attorneys' fees), (c) to permit Lessee to appear with its representatives and to
bid at any foreclosure sale with respect to any such Encumbrance, (d) that, if
subordination by Lessee is requested by the holder of each such Encumbrance, to
enter into an agreement with Lessee containing the provisions described in
Article XXXVIII of this Lease, and (e) Lessor further agrees that no such
Encumbrance shall in any way prohibit, derogate from, or interfere with Lessee's
right and privilege to collaterally assign its leasehold and contract rights
hereunder provided such collateral assignment and rights granted to the assignee
thereunder shall be subordinate to the rights of the holder of an Encumbrance as
provided in Article XXXVIII hereof.
ARTICLE XXXVIII
SUBORDINATION AND NON-DISTURBANCE
At the request from time to time by one or more Facility Lender, within ten
(10) days from the date of request, Lessee shall execute and deliver within such
ten (10) day period, to such Facility Lender, a written agreement in form and
content reasonably acceptable to Lessee and such Facility Lender whereby Lessee
subordinates this Lease and all of its rights and estate hereunder to each
Facility Instrument that encumbers the Leased Property or any part thereof and
agrees with each such Facility Lender that Lessee will attorn to and
49
recognize such Facility Lender or the purchaser at any foreclosure sale or any
sale under a power of sale contained in any such Facility Instrument as the case
may be, as Lessor under this Lease for the balance of the Term then remaining,
subject to all of the terms and provisions of this Lease; provided, however,
that each such Facility Lender simultaneously executes and delivers to Lessee a
written agreement consenting to this Lease and agreeing that, notwithstanding
any such other mortgage, deed of trust, right, title or interest, or any
default, expiration, termination, foreclosure, sale, entry or other act or
omission under, pursuant to or affecting any of the foregoing, Lessee shall not
be disturbed in peaceful enjoyment of the Leased Property nor shall this Lease
be terminated or canceled at any time, except in the event of a Default or Event
of Default under the terms of this Lease.
ARTICLE XXXIX
LICENSES
Lessee shall maintain at all times during the Term hereof and any holdover
period all federal, state and local governmental licenses, approvals,
qualifications, variances, certificates of need, franchises, accreditations,
certificates, certifications, consents, permits and other authorizations and all
contracts, including contracts with governmental or quasi-governmental entities
which may be necessary or useful in the operation of the Facility (collectively,
the "Licenses"), and shall qualify and comply with all applicable laws as they
may from time to time exist, including those applicable to certification and
participation as a provider under Medicare and Medicaid legislation and
regulations.
Lessee shall not, without the prior written consent of Lessor, which may be
granted or withheld in its sole discretion, effect or attempt to effect any
change in the license category or status of the Facility or any part thereof.
Under no circumstances shall Lessee have the right to transfer any of the
Licenses to any location other than the Facility or to any other person or
entity (except to Lessor as contemplated herein), during the Term hereof.
Following the termination of this Lease as a result of the occurrence of an
Event of Default, Lessee shall retain no rights whatsoever to the Licenses, and
Lessee will not move or attempt to move the Licenses to any other location;
provided, however, that in the event of a termination of this Lease other than
as a result of the occurrence of an Event of Default, the Licenses shall remain
with Lessee. To the extent that Lessee has or will extend any right, title, or
claim of right whatsoever in and to the Licenses or the right to operate the
Facility, all such right, title, or claim of right shall automatically revert to
the Lessor or to Lessor's designee upon termination of this Lease due to an
Event of Default, to the extent permitted by law. Upon any termination of this
Lease for an Event of Default to the extent permitted by law, Lessor shall have
the sole, complete, unilateral, absolute and unfettered right to cause all
Licenses to be reissued in Lessor's name or in the name of Lessor's designee
upon application therefor to the issuing authority, and to further have the
right to have any and all provider and/or third party payor agreements as a
provider in the Medicare and Medicaid and other federal healthcare programs
issued in Lessor's name or in the name of Lessor's designee.
