EXHIBIT 10.36
AMENDED, RESTATED AND CONSOLIDATED
MASTER LEASE DOCUMENT
GENERAL TERMS AND CONDITIONS
DATED AS OF SEPTEMBER 24, 1997
FOR LEASES BETWEEN
HEALTH AND RETIREMENT PROPERTIES TRUST, AS LANDLORD
(THE "LANDLORD")
AND
ECA HOLDINGS, INC.
MARIETTA/SCC, INC.
GLENWOOD/SCC, INC.
DUBLIN/SCC, INC.
AND
COLLEGE PARK/SCC, INC., AS TENANTS
(COLLECTIVELY, THE "TENANTS")
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS..................................................2
ARTICLE 2 LEASED PROPERTY AND TERM....................................11
2.1 Leased Property.............................................11
2.2 Condition of Leased Property................................12
2.3 Fixed Term..................................................13
ARTICLE 3 RENT........................................................13
3.1 Rent........................................................13
3.2 Late Payment of Rent........................................16
3.3 Net Lease...................................................16
3.4 No Termination, Abatement, Etc..............................16
ARTICLE 4 USE OF THE APPLICABLE LEASED PROPERTY.......................17
4.1 Permitted Use...............................................17
4.2 Compliance with Legal and Insurance Requirements, Etc.......18
4.3 Compliance with Medicaid and Medicare Requirements..........18
4.4 Environmental Matters.......................................18
ARTICLE 5 MAINTENANCE AND REPAIRS.....................................20
5.1 Maintenance and Repair......................................20
5.2 Tenant's Personal Property..................................21
5.3 Yield Up....................................................22
5.4 Encroachments, Restrictions, Etc............................22
5.5 Landlord to Grant Easements, Etc............................23
ARTICLE 6 CAPITAL ADDITIONS, ETC......................................23
6.1 Construction of Capital Additions to the Leased Property....23
6.2 Capital Additions Financed or Paid For by Tenant............24
6.3 Capital Additions Financed by Landlord......................25
6.4 Non-Capital Additions.......................................26
6.5 Salvage.....................................................26
ARTICLE 7 LIENS.......................................................27
7.1 Liens.......................................................27
7.2 Landlord's Lien.............................................27
ARTICLE 8 PERMITTED CONTESTS..........................................27
ARTICLE 9 INSURANCE AND INDEMNIFICATION...............................28
9.1 General Insurance Requirements..............................28
9.2 Replacement Cost............................................29
9.3 Waiver of Subrogation.......................................29
9.4 Form Satisfactory, Etc......................................29
9.5 Blanket Policy..............................................30
9.6 No Separate Insurance.......................................30
9.7 Indemnification of Landlord.................................30
ARTICLE 10 CASUALTY....................................................31
10.1 Insurance Proceeds..........................................31
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10.2 Damage or Destruction.......................................31
10.3 Damage Near End of Term.....................................33
10.4 Tenant's Property...........................................33
10.5 Restoration of Tenant's Property............................33
10.6 No Abatement of Rent........................................33
10.7 Waiver......................................................34
ARTICLE 11 CONDEMNATION................................................34
11.1 Total Condemnation, Etc.....................................34
11.2 Partial Condemnation........................................34
11.3 Abatement of Rent...........................................35
11.4 Temporary Condemnation......................................35
11.5 Allocation of Award.........................................36
ARTICLE 12 DEFAULTS AND REMEDIES.......................................36
12.1 Events of Default...........................................36
12.2 Remedies....................................................39
12.3 TENANT'S WAIVER.............................................40
12.4 Application of Funds........................................40
12.5 Landlord's Right to Cure Tenant's Default...................40
12.6 Trade Names.................................................40
ARTICLE 13 HOLDING OVER................................................41
ARTICLE 14 LANDLORD'S DEFAULT..........................................41
ARTICLE 15 PURCHASE OF LEASED .........................................41
ARTICLE 16 SUBLETTING AND ASSIGNMENT...................................42
16.1 Subletting and Assignment...................................42
16.2 Required Sublease Provisions................................42
16.3 Permitted Sublease..........................................43
16.4 Sublease Limitation.........................................43
ARTICLE 17 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS..............44
17.1 Estoppel Certificates.......................................44
17.2 Financial Statements........................................44
17.3 General Operations..........................................44
ARTICLE 18 LANDLORD'S RIGHT TO INSPECT.................................45
ARTICLE 19 APPRAISAL...................................................46
19.1 Appraisal Procedure.........................................46
19.2 Landlord's Right to Appraisal...............................47
ARTICLE 20 LANDLORD'S OPTION TO PURCHASE...............................47
20.1 Landlord's Option to Purchase the Tenant's Personal
Property; Transfer of Licenses............................47
ARTICLE 22 FACILITY MORTGAGES..........................................48
22.1 Landlord May Grant Liens....................................48
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22.2 Subordination of Lease......................................48
22.3 Notice to Mortgagee and Ground Landlord.....................49
ARTICLE 23 ADDITIONAL COVENANTS OF TENANT..............................49
23.1 Prompt Payment of Indebtedness..............................49
23.2 Conduct of Business.........................................50
23.3 Maintenance of Accounts and Records.........................50
23.4 Notice of Change of Name, Administrator, Etc................50
23.5 Notice of Litigation, Potential Event of Default, Etc.......50
23.6 Indebtedness of Tenant......................................50
23.7 Financial Condition of Tenant...............................51
23.8 Distributions, Payments to Affiliates, Etc. ...............51
23.9 Prohibited Transactions.....................................52
23.10 Investments.................................................52
23.11 Management of Leased Property...............................52
23.12 Liens and Encumbrances......................................53
23.13 Merger; Sale of Assets; Etc.................................53
23.14 Definitions.................................................54
ARTICLE 24 MISCELLANEOUS...............................................55
24.1 Limitation on Payment of Rent...............................55
24.2 No Waiver...................................................55
24.3 Remedies Cumulative.........................................55
24.4 Severability................................................55
24.5 Acceptance of Surrender.....................................55
24.6 No Merger of Title..........................................56
24.7 Conveyance by Landlord......................................56
24.8 Quiet Enjoyment.............................................56
24.9 NON-LIABILITY OF TRUSTEES...................................56
24.10 Landlord's Consent of Trustees..............................57
24.11 Memorandum of Lease.........................................57
24.12 Notices....................................................57
24.13 Construction................................................58
24.14 CONSENT TO JURISDICTION.....................................58
24.15 WAIVER OF JURY TRIAL........................................58
24.16 GOVERNING LAW...............................................58
AMENDED, RESTATED AND CONSOLIDATED MASTER LEASE DOCUMENT
GENERAL TERMS AND CONDITIONS
This AMENDED, RESTATED AND CONSOLIDATED MASTER LEASE DOCUMENT, GENERAL
TERMS AND CONDITIONS (hereinafter, the "Master Lease Document"), dated as of
September 24, 1997 is adopted as part of each lease executed by HEALTH AND
RETIREMENT PROPERTIES TRUST, a Maryland real estate investment trust, as
landlord ("Landlord"), on the one hand, and any of MARIETTA/SCC, INC.,
GLENWOOD/SCC, INC., DUBLIN/SCC, INC. and COLLEGE PARK/SCC, INC., each a Georgia
corporation (collectively, the "Georgia Companies") or ECA HOLDINGS, INC., a
Delaware corporation ("ECA"), as tenant (together with the Georgia Companies,
collectively, the "Tenants"), on the other.
RECITALS
This Master Lease Document is made and entered into with reference to
the following recitals:
A. Pursuant to that certain Master Lease Document, General Terms and
Conditions dated as of December 30, 1993, as amended, between Landlord
and ECA (the "1993 Master Lease Document") and the several Facility
Leases, as amended, between Landlord and ECA that incorporate by
reference the 1993 Master Lease Document, ECA has leased from Landlord
certain real property, and related improvements and personal property,
located in Colorado, Iowa, Kansas, Missouri and Wyoming (such leases
being the "1993 Leases" and such properties being the "1993 Leased
Properties").
B. Pursuant to that certain Master Lease Document, General Terms and
Conditions dated as of April 1, 1995, as amended, between Landlord and
ECA (the "1995 Master Lease Document") and the several Facility Leases,
as amended, between Landlord and ECA that incorporate by reference the
1995 Master Lease Document, Landlord has leased to ECA certain real
property, and related improvements and personal property, located in
Iowa, Kansas, Missouri and Nebraska (such leases being the "1995
Leases" and such properties being the "1995 Leased Properties").
C. Pursuant to that certain Master Lease Document, General Terms and
Conditions dated as of May 10, 1996, as amended, between Landlord and
the Georgia Companies (the "1996 Master Lease Document") and the
several Facility Leases, as amended, entered into between Landlord and
the Georgia Companies that incorporate by reference the 1996 Master
Lease Document, Landlord has leased to the Georgia Companies certain
real property, and related improvements and personal property, located
in Georgia (such leases being the "1996 Leases", and together with the
1993 Leases and the 1995 Leases, collectively, the "Existing Leases";
and such properties being the "1996 Leased Properties").
D. Pursuant to the terms of a Purchase and Sale Agreement dated as of even
date herewith (the "Restructuring Agreement"), the parties hereto have
agreed to amend, restate and consolidate the 1993 Master Lease
Document, the 1995 Master Lease Document and the 1996 Master Lease
Document, and to amend each of the Existing Leases.
E. The Restructuring Agreement also provides that Landlord will acquire
from ECA and simultaneously lease back to ECA under the terms of this
Master Lease Document and the several Facility Leases between Landlord
and ECA that incorporate by reference this Master Lease Document (such
leases being the "1997 Leases", and together with the Existing Leases,
as
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amended pursuant to the Restructuring Agreement, collectively, the
"Leases") certain real property and related improvements and personal
property, located in Canon City, Colorado Springs and Delta, Colorado
and as otherwise described on Exhibit A hereto (such properties being
the "1997 Leased Properties", and together with the 1993 Leased
Properties, the 1995 Leased Properties and the 1996 Leased Properties,
collectively, the "Collective Leased Properties").
F. Notwithstanding anything herein to the contrary, the terms and
conditions of this Master Lease Document shall be construed and
interpreted as to each Lease as if a separate lease containing all the
terms of this Master Lease Document and such Lease had been executed by
Landlord and the relevant Tenant with respect to the Leased Property
described in such Lease (hereinafter referred to as the "applicable
Leased Property").
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and each Tenant (hereinafter, "Tenant") agree that the
1993 Master Lease Document, the 1995 Master Lease Document and the 1996 Master
Lease Document are amended, restated and consolidated to read as follows:
ARTICLE 1
DEFINITIONS
For all purposes of this Master Lease Document, except as otherwise
expressly provided or unless the context otherwise requires, (i) the terms
defined in this Article shall have the meanings assigned to them in this Article
and include the plural as well as the singular, (ii) all accounting terms not
otherwise defined herein shall have the meanings assigned to them in accordance
with GAAP consistently applied, (iii) the use in this Master Lease Document of
"Articles," "Sections" and terms denoting other subdivisions shall refer to the
designated Articles, Sections and other subdivisions of this Master Lease
Document, and (iv) the words "herein," "hereof," "hereunder" and other words of
similar import shall refer to this Master Lease Document as a whole and not to
any particular Article, Section or other subdivision.
Added Value Percentage shall mean with respect to any Tenant's Capital
Addition, an amount (expressed as a percentage) equal to the quotient of the
Fair Market Added Value of such Capital Addition over the Fair Market Value of
the entire Leased Property (including all Capital Additions) immediately after
completion of such Tenant's Capital Addition. The Added Value Percentage for any
Tenant's Capital Additions shall remain in effect until any subsequent Capital
Addition is completed, at which time the Added Value Percentage will again be
determined as provided above.
Additional Charges: As defined in Section 3.1.2.
Adjusted Purchase Price shall mean, for the applicable Leased Property,
the Purchase Price of such Leased Property plus the aggregate amount of all
disbursements made by Landlord with respect to such Leased Property pursuant to
the terms of any renovation funding agreement, plus any other amount disbursed
or advanced by Landlord to finance, or to reimburse Tenant for its financing of,
any Capital Addition to such Leased Property less the amount of any Award or the
proceeds of any insurance received by Landlord in connection with a partial
Condemnation or a partial casualty involving the applicable Leased Property as
described in Section 11.2 or 10.2.2, and not applied by Landlord to the
restoration of the applicable Leased Property as provided therein.
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Affiliate shall mean as to any Person (a) any other Person which,
directly or indirectly, controls or is controlled by or is under common control
with such Person, (b) any other Person that owns, beneficially, directly or
indirectly, five percent (5%) or more on a consolidated basis, of the
outstanding capital stock, shares, equity or beneficial interests of such
Person, (c) any officer, director, employee, general partner or trustee of such
Person or any other Person controlling, controlled by or under common control
with such Person (excluding trustees and Persons serving in similar capacities
who are not otherwise an Affiliate of such Person), or (d) with respect to any
individual, a spouse, any ancestor or descendant, or any other relative (by
blood, adoption or marriage), within the third degree, of such individual. 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, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, through the ownership of voting securities, partnership interests or
other equity interests.
Applicable Laws: As defined in Section 4.4.
Applicable Percentage shall mean initially (a) 11.91% with respect to
any 1993 Leased Property, (b) 12.55% with respect to any 1995 Leased Property,
(c) 11.00% with respect to any 1996 Leased Property and (d) 11.7% with respect
to any 1997 Leased Property. Effective on the first day of each calendar year,
commencing January 1, 1999, the Applicable Percentage with respect to the
applicable Leased Property for such calendar year shall be increased to equal
the product of (x) the Applicable Percentage for the applicable Leased Property
on the last day of the prior calendar year multiplied by (y) a fraction, the
denominator of which shall be the Index (as hereinafter defined) (A) at June 30,
1997, in the case of the adjustment effective January 1, 1999 or (B) at November
30 of the year prior to such prior calendar year, in the case of the adjustment
effective any January 1 thereafter, and the numerator of which shall be the
Index at November 30 of the prior calendar year. As used herein, the term
"Index" shall mean the Consumer Price Index for Urban Wage Earners and Clerical
Workers, United States, All Items 1982-1984=100. The Index is presently
published by the Bureau of Labor Statistics of the United States Department of
Labor. In the event publication of the Index ceases, the computation of the
Minimum Rent during each year with respect to which the Index is to be applied
shall be computed upon the basis of whatever index published by the United
States Department of Labor at that time is most nearly comparable as a measure
of general changes in price levels for the United States. In the event that the
Index ceases to use 1982-84=100 as the basis of calculation, or if a substantial
change is made in the method used to determine the Index or the items used to
calculate the Index and Landlord shall in its sole discretion so elect, then the
Index shall be converted to the amount(s) that would have resulted had the
manner of calculating the Index in effect at the Effective Date not been
altered.
Award shall mean all compensation, sums or other value awarded, paid or
received by virtue of a total or partial Condemnation of the applicable Leased
Property (after deduction of all reasonable legal fees and other reasonable
costs and expenses, including, without limitation, expert witness fees, incurred
by Landlord, in connection with obtaining any such award).
Business Day shall mean any day other than Saturday, Sunday, or any
other day on which banking institutions in the State are authorized by law or
executive action to close.
Capital Addition shall mean one or more new buildings, or one or more
additional structures annexed to any portion of any of the Leased Improvements
with respect to the applicable Leased Property, or the material expansion of
existing improvements, which are constructed on any parcel or portion of the
Land during the Term, including, the construction of a new wing or new story,
the renovation of existing improvements on such Leased Property in order to
provide a functionally new
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facility needed to provide services not previously offered, or any expansion,
construction, renovation or conversion in order to increase the bed capacity of
the Facility located on the applicable Leased Property, to change the purpose
for which such beds are utilized or to materially improve the quality of such
Facility.
Capital Additions Cost shall mean the cost of any Capital Addition
proposed to be made by Tenant to the applicable Leased Property, whether paid
for by Tenant or Landlord. Such cost shall include (a) the cost of construction
of the Capital Addition, including site preparation and improvement, materials,
labor, supervision, developer and administrative fees, legal fees, and related
design, engineering and architectural services, the cost of any fixtures, the
cost of equipment and other personalty, the cost of construction financing
(including, but not limited to, capitalized interest) and other miscellaneous
costs approved by Landlord, (b) if agreed to by Landlord in writing, in advance,
the cost of any land (including all related acquisition costs incurred by
Tenant) contiguous to the Leased Property which is to become a part of the
Leased Property purchased for the purpose of placing thereon the Capital
Addition 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 Addition during construction, (d) title
insurance charges, (e) reasonable attorneys' fees and expenses, (f) filing,
registration and recording taxes and fees, (g) documentary stamp or transfer
taxes, and (h) all actual and reasonable costs and expenses of Landlord and
Tenant and, if agreed to by Landlord in writing, in advance, of any Lending
Institution committed to finance the Capital Addition, including, but not
limited to, all (i) reasonable attorneys' fees and expenses, (ii) printing
expenses, (iii) filing, registration and recording taxes and fees, (iv)
documentary stamp or transfer taxes, (v) title insurance charges and appraisal
fees, (vi) rating agency fees, and (vii) commitment fees charged by any Lending
Institution advancing or offering to advance any portion of any financing to
which Landlord has consented in writing for such Capital Addition.
CCA Entity: As defined in the Restructuring Agreement.
Change in Control shall be deemed to exist (a) if IHS shall cease to
own directly or indirectly, both beneficially and of record all the issued and
outstanding capital stock of any CCA Entity, or (b) upon the merger or
consolidation of IHS or any CCA Entity with or into any other Person or any one
or more sales or conveyances to any Person of all or substantially all of the
assets of IHS or any CCA Entity (provided that any merger or consolidation of
IHS with another Person or any sale of substantially all of the assets of IHS,
that in either case complies with Section 14(f) of the Guaranty dated as of
September 24, 1997, as in effect from time to time, by IHS in favor of Landlord,
shall not constitute a Change in Control for the purposes of this clause (b)).
Code shall mean the Internal Revenue Code of 1986 and, to the extent
applicable, the Treasury Regulations promulgated thereunder, each as from time
to time amended.
Collective Leased Properties shall mean, at any time and from time to
time at the time of determination, all of the Leased Properties that are then
subject to a Lease.
Commencement Date: As defined in the applicable Lease.
Community Care shall mean Community Care of America, Inc., a Delaware
corporation, and its successors and assigns.
Condemnation shall mean, as to the applicable Leased Property, (a) the
exercise of any governmental power, whether by legal proceedings or otherwise,
by a Condemnor of its power of
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condemnation, (b) a voluntary sale or transfer by Landlord to any Condemnor,
either under threat of condemnation or while legal proceedings for condemnation
are pending, and (c) a taking or voluntary conveyance of all or part of such
Leased Property, or any interest therein, or right accruing thereto or use
thereof, as the result or in settlement of any Condemnation or other eminent
domain proceeding affecting such Leased Property, whether or not the same shall
have actually been commenced.
Condemnor shall mean any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation.
Contingent Obligation of any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise, other
than agreements to purchase goods at an arm's length price in the ordinary
course of business) or (ii) entered into for the purpose of assuring in any
other manner the holder of such Indebtedness of the payment thereof or to
protect such holder against loss in respect thereof (in whole or in part),
provided that the term Contingent Obligation shall not include endorsements for
collection or deposit in the ordinary course of business.
Date of Taking shall mean, as to the applicable Leased Property, the
date the Condemnor has the right to possession of such Leased Property, or any
portion thereof, in connection with a Condemnation.
Default shall mean (a) any Event of Default or (b) any condition or
event that has occurred and is continuing and that (i) with the giving of notice
or lapse of time or both would, unless cured or waived, become an Event of
Default and (ii) either relates to the payment of Rent or relates to a matter as
to which Landlord has given Notice of default to any Tenant.
Distribution: As defined in Section 23.14.
Effective Date: As defined in the Restructuring Agreement.
Encumbrance: As defined in Section 22.1.
Environmental Obligation: As defined in Section 4.4.
Environmental Notice: As defined in Section 4.4.
Environmental Report: As defined in Section 4.4.
Event of Default: As defined in Section 12.1.
Extended Term(s): As defined in Section 2.4.
Facility shall mean the facility offering health care or related
services being operated or proposed to be operated on the applicable Leased
Property.
Facility Mortgage shall mean any Encumbrance placed upon the applicable
Leased Property in accordance with Article 22 hereof.
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Facility Mortgagee shall mean the holder of any Facility Mortgage.
Facility Trade Name shall mean any name under which any Tenant has
conducted the business of operating the Facility located on the applicable
Leased Property at any time during the Term.
Fair Market Added Value shall mean, as to any applicable Leased
Property, the Fair Market Value of such Leased Property (including all Capital
Additions) less the Fair Market Value of such Leased Property determined as if
no Tenant's Capital Additions had been constructed.
Fair Market Rental shall mean, as to the applicable Leased Property,
the rental which a willing tenant not compelled to rent would pay a willing
landlord not compelled to lease for the use and occupancy of such Leased
Property (including all Capital Additions other than Tenant's Capital Additions)
on the terms and conditions of the applicable Lease for the term in question,
assuming Tenant is not in default thereunder and determined by agreement between
Landlord and Tenant, or, failing agreement, in accordance with the appraisal
procedures set forth in Article 19 hereof or in such other manner as shall be
mutually acceptable to Landlord and Tenant.
Fair Market Value shall mean the price that a willing buyer not
compelled to buy would pay a willing seller not compelled to sell for the
applicable Leased Property, (a) assuming the same is unencumbered by the
applicable Lease, (b) determined in accordance with the appraisal procedures set
forth in Article 19 hereof or in such other manner as shall be mutually
acceptable to Landlord and the applicable Tenant, and (c) not taking into
account any reduction in value resulting from any indebtedness to which such
Leased Property is subject.
Fair Market Value Purchase Price shall mean the Fair Market Value of
the applicable Leased Property less the Fair Market Added Value.
Financial Officer's Certificate shall mean, as to any Person, a
certificate of the financial officer of such Person, duly authorized,
accompanying the financial statements required to be delivered by such Person
pursuant to Section 17.2, in which such officer shall (a) certify that such
statements have been properly prepared in accordance with GAAP and are true,
correct and complete in all material respects and fairly present the
consolidated financial condition of such Person at and as of the dates thereof
and the results of its and their operations for the periods covered thereby, (b)
certify that such officer has reviewed the Leases and has no knowledge of any
material default by Tenants or any other Guarantor in the performance or
observance of any of the provisions of the Leases or any Transaction Document or
of any condition or event which constitutes an Event of Default under the Leases
or any of the Transaction Documents or which with the passage of time or the
giving of notice or both would become such an Event of Default, and (c) provide
computations and schedules showing in reasonable detail compliance, as at the
date of each such financial statement, with Section 23.7 of the Master Lease
Document.
Financial Statements shall mean, for any Fiscal Year or other
accounting period of IHS and its consolidated subsidiaries, annual audited and
quarterly unaudited financial statements of each Tenant, including such Tenant's
balance sheet and the related statements of income and cash flows, 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.
Fiscal Year shall mean the twelve (12) month period from January 1 to
December 31.
Fixed Term: As defined in Section 2.3.
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Fixtures: As defined in Section 2.1(d).
First Extended Term: As defined in the applicable Lease.
GAAP shall mean generally accepted accounting principles consistently
applied.
Guarantor(s) shall mean any guarantor of any Tenant's obligations under
the applicable Lease, including, without limitation, IHS, each other CCA Entity,
and each such guarantor's successors and assigns.
Guaranty shall mean and include any guaranty or other agreement
executed by a Guarantor in favor of Landlord pursuant to which the payment and
performance of each Tenant's obligations under the applicable Lease (among other
obligations) are guaranteed, together with all modifications, amendments or
supplements thereto.
Hazardous Substances: As defined in Section 4.4.
IHS shall mean Integrated Health Services, Inc., a Delaware
corporation, and its successors and assigns.
Impositions shall mean for the applicable Leased Property,
collectively, all taxes (including, without limitation, all taxes imposed under
the laws of the State, as such laws may be amended from time to time, and all ad
valorem, sales and use, single business, gross receipts, transaction privilege,
rent or similar taxes as the same relate to or are imposed upon Landlord, Tenant
or the business conducted upon the applicable Leased Property), assessments
(including, without limitation, all assessments for public improvements or
benefit, whether or not commenced or completed prior to the date hereof and
whether or not to be completed within the Term), ground rents (including any
minimum rent under any ground lease, and any additional rent or charges
thereunder, whether payable by reference to Rent payable hereunder or
otherwise), 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 applicable Leased Property or the business conducted
thereon by Tenant (including all interest and penalties thereon due to any
failure in payment by Tenant), which at any time prior to, during or in respect
of the Term hereof may be assessed or imposed on or in respect of or be a lien
upon (a) Landlord's interest in such Leased Property, (b) such Leased Property
or any part thereof or any rent therefrom or any estate, right, title or
interest therein, or (c) any occupancy, operation, use or possession of, or
sales from, or activity conducted on, or in connection with such Leased Property
or the leasing or use of such Leased Property or any part thereof by Tenant.
Provided, however, nothing contained in the Lease with respect to the applicable
Leased Property shall be construed to require Tenant to pay (1) any tax based on
net income imposed on Landlord, or (2) any net revenue tax of Landlord, or (3)
any transfer fee or other tax imposed with respect to the sale, exchange or
other disposition by Landlord of the applicable Leased Property or the proceeds
thereof (other than in connection with the sale, exchange or other disposition
to, or in connection with a transaction involving, Tenant), or (4) any single
business, gross receipts (other than a tax on any rent received by Landlord from
Tenant), transaction privilege, rent or similar taxes as the same are related to
or imposed upon Landlord, except to the extent that any tax, assessment, tax
levy or charge, which Tenant 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.
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Indebtedness shall mean, as to any Person (determined without
duplication): (i) indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
or acquisition price of property or services (including amounts payable under
agreements not to compete and other similar arrangements), other than accounts
payable (other than for borrowed money) incurred in the ordinary course of
business and accrued expenses incurred in the ordinary course of business; (ii)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person; (iii) obligations of such Person under leases or real or
personal property that are or should be classified as capitalized lease
obligations under GAAP; (iv) obligations of such Person to redeem or otherwise
retire shares of capital stock of such Person; (v) indebtedness of others of the
type described in clauses (i) through (iv) above secured by a Lien on the
property of such Person, whether or not the respective obligation so secured has
been assumed by such Person; and (vi) all indebtedness of others of the type
described in clauses (i) through (v) above as to which such Person has entered
into a Contingent Obligation.
Independent Trustees shall mean Trustees who, in their individual
capacity, (a) are not Affiliates of Tenant and (b) do not perform any services
for Landlord except as Trustees.
Insurance Requirements shall mean all terms of any insurance policy
required by the applicable Lease with respect to the applicable Leased Property
and all requirements of the issuer of any such policy.
Investment: As defined in Section 23.10.
Land: As defined in Section 2.1(a) with respect to the applicable
Lease.
Landlord shall mean Health and Retirement Properties Trust (f/k/a
"Health and Rehabilitation Properties Trust"), a Maryland real estate investment
trust, and its successors and assigns.
Lease(s): As defined in the recital clauses hereto, and each other
lease entered into between Landlord and any Tenant, which incorporates by
reference this Master Lease Document.
Leased Improvements: As defined in Section 2.1(b) with respect to the
applicable Lease.
Leased Personal Property: As defined in Section 2.1(e) with respect to
the applicable Lease.
Leased Property: As defined in Section 2.1 with respect to the
applicable Lease.
Legal Requirements shall mean, as to the applicable Leased Property,
all federal, state, county, municipal and other governmental statutes, laws,
rules, orders, regulations, ordinances, judgments, decrees and injunctions
affecting such Leased Property or the maintenance, construction, alteration or
operation thereof, whether now or hereafter enacted or in existence, including,
without limitation, (a) all permits, licenses, certificates of need,
authorizations and regulations necessary to operate such Leased Property for its
Primary Intended Use, and (b) all covenants, agreements, restrictions and
encumbrances contained in any instruments at any time in force affecting such
Leased Property, including those which may (i) require material repairs,
modifications or alterations in or to such Leased Property or (ii) in any way
adversely affect the use and enjoyment thereof.
Lending Institution shall mean any insurance company, federally insured
commercial or savings bank, national banking association, savings and loan
association, employees' welfare, pension or
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retirement fund or system, corporate profit sharing or pension trust, college or
university, or real estate investment trust, including any corporation qualified
to be treated for federal tax purposes as a real estate investment trust, such
trust having a net worth of at least $100,000,000.
Lien shall mean and include any mortgage, security interest, pledge,
collateral assignment, or other encumbrance, lien or charge of any kind, or any
transfer of any property or assets for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors.
Management Agreement shall mean and include any agreement whether
written or oral entered into between Tenant and any other party (including any
Affiliate of Tenant) pursuant to which management services are provided to the
Facility located on the applicable Leased Property, together with all
amendments, modifications or supplements thereto.
Manager shall mean the management party under any Management Agreement.
Minimum Rent: As defined in the applicable Lease, as the same may be
adjusted from time to time in accordance with Section 3.1.1.
Notice shall mean a notice given in accordance with Section 24.12.
Officer's Certificate shall mean a certificate signed by an officer of
Tenant duly authorized by the board of directors of Tenant.
Overdue Rate shall mean, on any date, a per annum rate of interest
equal to eighteen percent (18%) but in no event greater than the maximum rate
then permitted under applicable law.
Permitted Encumbrances shall mean, with respect to the applicable
Leased Property, all rights, restrictions, and easements of record set forth on
Schedule B to the applicable owner's or leasehold title insurance policy issued
to Landlord on the date of the applicable Existing Lease, plus any other such
encumbrances as may have been consented to in writing by Landlord from time to
time.
Permitted Liens shall mean any Lien granted in compliance with Section
23.12.
Person shall mean any individual, corporation, general or limited
partnership, stock company or association, joint venture, association, company,
trust, bank, trust company, land trust, business trust, any government or agency
or political subdivision thereof or any other entity.
Primary Intended Use, with respect to the applicable Leased Property,
shall mean use as a licensed nursing home and such other uses as may be
incidental or necessary thereto.
Provider Agreements: All participation, provider and reimbursement
agreements or arrangements now or hereafter in effect for the benefit of Tenant
in connection with the operation of the applicable Facility relating to any
right of payment or other claim arising out of or in connection with Tenant's
participation in any Third Party Payor Program.
Purchase Price(s): With respect to the applicable Leased Property, the
amount identified as such in the applicable Lease.
Records: As defined in Section 7.2.
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Renovation Funding Agreement shall mean any agreement, whether now
existing or hereafter entered into, between any Tenant and Landlord, relating to
certain improvements made or to be made at a Leased Property, as the same may be
amended, modified or supplemented from time to time.
Rent shall mean, in connection with any applicable Leased Property, the
sum of Minimum Rent and Additional Charges payable with respect to such Leased
Property.
SEC shall mean the Securities and Exchange Commission.
Second Extended Term: As defined in the applicable Lease.
State shall mean the State or Commonwealth in which the applicable
Leased Property is located.
Subordinated Creditor shall mean any creditor of Tenant party to a
Subordination Agreement in favor of Landlord.
Subordination Agreement shall mean any agreement executed by a
Subordinated Creditor, Landlord and the Tenants pursuant to which the payment
and performance of Tenants' obligations to such Subordinated Creditor are
subordinated to the payment and performance of Tenants' obligations to Landlord
under the Leases and the other Transaction Documents.
Subsidiary shall mean, with respect to any Person, any corporation or
other entity of which the securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or indirectly
owned by such Person.
Tangible Net Worth: As defined in Section 23.14.
Tenant: As defined in the applicable Lease.
Tenants: As defined in the caption.
Tenant's Capital Additions: As defined in Section 6.2.2.
Tenant's Personal Property shall mean (a) all motor vehicles and (b)
consumable inventory and supplies, furniture, furnishings, movable walls and
partitions, equipment and machinery and all other personal property of Tenant
acquired by Tenant on and after the date hereof and located on the applicable
Leased Property or used in Tenant's business on such Leased Property and all
modifications, replacements, alterations and additions to such personal property
installed at the expense of Tenant, other than any items included within the
definition of Fixtures or Leased Personal Property.
Term shall mean, collectively, for the applicable Lease, the Fixed Term
and the Extended Terms, to the extent properly exercised pursuant to the
provisions of Section 2.4, unless sooner terminated pursuant to the provisions
of this Master Lease Document or the applicable Lease.
Test Rate shall mean the minimum interest rate necessary to avoid
imputation of original issue discount or interest income under Sections 483 or
1272 of the Code or any similar provision.
Third Party Payor Programs: All third party payor programs in which
Tenant currently or in the future may participate, including, without
limitation, Medicare, Medicaid, CHAMPUS, Blue Cross
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and/or Blue Shield, Managed Care Plans, other private insurance programs and
employee assistance programs.
Third Party Payors: Medicare, Medicaid, CHAMPUS, Blue Cross and/or Blue
Shield, private insurers and any other person which presently or in the future
maintains Third Party Payor Programs.
Transaction Documents shall mean, collectively, any agreement, note,
lease, master lease, mortgage, security agreement, pledge agreement, assignment,
guaranty or other agreement or instrument now or hereafter executed by, on the
one hand, Landlord or any Affiliate thereof, and on the other, any Tenant or any
guarantor of the obligations of any Tenant hereunder or under any lease, or any
of them (including, without limitation, any and all other documents executed in
connection with, relating to, evidencing or creating collateral or security for
the Leases), and any agreement, note, mortgage, security agreement, pledge
agreement, assignment, guaranty or other agreement or instrument hereafter
executed in connection with any extension, renewal, refunding or refinancing
thereof, as any of the same may hereafter from time to time be amended, modified
or supplemented.
Trustees shall mean the trustees of Landlord.
Unavoidable Delays shall mean delays due to strikes, lock-outs,
inability to procure materials, power failure, acts of God, governmental
restrictions, enemy action, civil commotion, unavoidable casualty or any other
causes beyond the reasonable control of the party responsible for performing an
obligation hereunder, but in no event to exceed forty-five (45) days (provided
that lack of funds shall not be deemed a cause beyond the control of Tenant) so
long as Tenant shall use reasonable efforts to alleviate the cause of such delay
and thereafter promptly perform such obligation, and so long as, in any event,
no permit, license, certificate of need or authorization necessary to operate
such Leased Property for its Primary Intended Use is adversely affected or
subject to any danger of revocation or termination. In no event shall Tenant's
obligation to pay the Rent be affected by Unavoidable Delays.
Unsuitable for Its Primary Intended Use shall mean a state or condition
of the Facility located at the applicable Leased Property such that (a)
following any damage or destruction involving such Leased Property, such Leased
Property cannot reasonably be expected to be restored to substantially the same
condition as existed immediately before such damage or destruction, and as
otherwise required by Section 10.2.4, within a period equal to six (6) months
following such damage or destruction or such shorter period of time as to which
business interruption insurance is available to cover Rent and other costs
related to such Leased Property following such damage or destruction, or (b) as
the result of a partial taking by Condemnation, either (i) such Facility cannot
reasonably be expected to be operated on a commercially practicable basis for
its Primary Intended Use taking into account, among other relevant factors, the
number of usable beds, the amount of square footage, or the revenues affected by
such partial taking or (ii) such Facility loses the use of more than 25% of the
number of usable beds available immediately prior to such partial taking.
Work: As defined in Section 10.2.4.
ARTICLE 2
LEASED PROPERTY AND TERM
2.1 Leased Property.
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Upon and subject to the terms and conditions hereinafter set forth,
Landlord leases to Tenant and Tenant leases from Landlord with respect to each
applicable Lease all of the following (collectively, the "Leased Property"):
(a) that certain tract, piece and parcel of land, as more
particularly described in the applicable Lease (the "Land");
(b) all buildings, structures, Fixtures 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 currently
situated upon the Land and all Capital Additions other than Tenant's Capital
Additions (collectively, the "Leased Improvements");
(c) all easements, rights and appurtenances relating to the
Land and the Leased Improvements;
(d) all equipment, machinery, fixtures, and other items of
property, now or hereafter 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, 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
Tenant's Personal Property (collectively the "Fixtures");
(e) all machinery, equipment, furniture, furnishings, moveable
walls or partitions, computers or trade fixtures or other personal property of
any kind or description used or useful in Tenant's business on or in the Leased
Improvements, and located on or in the Leased Improvements, and all
modifications, replacements, alterations and additions to such personal
property, except items, if any, included within the category of Fixtures, but
specifically excluding all items included within the category of Tenant's
Personal Property (collectively the "Leased Personal Property"); and
(f) all existing leases of space (including any security
deposits held by Tenant pursuant thereto) in the Leased Improvements to tenants
thereof.
2.2 Condition of Leased Property.
Tenant acknowledges receipt and delivery of possession of the
applicable Leased Property and Tenant accepts such Leased Property in its "as
is" condition, subject to the rights of Persons in possession, the existing
state of title, including all covenants, conditions, restrictions, reservations,
mineral leases, easements and other matters of record or that are visible or
apparent on the Leased Property, all applicable Legal Requirements, the liens of
financing instruments, mortgages and deeds of trust, and such other matters
which would be disclosed by an inspection of such Leased Property and the record
title thereto or by an accurate survey thereof. TENANT REPRESENTS THAT IT HAS
INSPECTED SUCH LEASED PROPERTY AND ALL OF THE FOREGOING AND HAS FOUND THE
CONDITION THEREOF SATISFACTORY AND IS NOT RELYING ON ANY REPRESENTATION OR
WARRANTY OF LANDLORD OR LANDLORD'S AGENTS OR EMPLOYEES WITH RESPECT THERETO AND
TENANT WAIVES ANY CLAIM OR ACTION AGAINST LANDLORD IN RESPECT OF THE CONDITION
OF THE APPLICABLE LEASED PROPERTY. LANDLORD MAKES NO WARRANTY OR REPRESENTATION
EXPRESS OR
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IMPLIED, IN RESPECT OF THE APPLICABLE LEASED PROPERTY OR ANY PART THEREOF,
EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR
PURPOSE OR OTHERWISE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN,
LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.
To the extent permitted by law, however, Landlord hereby assigns to Tenant all
of Landlord's rights to proceed against any predecessor in title for breaches of
warranties or representations or for latent defects in the applicable Leased
Property. Landlord shall fully cooperate with Tenant in the prosecution of any
such claims, in Landlord's or Tenant's name, all at Tenant's sole cost and
expense. Tenant shall indemnify, defend, and hold harmless Landlord from and
against any loss, cost, damage or liability (including reasonable attorneys'
fees) incurred by Landlord in connection with such cooperation.
2.3 Fixed Term.
The initial term of the applicable Lease (the "Fixed Term") shall be
for a fixed term as set forth in such Lease.
2.4 Extended Term.
The Tenants shall have the right to extend the Term of all, but not
less than all, of the Leases pertaining to the Collective Leased Properties, as
set forth in each Lease and below (the "Extended Term(s)") provided that (i) no
Default or default shall have occurred and be continuing under the applicable
Lease or the Master Lease Document, any other Lease pertaining to the Collective
Leased Properties, and (ii) this Lease and each other Lease pertaining to any
Collective Leased Property shall be in full force and effect (other than any
such Lease that has been terminated following condemnation or casualty in
accordance with the provisions hereof).
Each Extended Term under each Lease shall commence on the day
succeeding the expiration of the Fixed Term or the preceding Extended Term, as
the case may be. All of the terms, covenants and provisions of such Lease shall
apply to each such Extended Term, except that the Minimum Rent for the Second
Extended Term shall be as set forth in Section 3.1.1(c) (subject to adjustment
as provided in Section 3.1.1) with respect thereto. If the Tenants shall elect
to exercise any of the aforesaid extensions, they shall do so by giving Landlord
Notice thereof simultaneously as to all of the Collective Leased Properties not
later than twelve (12) months prior to the scheduled expiration of the then
current Term of the Leases (Fixed or Extended, as applicable), it being agreed
that time is of the essence with respect to the giving of such Notice. The
Tenants may not exercise their option for more than one such Extended Term at a
time. If the Tenants shall fail to give any such Notice, the Leases shall
automatically terminate at the end of the Term then in effect and Tenants shall
have no further option to extend the Term of the Leases. If the Tenants shall
give such Notice, the extension of the Leases shall be automatically effected
without the execution of any additional documents; it being understood and
agreed, however, that the Tenants and Landlord shall execute such documents and
agreements as either party shall reasonably require to evidence the same.
Notwithstanding the provisions of the foregoing sentence, if, subsequent to the
giving of such Notice, an Event of Default shall occur, the extension of the
Leases shall cease to take effect and the Leases shall automatically terminate
at the end of the Term then in effect and the Tenants shall have no further
option to extend the Term of the Leases, unless Landlord shall otherwise consent
in writing.
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ARTICLE 3
RENT
3.1 Rent.
Tenant shall pay to Landlord, in lawful money of the United States of
America which shall be legal tender for the payment of public and private debts,
at Landlord's address set forth above or at such other place or to such other
Person as Landlord from time to time may designate in a Notice to Tenant,
without offset, abatement, demand or deduction, Rent consisting of Minimum Rent
and Additional Charges during the Term, in each case except as hereinafter
expressly provided. All payments to Landlord shall be made by certified check,
wire transfer of immediately available funds or by other means acceptable to
Landlord in its sole discretion.
3.1.1 Minimum Rent:
(a) During Fixed Term and Extended Terms. The Minimum Rent
payable with respect to the Fixed Term and First Extended Term is the annual sum
set forth in the applicable Lease (subject to adjustment as provided herein).
The Minimum Rent payable with respect to the Second Extended Term for the
applicable Lease shall equal an annual sum (determined at the commencement of
such Extended Term for such Lease and subject to adjustment as set forth herein)
equal to the greater of (i) the product of (x) the Adjusted Purchase Price for
such Leased Property at such time and (y) the then Applicable Percentage, and
(ii) ninety-five percent (95%) of the Fair Market Rental for such Leased
Property at such time. Minimum Rent shall be payable in advance in equal,
consecutive monthly installments as set forth in such Lease, on the first day of
each calendar month of the Fixed Term and each Extended Term; provided, however,
that the first monthly payment of Minimum Rent shall be payable on the
Commencement Date, and that the first and last monthly payments of Minimum Rent
shall be prorated as to any partial month.
(b) Adjustments of Minimum Rent Following Disbursements Under
Renovation Funding Agreement. Effective on the date of each disbursement made
after the Effective Date to pay for the cost of any renovations at the
applicable Leased Property pursuant to the terms of the applicable Renovation
Funding Agreement, the Minimum Rent under the applicable Lease for such Leased
Property shall be adjusted, effective on the date of such disbursement, to an
annual sum equal to the product of (i) the Adjusted Purchase Price for such
Leased Property (giving effect to the making of such disbursement) and (ii) the
then Applicable Percentage. If any such disbursement is made during any calendar
month on other than the first day of such calendar month, Tenant shall pay to
Landlord on the first day of the immediately following calendar month (in
addition to the amount of Minimum Rent payable with respect to such month, as
adjusted pursuant to this paragraph (b)) the amount by which Minimum Rent for
such Leased Property for the preceding month, as adjusted for such disbursement,
exceeded the amount of Minimum Rent for such Leased Property payable by Tenant
for such preceding month without giving effect to such adjustment.