Upon termination of this Lease due to the occurrence of an Event of Default
and for reasonable periods of time immediately before and after such
termination, Lessee shall use its best efforts, without additional consideration
to Lessee, to facilitate an orderly transfer of the operation and occupancy of
the Facility to Lessor or any new lessee or operator selected by Lessor, it
being understood and agreed that such cooperation shall include, without
limitation, (a) Lessee's transfer and assignment if and to the extent permitted
by law, to Lessor, Lessor's nominee or Lessor's new lessee or operator of any
and all Licenses, (b) Lessee's use of best efforts to maintain, to the maximum
extent allowed by applicable law, the effectiveness of any and all such Licenses
until such time as any new Licenses necessary for any new Lessee or operator to
operate the Facility have been issued, and (c) the taking of such other actions
as are required by applicable law or as are reasonably requested by Lessor. Upon
any termination of this Lease or any breach or default by Lessee hereunder
(which breach or default is not cured within any applicable grace period and
which results in Lessor terminating this Lease), to the extent permitted by law,
Lessor shall have the sole, complete, unilateral, absolute and unfettered right
to cause any and all Licenses to be reissued in Lessor's name or in the name of
Lessor's designee upon application therefor to the appropriate authority,
50
if required, and to further have the right, to the extent permitted by law, to
have any and all Medicare and Medicaid and any other provider and/or third party
payor agreements issued in Lessor's name or in the name of Lessor's designee.
The provisions of this Article XXXIX are in addition to the other provisions of
this Lease.
It is an integral condition of this Lease that Lessee covenants and agrees
not to sell, move, modify, cancel, surrender, transfer, assign, sell, relocate,
pledge, secure, convey or in any other manner encumber any License or any
governmental or regulatory approval, consent or authorization of any kind to
operate the Facility. To the extent permitted by law, Lessee hereby grants to
Lessor a landlord's lien on the Licenses.
Lessee shall immediately (within two (2) business days) notify Lessor in
writing of any notice, action or other proceeding or inquiry of any governmental
agency, bureau or other authority whether federal, state, or local, of any kind,
nature or description, which could adversely affect any material License or
Medicare and Medicaid-certification status, or accreditation status of the
Facility, or the ability of Lessee to maintain its status as the licensed and
accredited operator of the Facility or which alleges noncompliance with any law.
Lessee shall immediately (within two (2) business days) upon Lessee's receipt,
furnish Lessor with a copy of any and all such notices and Lessor shall have the
right, but not the obligation, to attend and/or participate, in Lessor's sole
and absolute discretion, in any such actions or proceedings. Lessee shall act
diligently to correct any deficiency or deal effectively with any "adverse
action" or other proceedings, inquiry or other governmental action, so as to
maintain the licensure and Medicare and Medicaid-certification status stated
herein in good standing at all times. Lessee shall not agree to any settlement
or other action with respect to such proceedings or inquiry which affects the
use of the Leased Property or any portion thereof as provided herein without the
prior written consent of Lessor, which consent shall not be unreasonably
withheld or delayed. Lessee agrees to sign, acknowledge, provide and deliver to
Lessor (and if Lessee fails to do so upon request of Lessor, Lessee hereby
irrevocably appoints Lessor, as agent of Lessee for such express purposes) any
and all documents, instruments or other writings which are or may become
necessary, proper and/or advisable to cause any and all hospital licenses
required for the Primary Intended Use, Department of Human Services of the State
of Pennsylvania ("DHS") provider agreements, and/or state or federal Title XVIII
and/or Title XIX provider agreements to be obtained (either in total or
individually) in the name of Lessor or the name of Lessor's designee in the
event that Lessor reasonably determines in good faith that (irrespective of any
claim, dispute or other contention or challenge of Lessee) there is any breach,
default or other lapse in any representation, warranty, covenant or other
delegation of duty to Lessee (beyond any applicable grace or cure period) and
the issuing government agency has threatened or asserted that such license or
provider agreement will terminate or has lapsed or that Lessee's license or
certification or accreditation status is in jeopardy. This power is coupled with
the ownership interest of Lessor in and to the Facility and all incidental
rights attendant to any and all of the foregoing rights.