(c) Annual Adjustments of Minimum Rent. Effective on the first
day of each calendar year, commencing January 1, 1999, Minimum Rent with respect
to the applicable Leased Property for such calendar year shall be adjusted to
equal the product of (i) the Adjusted Purchase Price for such Leased Property as
of December 31 of the prior year and (ii) the Applicable Percentage as adjusted
in accordance with the definition of such term on such January 1.
Notwithstanding the foregoing (1) the maximum increase in Minimum Rent with
respect to the applicable Leased Property for any calendar year shall be limited
to 4% of Minimum Rent for the applicable Leased Property for the
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prior calendar year and (2) the minimum increase in Minimum Rent with respect to
the applicable Leased Property for any calendar year shall be 2% of Minimum Rent
for the applicable Leased Property for the prior calendar year.
(d) Credits Against Minimum Rent; Excess Condemnation and
Casualty Proceeds. Landlord shall credit the amount of any Award or the proceeds
of any insurance received by Landlord in connection with a partial Condemnation
or a partial casualty involving the applicable Leased Property as described in
Section 11.2 or 10.2.2, and not applied by Landlord to the restoration of the
applicable Leased Property affected by such partial Condemnation or partial
casualty as provided therein, to the payment of Minimum Rent payable with
respect to such Leased Property. Landlord shall calculate the amount of such
credits within 15 days after the end of each calendar month, and shall reduce
the amount of the installment of Minimum Rent next due after the date of such
calculation by the amount of such credits.
3.1.2 Additional Charges.
In addition to the Minimum Rent payable with respect to the applicable
Leased Property or otherwise, Tenant shall pay and discharge as and when due and
payable the following (collectively, "Additional Charges"):
(a) Impositions. Subject to Article 8 relating to Permitted
Contests, Tenant shall pay, or cause to be paid, all Impositions before any
fine, penalty, interest or cost (other than any opportunity cost as a result of
a failure to take advantage of any discount for early payment) may be added for
non-payment, such payments to be made directly to the taxing authorities where
feasible, and shall promptly upon request, furnish to Landlord copies of
official receipts or other satisfactory proof evidencing such payments. If any
such Imposition may, at the option of the taxpayer, lawfully be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Tenant may exercise the option to pay the same (and any accrued
interest on the unpaid balance of such Imposition) in installments and, in such
event, shall pay such installments during the Term as the same become due and
before any fine, penalty, premium, further interest or cost may be added
thereto. Landlord, at its expense, shall, to the extent required or permitted by
applicable law, prepare and file all tax returns in respect of Landlord's net
income, gross receipts, sales and use, single business, transaction privilege,
rent, ad valorem, franchise taxes and taxes on its capital stock, and Tenant, at
its expense, shall, to the extent required or 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. Provided no
Default shall have occurred and be continuing, if any refund shall be due from
any taxing authority in respect of any Imposition paid by Tenant, the same shall
be paid over to or retained by Tenant. Landlord and Tenant shall, upon request
of the other, provide such data as is maintained by the party to whom the
request is made with respect to the applicable Leased Property as may be
necessary to prepare any required returns and reports. In the event governmental
authorities classify any property covered by the applicable Lease as personal
property, Tenant shall file all personal property tax returns in such
jurisdictions where it may legally so file. Each party shall, to the extent it
possesses the same, provide the other, upon request, with cost and depreciation
records necessary for filing returns for any property so classified as personal
property. Where Landlord is legally required to file personal property tax
returns, Landlord shall provide Tenant with copies of assessment notices in
sufficient time for Tenant to file a protest. All Impositions assessed against
such personal property shall be (irrespective of whether Landlord or Tenant
shall file the relevant return) paid by Tenant not later than the last date on
which the same may be made without interest or penalty. If the provisions of any
Facility Mortgage require deposits on account of Impositions to be made with
such Facility Mortgagee, provided the Facility Mortgagee has not elected to
waive such provision, Tenant shall either pay Landlord the monthly
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amounts required at the time and place that payments of Minimum Rent are
required and Landlord shall transfer such amounts to such Facility Mortgagee or,
pursuant to written direction by Landlord, Tenant shall make such deposits
directly with such Facility Mortgagee.
Landlord shall give prompt Notice to Tenant of all Impositions payable
by Tenant hereunder of which Landlord at any time has knowledge, provided,
Landlord's failure to give any such Notice shall in no way diminish Tenant's
obligation hereunder to pay such Impositions, except that Tenant shall not be
obligated to pay any late charges or penalties attributable to Landlord's
failure to give such Notice promptly to Tenant.
(b) Utility Charges. Tenant shall pay or cause to be paid all
charges for electricity, power, gas, oil, water and other utilities used in the
applicable Leased Property during the Term.
(c) Insurance Premiums. Tenant shall pay or cause to be paid,
as Additional Charges, all premiums for the insurance coverage required to be
maintained pursuant to Article 9.
(d) Other Charges. Tenant shall pay or cause to be paid, as
Additional Charges, all other amounts, liabilities and obligations which Tenant
assumes or agrees to pay under the applicable Lease, including, without
limitation, all agreements to indemnify Landlord under Sections 4.4 and 9.7.
(e) Reimbursement for Additional Charges. If Tenant pays or
causes to be paid property taxes or similar Additional Charges attributable to
periods after the end of the Term, whether upon expiration or sooner termination
of the applicable Lease (other than termination following an Event of Default)
Tenant may, within sixty (60) days of the end of the Term, provide Notice to
Landlord of its estimate of such amounts. Landlord shall promptly reimburse
Tenant for all payments of such taxes and other similar Additional Charges that
are attributable to any period after the Term of the Lease.
(f) Sales Tax. Tenant shall also pay, as Additional Charges,
with all Rent due under the applicable Lease an amount equal to all sales, use,
excise and other taxes now or hereafter imposed by any lawful authority on all
amounts due or required under the applicable Lease and classified as Rent by any
such authority.
3.2 Late Payment of Rent.
If any installment of Minimum Rent or Additional Charges (but only as
to those Additional Charges which are payable directly to Landlord) shall not be
paid within ten (10) calendar days of its scheduled due date, Tenant shall pay
Landlord, on demand, as Additional Charges, a late charge (to the extent
permitted by law) computed at the Overdue Rate on the amount of such
installment, from the due date of such installment to the date of payment
thereof. To the extent that Tenant pays any Additional Charges directly to
Landlord pursuant to any requirement of the applicable Lease, Tenant shall be
relieved of its obligation to pay such Additional Charges to the entity to which
they would otherwise be due.
In the event of any failure by Tenant to pay any Additional Charges
when due, Tenant shall promptly pay and discharge, as Additional Charges, every
fine, penalty, interest and cost which may be added for non-payment or late
payment of such items. Landlord shall have all legal, equitable and contractual
rights, powers and remedies provided either in the applicable Lease or by
statute or otherwise in the case of non-payment of the Additional Charges as in
the case of non-payment of the Minimum Rent.
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3.3 Net Lease.
The Rent shall be absolutely net to Landlord, so that the applicable
Lease shall yield to Landlord the full amount of the installments or amounts of
Rent throughout the Term, subject to any other provisions of the applicable
Lease or this Master Lease Document which expressly provide for adjustment or
abatement of Rent or other charges.
3.4 No Termination, Abatement, Etc.
Except as otherwise specifically provided in the applicable Lease or in
this Master Lease Document, Tenant, to the extent permitted by law, shall remain
bound by the applicable Lease in accordance with its terms and shall neither
take any action without the consent of Landlord to modify, surrender or
terminate the same, nor seek, nor be entitled to any abatement, deduction,
deferment or reduction of the Rent, or set-off against the Rent, nor shall the
respective obligations of Landlord and Tenant be otherwise affected by reason of
(a) any damage to, or destruction of, the applicable Leased Property or any
portion thereof from whatever cause or any Condemnation, (b) the lawful or
unlawful prohibition of, or restriction upon Tenant's use of the applicable
Leased Property, or any portion thereof, or the interference with such use by
any Person or by reason of eviction by paramount title; (c) any claim which
Tenant may have against Landlord by reason of any default or breach of any
warranty by Landlord under the applicable Lease or any other agreement between
Landlord and Tenant, or to which Landlord and Tenant are parties, (d) any
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceedings affecting Landlord or any assignee
or transferee of Landlord, or (e) for any other cause whether similar or
dissimilar to any of the foregoing. Tenant hereby waives all rights arising from
any occurrence whatsoever, which may now or hereafter be conferred upon it by
law, to (a) modify, surrender or terminate the applicable Lease or quit or
surrender the applicable Leased Property or any portion thereof, or (b) entitle
Tenant to any abatement, reduction, suspension or deferment of the Rent or other
sums payable or other obligations to be performed by Tenant hereunder, except as
otherwise specifically provided in the applicable Lease or in this Master Lease
Document. The obligations of Tenant hereunder shall be separate and independent
covenants and agreements, and the Rent and all other sums payable by Tenant
hereunder shall continue to be payable in all events unless the obligations to
pay the same shall be terminated pursuant to the express provisions of the
applicable Lease or by termination of the applicable Lease other than by reason
of an Event of Default.
ARTICLE 4
USE OF THE APPLICABLE LEASED PROPERTY
4.1 Permitted Use.
4.1.1 Primary Intended Use.
Tenant shall, at all times during the Term, and at any other time
Tenant shall be in possession of the Leased Property, continuously use or cause
to be used the applicable Leased Property for its Primary Intended Use. Tenant
shall not use the applicable Leased Property or any portion thereof for any
other use without the prior written consent of Landlord (which consent shall not
be unreasonably withheld or delayed). No use shall be made or permitted to be
made of the applicable Leased Property and no acts shall be done thereon which
will cause the cancellation of any insurance policy covering such Leased
Property or any part thereof (unless another adequate policy is available), nor
shall Tenant sell or
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otherwise provide to residents or patients therein, or permit to be kept, used
or sold in or about such Leased Property any article which may be prohibited by
law or by the standard form of fire insurance policies, or any other insurance
policies required to be carried hereunder, or fire underwriter's regulations.
Tenant shall, at its sole cost, comply with all of the requirements pertaining
to the applicable Leased Property or other improvements of any insurance board,
association, organization or company necessary for the maintenance of insurance,
as herein provided, covering such Leased Property and Tenant's Personal
Property, including, without limitation, the Insurance Requirements.
4.1.2 Necessary Approvals.
Tenant shall proceed with all due diligence and exercise best efforts
to obtain and maintain all approvals necessary to use and operate, for its
Primary Intended Use, the applicable Leased Property and the Facility located at
such Leased Property under applicable local, state and federal law, and without
limiting the foregoing, shall use its best efforts to maintain appropriate
certifications for reimbursement and licensure.
4.1.3 Continuous Operation, Etc.
Tenant shall operate continuously the applicable Leased Property as a
provider of health care services in accordance with its Primary Intended Use.
Tenant will not take or omit to take any action, the taking or omission of which
may materially impair the value or the usefulness of such Leased Property or any
part thereof for its Primary Intended Use.
4.1.4 Lawful Use, Etc.
Tenant shall not use or suffer or permit the use of the applicable
Leased Property and Tenant's Personal Property for any unlawful purpose. Tenant
shall not commit or suffer to be committed any waste on the applicable Leased
Property, or in the Facility located on the applicable Leased Property located
thereon, nor shall Tenant cause or permit any nuisance thereon or therein.
Tenant shall neither suffer nor permit the applicable Leased Property or any
portion thereof, including any Capital Addition, or Tenant's Personal Property,
to be used in such a manner as (i) might reasonably tend to impair Landlord's
(or Tenant's, as the case may be) title thereto or to any portion thereof, or
(ii) may reasonably make possible a claim or claims for adverse usage or adverse
possession by the public, as such, or of implied dedication of the applicable
Leased Property or any portion thereof.
4.2 Compliance with Legal and Insurance Requirements, Etc.
Subject to the provisions of Article 8 hereof, Tenant, at its sole
expense, shall promptly (i) comply with Legal Requirements and Insurance
Requirements in respect of the use, operation, maintenance, repair, alteration
and restoration of the applicable Leased Property, and (ii) procure, maintain
and comply with all appropriate licenses, certificates of need, permits,
provider agreements and other authorizations and agreements required for any use
of the applicable Leased Property and Tenant's Personal Property then being
made, and for the proper erection, installation, operation and maintenance of
the applicable Leased Property or any part thereof, including, without
limitation, any Capital Additions.
4.3 Compliance with Medicaid and Medicare Requirements.
Tenant shall, at its sole cost and expense, make whatever improvements
(capital or ordinary) as are required to conform the applicable Leased Property
to such standards as may, from time to time, be
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required by Federal Medicare (Title 18) or Medicaid (Title 19) skilled and/or
intermediate care nursing programs, to the extent Tenant is a participant in
such programs, or any other applicable programs or legislation, or capital
improvements required by any other governmental agency having jurisdiction over
such Leased Property as a condition of the continued operation of such Leased
Property for its Primary Intended Use.
4.4 Environmental Matters.
Tenant shall not store, spill upon, dispose of or transfer to or from
the applicable Leased Property any Hazardous Substance, except that Tenant may
store, transfer and dispose of Hazardous Substances in compliance with all
Applicable Laws. Tenant shall maintain the applicable Leased Property at all
times free of any Hazardous Substance (except such Hazardous Substances as are
maintained in compliance with all Applicable Laws). Tenant shall, as to the
applicable Leased Property, promptly: (a) notify Landlord in writing of any
change in the nature or extent of such Hazardous Substances maintained, (b)
transmit to Landlord a copy of any Community-Right-To-Know report, which is
required to be filed, if any, by Tenant for the applicable Leased Property
pursuant to XXXX Title III or any other Applicable Law, (c) transmit to Landlord
copies of any citations, orders, notices or other governmental communications
received by Tenant or its agents or representatives with respect thereto
(collectively, "Environmental Notice"), which Environmental Notice requires a
written response or any action to be taken and/or if such Environmental Notice
gives notice of and/or could give rise to a violation of any Applicable Law
and/or could give rise to any cost, expense, loss or damage (an "Environmental
Obligation"), (d) observe and comply with any and all Applicable Laws relating
to the use, maintenance and disposal of Hazardous Substances and all orders or
directives from any official, court or agency of competent jurisdiction relating
to the use or maintenance or requiring the removal, treatment, containment or
other disposition thereof, and (e) pay or otherwise dispose of any fine, charge
or Imposition related thereto, unless Tenant shall contest the same in good
faith and by appropriate proceedings and the right to use and the value of such
Leased Property is not materially and adversely affected thereby.
For purposes of this Section 4.4, (i) the term "Applicable Laws" shall
mean and include all applicable Federal, state or local statutes, laws,
ordinances, rules and regulations, licensing requirements or conditions, whether
now existing or hereafter arising, relating to Hazardous Substances; and (ii)
the term "Hazardous Substances" shall mean hazardous substances (as defined by
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), as now in effect or as hereafter from time to time amended),
hazardous wastes (as defined by the Resource Conservation and Recovery Act
("RCRA"), as now in effect or as hereafter from time to time amended), any
hazardous waste, hazardous substance, pollutant or contaminant, oils,
radioactive materials, asbestos in any form or condition, or any pollutant or
contaminant or hazardous, dangerous or toxic chemicals, materials or substances
within the meaning of any other applicable Federal, state or local law,
regulation, ordinance or requirements relating to or imposing liability or
standards of conduct concerning any hazardous, toxic or dangerous waste,
substance or materials, all as now in effect or hereafter from time to time
amended.
If at any time prior to the termination of the applicable Lease,
Hazardous Substances are discovered on the applicable Leased Property, Tenant
hereby agrees to take all actions, and to incur any and all expense, as may be
reasonably necessary and as may be required by any municipal, State or Federal
agency or other governmental entity or agency having jurisdiction thereof, (i)
to clean up and remove from and about the applicable Leased Property all
Hazardous Substances thereon, (ii) to contain and prevent any further release or
threat of release of Hazardous Substances on or about the applicable Leased
Property and (iii) to use good faith efforts to eliminate any further release or
threat of release of Hazardous Substances on or about the applicable Leased
Property.
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Six (6) months prior to expiration of the final Term for the Collective
Leased Properties, Tenant, at its sole cost and expense, shall designate a
qualified environmental engineer, satisfactory to Landlord in its sole
discretion, which engineer shall conduct an environmental investigation of the
Collective Leased Properties and prepare an environmental site assessment report
(the "Environmental Report"). The scope of such Environmental Report shall
include, without limitation, review of relevant records, interviews with persons
knowledgeable about the Collective Leased Properties and relevant governmental
agencies, a site inspection of the Collective Leased Properties, any buildings,
the fence lines of the Collective Leased Properties and adjoining properties
(Phase I) and shall otherwise be reasonably satisfactory in form and substance
to Landlord. If such investigation, in the opinion of the performing engineer,
indicates that any Leased Property is not free from oil, asbestos, radon and
other Hazardous Substances (except in compliance with Applicable Laws), such
investigation shall also include a more detailed physical site inspection,
appropriate testing, subsurface and otherwise, and review of historical records
(Phase II) of such Leased Property to demonstrate the compliance of such Leased
Property with Applicable Laws and the absence of Hazardous Substances.
All preliminary drafts of such Environmental Report, and supplements
and amendments thereto, shall be provided to Landlord contemporaneously with
delivery thereof to Tenant. With respect to any recommendations contained in the
Environmental Report, violations of Applicable Laws and/or the existence of any
conditions at the applicable Leased Property which could give rise to an
Environmental Obligation, Tenant shall promptly give Notice to Landlord of all
action Tenant proposes to take in connection therewith and Tenant shall promptly
take all actions, and incur any and all expense, as may be reasonably necessary
and as may be required by any municipal, State or Federal agency or other
governmental entity or agency having jurisdiction thereof and as may be required
by Landlord, (i) to clean up, remove or remediate from and about the applicable
Leased Property all Hazardous Substances thereon, (ii) to contain, prevent and
eliminate any further release or threat of release of Hazardous Substances on or
about the applicable Leased Property, and (iii) to otherwise eliminate such
violation or condition from the applicable Leased Property to the reasonable
satisfaction of Landlord.
Tenant shall protect, indemnify and hold harmless Landlord and each
Facility Mortgagee, their trustees, officers, agents, employees and
beneficiaries, and any of their respective successors or assigns (hereafter the
"Indemnitees," and when referred to singly, an "Indemnitee") for, from and
against any and all debts, liens, claims, causes of action, administrative
orders or notices, costs, fines, penalties or expenses (including, without
limitation, attorney's fees and expenses) imposed upon, incurred by or asserted
against any Indemnitee resulting from, either directly or indirectly, the
presence in, upon or under the soil or ground water of the applicable Leased
Property or any properties surrounding the applicable Leased Property of any
Hazardous Substances in violation of any Applicable Law or otherwise by reason
of any failure by Tenant or any Person claiming under Tenant to perform or
comply with any of the terms of this Section 4.4. Tenant's duty herein includes
but is not limited to costs associated with personal injury or property damage
claims as a result of the presence of Hazardous Substances in, upon or under the
soil or ground water of the applicable Leased Property in violation of any
Applicable Law. Upon written request of Landlord, Tenant shall undertake the
defense, at Tenant's sole cost and expense, of any indemnification duties set
forth herein. In the event that Tenant refuses to undertake the defense of an
Indemnitee promptly after receiving such notice, such Indemnitee may undertake
its own defense.
Tenant shall, upon demand, pay to Landlord, as an Additional Charge,
any cost, expense, loss or damage incurred by Landlord and growing out of a
failure of Tenant strictly to observe and perform the foregoing requirements
(including, without limitation, reasonable attorneys' fees), which amounts shall
bear interest from the date incurred until paid at the Overdue Rate.
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The provisions of this Section 4.4 shall survive the expiration or
sooner termination of the applicable Lease.
ARTICLE 5
MAINTENANCE AND REPAIRS
5.1 Maintenance and Repair.
5.1.1 Tenant's Obligations.
Tenant shall, at its sole cost and expense, keep the applicable Leased
Property and all private roadways, sidewalks and curbs appurtenant thereto (and
Tenant's Personal Property) in good order and repair, reasonable wear and tear
excepted (whether or not the need for such repairs occurs as a result of
Tenant's use, any prior use, the elements or the age of such Leased Property or
Tenant's Personal Property, or any portion thereof), and, shall promptly make
all necessary and appropriate repairs and replacements thereto of every kind and
nature, whether interior or exterior, structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen or arising by reason of a condition
existing prior to the commencement of the Term (concealed or otherwise),
provided, Tenant shall be permitted to prosecute claims against Landlord's
predecessors in title for breach of any representation or warranty made to or on
behalf of Landlord, or for any latent defects in such Leased Property. All
repairs shall be made in good, workmanlike and first-class manner, in accordance
with all applicable federal, state and local statutes, ordinances, by-laws,
codes, rules and regulations relating to any such work. Tenant will not take or
omit to take any action, the taking or omission of which would materially impair
the value or the usefulness of the applicable Leased Property or any part
thereof for its Primary Intended Use. Tenant's obligations under this Section
5.1.1 as to the applicable Leased Property shall be limited, in the event of any
casualty or Condemnation involving such Leased Property, as set forth in
Sections 10.2.1 and 11.1. Notwithstanding this Section 5.1.1, Tenant's
obligations with respect to Hazardous Substances are as set forth in Article 4.
5.1.2 Landlord's Obligations.
Landlord shall not, under any circumstances, be required to build or
rebuild any improvement on the applicable Leased Property, or to make any
repairs, replacements, alterations, restorations or renewals of any nature or
description to the applicable Leased Property, whether ordinary or
extraordinary, structural or nonstructural, foreseen or unforeseen, or to make
any expenditure whatsoever with respect thereto, in connection with the
applicable Lease, or to maintain the applicable Leased Property in any way,
except as specifically provided herein. Tenant hereby waives, to the extent
permitted by law, the right to make repairs at the expense of Landlord pursuant
to any law in effect at the time of the execution of the applicable Lease or
hereafter enacted. Landlord shall have the right to give, record and post, as
appropriate, notices of nonresponsibility under any mechanic's lien laws now or
hereafter existing.
5.1.3 Nonresponsibility of Landlord; No Mechanics Liens.
Landlord's interest in the Leased Property shall not be subject to
liens for Capital Additions made by Tenant, and Tenant shall have no power or
authority to create any lien or permit any lien to attach to the Leased Property
or the present estate, reversion or other estate of Landlord in the Leased
Property or on the building or other improvements thereon as a result of Capital
Additions made by
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Tenant or for any other cause or reason. All materialmen, contractors, artisans,
mechanics and laborers and other persons contracting with Tenant with respect to
the Leased Property or any part thereof, are hereby charged with notice that
such liens are expressly prohibited and that they must look solely to Tenant to
secure payment for any work done or material furnished for Capital Additions by
Tenant or for any other purpose during the term of the applicable Lease.
Nothing contained in this Lease shall be deemed or construed in any way
as constituting the consent or request of Landlord, express or implied by
inference or otherwise, to any contractor, subcontractor, laborer or materialmen
for the performance of any labor or the furnishing of any materials for any
alteration, addition, improvement or repair to the Leased Property or any part
thereof or as giving Tenant any right, power or authority to contract for or
permit the rendering of any services or the furnishing of any materials that
would give rise to the filing of any lien against the Leased Property or any
part thereof nor to subject Landlord's estate in the Leased Property or any part
thereof to liability under the Mechanic's Lien Law of the State in any way, it
being expressly understood Landlord's estate shall not be subject to any such
liability.
5.2 Tenant's Personal Property.
Tenant may (and shall as provided hereinbelow), at its expense,
install, affix or assemble or place on any parcels of the Land or in any of the
Leased Improvements, any items of Tenant's Personal Property, and Tenant may,
subject to the conditions set forth below, remove the same at any time, provided
that no Default has occurred and is continuing. Tenant shall provide and
maintain during the entire Term all such Tenant's Personal Property as shall be
necessary in order to operate the Facility located at the Leased Property in
compliance with all applicable licensure and certification requirements, in
compliance with applicable Legal Requirements and Insurance Requirements and
otherwise in accordance with customary practice in the industry for the Primary
Intended Use. All of Tenant's Personal Property not removed by Tenant on or
prior to the expiration or earlier termination of the applicable Lease of the
applicable Leased Property where such Tenant's Personal Property is located
shall be considered abandoned by Tenant and may be appropriated, sold, destroyed
or otherwise disposed of by Landlord without the necessity of first giving
notice thereof to Tenant, without any payment to Tenant and without any
obligation to account therefor. Tenant shall, at its expense, restore such
Leased Property to the condition required by Section 5.3, including repair of
all damage to such Leased Property caused by the removal of Tenant's Personal
Property, whether effected by Tenant or Landlord.
If Tenant uses any item of tangible personal property (other than motor
vehicles) on, or in connection with, the Leased Property which belongs to anyone
other than Tenant, Tenant shall use all reasonable efforts to require the
agreement permitting such use to provide that Landlord or its designee may
assume Tenant's rights under such agreement upon management or operation of the
applicable Facility by Landlord or its designee.
5.3 Yield Up.
Upon the expiration or sooner termination of the applicable Lease
(unless the applicable Leased Property is transferred to Tenant as provided
herein), Tenant shall vacate and surrender the applicable Leased Property to
Landlord in the condition in which such Leased Property was on the Commencement
Date, except as repaired, rebuilt, restored, altered or added to as permitted or
required by the provisions of such Lease, ordinary wear and tear excepted (and
casualty damage and condemnation, in the event that the applicable Lease is
terminated following a casualty or total condemnation in accordance with Article
10 or Article 11).
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In addition, upon the expiration or earlier termination of the
applicable Lease unless the applicable Leased Property is transferred to Tenant
as provided herein, Tenant shall, at Landlord's sole cost and expense, use its
best efforts to transfer to and cooperate with Landlord or Landlord's nominee in
connection with the processing of all applications for licenses, operating
permits and other governmental authorizations and all contracts, including
contracts with governmental or quasi-governmental entities which may be
necessary for the operation of the Facility located on such Leased Property. If
requested by Landlord, Tenant will continue to manage such Facility after the
expiration of the Term and for as long thereafter as is necessary to obtain all
necessary licenses, operating permits and other governmental authorizations, on
such reasonable terms (which shall include an agreement to reimburse Tenant for
its reasonable out-of-pocket costs and expenses, and reasonable administrative
costs) as Landlord shall request.
5.4 Encroachments, Restrictions, Etc.
If any of the Leased Improvements on the applicable Leased Property
shall, at any time, encroach upon any property, street or right-of-way adjacent
to such Leased Property, other than Permitted Encumbrances, or shall violate the
agreements or conditions contained in any lawful restrictive covenant or other
agreement affecting such Leased Property, or any part thereof, or shall impair
the rights of others under any easement or right-of-way to which such Leased
Property is subject, upon the request of Landlord (but only as to any
encroachment, violation or impairment that is not a Permitted Encumbrance) or of
any Person affected by any such encroachment, violation or impairment, Tenant
shall, at its sole cost and expense, subject to its right to contest the
existence of any encroachment, violation or impairment in accordance with the
provisions of Article 8, either (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 Landlord or
Tenant, or (b) make such changes in the Leased Improvements and take such other
actions, as are reasonably practicable to remove such encroachment, and to end
such violation or impairment, including, if necessary, the alteration of any of
the Leased Improvements and, in any event, take all such actions as may be
necessary in order to ensure the continued operation of the Leased Improvements
for the Primary Intended Use substantially in the manner and to the extent the
Leased Improvements were operated prior to the assertion of such violation,
impairment or encroachment. Any such alteration shall be made in conformity with
the applicable requirements of this Article 5. Tenant's obligations under this
Section 5.4 shall be in addition to and shall in no way discharge or diminish
any obligation of any insurer under any policy of title or other insurance.
5.5 Landlord to Grant Easements, Etc.
Landlord will, from time to time, so long as no Default shall have
occurred and be continuing, at the request of Tenant with respect to the
applicable Leased Property and at Tenant's sole cost and expense, (a) grant
easements and other rights in the nature of easements with respect to such
Leased Property to third parties, (b) release existing easements or other rights
in the nature of easements which are for the benefit of such Leased Property,
(c) dedicate or transfer unimproved portions of such Leased Property for road,
highway or other public purposes, (d) execute petitions to have such Leased
Property annexed to any municipal corporation or utility district, (e) execute
amendments to any covenants and restrictions affecting such Leased Property and
(f) execute and deliver to any Person any instrument appropriate to confirm or
effect such grants, release, dedications, transfers, petitions and amendments
(to the extent of its interests in such Leased Property); provided that Landlord
shall have determined that such grant, release, dedication, transfer, petition
or amendment is not detrimental to the operation of such Leased Property for its
Primary Intended Use and does not materially reduce the value of such Leased
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Property, and that Landlord shall have received an Officer's Certificate
confirming such determination, and such additional information as Landlord may
request.
ARTICLE 6
CAPITAL ADDITIONS, ETC.
6.1 Construction of Capital Additions to the Leased Property.
Tenant shall not construct or install Capital Additions on the
applicable Leased Property without obtaining Landlord's prior written consent,
provided that no consent shall be required for any Capital Addition so long as
(a) the Capital Additions Costs for such Capital Addition are less than
$250,000, (b) such construction or installation would not adversely affect or
violate any Legal Requirement or Insurance Requirement applicable to the
applicable Leased Property, (c) such construction or installation could not
reasonably be expected to result in a decrease in the Fair Market Value or the
Fair Market Rental for such Leased Property, and (d) Landlord shall have
received an Officer's Certificate certifying as to the satisfaction of the
conditions set out in clauses (a), (b) and (c) above. If Landlord's consent is
required, prior to commencing construction of any Capital Addition, Tenant shall
submit to Landlord, in writing, a proposal setting forth, in reasonable detail,
any proposed Capital Addition and shall provide to Landlord, such plans and
specifications, and such available permits, licenses, contracts and other
information concerning the proposed Capital Addition as Landlord may request.
Landlord shall have thirty (30) days to review all materials submitted to
Landlord in connection with any such proposal. Failure of Landlord to respond to
Tenant's proposal within thirty-five (35) days after receipt of all information
and materials requested by Landlord in connection with the proposed Capital
Addition shall be deemed to constitute approval of such proposed Capital
Addition. Without limiting the generality of the foregoing, such proposal shall
indicate the approximate projected cost of constructing such Capital Addition,
the use or uses to which it will be put and a good faith estimate of the change,
if any, in the Fair Market Value or the Fair Market Rental that Tenant
anticipates will result from such Capital Addition. No Capital Addition shall be
made which would tie in or connect any Leased Improvement on the applicable
Leased Property with any other improvements on property adjacent to such Leased
Property (and not part of the Land) including, without limitation, tie-ins of
buildings or other structures or utilities. Tenant shall not finance the cost of
any construction of any Capital Addition except as provided in Section 6.2.1.
Any Capital Additions (including Tenant's Capital Additions) shall, upon the
expiration or sooner termination of the applicable Lease for such Leased
Property, pass to and become the property of Landlord, free and clear of all
encumbrances other than Permitted Encumbrances but subject to Landlord's
obligation to compensate Tenant for Tenant's Capital Additions as provided
below.
6.2 Capital Additions Financed or Paid For by Tenant.
6.2.1 Financing of Capital Additions.
Tenant may arrange for financing for Capital Additions from third party
lenders, provided, however that (i) the terms and conditions of any such
financing shall be commercially reasonable; (ii) any lender with respect thereto
shall be a Subordinated Creditor (as to Tenant) and any security interests in
any property of Tenant, including, without limitation, the applicable Leased
Property, shall be expressly and fully subordinated to this Agreement and to the
interest of Landlord in the applicable Leased Property and to the rights of any
Facility Mortgagee; and (iii) the aggregate proceeds of such financing shall be
used for improvements in or at the Collective Leased Properties.
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6.2.2 Amendments to Lease.
If, pursuant to the provisions of this Lease, Tenant either pays for or
arranges financing (to the extent permitted in Section 6.2.1) to pay for the
costs of construction or installation of any Capital Addition ("Tenant's Capital
Additions") (but excluding, in any event, any Capital Addition financed by or
through Landlord including, without limitation, all Capital Additions paid for
or financed through disbursements under any Renovation Funding Agreement), this
Lease shall be and hereby is amended to provide as follows:
(a) There shall be no adjustment in the Minimum Rent by reason
of any such Tenant's Capital Addition.
(b) Upon the expiration or earlier termination of the
applicable Lease (but if the applicable Lease is terminated by reason of an
Event of Default, only after Landlord is fully compensated for all damages
resulting therefrom), Landlord shall compensate Tenant for all Tenant's Capital
Additions in any of the following ways determined in Landlord's sole discretion:
(i) By purchasing such Tenant's Capital Additions from Tenant
for cash in the amount of the then Fair Market Added Value of such
Tenant's Capital Additions; or
(ii) By purchasing such Tenant's Capital Additions from Tenant
by delivering to Tenant Landlord's purchase money promissory note in
the amount of the Fair Market Added Value, which note shall be on then
commercially reasonable terms and secured by a mortgage or deed of
trust on the applicable Leased Property and such Tenant's Capital
Additions subject to all existing mortgages and encumbrances on such
Leased Property and such Tenant's Capital Additions at the time of such
purchase; or
(iii) Upon termination of the applicable Lease by reason of an
Event of Default, by assigning to Tenant the right to receive an amount
equal to the Added Value Percentage (determined as of the date of the
expiration or earlier termination of this Lease) of all rent and other
consideration receivable by Landlord under any re-letting or other
disposition of the Leased Property and such Tenant's Capital Additions,
after deducting from such rent all costs and expenses incurred by
Landlord in connection with such reletting or other disposition of the
Leased Property and such Tenant's Capital Additions and all costs and
expenses of operating and maintaining the Leased Property and such
Tenant's Capital Additions during the term of any such new lease which
are not borne by Tenant thereunder, with the provisions of this Section
6.2.2 to remain in effect until the sale or other final disposition of
the Leased Property and such Tenant's Capital Additions, at which time
the Fair Market Added Value of such Tenant's Capital Addition shall be
immediately due and payable, such obligation to be secured by a
mortgage on the Leased Property and such Tenant's Capital Additions,
subject to all existing mortgages and encumbrances on the Leased
Property at the time of such purchase and assignment; or
(iv) By making such other arrangement regarding such
compensation as shall be mutually acceptable to Landlord and Tenant.
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6.3 Capital Additions Financed by Landlord.
If Landlord shall, at the request of Tenant and in Landlord's sole
discretion, elect to finance the proposed Capital Addition, Tenant shall provide
Landlord with such information as Landlord may from time to time request,
including, without limitation, the following:
(a) Evidence that such Capital Addition will be, and upon
completion, has been completed in compliance with the applicable requirements of
State and federal law with respect to capital expenditures for healthcare
facilities;
(b) Copies of all building, zoning and land use permits and
approvals and upon completion of such Capital Addition, a copy of the
certificate of occupancy for such Capital Addition, if required;
(c) Such information, certificates, licenses, permits or other
documents necessary to confirm that Tenant 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;
(d) An Officer's Certificate and a certificate from Tenant's
architect setting forth, in reasonable detail, the projected (or actual, if
available) Capital Additions Cost and invoices and lien waivers from Tenant's
contractors for such work;
(e) A deed conveying to Landlord title to any land acquired
for the purpose of constructing the Capital Addition free and clear of any liens
or encumbrances, except those approved by Landlord, and, upon completion of the
Capital Addition, a final as-built survey thereof reasonably satisfactory to
Landlord;
(f) Endorsements to any outstanding policy of title insurance
covering the Leased Property or commitments therefor, satisfactory in form and
substance to Landlord, (i) updating the same without any additional exceptions
except as approved by Landlord, and (ii) 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 (g) below);
(g) If appropriate, (i) an owner's policy of title insurance
insuring fee simple title to any land conveyed to Landlord pursuant to
subparagraph (e) above, free and clear of all liens and encumbrances, except
those approved by Landlord, and (ii) a lender's policy of title insurance,
reasonably satisfactory in form and substance to Landlord and any Facility
Mortgagee;
(h) An appraisal of the Leased Property by Valuation
Counselors or some other Member of the Appraisal Institute of America,
acceptable to Landlord, and/or an Officer's Certificate stating that the value
of the Leased Property upon completion of the Capital Addition exceeds the Fair
Market Value thereof prior to the commencement of such Capital Addition by an
amount not less than 80% of the Capital Additions Cost; and
(i) Prints of architectural and engineering drawings relating
to such Capital Addition and such other certificates, documents, opinions of
counsel, appraisals, surveys, certified copies of duly adopted resolutions of
the board of directors of Tenant authorizing the execution and delivery of any
lease amendment or other instruments required by Landlord, any Facility
Mortgagee and any
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Lending Institution advancing or reimbursing Landlord or Tenant for any portion
of the Capital Additions Cost.
If Landlord shall finance the proposed Capital Addition, Tenant shall
pay to Landlord all reasonable costs and expenses paid or incurred by Landlord
and any Facility Mortgagee or Lending Institution which has committed to finance
such Capital Addition in connection therewith, including, but not limited to,
(a) the reasonable attorneys' fees and expenses, (b) all printing expenses, (c)
all filing, registration and recording taxes and fees, (d) documentary stamp
taxes, (e) title insurance charges, appraisal fees, and rating agency fees, and
(f) commitment fees.
6.4 Non-Capital Additions.
Tenant shall have the right, at Tenant's sole cost and expense, to make
additions, modifications or improvements to the applicable Leased Property which
are not Capital Additions ("Non-Capital Additions") from time to time as Tenant,
in its discretion, may deem desirable for the Primary Intended Use, provided
that such action will not materially alter the character or purpose or
materially detract from the value, operating efficiency or revenue-producing
capability of such Leased Property, or adversely affect the ability of Tenant to
comply with the provisions of the applicable Lease, and, without limiting the
foregoing, will not adversely affect or violate any Legal Requirement or
Insurance Requirement applicable to the applicable Leased Property. All such
Non-Capital Additions shall, upon expiration or earlier termination of the
applicable Lease for such Leased Property, pass to and become the property of
Landlord, free and clear of all liens and encumbrances, other than Permitted
Encumbrances.
6.5 Salvage.
All materials which are scrapped or removed in connection with the
making of either Capital Additions or Non-Capital Additions or repairs required
by Article 5 shall be or become the property of the party that paid for such
work.
ARTICLE 7
LIENS
7.1 Liens.
Subject to Article 8, Tenant shall not directly or indirectly create,
suffer to be created or allow to remain and shall promptly discharge, at its
expense, any lien, encumbrance, attachment, title retention agreement or claim
upon the applicable Leased Property or Tenant's leasehold interest in such
Leased Property or any attachment, levy, claim or encumbrance in respect of the
Rent, other than (a) Permitted Encumbrances, (b) restrictions, liens and other
encumbrances which are consented to in writing by Landlord, (c) liens for those
taxes of Landlord which Tenant is not required to pay hereunder, (d) subleases
permitted by Article 16, (e) liens for Impositions or for sums resulting from
noncompliance with Legal Requirements so long as (i) the same are not yet
payable, or (ii) are being contested in accordance with Article 8, (f) liens of
mechanics, laborers, materialmen, suppliers or vendors incurred in the ordinary
course of business that are not yet due and payable, or are for sums that are
being contested in accordance with Article 8, and (g) any Facility Mortgages or
other liens which are the responsibility of Landlord pursuant to the provisions
of Article 22.
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7.2 Landlord's Lien.
In addition to any statutory landlord's lien and in order to secure
payment of the Rent and all other sums payable hereunder by Tenant, and to
secure payment of any loss, cost or damage which Landlord may suffer by reason
of Tenant's breach of the applicable Lease, Tenant hereby grants unto Landlord a
security interest in and an express contractual lien upon the Tenant's Personal
Property (except motor vehicles), and all ledger sheets, files, records,
documents and instruments (including, without limitation, computer programs,
tapes and related electronic data processing) relating to the operation of the
Facility located at the applicable Leased Property (the "Records") and all
proceeds therefrom, subject to any Permitted Liens; and such Tenant's Personal
Property shall not be removed from the applicable Leased Property at any time
when a Default has occurred and is continuing.
Upon Landlord's request, Tenant shall execute and deliver to Landlord
financing statements in form sufficient to perfect the security interest of
Landlord in Tenant's Personal Property and the proceeds thereof in accordance
with the provisions of the applicable laws of the State. Tenant hereby grants
Landlord an irrevocable limited power of attorney, coupled with an interest, to
execute all such financing statements in Tenant's name, place and stead. The
security interest herein granted is in addition to any statutory lien for the
Rent.
ARTICLE 8
PERMITTED CONTESTS
Tenant shall have the right to contest the amount or validity of any
Imposition, Legal Requirement, Insurance Requirement, lien, attachment, levy,
encumbrance, charge or claim (collectively "Claims") as to the applicable Leased
Property, by appropriate legal proceedings, conducted in good faith and with due
diligence, provided that (a) the foregoing shall in no way be construed as
relieving, modifying or extending Tenant's obligation to pay any Claims as
finally determined, (b) such contest shall not cause Landlord or Tenant to be in
default under any mortgage or deed of trust encumbering such Leased Property or
any interest therein or result in or reasonably be expected to result in a lien
attaching to such Leased Property, (c) no part of the applicable Leased Property
nor any Rent therefrom shall be in any immediate danger of sale, forfeiture,
attachment or loss, and (d) Tenant shall indemnify and hold harmless Landlord
from and against any cost, claim, damage, penalty or reasonable expense,
including reasonable attorneys' fees, incurred by Landlord in connection
therewith or as a result thereof. Upon Landlord's request, Tenant shall either
(i) provide a bond or other assurance reasonably satisfactory to Landlord that
all Claims which may be assessed against the applicable Leased Property,
together with all interest and penalties thereon will be paid, or (ii) deposit
within the time otherwise required for payment with a bank or trust company, as
trustee, as security for the payment of such Claims, an amount sufficient to pay
the same, together with interest and penalties in connection therewith and all
Claims which may be assessed against or become a Claim on the applicable Leased
Property, or any part thereof, in connection with any such contest. Tenant shall
furnish Landlord and any Facility Mortgagee with reasonable evidence of such
deposit within five (5) days after request therefor. Landlord agrees to join in
any such proceedings if required legally to prosecute such contest; provided,
Landlord shall not thereby be subjected to any liability therefor (including,
without limitation, for the payment of any costs or expenses in connection
therewith). Tenant shall be entitled to any refund of any Claims and such
charges and penalties or interest thereon which have been paid by Tenant or paid
by Landlord and for which Landlord has been fully reimbursed by Tenant. If
Tenant shall fail (x) to pay any Claims when finally determined, (y) to provide
security therefor as provided in this Article 8, or (z) to prosecute any such
contest diligently and in good faith, Landlord may, upon reasonable notice to
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Tenant (which notice may be oral and shall not be required if Landlord shall
determine the same is not practicable), pay such charges, together with interest
and penalties due with respect thereto, and Tenant shall reimburse Landlord
therefor, upon demand, as Additional Charges.