ARTICLE XL
COMPLIANCE WITH HEALTHCARE LAWS
Lessee hereby covenants, warrants and represents to Lessor that as of the
Commencement Date and throughout the Term ( it being understood and agreed that
Lessee shall have the periods contemplated herein to obtain its Medicare billing
number and provider agreement): (i) Lessee shall be, and shall continue to be
validly licensed, Medicare and Medicaid certified, and, if required, accredited
to operate the Facility in accordance with the applicable rules and regulations
of the State of Pennsylvania, federal governmental authorities and accrediting
bodies, including, but not limited to, the United States Department of Health
and Human Services, DHSS, DHS and CMS; and/or (ii) Lessee shall be, and shall
continue to be, certified by and the holder of valid provider agreements with
Medicare/Medicaid issued by DHHS, DHS and/or CMS and shall remain so certified
and shall remain such a holder in connection with its operation of the Primary
Intended Use on the Leased Property as a licensed and Medicare and Medicaid
certified hospital facility; (iii) Lessee shall be, and shall continue to be in
substantial compliance with and shall remain in substantial compliance with all
state and federal laws, rules, regulations and procedures with regard to the
operation of the Facility, including, without limitation, substantial compliance
under
51
HIPAA; (iv) Lessee shall operate the Facility in a manner consistent with high
quality services and sound reimbursement principles under the Medicare and
Medicaid programs and as required under state and federal law; (v) Lessee shall
not abandon, terminate, vacate or fail to renew any license, certification,
accreditation, certificate, approval, permit, waiver, provider agreement or any
other authorization which is required for the lawful and proper operation of the
Facility or in any way commit any act which will or may cause any such license,
certification, accreditation, certificate, approval, permit, waiver, provider
agreement or other authorization to be revoked by any federal, state or local
governmental authority or accrediting body having jurisdiction thereof; (vi)
neither Lessee or any Affiliate of Lessee will exercise any provision of any
third party agreement which would result in compensation to a physician which
would not comply with Healthcare Laws; and (vii) Lessee and Lessee's Affiliates
acknowledge that Lessor has not consented to the compliance with Healthcare Laws
of any method of redeeming or canceling options granted Xxxx Xxxxxx, M.D. ("Xx.
Xxxxxx") by Section 4.1 of the April 26, 2004 Medical Director Services
Agreement between Lessee and Xx. Xxxxxx, M.D. if, due to a change in Healthcare
Laws after the date hereof, her ownership is prohibited in Lessee or any
Affiliate.
ARTICLE XLI
MISCELLANEOUS
41.1 GENERAL. Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Lessee or Lessor
arising prior to any date of expiration or termination of this Lease shall
survive such expiration or termination. If any term or provision of this Lease
or any application thereof shall be invalid or unenforceable, the remainder of
this Lease and any other application of such term or provision shall not be
affected thereby. If any late charges provided for in any provision of this
Lease are based upon a rate in excess of the maximum rate permitted by
applicable law, the parties agree that such charges shall be fixed at the
maximum permissible rate. Neither this Lease nor any provision hereof may be
changed, waived, discharged or terminated except by an instrument in writing and
in recordable form signed by Lessor and Lessee. All the terms and provisions of
this Lease shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. The headings in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
41.2 LESSOR'S EXPENSES. In addition to other provisions herein, Lessee
agrees and shall pay and/or reimburse Lessor's reasonable costs and expenses,
including legal fees, incurred or resulting from and relating to (a) requests by
Lessee for approval or consent under this Lease, (b) requests by Lessor for
approval or consent under this Lease or any other documents executed between
Lessor and Lessee in connection herewith, (c) any circumstances or developments
which give rise to Lessor's right of consent or approval, (d) circumstances
resulting from any action or inaction by Lessee contrary to the lease
provisions, and (e) a request for changes including, but not limited to (i) the
permitted use of the Leased Property, (ii) alterations and improvements to the
Leased Improvements, (iii) subletting or assignment, and (iv) any other changes
in the terms, conditions or provisions of this Lease. Such expenses and fees
shall be paid by Lessee within thirty (30) days of the submission of a statement
for the same or such amount(s) shall become Additional Charges and subject to
the Overdue Rate after the said thirty (30) day period.
41.3 ENTIRE AGREEMENT; MODIFICATIONS. This Lease embodies and constitutes
the entire understanding between the parties with respect to the transactions
contemplated herein, and all prior to contemporaneous agreements,
understandings, representations and statements (oral or written) are merged into
this Lease. Neither this Lease nor any provision hereof may be modified or
amended except by an instrument in writing signed by Lessor and Lessee.
41.4 LEASE GUARANTY. The parties acknowledge that the Guarantors have
executed that certain Lease Guaranty of even date herewith in the form of
EXHIBIT D attached hereto and made a part hereof by reference and incorporation.
52
41.5 LESSOR'S RIGHT TO SELL. Lessee understands that Lessor may sell its
interest in the Leased Property in whole or in part. The Lessee agrees that any
purchaser may exercise any and all rights of Lessor, as fully as if such had
made the purchase of the Leased Property directly from the Lessee as set out in
the Purchase Agreement; provided, however, such purchaser shall be subject to
the same restrictions imposed upon Lessor hereunder. Lessor may divulge to any
such purchaser all information, reports, financial statements, certificates and
documents obtained by it from Lessee.
41.6 FUTURE FINANCING. Lessee hereby agrees that if at any time during the
Term Lessee purchases or contemplates the purchase of a facility, or property to
be used, for the operation of a healthcare business, Lessee shall notify Lessor
in writing ("Lessee's Notice") of such purchase or contemplated purchase, and
Lessor shall have the first opportunity to provide financing for such purchase,
expansion or renovation upon terms mutually agreeable to Lessor and Lessee.
Lessor shall notify Lessee in writing on or before the expiration of twenty (20)
business days after receipt of Lessee's Notice whether Lessor is interested in
providing such financing. If Lessor agrees to provide the financing, the terms
and conditions of such financing will be contingent upon, among other things,
performance benchmarks acceptable to Lessor and the Lessor's satisfaction and
approval of other due diligence requirements.
41.7 CASH DEPOSIT; LETTER OF CREDIT. Simultaneously herewith, Lessee has
deposited with Lessor, to be held in an interest bearing account at a financial
institution of Lessor's choosing, the sum of Three Million Nine Hundred
Seventy-Seven Thousand Five Hundred Dollars ($3,977,500.00) to secure
performance of Lessee's obligations hereunder (the "Cash Deposit"). On or before
the date of Final Funding (as defined in the Funding Agreement), Lessee shall
obtain and deliver to Lessor an unconditional and irrevocable letter of credit
from a bank acceptable to Lessor (the "Letter of Credit") naming Lessor
beneficiary thereunder, in an amount equal to the sum of Three Million Nine
Hundred Seventy-Seven Thousand Five Hundred Dollars ($3,977,500.00). Once the
Letter of Credit has been obtained, the Cash Deposit shall be retained by Lessor
and applied to the repayment of the Promissory Note.
41.8 CASH INJECTION. Intentionally Omitted.
41.9 TANGIBLE NET WORTH. Subject to the provisions of this Section 41.9, as
of the Commencement Date, Lessee shall achieve a Tangible Net Worth of Five
Million and No/100 Dollars ($5,000,000.00), which Lessee may satisfy by any of
the following: (i) Lessee receiving a total equity contribution of no less than
Five Million and No/100 Dollars ($5,000,000.00), (ii) Lessee obtaining a line of
credit of Five Million and No/100 Dollars ($5,000,000.00), which line of credit
shall be in form and substance satisfactory to Lessor in its sole discretion, or
(iii) Lessee achieving such Tangible Net Worth level through a combination of
equity contribution, approved line of credit or operating earnings; provided,
however, that until terminated or a default occurs thereunder, the existence of
the Lease Guaranty shall satisfy the requirements of this Section 41.9. At the
termination of the Lease Guaranty, Lessee shall provide evidence to Lessor, in
the form of an unaudited balance sheet of Lessee, certified as true and correct
by the chief financial officer of Lessee, reflecting that the foregoing Tangible
Net Worth requirement has been satisfied. At no time during the Term shall
Lessee make any distributions to its equity owners unless following such
distribution the Tangible Net Worth of Lessee is at least Five Million and
No/100 Dollars ($5,000,000.00).
41.10 ADDITIONAL LETTER OF CREDIT. Simultaneously with the execution of
this Lease, Lessee shall execute and deliver to Lessor the Assignment of Rents
and Leases granting Lessor, among other things, a security interest in any
letter of credit or other form of credit enhancement from a sublessee,
subtenant, operating company, management company, or any other individual or
entity relating to the Facility (collectively the "Additional Letter of
Credit"). Lessee shall, within ten (10) days from demand execute, and cause any
applicable sublessee, subtenant, operating company, management company, or any
other individual or entity to execute and deliver, all documents (including,
without limitation, all bank/lender required documents) necessary for Lessor to
perfect its security interest in the Additional Letter of Credit.