ARTICLE 9
INSURANCE AND INDEMNIFICATION
9.1 General Insurance Requirements.
Tenant shall at all times during the Term and at any other time Tenant
shall be in possession of the applicable Leased Property, keep the applicable
Leased Property and all property located in or on the applicable Leased
Property, including Tenant's Personal Property, insured against the risks and in
the amounts as follows:
(a) Loss or damage by fire, vandalism and malicious mischief,
extended coverage perils, earthquake and all physical loss perils insurance,
including but not limited to sprinkler leakage, in an amount equal to not less
than the greater of (i) the Adjusted Purchase Price or (ii) one hundred percent
(100%) of the then full Replacement Cost thereof (as defined in Section 9.2
below) with the usual extended coverage endorsements, including a Replacement
Cost Endorsement and Builder's Risk Coverage during the continuance of any
construction on the applicable Leased Property;
(b) Loss or damage by explosion of steam boilers, pressure
vessels or other similar apparatus, now or hereafter installed in the Facility
located at the Leased Property, in such amounts as may be reasonably required by
Landlord or any Facility Mortgagee from time to time;
(c) Business interruption and blanket earnings plus extra
expense under a rental value insurance policy covering risk of loss during the
lesser of the first twelve (12) months of reconstruction or the actual
reconstruction period necessitated by the occurrence of any of the hazards
described in subparagraphs (a) and (b) above, in such amounts as may be
customary for comparable properties in the area and in an amount sufficient to
prevent Landlord or Tenant from becoming a co-insurer;
(d) Claims for personal injury or property damage under a
policy of comprehensive general accident and public liability insurance (in a
broad form comprehensive policy, including, without limitation, broad form
contractual liability, independent contractor's hazard and completed operations
coverage), claims arising out of malpractice in an amount not less than One
Million Dollars ($1,000,000) per occurrence, Three Million Dollars ($3,000,000)
in the aggregate and umbrella coverage of all such claims in an amount not less
than Ten Million Dollars ($10,000,000);
(e) Flood (when the applicable Leased Property is located in
whole or in part within an area identified as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968, as amended, or the Flood Disaster Protection Act of
1973, as amended (or any successor acts thereto)) and such other hazards and in
such amounts as may be customary for comparable properties in the area;
(f) Worker's compensation insurance coverage for all persons
employed by Tenant on the applicable Leased Property with statutory limits and
otherwise with limits of and provisions in
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accordance with the requirements of applicable local, State and federal law, and
employer's liability insurance in such amounts as Landlord and any Facility
Mortgagee shall reasonably require; and
(g) Such additional insurance as may be reasonably required,
from time to time, by Landlord or any Facility Mortgagee.
9.2 Replacement Cost.
"Replacement Cost" as used herein, shall mean the actual replacement
cost of the property requiring replacement from time to time, including an
increased cost of construction endorsement, less exclusions provided in the
standard form of fire insurance policy. In the event either party believes that
the then full replacement cost less such exclusions has increased or decreased
at any time during the Term, such party, at its own cost, shall have the right
to have such full replacement cost redetermined by an accredited appraiser
approved by the other, which approval shall not be unreasonably withheld or
delayed. The party desiring to have the full replacement cost so redetermined
shall forthwith, on receipt of such determination by such appraiser, give
written Notice thereof to the other. The determination of such appraiser shall
be final and binding on the parties hereto, and Tenant shall forthwith conform
the amount of the insurance carried to the amount so determined by the
appraiser.
9.3 Waiver of Subrogation.
Landlord and Tenant agree that (insofar as and to the extent that such
agreement may be effective without invalidating or making it impossible to
secure insurance coverage from responsible insurance companies doing business in
the State) with respect to any property loss which is covered by insurance then
being carried by Landlord or Tenant, respectively, the party carrying such
insurance and suffering said loss releases the other of and from any and all
claims with respect to such loss; and they further agree that their respective
insurance companies shall have no right of subrogation against the other on
account thereof, even though extra premium may result therefrom. In the event
that any extra premium is payable by Tenant as a result of this provision,
Landlord shall not be liable for reimbursement to Tenant for such extra premium.
9.4 Form Satisfactory, Etc.
All insurance policies and endorsements required pursuant to this
Article 9 shall be fully paid for, nonassessable and contain such provisions and
expiration dates and be in such form and amounts and issued by insurance
carriers authorized to do business in the State, having a general policy
holder's rating of A or A+ in Best's latest rating guide, and as otherwise shall
be approved by Landlord. Without limiting the foregoing, such policies shall
include no deductible in excess of $5,000 (unless consistent with deductibles
included in policies carried by entities engaged in similar businesses and
owning similar properties similarly situated and agreed to in advance by
Landlord) and, with the exception of the insurance described in Section 9.1(f),
shall name Landlord and any Facility Mortgagee as additional insureds, as their
interests may appear. All losses shall be payable to Landlord, any Facility
Mortgagee and Tenant as provided in Article 10. Any loss adjustment shall
require the prior written consent of Landlord, Tenant, and each Facility
Mortgagee. Tenant shall pay all insurance premiums, and deliver policies or
certificates thereof to Landlord prior to their effective date (and, with
respect to any renewal policy, thirty (30) days prior to the expiration of the
existing policy), and in the event Tenant shall fail either to effect such
insurance as herein required, to pay the premiums therefor, or to deliver such
policies or certificates to Landlord or any Facility Mortgagee at the times
required, Landlord shall have the right, but not the obligation, to acquire such
insurance and pay the premiums therefor, which amounts shall be payable to
Landlord, upon demand, as Additional Charges, together with interest accrued
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thereon at the Overdue Rate from the date such payment is made until the date
repaid. All such policies shall provide Landlord (and any Facility Mortgagee, if
required by the same) thirty (30) days' prior written notice of any
modification, expiration or cancellation of such policy.
9.5 Blanket Policy.
Notwithstanding anything to the contrary contained in this Article 9,
Tenant's obligation to maintain the insurance herein required may be brought
within the coverage of a so-called blanket policy or policies of insurance
carried and maintained by Tenant; provided, that (a) the coverage thereby
afforded will not be reduced or diminished from that which would exist under a
separate policy meeting all other requirements of the applicable Lease, and (b)
the requirements of this Article 9 are otherwise satisfied. Without limiting the
foregoing, the amounts of insurance that are required to be maintained pursuant
to Section 9.1 shall be on a Facility by Facility basis, and shall not be
subject to an aggregate limit.
9.6 No Separate Insurance.
Tenant shall not take out separate insurance, concurrent in form or
contributing in the event of loss with that required by this Article 9, or
increase the amount of any existing insurance by securing an additional policy
or additional policies, unless all parties having an insurable interest in the
subject matter of such insurance, including, Landlord and all Facility
Mortgagees, are included therein as additional insureds, and the loss is payable
under such insurance in the same manner as losses are payable under the
applicable Lease. In the event Tenant shall take out any such separate insurance
or increase any of the amounts of the then existing insurance, Tenant shall give
Landlord prompt Notice thereof.
9.7 Indemnification of Landlord.
Notwithstanding the existence of any insurance provided for herein, and
without regard to the policy limits of any such insurance, the Tenants jointly
and severally agree to protect, indemnify and hold harmless Landlord for, from
and against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and reasonable expenses (including, without limitation, reasonable
attorneys' fees), to the maximum extent permitted by law, imposed upon or
incurred by or asserted against Landlord by reason of: (a) any accident, injury
to or death of persons or loss of or damage to property occurring on or about
any Collective Leased Property or adjoining sidewalks or rights of way,
including, without limitation, any claims of malpractice, (b) any past, present
or future use, misuse, non-use, condition, management, maintenance or repair by
any Tenant or anyone claiming under any Tenant of any Collective Leased Property
or Tenant's Personal Property or any litigation, proceeding or claim by
governmental entities or other third parties to which Landlord is made a party
or participant related to any Collective Leased Property or Tenant's Personal
Property or such use, misuse, non-use, condition, management, maintenance, or
repair thereof including, failure to perform obligations (other than
Condemnation proceedings) to which Landlord is made a party, (c) any Impositions
(which is the joint and several obligation of the Tenants to pay pursuant to the
applicable provisions of the applicable Lease), and (d) any failure on the part
of any Tenant or anyone claiming under any Tenant to perform or comply with any
of the terms of any applicable Lease. The Tenants shall pay all amounts payable
under this Section 9.7 within ten (10) days after demand therefor, and if not
timely paid, such amounts shall bear interest at the Overdue Rate from the date
of determination to the date of payment. Each Tenant, at its expense, agrees,
jointly and severally, to contest, resist and defend any such claim, action or
proceeding asserted or instituted against Landlord or may compromise or
otherwise dispose of the same, with Landlord's prior written consent (which
consent may not be unreasonably withheld or delayed).
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The obligations of each Tenant under this Section 9.7 are in addition to the
obligations set forth in Section 4.4 and shall survive the termination of the
applicable Lease.
ARTICLE 10
CASUALTY
10.1 Insurance Proceeds.
All proceeds payable by reason of any loss or damage to the applicable
Leased Property, or any portion thereof, and insured under any policy of
insurance required by Article 9 (including, without limitation, proceeds of any
business interruption insurance) shall be paid directly to Landlord (subject to
the provisions of Section 10.2). If Tenant is required to reconstruct or repair
such Leased Property as provided herein, such proceeds shall be paid out by
Landlord from time to time for the reasonable costs of reconstruction or repair
of such Leased Property necessitated by such damage or destruction, subject to
the provisions of Section 10.2.4. Provided no Default or Event of Default has
occurred and is continuing, any excess proceeds of insurance remaining after the
completion of the restoration shall be paid to Tenant. In the event that Section
10.2.1 below is applicable, the insurance proceeds shall be retained by the
party entitled thereto pursuant to Section 10.2.1. All salvage resulting from
any risk covered by insurance shall belong to Landlord, except any salvage
related to Tenant's Capital Additions and Tenant's Personal Property shall
belong to Tenant.
10.2 Damage or Destruction.
10.2.1 Damage or Destruction of Leased Property.
If, during the Term, the applicable Leased Property shall be totally or
partially destroyed and the Facility located thereon is thereby rendered
Unsuitable for Its Primary Intended Use, Tenant shall, at Tenant's option,
exercisable by Notice to Landlord within sixty (60) days after the date of such
damage or destruction, irrevocably offer either (a) to purchase such Leased
Property from Landlord within one hundred twenty (120) of such Notice for a
purchase price equal to the greater of (i) the Adjusted Purchase Price of such
Leased Property or (ii) the Fair Market Value Purchase Price of such Leased
Property immediately prior to such damage or destruction or (b) to restore the
Facility to substantially the same condition as existed immediately before the
damage or destruction. If Tenant shall fail to give such Notice, Tenant shall be
deemed to have elected the option provided in clause (a) above. In the event
Landlord does not accept Tenant's offer to purchase the applicable Leased
Property within thirty (30) days after receipt of Tenant's Notice of election,
the applicable Lease with respect to the applicable Leased Property shall
terminate without further liability hereunder and Landlord shall be entitled to
retain the insurance proceeds payable on account of such damage. In the event
Tenant purchases such Leased Property as provided in this Section 10.2.1, the
insurance proceeds payable on account of such damage shall be paid to Tenant.
10.2.2 Partial Damage or Destruction.
If during the Term, the applicable Leased Property shall be totally or
partially destroyed but the Facility located thereon is not rendered Unsuitable
for its Primary Intended Use, Tenant shall promptly restore such Facility as
provided in Section 10.2.4.
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10.2.3 Insufficient Insurance Proceeds.
If the cost of the repair or restoration of the applicable Leased
Property exceeds the amount of insurance proceeds received by Landlord pursuant
to Article 9, upon the demand of Landlord, Tenant shall contribute any excess
amounts needed to restore such Leased Property. Such difference shall be paid by
Tenant to Landlord and held by Landlord, together with any other insurance
proceeds, for application to the cost of repair and restoration.
10.2.4 Disbursement of Proceeds.
In the event Tenant is required to restore the applicable Leased
Property pursuant to Section 10.2, Tenant will, at its sole cost and expense,
commence promptly and continue diligently to perform the repair and restoration
of such Leased Property (hereinafter called the "Work"), or shall cause the same
to be done, so as to restore such Leased Property in full compliance with all
Legal Requirements and so that such Leased Property shall be at least equal in
value and general utility to its general utility and value immediately prior to
such damage or destruction. Subject to the terms hereof, Landlord shall advance
the insurance proceeds (other than proceeds of business interruption insurance
which shall be advanced as provided below) and the amounts paid to it pursuant
to Section 10.2.3 to Tenant regularly during the repair and restoration period
so as to permit payment for the cost of any such restoration and repair. Any
such advances shall be for not less than $50,000 (or such lesser amount as
equals the entire balance of the repair and restoration) and Tenant shall submit
to Landlord a written requisition and substantiation therefor on AIA Forms G702
and G703 (or on such other form or forms as may be acceptable to Landlord).
Landlord may, at its option, condition advancement of said insurance proceeds
and other amounts on (i) the absence of any Default, (ii) its approval of plans
and specifications of an architect satisfactory to Landlord, (iii) general
contractors' estimates, (iv) architect's certificates, (v) unconditional lien
waivers of general contractors, (vi) evidence of approval by all governmental
authorities and other regulatory bodies whose approval is required and (vii)
such other certificates as Landlord may, from time to time, reasonably require.
Except as provided in the following sentence and provided no Default has
occurred and is continuing, on the first day of each calendar month during which
proceeds of business interruption insurance are disbursed to Landlord under the
policy of business interruption insurance maintained pursuant to Article 9,
Landlord shall disburse proceeds of business interruption insurance received by
it to Tenant upon Notice from Tenant accompanied by a certification from Tenant
that such moneys will be used for costs or expenses of owning or operating the
applicable Leased Property. Proceeds of business interruption insurance shall be
applied by Landlord, on the first day of the calendar month following such
disbursement, first to the payment of all Minimum Rent and Additional Charges
then due and payable and to become due and payable for the period for which such
proceeds have been paid by the insurance provider, if at any time the amount of
such proceeds will be insufficient to pay all Minimum Rent and Additional
Charges due or to come due during such period, Landlord shall suspend
disbursement of such proceeds.
Landlord's obligation to disburse insurance proceeds under this Article
10 shall be subject to the release of such proceeds by the applicable Facility
Mortgagee to Landlord.
Tenant's obligation to restore the applicable Leased Property pursuant
to this Article 10 shall be subject to the release of available insurance
proceeds by the applicable Facility Mortgagee to Landlord.
10.2.5 Termination of Applicable Lease.
If Landlord accepts Tenant's offer to purchase the applicable Leased
Property, as provided herein, the applicable Lease shall terminate as to the
applicable Leased Property upon payment of the
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purchase price therefor, and Landlord shall remit to Tenant all insurance
proceeds pertaining to the applicable Leased Property then held by Landlord.
10.3 Damage Near End of Term.
Notwithstanding any provisions of Section 10.1 or 10.2 to the contrary,
if damage to or destruction of the applicable Leased Property occurs during the
last eighteen (18) months of the Second Extended Term of the applicable Lease
and if such damage or destruction cannot reasonably be expected to be fully
repaired and restored prior to the date that is six (6) months prior to the end
of such Term, then Tenant shall have the right to terminate the applicable Lease
on thirty (30) days prior Notice to Landlord by giving Notice thereof to
Landlord within sixty (60) days after the date of such damage or destruction.
10.4 Tenant's Property.
All insurance proceeds payable by reason of any loss of or damage to
any of Tenant's Personal Property or Tenant's Capital Additions shall be paid to
Tenant and, to the extent necessary to repair or replace Tenant's Capital
Additions or Tenant's Personal Property in accordance with Section 10.5, Tenant
shall hold such proceeds in trust to pay the cost of repairing or replacing
damaged Tenant's Personal Property or Tenant's Capital Additions.
10.5 Restoration of Tenant's Property.
If Tenant is required to restore the applicable Leased Property as
hereinabove provided, Tenant shall either (a) restore all alterations and
improvements made by Tenant, Tenant's Personal Property and all Tenant's Capital
Additions, or (b) replace such alterations and improvements, Tenant's Personal
Property, and/or Tenant's Capital Additions with improvements or items of the
same or better quality and utility in the operation of such Leased Property.
10.6 No Abatement of Rent.
The applicable Lease shall remain in full force and effect and Tenant's
obligation to make all payments of Rent and to pay all other charges as and when
required under such Lease shall remain unabated during the Term notwithstanding
any damage involving the applicable Leased Property (provided that Landlord
shall credit against such payments any amounts paid to Landlord as a consequence
of such damage under any business interruption insurance obtained by Tenant
hereunder); provided, however, that effective upon the purchase of such Leased
Property or termination of such Lease pursuant to and in accordance with Section
10.2, such Lease shall terminate except with respect to the obligations and
liabilities of Tenant thereunder, actual or contingent, that arose prior to such
termination. The provisions of this Article 10 shall be considered an express
agreement governing any cause of damage or destruction to the applicable Leased
Property and, to the maximum extent permitted by law, no local or State statute,
laws, rules, regulation or ordinance in effect during the Term which provide for
such a contingency shall have any application in such case.
10.7 Waiver.
Tenant hereby waives any statutory rights of termination which may
arise by reason of any damage or destruction of the applicable Leased Property
which Landlord is obligated to restore or may restore under any of the
provisions of the applicable Lease.
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ARTICLE 11
CONDEMNATION
11.1 Total Condemnation, Etc.
11.1.1 Total Condemnation.
If the whole of the applicable Leased Property shall be taken by
Condemnation, the Rent for such Leased Property shall xxxxx in its entirety on
the Date of Taking, the applicable Lease shall terminate and Tenant and Landlord
shall seek the Award for their interests in such Leased Property as provided in
Section 11.5. If the Award received by Landlord for Landlord's interest in such
Leased Property is less than the greater of (x) the Adjusted Purchase Price or
(y) the Fair Market Value Purchase Price of such Leased Property immediately
prior to such Condemnation, Tenant shall contribute and pay to Landlord the
lesser of (1) the amount of Tenant's Award or (2) such shortfall; provided,
however, that notwithstanding the foregoing, if the sum of the Awards received
by Landlord and Tenant with respect to such Condemnation is less than the
Adjusted Purchase Price of such Leased Property, Tenant shall pay the amount of
such difference to Landlord, whether or not such amount exceeds Tenant's Award.
11.1.2 Constructive Total Condemnation.
If a Condemnation of less than the whole of the applicable Leased
Property renders such Leased Property Unsuitable for Its Primary Intended Use,
Tenant shall irrevocably offer to Landlord, by Notice to Landlord within sixty
(60) days after the Date of Taking, the right either (a) to have Tenant purchase
such Leased Property from Landlord within one hundred twenty (120) days of such
Notice for a purchase price equal to the greater of (i) the Adjusted Purchase
Price of such Leased Property or (ii) the Fair Market Value Purchase Price of
such Leased Property immediately prior to such Condemnation or (b) to terminate
this Agreement with respect to the affected Leased Property. Failure by Landlord
to elect clause (a) or (b) above in response to Tenant's Notice of such offer
within thirty (30) days following the date of Tenant's Notice shall be deemed an
election by Landlord to sell such Leased Property to Tenant in accordance with
clause (a) preceding. In the event Landlord elects to terminate this Agreement
with respect to the affected Leased Property, the Rent for such Leased Property
shall xxxxx in its entirety on the Date of Taking, the applicable Lease shall
terminate and Tenant and Landlord shall seek the Award for their interests in
such Leased Property as provided in Section 11.5. In the event Tenant purchases
such Leased Property as provided in this Section 11.1.2, the Tenant shall be
entitled to receive the Award that the Landlord would have been entitled to
receive had it made the election described in clause (b) above.
11.2 Partial Condemnation.
In the event of a Condemnation of less than the whole of the applicable
Leased Property such that such Leased Property is still suitable for its Primary
Intended Use, Tenant will, at its sole cost and expense, commence promptly and
continue diligently to restore the untaken portion of the Leased Improvements on
such Leased Property so that such Leased Improvements shall constitute a
complete architectural unit of the same general character and condition (as
nearly as may be possible under the circumstances) as the Leased Improvements
existing immediately prior to such Condemnation, in full compliance with all
Legal Requirements. Subject to the terms hereof, Landlord shall contribute to
the cost of restoration that part of the Award necessary to complete such repair
or restoration, together with severance and other damages awarded for the taken
Leased Improvements, to Tenant regularly during the restoration period so as to
permit payment for the cost of such repair or restoration. Landlord may, at its
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option, condition advancement of said Award and other amounts on (i) the absence
of any Default, (ii) its approval of plans and specifications of an architect
satisfactory to Landlord (which approval shall not be unreasonably withheld or
delayed), (iii) general contractors' estimates, (iv) architect's certificates,
(v) unconditional lien waivers of general contractors, (vi) evidence of approval
by all governmental authorities and other regulatory bodies whose approval is
required and (vii) such other certificates as Landlord may, from time to time,
reasonably require. Landlord's obligation under this Section 11.2 to disburse
the Award and such other amounts shall be subject to (1) the collection thereof
by Landlord and (2) the satisfaction of any applicable requirements of any
Facility Mortgage, and the release of such Award by the applicable Facility
Mortgagee. Tenant's obligation to restore the applicable Leased Property shall
be subject to the release of the Award by the applicable Facility Mortgagee to
Landlord. If the cost of the restoration of the applicable Leased Property
exceeds that part of the Award necessary to complete such restoration, together
with severance and other damages awarded for the taken Leased Improvements,
Tenant shall contribute upon the demand of Landlord any excess amounts needed to
restore such Leased Property. Such difference shall be paid by Tenant to
Landlord and held by Landlord, together with such part of the Award and such
severance and other damages, for application to the cost of restoration.
11.3 Abatement of Rent.
Other than as specifically provided in this Master Lease Document, the
applicable Lease shall remain in full force and effect and Tenant's obligation
to make all payments of Rent and to pay all other charges as and when required
under such Lease shall remain unabated during the Term notwithstanding any
Condemnation involving the applicable Leased Property; provided, however, that
effective upon the purchase of such Leased Property or the termination of the
Lease pursuant to and in accordance with Section 11.1, such Lease shall
terminate except with respect to the obligations and liabilities of Tenant
thereunder, actual or contingent, that arose prior to such termination. The
provisions of this Article 11 shall be considered an express agreement governing
any Condemnation involving the applicable Leased Property and, to the maximum
extent permitted by law, no local or State statute, law, rule, regulation or
ordinance in effect during the Term which provides for such a contingency shall
have any application in such case.