41.11 CHANGE IN OWNERSHIP/CONTROL. So long as this Lease remains in effect,
the aggregate ownership of the current members of Lessee shall not be reduced
below fifty-one percent (51%), except if such ownership is
53
reduced through a sale of equity to either BH1 or its affiliates or Centre
Partners or its affiliates; provided, however, that if Lessee receives a bona
fide offer to purchase equity in Lessee and Lessee desires to engage in a
transaction which would cause Lessee to fail the provisions of this Section
41.10, then Lessee shall provide Lessor with notice as to all of the material
terms of such bona fide offer and shall seek Lessor's consent to such
transaction and, in the event Lessor fails to give such consent, Lessee shall
have the option, by giving written notice to Lessor within thirty (30) days
following such failure to give consent, to purchase the Leased Property for a
purchase price equal to the greater of (i) a purchase price calculated in the
same manner as provided in Section 34.1 of this Lease or (ii) an amount equal to
the sum of (A) the Total Development Costs (including any Capital Additions
funded by the Lessor, but excluding any Capital Additions funded by the Lessee)
and (B) an amount sufficient to yield to Lessor an internal rate of return that
is equal to thirteen percent (13%) per year, taking into account all payments of
Rent (other than Additional Charges) received by Lessor to the closing date of
such purchase. Unless expressly otherwise provided in this Section 35.1, in the
event the Lessee exercises such option to purchase the Leased Property, (i) the
terms set forth in Article XVIII shall apply, (ii) Lessee shall continue paying
Rent as required under this Lease until the purchase is closed, and (iii) the
sale/purchase must be closed within ninety (90) days after the date of the
written notice from Lessee to Lessor of Lessee's intent to purchase, unless a
different closing date is agreed upon in writing by Lessor and Lessee.
41.12 LESSOR SECURITIES OFFERING AND FILINGS. Notwithstanding anything
contained herein to the contrary, in connection with a public offering or the
private placement of securities of Lessor or MPT, or their efforts to obtain
financing for the Leased Property, Lessor and MPT may disclose that Lessor has
entered into this Lease with the Lessee respecting the Facility and the Leased
Property and may provide and disclose other information regarding this Lease,
the Lessee, the Leased Property, the Facility, the Commitment Letter, and such
other additional information which Lessor and MPT may reasonably deem necessary,
to its proposed investors in such public offering or private offering of
securities or any prospective lenders with respect to such financing. Lessee
shall cooperate with Lessor and MPT by providing financial and other information
reasonably requested by Lessor and MPT in connection with such offering of
securities or financing. Lessor and MPT shall have the right of access to the
Facility, at reasonable business hours and upon advance notice, and all
documentation and information relating to the Facility.
41.13 NON-RECOURSE AS TO LESSOR. Anything contained herein to the contrary
notwithstanding, any claim based on or in respect of any liability of Lessor
under this Lease shall be enforced only against the Leased Property and not
against any other assets, properties or funds of (i) Lessor, (ii) any director,
officer, general partner, shareholder, limited partner, beneficiary, employee or
agent of Lessor or any general partner of Lessor or any of its general partners
(or any legal representative, heir, estate, successor or assign of any thereof),
(iii) any predecessor or successor partnership or corporation (or other entity)
of Lessor or any of its general partners, shareholders, officers, directors,
employees or agents, either directly or through Lessor or its general partners,
shareholders, officers, directors, employees or agents or any predecessor or
successor partnership or corporation (or other entity), or (iv) any person
affiliated with any of the foregoing, or any director, officer, employee or
agent of any thereof.
41.14 SUBDIVISION, COVENANTS, RESTRICTIONS AND RECIPROCAL EASEMENTS. Lessor
shall have the right, but not the obligation, to subdivide the Land and to place
of record all covenants, restrictions and reciprocal easements (collectively the
"Declarations") which Lessor deems necessary for the ownership, use and
operation of the Facility, such Declarations to be in form and content
acceptable to Lessor, in its sole discretion; provided, however, such
Declarations shall not adversely affect Lessee's occupancy, use or enjoyment of
the Leased Property as contemplated hereby or any other rights of Lessee
hereunder.
41.15 FORCE MAJEURE. Except for Rent and other monetary obligations payable
pursuant to the terms of this Lease, in the event Lessor or Lessee shall be
delayed, hindered in or prevented from the performance of any act required under
this Lease by reason of strikes, lockouts, labor troubles, inability to procure
materials, failure of power, unavailability of any utility service, restrictive
governmental laws or regulations, riots, insurrections, the failure to act, or
default of another party, war, or other reason beyond Lessor's or Lessee's
control (individually "Force Majeure"), then performance of such act shall be
excused for the period of the delay, and the period of the
54
performance of any such act shall be extended for a period equivalent to the
period of such delay. Within ten (10) business days following the occurrence of
Force Majeure, the party claiming a delay due to such event shall give written
notice to the other setting forth a reasonable estimate of such delay, provided
that failure to deliver the foregoing notice shall not prevent the force majeure
event from excusing performance as set forth in the preceding sentence.
41.16 MANAGEMENT AGREEMENTS. Lessee shall not engage any Management Company
or allow any tenants, subtenants or sublessees of the Facility to engage any
Management Company, without Lessor's prior written consent, which consent shall
not be unreasonably withheld; provided, however, Lessor's rights relating to any
Management Company as set forth in Section 16.2 hereof shall be at Lessor's sole
and absolute discretion. Lessee shall, if required by Lessor, assign all of
Lessee's rights under the Management Agreement to Lessor and Lessor shall be
entitled to assign same to Lessor's lender. At the request of the Lessor from
time to time, Lessee shall execute and deliver (and require the tenants,
subtenants or sublessees to execute and deliver, if applicable) an assignment
and/or subordination agreement relating to the Management Agreements, which
assignment and/or subordination agreement shall be in such form and content as
reasonably acceptable to Lessor and/or any lender providing financing to Lessor,
and shall be delivered to Lessor within ten (10) days after Lessor's request.
Lessee hereby agrees that all payments and fees payable under the Management
Agreements are and shall be subordinate to the payment of the obligations under
this Lease and all other documents executed in connection with this Lease and
the Purchase Agreement. Lessee agrees that all Management Agreements entered
into in connection with the Leased Property shall expressly contain provisions
acceptable to Lessor which (i) require an assignment of the Management
Agreements to Lessor upon request by Lessor, (ii) confirm and warrant that all
sums due and payable under the Management Agreements are subordinate to this
Lease, (iii) xxxxx Xxxxxx the right to terminate the Management Agreement
(individually or collectively, if more than one (1)) upon an Event of Default or
Default hereunder, (iv) require the Management Company to execute and deliver to
Lessor within ten (10) days from Lessor's request an estoppel certificate,
assignment and/or subordination agreement as required by Lessor and/or Lessor's
lender providing financing to Lessor, in such form and content as is acceptable
to Lessor and/or its lender, and (v) all fees due and payable under any
Management Agreements, shall be subordinate to all monetary obligations under
this Lease. At the request of the Lessor from time to time, Lessee shall execute
and obtain from all parties subject to such Management Agreements executed
written confirmation of such assignment or subordination, which shall be
delivered to Lessor within ten (10) days from Lessor's request.
41.17 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS
EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAW
PRINCIPLES (THE "APPLICABLE LAW").
41.18 JURISDICTION AND VENUE. LESSOR AND LESSEE CONSENT TO PERSONAL
JURISDICTION IN THE STATE OF DELAWARE. LESSOR AND LESSEE AGREE THAT ANY ACTION
OR PROCEEDING ARISING FROM OR RELATED TO THIS LEASE SHALL BE BROUGHT AND TRIED
EXCLUSIVELY IN THE STATE OR FEDERAL COURTS OF THE STATE OF DELAWARE. EACH OF THE
PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF
VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. LESSEE
EXPRESSLY ACKNOWLEDGES THAT DELAWARE IS A FAIR, JUST AND REASONABLE FORUM AND
LESSEE AGREES NOT TO SEEK REMOVAL OR TRANSFER OF ANY ACTION FILED BY LESSOR IN
SAID COURTS. FURTHER, LESSOR AND LESSEE IRREVOCABLY AND UNCONDITIONALLY WAIVE
ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY
CERTIFIED MAIL ADDRESSED TO A PARTY AT THE ADDRESS DESIGNATED PURSUANT TO
ARTICLE XXXII HEREOF SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PARTY
FOR ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER
COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT.