11.4 Temporary Condemnation.
In the event of any temporary Condemnation of all or any part of the
applicable Leased Property or Tenant's interest under the applicable Lease of
such Leased Property, the applicable Lease shall continue in full force and
effect, and Tenant shall continue to pay, in the manner and on the terms therein
specified, the full amount of the Rent. Tenant shall continue to perform and
observe all of the other terms and conditions hereof on the part of the Tenant
to be performed and observed. Provided no Default or Event of Default that
relates to the payment of money has occurred and is continuing, the entire
amount of any Award made for such temporary Condemnation allocable to the Term,
whether paid by way of damages, rent or otherwise, shall be paid to Tenant.
Tenant shall, promptly upon the termination of any such period of temporary
Condemnation, at its sole cost and expense, restore such Leased Property to the
condition that existed immediately prior to such Condemnation, in full
compliance with all Legal Requirements, unless such period of temporary
Condemnation shall extend beyond the expiration of the Term, in which event
Tenant shall not be required to make such restoration. For purposes of this
Section 11.4, a Condemnation shall be deemed to be temporary if the period of
such Condemnation is not expected to, and does not, exceed twenty-four (24)
months.
11.5 Allocation of Award.
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Except as provided in the second sentence of this Section 11.5, the
total Award shall be solely the property of and payable to Landlord. Any portion
of the Award made for the taking of Tenant's leasehold interest in the Leased
Property, Tenant's Capital Additions, loss of business during the remainder of
the Term, the taking of Tenant's Personal Property, or Tenant's removal and
relocation expenses shall be the sole property of and payable to Tenant (subject
to the provisions of Section 11.2 hereof). In any Condemnation proceedings,
Landlord and Tenant shall each seek its own Award in conformity herewith, at its
own expense.
ARTICLE 12
DEFAULTS AND REMEDIES
12.1 Events of Default.
The occurrence, and continuance beyond the expiration of any applicable
grace period specifically provided for in this Section 12.1, of any one or more
of the following events shall constitute an "Event of Default" under the
applicable Lease:
(a) an Event of Default (as defined therein) shall occur and
be continuing under any Deed of Trust or Security Agreement constituting a
Transaction Document; or
(b) any Tenant shall fail to make any payment of the Rent or
any other sum (including, but not limited to, payment of the purchase price for
any of the Collective Leased Properties which any Tenant shall be obligated or
elects to purchase pursuant to the terms of this Master Lease Document or any
Lease) payable hereunder or under any Lease when due and such failure continues
unremedied for a period of ten (10) days after Notice thereof from Landlord; or
(c) any Tenant or Guarantor shall default in the due
observance or performance of any of the terms, covenants or agreements contained
herein or in any other Transaction Document to be performed or observed by it,
in each case relating to other than the payment of money and not otherwise
referred to in this Section 12.1, and such default shall remain unremedied for a
period of thirty (30) days after Notice thereof from Landlord (provided that no
such Notice shall be required if Landlord shall reasonably determine immediate
action is necessary to protect person or property), provided, however, that if
such default is susceptible of cure but such cure cannot be accomplished with
due diligence within such period of time, and if in addition such Tenant or
Guarantor commences to cure such default within thirty (30) days after Notice
thereof from Landlord, and thereafter prosecutes the curing of such default with
all due diligence, such period of time shall be extended to such period of time
(not to exceed an additional forty-five (45) days, or with respect to any such
default under Section 4.4 hereof or like provision of any other Transaction
Document, ninety (90) days) as may be necessary to cure such default with all
due diligence; or
(d) any Tenant shall default in due performance or observance
of any term, covenant or agreement on its part to be performed or observed
pursuant to Articles 7, 9 or 16 and such default shall remain unremedied for a
period of thirty (30) days after Notice thereof from Landlord; or
(e) IHS shall default in the due performance or observance of
Section 14(d), (f) or (g) of the IHS Guaranty; or
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(f) any material Transaction Document shall cease for any
reason to be in full force and effect (other than as specifically provided
therein, or released as provided therein), or any Tenant or any Guarantor shall
so assert in writing; or
(g) any obligation of IHS or of any Subsidiary thereof, in
respect of any Indebtedness (excluding trade accounts payable in the ordinary
course of business on customary trade terms) in each case in the aggregate
amount of $30,000,000, or any guaranty relating thereto shall be declared to be
or shall become due and payable prior to the stated maturity thereof, or there
shall occur and be continuing any default under any instrument, agreement or
evidence of indebtedness relating to any such Indebtedness for money borrowed
the effect of which is to permit the holder or holders of such instrument,
agreement or evidence of indebtedness, or a trustee, agent or other
representative on behalf of such holder or holders, to cause such Indebtedness
for money borrowed to become due prior to its stated maturity; or
(h) if:
(i) a final unappealable determination by applicable state
authorities of the revocation or limitation of any license, permit,
certification or approval required for the lawful operation of any
Facility located on any Collective Leased Property in accordance with
its Primary Intended Use or the loss or limitation of any license,
permit, certification or approval under any other circumstances under
which the applicable Tenant is required to cease its operation of such
Facility in accordance with its Primary Intended Use at the time of
such loss or limitation, or
(ii) any Provider Agreement material to the operation or
financial condition of any Tenant or any Facility shall be terminated
prior to the expiration of the term thereof or, without the prior
written consent of Landlord in each instance (which consent may be
withheld in Landlord's sole and absolute discretion), shall not be
renewed or extended or replaced upon the expiration of the stated term
thereof and such termination, or
(iii) after any Tenant has obtained approval for Medicare
and/or Medicaid funding, a final unappealable determination is made by
the applicable governmental authority that Tenant shall have failed to
comply with applicable Medicare and/or Medicaid regulations in the
operation of any Facility, as a result of which failure such Tenant is
declared ineligible to receive reimbursements under the Medicare and/or
Medicaid programs,
and in any such case such event or condition (x) may reasonably be expected to
have a material adverse effect upon the operations, business, property, or
assets of, liabilities, or the condition of, or revenues generated by, the
Tenants or their Facilities taken as a whole, and (y) remains unremedied for a
period of thirty (30) days after Notice thereof from Landlord; or
(i) any representation or warranty that is qualified as to
materiality, and any material representation or warranty that is not qualified
as to materiality, made by or on behalf of any Tenant or any Guarantor under or
in connection with any Lease or any of the other Transaction Documents, or in
any document, certificate or agreement delivered pursuant to the terms of such
Lease or any of the other Transaction Documents, shall prove to have been false
or misleading in any material respect on the day when made or deemed made,
provided, however, that if such default is susceptible of cure such default
shall not constitute an Event of Default hereunder unless it shall remain
unremedied for a period of thirty (30) days after Notice thereof from Landlord;
or
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(j) any Tenant or any Guarantor shall make a general
assignment for the benefit of creditors; or
(k) any petition shall be filed by or against (i) any Tenant
or (ii) any Guarantor under the Federal bankruptcy laws, or any other proceeding
shall be instituted by or against any Tenant or any Guarantor seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for any Tenant or any Guarantor or for any
substantial part of the property of any Tenant or any Guarantor, and such
proceeding is not dismissed within ninety (90) days after institution thereof,
or any Tenant or any Guarantor shall take any action to authorize or effect any
of the actions set forth above in this paragraph (k); or
(l) any Tenant or any Guarantor shall cause or institute any
proceeding for its dissolution or termination; or
(m) A final judgment which, with other outstanding final
judgments against IHS or any Subsidiary thereof, exceeds an aggregate of
$50,000,000 in excess of applicable insurance coverage shall be rendered against
IHS or any Subsidiary thereof, if, (i) within 30 days after entry thereof, such
judgment shall not have been discharged or execution thereof stayed pending
appeal or (ii) within 30 days after the expiration of any such stay, such
judgment shall not have been discharged.
(n) if, except as a result of damage, destruction or a partial
or complete Condemnation, any Tenant voluntarily ceases operations on any
applicable Leased Property for its Primary Intended Use for a period in excess
of thirty (30) consecutive days, provided, however, that in the event that
before the expiration of said 30-day period, Tenant makes the determination
provided for in Section 21.1 and follows the procedures set forth therein then
the continued cessation of operating beyond the 30th day shall not be an Event
of Default;
then, and in any such event, Landlord, in addition to all other remedies
available to it, may terminate all of the Leases, or any of them, as Landlord,
in its sole discretion, elects, by giving Notice of such termination, and upon
the expiration of the time, if any, fixed in such Notice, the Term of each Lease
designated by Landlord shall terminate and all rights of any Tenant under such
Lease shall cease. Landlord shall have all rights at law and in equity available
to Landlord as a result of Tenant's breach of any Lease.
Upon the occurrence of an Event of Default, Landlord may, in
addition to any other remedies provided herein, enter upon the Collective Leased
Properties or any portion thereof and take possession of any and all of Tenant's
Personal Property and the Records on the applicable Leased Property, without
liability for trespass or conversion (Tenant hereby waiving any right to notice
or hearing prior to such taking of possession by Landlord) and sell the same at
public or private sale, after giving Tenant reasonable Notice of the time and
place of any public or private sale, at which sale Landlord or its assigns may
purchase all or any portion of Tenant's Personal Property unless otherwise
prohibited by law. Unless otherwise provided by law and without intending to
exclude any other manner of giving Tenant reasonable notice, the requirement of
reasonable Notice shall be met if such Notice is given at least five (5) days
before the day of sale. The proceeds from any such disposition, less all
expenses incurred in connection with the taking of possession, holding and
selling of such property (including, reasonable attorneys' fees) shall be
applied as a credit against the indebtedness which is secured by the security
interest granted in Section 7.2. Any surplus shall be paid to Tenant or as
otherwise required by law and Tenant shall pay any deficiency to Landlord, as
Additional Charges, upon demand.
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12.2 Remedies.
Neither (a) the termination of the applicable Lease pursuant to Section
12.1, (b) the repossession of the applicable Leased Property or any portion
thereof, (c) the failure of Landlord, notwithstanding reasonable good faith
efforts, to re-let the applicable Leased Property or any portion thereof, nor
(d) the reletting of all or any portion thereof, shall relieve Tenant of its
liability and obligations hereunder, all of which shall survive any such
termination, repossession or re-letting. In the event of any such termination,
Tenant shall forthwith pay to Landlord all Rent due and payable with respect to
the applicable Leased Property to and including the date of such termination.
Thereafter, Tenant, until the end of what would have been the Term of the
applicable Lease in the absence of such termination, and whether or not the
applicable Leased Property or any portion thereof shall have been re-let, shall
be liable to Landlord for, and shall pay to Landlord, as current damages, the
Rent and other charges which would be payable hereunder for the remainder of the
Term had such termination not occurred, less the net proceeds, if any, of any
re-letting of the applicable Leased Property, after deducting all expenses in
connection with such reletting, including, without limitation, all repossession
costs, brokerage commissions, legal expenses, attorneys' fees, advertising,
expenses of employees, alteration costs and expenses of preparation for such
reletting. Tenant shall pay such current damages to Landlord monthly on the days
on which the Minimum Rent would have been payable hereunder if the applicable
Lease had not been terminated.
At any time after such termination, whether or not Landlord shall have
collected any such current damages, as liquidated final damages beyond the date
of such termination, at Landlord's election, Tenant shall pay to Landlord either
(a) an amount equal to the excess, if any, of the Rent and other charges which
would be payable hereunder from the date of such termination (assuming that, for
the purposes of this paragraph, annual payments by Tenant on account of
Impositions would be the same as payments required for the immediately preceding
twelve calendar months, or if less than twelve calendar months have expired
since the Commencement Date, the payments required for such lesser period
projected to an annual amount) for what would be the then unexpired term of the
applicable Lease if the same remained in effect, over the Fair Market Rental for
the same period, or (b) an amount equal to the lesser of (i) the Rent and other
charges that would have been payable for the balance of the Term had it not been
terminated, or (ii) the aggregate of the Rent and other charges accrued in the
twelve (12) months ended next prior to such termination (without reduction for
any free rent or other concession or abatement). In the event the applicable
Lease is so terminated prior to the expiration of the first full year of the
Term, the liquidated damages which Landlord may elect to recover pursuant to
clause (b) (ii) of this paragraph shall be calculated as if such termination had
occurred on the first anniversary of the Commencement Date. Nothing contained in
the applicable Lease shall, however, limit or prejudice the right of Landlord to
prove and obtain in proceedings for bankruptcy or insolvency an amount equal to
the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, the damages are to be proved, whether or
not the amount be greater than, equal to, or less than the amount of the loss or
damages referred to above.
In case of any Event of Default, re-entry, expiration and
dispossession by summary proceedings or otherwise, Landlord may (a) relet the
applicable Leased Property or any part or parts thereof, either in the name of
Landlord or otherwise, for a term or terms which may at Landlord's option, be
equal to, less than or exceed the period which would otherwise have constituted
the balance of the Term and may grant concessions or free rent to the extent
that Landlord considers advisable and necessary to relet the same, and (b) may
make such reasonable alterations, repairs and decorations in the applicable
Leased Property or any portion thereof as Landlord, in its sole judgment,
considers it advisable and necessary for the purpose of reletting the applicable
Leased Property; and the making of such alterations, repairs and decorations
shall not operate or be construed to release Tenant from liability hereunder as
aforesaid.
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Landlord shall in no event be liable in any way whatsoever for failure to relet
the applicable Leased Property, or, in the event that the applicable Leased
Property is relet, for failure to collect the rent under such reletting. To the
fullest extent permitted by law, Tenant hereby expressly waives any and all
rights of redemption granted under any present or future laws in the event of
Tenant being evicted or dispossessed, or in the event of Landlord obtaining
possession of the applicable Leased Property, by reason of the violation by
Tenant of any of the covenants and conditions of the applicable Lease.
12.3 TENANT'S WAIVER.
IF THE APPLICABLE LEASE IS TERMINATED PURSUANT TO SECTION 12.1 OR 12.2
HEREOF, TENANT WAIVES, TO THE EXTENT PERMITTED BY LAW, (A) ANY RIGHT TO A TRIAL
BY JURY IN THE EVENT OF SUMMARY PROCEEDINGS TO ENFORCE THE REMEDIES SET FORTH IN
THIS ARTICLE 12, AND (B) THE BENEFIT OF ANY LAWS NOW OR HEREAFTER IN FORCE
EXEMPTING PROPERTY FROM LIABILITY FOR RENT OR FOR DEBT.
12.4 Application of Funds.
Any payments received by Landlord under any of the provisions of the
applicable Lease during the existence or continuance of any Default or Event of
Default (and any payment made to Landlord rather than Tenant due to the
existence of any Default or Event of Default) shall be applied to the Tenants'
obligations under the applicable Lease and under the other Transaction Documents
in such order as Landlord may determine or as may be prescribed by the laws of
the State.
12.5 Landlord's Right to Cure Tenant's Default.
If an Event of Default shall have occurred and be continuing, Landlord,
after Notice to Tenant (provided that no such notice shall be required if
Landlord shall reasonably determine immediate action is necessary to protect
person or property), without waiving or releasing any obligation of Tenant, and
without waiving or releasing any Event of Default, may (but shall not be
obligated to), at any time thereafter, make such payment or perform such act for
the account and at the expense of Tenant, and may, to the extent permitted by
law, enter upon the applicable Leased Property or any portion thereof for such
purpose and take all such action thereon as, in Landlord's opinion, may be
necessary or appropriate therefor, including the management of the Facility
located on the applicable Leased Property by Landlord or its designee, and
Tenant hereby irrevocably appoints, in the event of such election by Landlord,
Landlord or its designee as manager of the Facility located on the applicable
Leased Property and its attorney in fact for such purpose, irrevocably and
coupled with an interest, in the name, place and stead of Tenant. No such entry
shall be deemed an eviction of Tenant. All reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees) incurred by Landlord
in connection therewith, together with interest thereon (to the extent permitted
by law) at the Overdue Rate from the date such sums are paid by Landlord until
repaid, shall be paid by Tenant to Landlord, on demand.
12.6 Trade Names.
If the applicable Lease relating to a Facility is terminated for any
reason Tenant shall not use a Facility Trade Name in the same market in which
such Facility is located in connection with any business that competes with such
Facility.
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ARTICLE 13
HOLDING OVER
Any holding over by Tenant after the expiration of the Term shall be
treated as a daily tenancy at sufferance at a rate equal to 1-1/2 times the
Minimum Rent then in effect plus Additional Charges and other charges herein
provided (prorated on a daily basis). Tenant shall also pay to Landlord all
damages (other than consequential damages) sustained by reason of any such
holding over. Otherwise, such holding over shall be on the terms and conditions
set forth in the applicable Lease, to the extent applicable. Nothing contained
herein shall constitute the consent, express or implied, of Landlord to the
holding over of Tenant after the expiration or earlier termination of the
applicable Lease.
ARTICLE 14
LANDLORD'S DEFAULT
If Landlord shall default in the performance or observance of any of
its covenants or obligations set forth in the applicable Lease, and such default
shall continue for a period of thirty (30) days after Notice thereof from Tenant
to Landlord and any applicable Facility Mortgagee, or such additional period as
may be reasonably required to correct the same, Tenant may declare the
occurrence of a "Landlord Default" by a second Notice to Landlord and to such
Facility Mortgagee. Thereafter, Tenant may forthwith cure the same and, subject
to the provisions of the following paragraph, invoice Landlord for costs and
expenses (including reasonable attorneys' fees and court costs) incurred by
Tenant in curing the same, together with interest from the date Landlord
receives Tenant's invoice, at a rate equal to the lesser of the Overdue Rate or
the maximum rate allowed by law. Tenant shall have no right to terminate the
applicable Lease for any default by Landlord hereunder and no right, for any
such default, to offset or counterclaim against any Rent or other charges due
hereunder.
If Landlord shall in good faith dispute the occurrence of any Landlord
Default and Landlord, before the expiration of the applicable cure period, shall
give Notice thereof to Tenant, setting forth, in reasonable detail, the basis
therefor, no Landlord Default shall be deemed to have occurred and Landlord
shall have no obligation with respect thereto until final adverse determination
thereof. If Tenant and Landlord shall fail, in good faith, to resolve the
dispute within ten (10) days after Landlord's Notice of dispute, either may
submit the matter for resolution to a court of competent jurisdiction.
ARTICLE 15
PURCHASE OF LEASED PROPERTY
In the event Tenant shall purchase the applicable Leased Property from
Landlord pursuant to the terms of the applicable Lease and this Master Lease
Document, Landlord shall, upon receipt from Tenant of the applicable purchase
price, together with full payment of any unpaid Rent and other charges due and
payable with respect to any period ending on or before the date of the purchase,
and so long as no Default shall have occurred and be continuing at such time,
deliver to Tenant an appropriate deed or other instruments, conveying the entire
interest of Landlord in and to such Leased Property to Tenant, free and clear of
all encumbrances created through the act or omission of Landlord other than (i)
those liens, if any, which Tenant has agreed in writing to accept and take title
subject to, and (ii) encumbrances imposed on such Leased Property under Section
5.5 hereof. The difference between the applicable
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purchase price and the total cost of discharging the encumbrances described in
clause (i) above shall be paid in cash to Landlord or as Landlord may direct, in
federal or other immediately available funds. Other than as specifically
provided above, such Leased Property shall be conveyed to Tenant on an "as is"
basis, and in its then physical condition. The closing of any such sale shall be
subject to all terms and conditions with respect thereto set forth in the
applicable Lease and in the other Transaction Documents, and shall, unless
waived by Tenant, be contingent upon and subject to Tenant's obtaining all
required governmental consents and approvals for such transfer. All expenses of
such conveyance, including, without limitation, all transfer and sales taxes,
documentary fees, the fees and expenses of counsel to Landlord and the cost of
any title examination or title insurance, shall be paid by Tenant.
ARTICLE 16
SUBLETTING AND ASSIGNMENT
16.1 Subletting and Assignment.
Except as provided in Section 16.3 below, Tenant shall not, without the
prior written consent of a majority of the Independent Trustees and a majority
of the Trustees, assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer the applicable Lease or sublease (which term shall be deemed to include
the granting of concessions and licenses and the like), all or any part of the
applicable Leased Property or suffer or permit the applicable Lease or the
leasehold estate created hereby or thereby or any other rights arising under the
applicable Lease to be assigned, transferred, mortgaged, pledged, hypothecated
or encumbered, in whole or in part, whether voluntarily, involuntarily or by
operation of law, or permit the use or occupancy of the applicable Leased
Property by anyone other than Tenant, or the applicable Leased Property to be
offered or advertised for assignment or subletting. For purposes of this Section
16.1, any Change in Control, including without limitation, any transaction
pursuant to which Tenant is merged or consolidated with another entity or
pursuant to which all or substantially all of Tenant's assets are transferred to
any other entity, shall be deemed to be an assignment of the applicable Lease.
If the applicable Lease is assigned or if the applicable Leased
Property or any part thereof are sublet (or occupied by anybody other than
Tenant and its employees) Landlord, after an Event of Default occurs and is
continuing, may collect the rents from such assignee, subtenant or occupant, as
the case may be, and apply the net amount collected to the Rent herein reserved,
but no such collection shall be deemed a waiver of the provisions set forth in
the first paragraph of this Section 16.1, the acceptance by Landlord of such
assignee, subtenant or occupant, as the case may be, as a tenant, or a release
of Tenant from the future performance by Tenant of its covenants, agreements or
obligations contained in the applicable Lease.
No subletting or assignment shall in any way impair the continuing
primary liability of Tenant hereunder, and no consent to any subletting or
assignment in a particular instance shall be deemed to be a waiver of the
prohibition set forth in this Section 16.1. No assignment, subletting or
occupancy shall affect the Primary Intended Use. Any subletting, assignment or
other transfer of Tenant's interest in the applicable Lease in contravention of
this Section 16.1 shall be voidable at Landlord's option.