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41.19 COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
ARTICLE XLII
MEMORANDUM OF LEASE
Lessor and Lessee shall, promptly upon the request of either, enter into a
short form memorandum of this Lease in which reference to this Lease and all
options contained herein shall be made. The short form memorandum shall be in
form suitable for recording and reasonably satisfactory to Lessor and Lessee;
provided, however, such short form memorandum shall at a minimum contain such
matters required by the laws of the state in which the Leased Property is
located.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
56
IN WITNESS WHEREOF, the parties have caused this Lease to be executed and
their respective seals to be hereunto affixed and attested by their respective
officers thereunto duly authorized.
LESSOR:
MPT OF BUCKS COUNTY, L.P.
BY: MPT OF BUCKS COUNTY, LLC
ITS: GENERAL PARTNER
BY: MPT OPERATING PARTNERSHIP, L.P.
ITS: SOLE MEMBER
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------
Xxxxxx X. Xxxxx, Xx.
Its: President and Chief Executive Officer
LESSEE:
BUCKS COUNTY ONCOPLASTIC INSTITUTE, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx, M.D.
--------------------------------------
Xxxxxx X. Xxxxxxxxxx, M.D.
Its: Chief Manager
STATE OF ALABAMA
JEFFERSON COUNTY
On this, the _______ day of September, 2005, before me, a Notary Public for
the State of Alabama, the undersigned officer, personally appeared XXXXXX X.
XXXXX, XX., known to me (or satisfactorily proven) to be the person whose name
is subscribed to the within instrument, and who acknowledged himself to be the
President and Chief Executive Officer of MPT Operating Partnership, L.P., a
Delaware limited partnership, which limited partnership is the sole member of
MPT OF BUCKS COUNTY, LLC, a Delaware limited liability company, which limited
liability company is the general partner of MPT OF BUCKS COUNTY, L.P., a
Delaware limited partnership, and further acknowledged that he, as such officer,
being authorized to do so, executed the foregoing instrument for the purposes
therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
________________________________________
Notary Public
Print Name: ____________________________
[AFFIX SEAL] My Commission Expires: _________________
STATE/COMMONWEALTH OF _______________
COUNTY OF ___________________________
On this, the ________ day of September, 2005, before me, a Notary Public
for the Commonwealth of Pennsylvania, the undersigned officer, personally
appeared XXXXXX X. XXXXXXXXXX, M.D., known to me (or satisfactorily proven) to
be the person whose name is subscribed to the within instrument, and who
acknowledged himself to be the Chief Manager of BUCKS COUNTY ONCOPLASTIC
INSTITUTE, LLC, a Delaware limited liability company, and further acknowledged
that he, as such officer, being authorized to do so, executed the foregoing
instrument for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
________________________________________
Notary Public
Print Name: ____________________________
[AFFIX SEAL] My Commission Expires: _________________
Exhibit A
PROPERTY DESCRIPTION
All that certain tract of land situated on the Westerly side of Xxxxxxx Drive,
Bensalem Township, Bucks County, Pennsylvania, as shown on that ALTA/ACSM Land
Title Survey prepared by Xxxxxx Xxxxxxx & Taylor, Chalfont, PA, dated May 12,
2005, most recently revised September 15, 2005, as follows:
Beginning at a common corner of Bucks County Hospital/MOB and the "ITT" property
(tax parcel 2-35-1-8) on the Westerly legal right-of-way line of Xxxxxxx Drive,
60 feet wide.