16.2 Required Sublease Provisions.
Any sublease of all or any portion of the applicable Leased Property
shall provide (a) that it is subject and subordinate to the applicable Lease and
to the matters to which the applicable Lease
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and such Lease is or shall be subject or subordinate; (b) that in the event of
termination of such Lease or reentry or dispossession of Tenant by Landlord
under such Lease, Landlord may, at its option, terminate such sublease or take
over all of the right, title and interest of Tenant, as sublessor under such
sublease, and such subtenant shall, at Landlord's option, attorn to Landlord
pursuant to the then executory provisions of such sublease, except that neither
Landlord nor any Facility Mortgagee, as holder of a mortgage or as Landlord
under the applicable Lease, if such mortgagee succeeds to that position, shall
(i) be liable for any act or omission of Tenant under such sublease, (ii) be
subject to any credit, counterclaim, offset or defense which theretofore accrued
to such subtenant against Tenant, (iii) be bound by any previous modification of
such sublease not consented to in writing by Landlord or by any previous
prepayment of more than one (1) month's Rent, (iv) be bound by any covenant of
Tenant to undertake or complete any construction of such Leased Property or any
portion thereof, (v) be required to account for any security deposit of the
subtenant other than any security deposit actually delivered to Landlord by
Tenant, (vi) be bound by any obligation to make any payment to such subtenant or
grant any credits, except for services, repairs, maintenance and restoration
provided for under the sublease that are performed after the date of such
attornment, (vii) be responsible for any monies owing by Tenant to the credit of
such subtenant, or (viii) be required to remove any Person occupying such Leased
Property or any part thereof; and (c) in the event the subtenant receives a
written Notice from Landlord or the Facility Mortgagee, if any, stating that an
Event of Default has occurred and is continuing, the subtenant shall thereafter
be obligated to pay all rentals accruing under said sublease directly to the
party giving such Notice or as such party may direct. All rentals received from
the subtenant by Landlord or the Facility Mortgagee, if any, as the case may be,
shall be credited against the amounts owing by Tenant under the applicable
Lease; and such sublease shall provide that the subtenant thereunder shall, at
the request of Landlord, execute a suitable instrument in confirmation of such
agreement to attorn. An original counterpart of each such sublease and
assignment and assumption, duly executed by Tenant and such subtenant or
assignee, as the case may be, in form and substance satisfactory to Landlord,
shall be delivered promptly to Landlord and (a) in the case of an assignment,
the assignee shall assume in writing and agree to keep and perform all of the
terms of the applicable Lease on the part of Tenant to be kept and performed and
shall be, and become, jointly and severally liable with Tenant for the
performance thereof and (b) in case of either an assignment or subletting,
Tenant 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 covenants and conditions to be performed by Tenant hereunder.
The provisions of this Section 16.2 shall not be deemed a waiver of the
provisions set forth in the first paragraph of Section 16.1.
16.3 Permitted Sublease.
Notwithstanding the foregoing, but subject to the provisions of Section
16.4 below and any other express conditions or limitations set forth herein,
Tenant may, in each instance after Notice to Landlord, sublease space at the
applicable Leased Property for laundry, commissary or child care purposes or
similar concessions in furtherance of the Primary Intended Use, so long as such
sublease would not reduce the number of licensed beds at the applicable
Facility, would not violate or affect any Legal Requirement or Insurance
Requirement, and Tenant has provided such additional insurance coverage
applicable to the activities to be conducted in such subleased space as is
acceptable to Landlord (and any Facility Mortgagee) in its discretion.
16.4 Sublease Limitation.
Anything contained in this Lease to the contrary notwithstanding,
Tenant shall not sublet the applicable Leased Property on any basis such that
the rental to be paid by the sublessee thereunder would
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be based, in whole or in part, on either (a) the income or profits derived by
the business activities of the sublessee, or (b) any other formula such that any
portion of the sublease rental would fail to qualify as "rents from real
property" within the meaning of Section 856(d) of the Code, or any similar or
successor provision thereto.
ARTICLE 17
ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
17.1 Estoppel Certificates
At any time and from time to time, upon not less than ten (10) days
prior Notice by Landlord, Tenant shall furnish to Landlord an Officer's
Certificate certifying that the applicable Lease is unmodified and in full force
and effect (or that the applicable Lease is in full force and effect as modified
and setting forth the modifications), the date to which the Rent has been paid,
that Tenant is not in default in the performance or observance of any of the
terms of the applicable Lease and that no event exists which with the giving of
notice, lapse of time, or both, would constitute a Default or an Event of
Default, or if a Default or an Event of Default shall exist, specifying in
reasonable detail such Default or an Event of Default, and the steps being taken
to remedy the same, and such additional information as Landlord may reasonably
request. Any such certificate furnished pursuant to this Section 17.1 may be
relied upon by Landlord and any prospective purchaser or mortgagee of the
applicable Leased Property.
17.2 Financial Statements.
Tenant shall furnish the following statements to Landlord:
(a) within sixty (60) days after each of the first three
quarters of any Fiscal Year, the unaudited Financial Statements for such
quarter, prepared on a Facility by Facility basis (together with occupancy
percentages and payor mix on a Facility by Facility basis), in each case
accompanied by the Financial Officer's Certificate;
(b) within one hundred twenty (120) days after the end of each
Fiscal Year, the Financial Statements for such year, including the most recent
financial statements of Tenant prepared on a Facility by Facility basis, in each
case certified by Peat Marwick LLP or any other independent certified public
accountant reasonably satisfactory to Landlord and accompanied by the Financial
Officer's Certificate;
(c) at any time and from time to time upon not less than
thirty (30) days Notice from Landlord, Tenant will furnish to Landlord any
Financial Statements or any other financial reporting information required to be
filed by Landlord with any securities and exchange commission, the SEC or any
successor agency, or any other governmental authority, or required pursuant to
any order issued by any court governmental authority or arbitrator in any
litigation to which Landlord is a party, for purposes of compliance therewith;
and
(d) promptly upon Notice from Landlord, such other information
concerning the business, financial condition and affairs of Tenant as Landlord
may reasonably request from time to time.
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Landlord may at any time, and from time to time, provide any Facility Mortgagee
with copies of any of the foregoing statements.
17.3 General Operations.
Tenant covenants and agrees to furnish to Landlord:
17.3.1 Reimbursement, Licensure, Etc.
Within thirty (30) days after receipt or modification thereof, copies
of
(a) all licenses authorizing Tenant to operate the Facility
for its Primary Intended Use;
(b) all Medicare and Medicaid certifications, together with
provider agreements and all material correspondence relating thereto with
respect to the Facility (excluding, however, correspondence which may be subject
to any attorney-client privilege);
(c) a Nursing Home Administrator License for the individual
employed in such capacity with respect to the Facility; and
(d) all reports of surveys, statements of deficiencies, plans
of correction, and all material correspondence relating thereto, including,
without limitation, all reports and material correspondence concerning
compliance with or enforcement of licensure, Medicare/Medicaid, and
accreditation requirements, including physical environment and Life Safety Code
survey reports (excluding, however, correspondence which may be subject to any
attorney-client privilege); and
(e) with reasonable promptness, such other confirmation as to
the Licensure and Medicare and Medicaid participation of Tenant as Landlord may
reasonably request from time to time.
17.3.2 Annual Budgets.
Not less than ninety (90) days after the commencement of any Fiscal
Year, proposed annual income and ordinary expense and capital improvement
budgets setting forth projected income and costs and expenses projected to be
incurred by Tenant in managing, owning, maintaining and operating the Facility
for such Fiscal Year.
ARTICLE 18
LANDLORD'S RIGHT TO INSPECT
Tenant shall permit Landlord and its authorized representatives to
inspect the applicable Leased Property during usual business hours upon not less
than twenty-four (24) hours' Notice (provided that no such notice shall be
required if Landlord shall reasonably determine immediate action is necessary to
protect person or property), and to make such repairs as Landlord is permitted
or required to make pursuant to the terms of the applicable Lease; provided that
any inspection or repair by Landlord or its representatives will not
unreasonably interfere with Tenant's use and operation of applicable Leased
Property; further provided that in the event of an emergency, as determined by
Landlord in its sole discretion, prior notice shall not be necessary.
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ARTICLE 19
APPRAISAL
19.1 Appraisal Procedure.
In the event that it becomes necessary to determine the Fair Market
Value or Fair Market Rental of any property for any purpose of the applicable
Lease, and the parties cannot agree amongst themselves on such Fair Market Value
or Fair Market Rental, Tenant may request that Landlord select, or Landlord may
on its own initiative select, a Qualified Appraiser (as hereinafter defined). If
Tenant does not accept the Fair Market Value or Fair Market Rental, as the case
may be, of such property as of the relevant date as determined by such Qualified
Appraiser, Tenant may, within ten (10) days after receiving the report of such
Qualified Appraiser, by written Notice to Landlord, appoint a second Qualified
Appraiser. If Tenant does not so appoint a second Qualified Appraiser within
such ten (10) day period, Tenant shall be deemed to have accepted the Fair
Market Value or Fair Market Rental determined by the first Qualified Appraiser.
The two appraisers so designated shall meet within ten (10) days after the
second Qualified Appraiser is designated, and, if within ten (10) days after the
second Qualified Appraiser is designated, the two appraisers do not agree upon
the Fair Market Value or Fair Market Rental, as the case may be, of any property
as of the relevant date, the two appraisers shall designate a third Qualified
Appraiser, within ten (10) days thereafter. In the event that the two appraisers
are unable to agree upon the appointment of a third Qualified Appraiser within
such ten (10) day period, either Landlord or Tenant, on behalf of both, may then
request appointment of such appraiser by the then president of the American
Arbitration Association. In the event of a failure, refusal or inability of any
appraiser to act, a new Qualified Appraiser shall be appointed in his stead,
which appointment shall be made in the same manner as hereinabove provided for
the appointment of such appraiser so failing, refusing or being unable to act.
In the event that all appraisers cannot agree upon such value within ten (10)
days as aforesaid, each appraiser shall submit his appraisal of such value to
the other two appraisers in writing, and such value shall be determined by
calculating the average of the two numerically closest (or, if the values are
equidistant, all three) values determined by the three appraisers.
"Qualified Appraiser" shall mean any disinterested person who is a
member in good standing of the American Institute of Real Estate Appraisers or
the American Society of Real Estate Counselors (or the successor to either of
such organizations) and who has had not less than ten (10) years experience in
appraising and valuing, commercial buildings in the State.
The costs (other than Landlord's counsel fees) of each such appraisal
shall be borne by Tenant and shall be included as part of the Additional
Charges. Upon determining such value, the appraisers shall promptly notify
Landlord and Tenant in writing of such determination. If any party shall fail to
appear at the hearings appointed by the appraisers, the appraisers may act in
the absence of such party.
The determination of the board of appraisers (or the single Qualified
Appraiser, as appropriate) made in accordance with the foregoing provisions
shall be final and binding upon the parties, such determination may be entered
as an award in arbitration in a court of competent jurisdiction, and judgment
thereon may be entered.
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19.2 Landlord's Right to Appraisal.
Landlord shall have the right, exercisable twice at any time during the
Term, to appoint a Qualified Appraiser (which may include, without limitation,
American Appraisal Associates) to perform a complete appraisal of the applicable
Leased Property, (each such appraisal to include complete valuations of such
Leased Property based upon (a) the "Cost Approach", (b) the "Market Approach"
and (c) the "Income Approach"), which appraisal shall meet all requirements of
any state or Federal bank regulatory authority that Landlord or any Facility
Mortgagee considers relevant. The costs of the first of such appraisals shall be
borne by Tenant and shall be included as part of the Additional Charges.
ARTICLE 20
LANDLORD'S OPTION TO PURCHASE
20.1 Landlord's Option to Purchase the Tenant's Personal Property;
Transfer of Licenses.
Effective on not less than fifteen (15) days' prior Notice given at
least sixty (60) days prior to expiration of the Term (or such shorter period as
shall be appropriate if the applicable Lease is terminated prior to its
expiration date), Landlord shall have the option to purchase all (but not less
than all) of Tenant's Personal Property (except motor vehicles), if any, at the
expiration or termination of the applicable Lease, for an amount equal to the
then fair market value thereof (determined in accordance with the appraisal
procedures set forth in Article 19), subject to, and with appropriate price
adjustments for, all equipment leases, conditional sale contracts, security
interests and other encumbrances to which such Tenant's Personal Property is
subject. Tenant's Personal Property will be conveyed to Landlord on an "as-is"
basis, in its then current condition and state of repair. Tenant shall provide
Landlord with warranties of title, reflecting no encumbrances as to which
adjustments to the purchase price thereof, as required by the previous sentence,
have not been made. Failure of Landlord to notify Tenant of the election of its
option to purchase Tenant's Personal Property by the fifteenth day prior to the
termination of the applicable Lease shall be deemed to constitute a waiver of
Landlord's right to purchase Tenant's Personal Property at the applicable Leased
Property. Upon the expiration or sooner termination of the applicable Lease, or
upon management of the Facility located on the applicable Leased Property by the
Landlord or its designee, Tenant shall use all reasonable efforts to transfer
and assign to Landlord or its designee, or assist Landlord or its designee in
obtaining, any contracts, licenses, and certificates required for the then
operation of such Facility.
ARTICLE 21
PURCHASE OF LEASED PROPERTY BY TENANT
21.1 If any Tenant has (a) either (x) permanently ceased operation of
any Collective Leased Property for its Primary Intended Use or (y) has
reasonably determined that the operating revenues from such Leased Property have
not been, and will not be in the foreseeable future, sufficient to cover Rent
for such Leased Property as and when due, and (b) entered into a binding
agreement to sell, or sublease for the remaining Term, such Leased Property to a
Person that is not an Affiliate of Tenant, IHS or any other CCA Entity, and
neither Tenant, IHS nor any other CCA Entity retains any management or service
rights in such Leased Property or with regard to the residents of the applicable
Facility (a "Disposition Transaction"), such Tenant may give Landlord
irrevocable written Notice of its election to terminate the Lease for such
Leased Property and simultaneously purchase such Leased Property from the
Landlord
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for a purchase price equal to the greater of (i) one hundred twenty percent
(120%) of the Adjusted Purchase Price for such Leased Property or (ii) where
such Leased Property is being sold to an unaffiliated third party as provided
above, the proceeds (net of reasonable and customary costs of disposition) of
such sale, effective on the Business Day occurring not later than ninety (90)
days after the date of such Notice (the "Purchase Date") designated in such
Notice. Such Notice shall be accompanied by an Officer's Certificate that both
demonstrates and certifies that Tenant is entitled to provide such Notice
pursuant to this Section 21.1. Upon receipt from Tenant of the purchase price
provided for above and any Rent due and payable through the Purchase Date under
the Lease for the applicable Leased Property, and, in the case of a Disposition
Transaction, subject to Landlord having received evidence satisfactory to it
that all applicable conditions to the consummation of such Disposition
Transaction have been satisfied, Landlord shall convey such Leased Property to
Tenant on the Purchase Date in accordance with the provisions of Article 15 and
such Lease shall thereupon terminate as to such Leased Property, provided no
Event of Default shall have occurred and be continuing.
ARTICLE 22
FACILITY MORTGAGES
22.1 Landlord May Grant Liens.
Without the consent of Tenant, Landlord may, subject to the terms and
conditions set forth in this Section 22.1, from time to time, directly or
indirectly, create or otherwise cause to exist any lien, encumbrance or title
retention agreement ("Encumbrance") upon the applicable Leased Property, or any
portion thereof or interest therein, whether to secure any borrowing or other
means of financing or refinancing. Any such Encumbrance shall include the right
to prepay (whether or not subject to a prepayment penalty) and shall provide
(subject to Section 22.2 below) that it is subject to the rights of Tenant under
the applicable Lease, including the rights of Tenant to acquire such Leased
Property pursuant to the applicable provisions of the applicable Lease (except
Tenant's right of first refusal to purchase such Leased Property shall not apply
upon foreclosure or transfer in lieu thereof, provided, that any such purchaser
or transferee (a) shall take title subject to Tenant's rights to acquire such
Leased Property pursuant to the applicable Lease, (b) shall agree to give Tenant
the same Notice, if any, given to Landlord of any default or acceleration of any
obligation with respect to such Encumbrance, and (c) shall agree to permit
Tenant to appear by its representative and bid at any sale in foreclosure made
with respect to any such Encumbrance).
22.2 Subordination of Lease.
Subject to Section 22.1 above, the applicable Lease, any and all rights
of Tenant hereunder, are and shall be subject and subordinate to any ground or
master lease, and all renewals, extensions, modifications and replacements
thereof, and to all mortgages and deeds of trust, which may now or hereafter
affect the applicable Leased Property or any improvements thereon and/or any of
such leases, whether or not such mortgages or deeds of trust shall also cover
other lands and/or buildings and/or leases, to each and every advance made or
hereafter to be made under such mortgages and deeds of trust, and to all
renewals, modifications, replacements and extensions of such leases and such
mortgages and deeds of trust and all consolidations of such mortgages and deeds
of trust. This Section shall be self-operative and no further instrument of
subordination shall be required. In confirmation of such subordination, Tenant
shall promptly execute, acknowledge and deliver any instrument that Landlord,
the lessor under any such lease or the holder of any such mortgage or the
trustee or beneficiary of any deed of trust or any of their respective
successors in interest may reasonably request to evidence such
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subordination. Any lease to which the applicable Lease is, at the time referred
to, subject and subordinate is herein called "Superior Lease" and the lessor of
a Superior Lease or its successor in interest at the time referred to, is herein
called "Superior Landlord" and any mortgage or deed of trust to which the
applicable Lease is, at the time referred to, subject and subordinate, is herein
called "Superior Mortgage" and the holder, trustee or beneficiary of a Superior
Mortgage is herein called "Superior Mortgagee".
If any Superior Landlord or Superior Mortgagee or the nominee or
designee of any Superior Landlord or Superior Mortgagee shall succeed to the
rights of Landlord under the applicable Lease, whether through possession or
foreclosure action or delivery of a new lease or deed, or otherwise, then at the
request of such party so succeeding to Landlord's rights (herein called
"Successor Landlord") and upon such Successor Landlord's written agreement to
accept Tenant's attornment, Tenant shall attorn to and recognize such Successor
Landlord as Tenant's landlord under the applicable Lease, and shall promptly
execute and deliver any instrument that such Successor Landlord may reasonably
request to evidence such attornment. Upon such attornment, the applicable Lease
shall continue in full force and effect as a direct lease between the Successor
Landlord and Tenant upon all of the terms, conditions and covenants as are set
forth in the applicable Lease, except that the Successor Landlord (unless
formerly the landlord under the applicable Lease or its nominee or designee)
shall not be (a) liable in any way to Tenant for any act or omission, neglect or
default on the part of Landlord under the applicable Lease, (b) responsible for
any monies owing by or on deposit with Landlord to the credit of Tenant, (c)
subject to any counterclaim or setoff which theretofore accrued to Tenant
against Landlord, (d) bound by any modification of the applicable Lease
subsequent to such Superior Lease or Mortgage, or by any previous prepayment of
Minimum Rent for more than one (1) month, which was not approved in writing by
the Superior Landlord or the Superior Mortgagee thereto, (e) liable to the
Tenant beyond the Successor Landlord's interest in the applicable Leased
Property and the rents, income, receipts, revenues, issues and profits issuing
from such Leased Property, (f) responsible for the performance of any work to be
done by the Landlord under the applicable Lease to render the applicable Leased
Property ready for occupancy by Tenant, or (g) required to remove any Person
occupying the applicable Leased Property or any part thereof, except if such
person claims by, through or under the Successor Landlord. Tenant agrees at any
time and from time to time to execute a suitable instrument in confirmation of
Tenant's agreement to attorn, as aforesaid.
22.3 Notice to Mortgagee and Ground Landlord.
Subsequent to the receipt by Tenant of Notice from any Person that it
is a Facility Mortgagee, or that it is the ground lessor under a lease with
Landlord, as ground lessee, which includes the applicable Leased Property as
part of the demised premises, no Notice from Tenant to Landlord as to the
applicable Leased Property shall be effective unless and until a copy of the
same is given to such Facility Mortgagee or ground lessor, and the curing of any
of Landlord's defaults by such Facility Mortgagee or ground lessor shall be
treated as performance by Landlord.
ARTICLE 23
ADDITIONAL COVENANTS OF TENANT
23.1 Prompt Payment of Indebtedness.
Tenant will (a) pay or cause to be paid when due all payments of
principal of and premium and interest on Indebtedness for money borrowed and
will not permit or suffer any such Indebtedness to
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become or remain in default beyond any applicable grace or cure period, (b) pay
or cause to be paid when due all lawful claims for labor and rents, (c) pay or
cause to be paid when due all trade payables and (d) pay or cause to be paid
when due all other Indebtedness upon which it is or becomes obligated, except,
in each case, other than that referred to in clause (a), to the extent payment
is being contested in good faith by appropriate proceedings in accordance with
Article 8 and if Tenant shall have set aside on its books adequate reserves with
respect thereto in accordance with GAAP or unless and until foreclosure,
distraint sale or other similar proceedings shall have been commenced.
23.2 Conduct of Business.
Tenant will not engage in any business other than the ownership and
operation of (a) the applicable Leased Property, or (b) any other health care
properties owned by Landlord and leased to Tenant or given as security for
Indebtedness owed to Landlord, and will do or cause to be done all things
necessary to preserve, renew and keep in full force and effect and in good
standing its corporate existence and its rights and licenses necessary to
conduct such business.