1) Thence along the ITT property South 16 degrees 03 minutes 24 seconds West
80.60 feet to a concrete monument found;
2) Thence still along the ITT property South 09 degrees 39 minutes 43 seconds
West 403.74 feet to a point;
3) Thence still along the ITT property South 80 degrees 20 minutes 17 seconds
East 171.88 feet to a point;
4) Thence still along the ITT property South 44 degrees 27 minutes 04 seconds
East 80.00 feet to a corner in line of the boundary of Glenview Corporate Center
and along various adjoining property owners;;
5) Thence along the boundary of Glenview Corporate Center South 45 degrees 32
minutes 56 seconds West 345.00 feet to a point;
6) Thence still along the boundary of Glenview Corporate Center South 30 degrees
16 minutes 44 seconds West 676.04 feet to a point, a corner of remaining lands
of tax parcel 2-35-1 of which this was a part;
7) Thence along tax parcel 2-35-1 North 59 degrees 43 minutes 16 seconds West
26.81 feet to a point;
8) Thence still along parcel 2-35-1 North 04 degrees 53 minutes 26 seconds East
99.20 feet to a point;
9) Thence still along parcel 2-35-1 North 28 degrees 05 minutes 21 seconds East
36.24 feet to a point;
10) Thence still along parcel 2-35-1 North 01 degree 18 minutes 13 seconds West
19.91 feet to a point;
11) Thence still along parcel 2-35-1 North 23 degrees 51 minutes 58 seconds East
501.50 feet to a point;
12) Thence still along parcel 2-35-1 North 80 degrees 05 minutes 18 seconds West
217.44 feet to a point;
13) Thence still along parcel 2-35-1 North 01 degree 18 minutes 13 seconds West
182.67 feet to a point;
14) Thence still along parcel 2-35-1 North 12 degrees 22 minutes 52 seconds West
136.82 feet to a point;
15) Thence still along parcel 2-35-1 North 62 degrees 45 minutes 33 seconds West
47.59 feet to a point;
16) Thence still along parcel 2-35-1 North 05 degrees 32 minutes 12 seconds West
140.76 feet to a point;
17) Thence still along parcel 2-35-1 North 13 degrees 45 minutes 44 seconds West
377.69 feet to a point;
18) Thence still along parcel 2-35-1 North 32 degrees 14 minutes 28 seconds East
550.47 feet to a point;
19) Thence still along parcel 2-35-1 South 73 degrees 10 minutes 35 seconds East
250.00 feet to a point on the Westerly side of Xxxxxxx Drive;
20) Thence still along the Westerly side of Xxxxxxx Drive South 16 degrees 47
minutes 24 seconds Wset 182.15 feet to a point of curvature;
21) Thence still along Xxxxxxx Drive and a curve to the left having a radius of
235.00 feet the arc distance of 372.15 feet to the point of beginning.
Exhibit B
PERMITTED EXCEPTIONS
1. Rights granted to Xxxx Telephone Company as in Land Record Books 172, Page
2269, 89, Page 868, 89, Page 872, and 262, Page 1975.
2. Rights to Philadelphia Electric Company as in Land Record Books 101, Page
746, 1165, Page 37, and 1803, Page 383.
3. Declaration of Protective Covenants as in Land Record Book 192, Page 1875, as
shown on Survey (defined below).
4. Rights granted to Philadelphia Electric Company and Xxxx Telephone Company as
in Deed Book 775, Page 482.
5. Sewer Easement as in Deed Book 1288, Page 174.
6. Conditions disclosed by Plans recorded in Plan Books 259, Page 56A, and 299,
Page 81, as shown on Survey (defined below).
7. Dedication of Documents of Completion to allow connection to the Sewer and
Water Facilities as in Land Record Book 1588, Page 244 (Easement "B" affects
subject parcel and is shown on the Survey defined below.)
8. Conditions disclosed by Record Plan of Bucks County Hospital/MOB to be
recorded.
9. Conditions disclosed on that ALTA/ACSM Land Title Survey prepared by Xxxxxx
Xxxxxxx & Taylor, Chalfont, PA, dated May 12, 2005, most recently revised
September 15, 2005, as follows ("Survey"):
a. Detention basin berm shown;
b. 30" RCP and 36" RCP shown; and
c. Poquessing Creek (waters of he United States) runs adjacent to a portion
of the land.
10. Rights or claims by parties in possession under the terms of any unrecorded
lease or agreement(s) of sale, including, without limitation, that certain Lease
between Bucks County Oncoplastic Institute, LLC and Xxxx XxXxxx, M.D. and
Associates, P.C., effective as of September 1, 2005.
11. Easements, or claims of easements, not shown by the public record.
Exhibit C
EXISTING SUBLEASES
Lease between Bucks County Oncoplastic Institute, LLC and Xxxx XxXxxx, M.D. and
Associates, P.C., effective as of September 1, 2005.
Exhibit D
LEASE GUARANTY
See attached