23.3 Maintenance of Accounts and Records.
Tenant will keep true records and books of account in which full, true
and correct entries will be made of dealings and transactions in relation to the
business and affairs of Tenant in accordance with GAAP. Tenant will apply
accounting principles in the preparation of the financial statements of Tenant
which, in the judgment of and the opinion of its independent public accountants,
are in accordance with GAAP, except for changes approved by such independent
public accountants. Tenant will provide to Landlord either in a footnote to the
financial statements delivered under Section 17.2 which relate to the period in
which such change occurs, or in separate schedules to such financial statements,
information sufficient to show the effect of any such changes on such financial
statements.
23.4 Notice of Change of Name, Administrator, Etc.
Tenant will promptly give Notice to Landlord of any change in (a) the
name (operating or otherwise) of Tenant or the applicable Facility, (b) the
individual licensed as administrator of the Facility, (c) the number of beds in
any bed category for which the applicable Facility is licensed or the number of
beds in any bed category available for use at the applicable Facility, and (d)
the patient and/or child care services that are offered at the applicable
Facility.
23.5 Notice of Litigation, Potential Event of Default, Etc.
Tenant will promptly give Notice to Landlord of any litigation or any
administrative proceeding to which it may hereafter become a party which
involves a potential liability equal to or greater than $250,000, or which may
otherwise result in any material adverse change in the business, operations,
property, prospects, results of operation or condition, financial or other, of
Tenant. Forthwith upon Tenant obtaining knowledge of any Default or Event of
Default, or any event or condition that would be required to be disclosed in a
current report filed by Tenant on Form 8-K or in Part II of a quarterly report
on Form 10-Q if Tenant were required to file such reports under the Securities
Exchange Act of 1934, as amended, Tenant will furnish a Notice to Landlord
specifying the nature and period of existence thereof and what action Tenant has
taken or is taking or proposes to take with respect thereto.
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23.6 Indebtedness of Tenant.
Tenant shall not create, incur, assume or guarantee, or permit to
exist, or become or remain liable directly or indirectly upon, any Indebtedness
except the following:
(a) Indebtedness of Tenant to Landlord;
(b) unsecured Indebtedness of Tenant, other than for money
borrowed, incurred in the ordinary course of business;
(c) Indebtedness of Tenant for taxes, assessments,
governmental charges or levies, to the extent that payment thereof shall not at
the time be required to be made in accordance with the provisions of Article 8;
(d) Indebtedness of Tenant in respect of judgments or awards
(i) which have been in force for less than the applicable appeal period and in
respect of which execution thereof shall have been stayed pending such appeal or
review, or (ii) which are fully covered by insurance payable to Tenant, or (iii)
which are for an amount not in excess of (x) $5,000,000 in the aggregate at any
one time outstanding for all Tenants or (y) $250,000 individually, and (A) which
have been in force for not longer than the applicable appeal period, so long as
execution is not levied thereunder, or (B) in respect of which an appeal or
proceedings for review shall at the time be prosecuted in good faith in
accordance with the provisions of Article 8, and in respect of which execution
thereof shall have been stayed pending such appeal or review;
(e) Indebtedness (including without limitation, accrued and
unpaid management fees) of Tenant owed to IHS or any wholly-owned Subsidiary of
IHS, provided that the payment of such Indebtedness shall be subject to the
terms of a Subordination Agreement among Tenant as debtor, IHS or such
wholly-owned Subsidiary as subordinate creditor and Landlord as senior creditor,
which subordination agreement shall be satisfactory to Landlord in its sole and
absolute discretion; or
(f) Indebtedness of Tenant secured by security interests
permitted by paragraph (a) of Section 23.12, which Indebtedness is obtained from
a Lending Institution that is not an Affiliate of Tenant; provided that at the
time of incurrence thereof and after giving effect thereto, Tenant, on a pro
forma basis, would have had a ratio of current assets to current liabilities,
determined in accordance with GAAP, of at least 1 to 1, if such Indebtedness had
been outstanding on the last day of the most recently completed fiscal quarter
of Tenant and any Indebtedness which is to be satisfied with the proceeds of
such Indebtedness had been satisfied as of such day; or
(g) Indebtedness of Tenant as guarantor of or co-borrower with
IHS or any Subsidiary thereof, secured by security interests permitted by
paragraph (b) of Section 23.12, which Indebtedness is obtained from a Lending
Institution that is not an Affiliate of Tenant; provided that at the time of
incurrence thereof and after giving effect thereto, no Event of Default shall
have occurred and be continuing; or
(h) Indebtedness of Tenant expressly consented to in writing
by Landlord.
23.7 Financial Condition of Tenant.
(a) Tenant shall at all times maintain a ratio of Current
Assets to Current Liabilities of at least 1 to 1.
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(b) Tenant shall at all times maintain Tangible Net Worth in
an amount at least equal to $1.00.
23.8 Distributions, Payments to Affiliates, Etc.
Tenant will not declare, order, pay or make, directly or indirectly,
any Distributions or any payment to any Affiliate (including payments in the
ordinary course of business and payments pursuant to management agreements with
any such Affiliate) or set apart any sum or property therefor, or agree to do
so, if, at the time of such proposed action, or immediately after giving effect
thereto, any event or condition shall exist which constitutes a Default or an
Event of Default; provided however that, notwithstanding the foregoing, if,
after the occurrence and during the continuance of a Default or Event of
Default, HRP requests that an Affiliate of Tenant (including IHS) provide goods
or services to the applicable Facility or its residents, such Affiliate shall be
entitled to be paid for such goods or services so provided on customary
commercial terms.
23.9 Prohibited Transactions.
Tenant shall not permit to exist or enter into any agreement or
arrangement whereby it engages in a transaction of any kind with any Affiliate
of Tenant, unless such Affiliate, Tenant and Landlord shall have first executed
and delivered a Subordination Agreement covering the obligations of the Tenant
under such arrangement or agreement.
23.10 Investments.
Tenant shall not make, or permit to remain outstanding, at any time any
Investment (including without limitation, the formation of or investment in any
Subsidiary or the acquisition of any business) except the following:
(a) Marketable direct full faith and credit obligations of,
and marketable obligations guaranteed by, the United States of America, or any
agency or instrumentality thereof, which mature within one year from the date of
acquisition thereof;
(b) Marketable direct full faith and credit obligations of any
state of the United States of America, or any county, city, town, township or
other governmental subdivision of any such state, which mature within one year
from the date of acquisition thereof, provided, that such obligations are
accorded a rating within one of the three highest grades by Xxxxx'x Investors
Service, Inc. or Standard & Poor's Corporation;
(c) Commercial paper maturing no more than two hundred and
seventy (270) days from the date of issue, provided that such paper is accorded
a rating within the highest category by Xxxxx'x Investors Service, Inc. or
Standard & Poor's Corporation; or
(d) Certificates of deposit which have a remaining term to
maturity at the time of purchase of no more than one year (or which are subject
to a repurchase agreement with one of the banks or trust companies described in
this paragraph (d) exercisable within one year from the time of purchase) issued
by banks or trust companies organized under the laws of the United States of
America or a State thereof and which are member banks of the Federal Reserve
System, and have aggregate capital, surplus and undivided profits of at least
$100,000,000 and the long term obligations of which carry a rating of "A" or
better by Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation;
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(e) Bonds or debentures which have a remaining term to
maturity at the time of purchase of no more than one year, issued by a
corporation, organized under the laws of a State of the United States or the
District of Columbia; provided, that such obligations carry a rating of "A" or
better by Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation.
23.11 Management of Leased Property.
Tenant shall not enter into any Management Agreement unless the terms
thereof have been previously approved in writing by Landlord, and such approval
shall be in Landlord's sole discretion, except that no such approval shall be
required with respect to any Management Agreement between Tenant and IHS or a
Subsidiary thereof as Manager (an "IHS Management Agreement") provided that
Landlord is promptly provided with a true and complete copy of such Management
Agreement. All management fees, payments in connection with any extension of
credit and fees for services provided in connection with the operation of the
applicable Facility, payable by Tenant, to (a) any Guarantor (or any of its
Affiliates) or (b) any Affiliates of Tenant, shall be subordinated to all of the
obligations of Tenant due under the applicable Lease pursuant to a Subordination
Agreement. Tenant shall not agree to any change in the Manager of the applicable
Leased Property and/or the applicable Facility, to any change in the Management
Agreement, or, other than an IHS Management Agreement, terminate any Management
Agreement or permit the Manager to assign the Management Agreement to any person
other than IHS or a Subsidiary thereof without the prior written approval of
Landlord in each instance, which approval shall be subject to Landlord's sole
and absolute discretion. The Management Agreement shall provide that Landlord
shall be provided notice of any defaults thereunder and, at Landlord's option,
an opportunity to cure such default; all in form and substance satisfactory to
Landlord in its sole and absolute discretion. If Landlord shall cure any of
Tenant's defaults under the Management Agreement, the cost of such cure shall be
payable upon demand by Tenant to Landlord with interest accruing from the demand
date at the Overdue Rate and the Landlord shall have the same rights and
remedies for failure to pay such costs on demand as for Tenant's failure to pay
Minimum Rent. Tenant shall deliver to Landlord any instrument requested by
Landlord to implement the intent of the foregoing provision.
23.12 Liens and Encumbrances. Except as permitted by Section 7.1,
Tenant shall not create or incur or suffer to be created or incurred or to exist
any Lien on any applicable Lease, the capital stock of Tenant, Tenant's Personal
Property or any of its other respective assets, properties, rights or income, or
any of its interest therein, now or at any time hereafter owned, other than:
(a) Security interests securing the purchase price of
equipment or personal property acquired after the Commencement Date; provided,
however, that (i) such Lien shall at all times be confined solely to the asset
in question, (ii) the aggregate principal amount of Indebtedness secured by any
such Lien does not exceed the cost of acquisition or construction of the
property subject thereto; (iii) the aggregate principal amount of Indebtedness
secured by any such Lien in favor of a single vendor shall not exceed $250,000
at any one time outstanding, and (iv) the incurrence of the Indebtedness so
secured complied with clause (g) of Section 23.6; or
(b) Security interests in its capital stock, and in its
accounts receivable and general intangibles relating to such accounts
receivable, and books and records relating to accounts receivable and such
general intangibles; provided, however, that (i) such security interest shall at
all times be confined solely to such assets, (ii) the incurrence of the
Indebtedness so secured complies with clause (g) of Section 23.6 and (iii) the
Person issuing such Indebtedness becomes party to an intercreditor agreement
with Landlord, the terms and conditions of which are reasonably satisfactory to
Landlord; or
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(c) Permitted Encumbrances.
23.13 Merger; Sale of Assets; Etc. Tenant shall not (i) sell, lease (as
lessor or sublessor), transfer or otherwise dispose of, or abandon, all or any
material portion of its assets (including capital stock) or business to any
Person, (ii) merge into or with or consolidate with any other entity, or (iii)
sell, lease (as lessor or sublessor), transfer or otherwise dispose of, or
abandon, any personal property or fixtures or any real property, provided that,
notwithstanding the provisions of clause (iii), Tenant may dispose of equipment
or fixtures which have become inadequate, obsolete, worn-out, unsuitable,
undesirable or unnecessary, provided substitute equipment or fixtures having
equal or greater value and utility (but not necessarily having the same
function) have been provided.
23.14 Definitions.
When used in this Article 23 the following terms shall have the
respective meanings provided therefor and, unless otherwise specifically
indicated, shall be deemed to relate to Tenant:
(a) The term "Current Assets" shall mean, as of any applicable
date, all amounts that should, in accordance with GAAP, be included as current
assets on the balance sheet of Tenant as at such date (excluding those accounts
receivable of any Affiliate account debtor, where such account debtor is either
not financially viable, or where the account receivable is not considered
collectible under GAAP).
(b) The term "Current Liabilities" shall mean, as of any
applicable date, all amounts that should, in accordance with GAAP, be included
as current liabilities on the balance sheet of Tenant as at such date,
excluding, however, all current liabilities owed to any Affiliate so long as
such current liabilities are subordinated to the obligations of Tenant to
Landlord pursuant to a Subordination Agreement.
(c) The term "Distributions" shall mean (i) any declaration or
payment of any dividend (except dividends payable in common stock of Tenant) on
or in respect of any shares of any class of capital stock of Tenant, (ii) any
purchase, redemption retirement or other acquisition of any shares of any class
of capital stock of a corporation, (iii) any other distribution on or in respect
of any shares of any class of capital stock of a corporation, or (iv) any return
of capital to shareholders.
(d) The term "Investment" shall mean all loans, advances,
extensions of credit (except for accounts and notes receivable for merchandise
sold or services furnished in the ordinary course of business, and amounts paid
in advance on account of the purchase price of merchandise to be delivered to
the payor within one year of the date of the advance), or purchases of stock,
notes, bonds or other securities or evidences of indebtedness or capital
contribution to any Person, whether in cash or other property. The amount of an
Investment shall be its cost (the amount of cash or the fair market value of
other property given in exchange therefor), whether or not written or charged
off or sold or otherwise disposed of, except to the extent such cost shall have
been paid to Tenant by a Person in which Tenant had no present or prospective
financial interest at the time of such payment.
(e) The term "Tangible Net Worth" shall mean the excess of
total assets over total liabilities, total assets and total liabilities each to
be determined in accordance with GAAP; excluding, however, from the
determination of total assets: (i) goodwill, organizational expenses, research
and development expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other similar intangibles;
(ii) all deferred charges or unamortized debt discount and expense; (iii) all
reserves carried and not deducted from assets; (iv) treasury stock and capital
stock,
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obligations or other securities of, or capital contributions to, or investments
in, any subsidiary; (v) securities which are not readily marketable; (vi) any
write-up in the book value of any asset resulting from a revaluation thereof
subsequent to the Commencement Date; and (vii) any items not included in clauses
(i) through (vi) above that are treated as intangibles in conformity with GAAP;
and excluding from the determination of total liabilities all liabilities owing
by Tenant to any Affiliate so long as such liabilities are subordinated to the
obligations of Tenant to Landlord pursuant to a Subordination Agreement.
ARTICLE 24
MISCELLANEOUS
24.1 Limitation on Payment of Rent.
All agreements between Landlord and Tenant herein are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of Rent, or otherwise, shall the Rent or any other amounts payable
to Landlord under this Lease or any of the other Transaction Documents exceed
the maximum permissible under applicable law, the benefit of which may be
asserted by Tenant as a defense, and if, from any circumstance whatsoever,
fulfillment of any provision of the applicable Lease or any of the other
Transaction Documents, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by law, or if from
any circumstances Landlord should ever receive as fulfillment of such provision
such an excessive amount, then, ipso facto, the amount which would be excessive
shall be applied to the reduction of the installment(s) of Minimum Rent next due
and not to the payment of such excessive amount. This provision shall control
every other provision of the Transaction Documents and any other agreements
between Landlord and Tenant.
24.2 No Waiver.
No failure by Landlord 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
of any such term. To the extent permitted by law, no waiver of any breach shall
affect or alter the applicable Lease, which shall continue in full force and
effect with respect to any other then existing or subsequent breach.
24.3 Remedies Cumulative.
To the extent permitted by law, each legal, equitable or contractual
right, power and remedy of Landlord, now or hereafter provided either in the
applicable 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 Landlord of any one or more of such rights,
powers and remedies shall not preclude the simultaneous or subsequent exercise
by Landlord of any or all of such other rights, powers and remedies.
24.4 Severability.
Any clause, sentence, paragraph, section or provision of the applicable
Lease held by a court of competent jurisdiction to be invalid, illegal or
ineffective shall not impair, invalidate or nullify the remainder of the
applicable Lease, but rather the effect thereof shall be confined to the clause,
sentence,
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paragraph, section or provision so held to be invalid, illegal or ineffective,
and the applicable Lease shall be construed as if such invalid, illegal or
ineffective provisions had never been contained therein.
24.5 Acceptance of Surrender.
No surrender to Landlord of the applicable Lease or of the applicable
Leased Property or any part thereof, or of any interest therein, shall be valid
or effective unless agreed to and accepted in writing by Landlord and no act by
Landlord or any representative or agent of Landlord, other than such a written
acceptance by Landlord, shall constitute an acceptance of any such surrender.
24.6 No Merger of Title.
It is expressly acknowledged to be the intent of the parties that there
shall be no merger of the applicable Lease or of the leasehold estate created
hereby by reason of the fact that the same Person may acquire, own or hold,
directly or indirectly (a) the applicable Lease or the leasehold estate created
hereby or any interest in the applicable Lease or such leasehold estate and (b)
the fee estate or ground landlord's interest in the applicable Leased Property.
24.7 Conveyance by Landlord.
If Landlord or any successor owner of the applicable Leased Property
shall convey such Leased Property in accordance with the terms hereof other than
as security for a debt, and the grantee or transferee of such Leased Property
shall expressly assume all obligations of Landlord hereunder arising or accruing
from and after the date of such conveyance or transfer, Landlord or such
successor owner, as the case may be, shall thereupon be released from all future
liabilities and obligations of Landlord under the applicable Lease arising or
accruing from and after the date of such conveyance or other transfer as to such
Leased Property and all such future liabilities and obligations shall thereupon
be binding upon the new owner.
24.8 Quiet Enjoyment.
So long as Tenant shall pay the Rent as the same becomes due and shall
substantially comply with all of the terms of the applicable Lease and perform
its obligations hereunder and thereunder, Tenant shall peaceably and quietly
have, hold and enjoy the applicable Leased Property for the Term hereof, free of
any claim or other action by Landlord or anyone claiming by, through or under
Landlord, but subject to (a) any Encumbrance permitted under Article 21, or
otherwise permitted to be created by Landlord hereunder, (b) all Permitted
Encumbrances, (c) liens as to obligations of Landlord that are either not yet
due or which are being contested in good faith and by proper proceedings, and
(d) liens that have been consented to in writing by Tenant. Except as otherwise
provided in the applicable Lease, no failure by Landlord to comply with the
foregoing covenant shall give Tenant any right to cancel or terminate the
applicable Lease or xxxxx, reduce or make a deduction from or offset against the
Rent or any other sum payable under the applicable Lease, or to fail to perform
any other obligation of Tenant hereunder.
24.9 NON-LIABILITY OF TRUSTEES.
THE DECLARATION OF TRUST ESTABLISHING LANDLORD, DATED OCTOBER 9, 1986,
A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS
DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF
MARYLAND, PROVIDES THAT THE NAME "HEALTH AND
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RETIREMENT PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION
COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO
TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF LANDLORD SHALL BE HELD TO
ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST, LANDLORD. ALL PERSONS DEALING WITH LANDLORD, IN ANY WAY, SHALL LOOK
ONLY TO THE ASSETS OF LANDLORD FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF
ANY OBLIGATION.
24.10 Landlord's Consent of Trustees.
Where provision is made in the applicable Lease for Landlord's consent
and Landlord shall fail or refuse to give such consent, Tenant shall not be
entitled to any damages for any withholding by Landlord of its consent, it being
intended that Tenant's sole remedy shall be an action for specific performance
or injunction, and that such remedy shall be available only in those cases where
Landlord has expressly agreed in writing not to unreasonably withhold its
consent.
24.11 Memorandum of Lease.
Neither Landlord nor Tenant shall record the applicable Lease or this
Master Lease Document. However, Landlord and Tenant shall promptly, upon the
request of either, enter into a short form memorandum of the applicable Lease,
in form suitable for recording under the laws of the State in which reference to
the applicable Lease and the Master Lease Document, and all options contained
herein, shall be made. Tenant shall pay all costs and expenses of recording such
memorandum.
24.12 Notices.
Any notice, request, demand, statement or consent ("Notice") desired or
required to be given hereunder shall be in writing and shall be delivered by
hand, sent by certified mail, return receipt requested, or sent by a nationally
recognized commercial overnight delivery service with provisions for a receipt,
postage or delivery charges prepaid, and shall be deemed given (1) when actually
delivered, if delivered by hand, (2) upon receipt, if sent by certified mail, or
(3) the next Business Day after being placed in the possession of an overnight
delivery service, if sent by an overnight delivery service, and shall be
addressed as follows:
If to Tenant: c/o Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx,
Executive Vice President--Finance
With copies to: Blass & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
If to Landlord: Health and Retirement Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: President
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With a copy to: Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Xx., Esq.
or at such other place as any party hereto may from time to time hereafter
designate to the other in writing. Any Notice given to Tenant from Landlord
shall not imply that such Notice or any further or similar Notice was or is
required. The failure of Landlord to provide the copies indicated above shall
not render any Notice given by Landlord to Tenant ineffective.
24.13 Construction.
Anything contained in the applicable Lease to the contrary
notwithstanding, (i) all claims against, and liabilities of, Tenant or Landlord
arising prior to any date of termination or expiration of the applicable Lease
shall survive such termination or expiration and (ii) neither party hereto shall
be liable for any consequential damages suffered by the other party as the
result of a breach by such party of its obligations owed to the other party. If
any term or provision of the applicable Lease or any application thereof shall
be invalid or unenforceable, the remainder of the applicable Lease and any other
application of such term or provisions shall not be affected thereby. If any
late charges or any interest rate 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 the applicable Lease nor any provision hereof may be changed,
waived, discharged or terminated except by an instrument in writing signed by
the party to be charged. All the terms and provisions of the applicable Lease
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Each term or provision of this Master Lease
Document or the applicable Lease to be performed by Tenant shall be construed as
an independent covenant and condition. Time is of the essence with respect to
the exercise of any rights of Tenant under this Master Lease Document and the
applicable Lease. Except as otherwise set forth in this Master Lease Document,
any obligations of Tenant (including without limitation, any monetary, repair
and indemnification obligations) shall survive the expiration or sooner
termination of the applicable Lease. The headings in the applicable Lease are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
24.14 CONSENT TO JURISDICTION.
ANY ACTION TO ENFORCE, ARISING OUT OF, OR RELATING IN ANY WAY TO, ANY
OF THE PROVISIONS OF THE APPLICABLE LEASE OR ANY TRANSACTION DOCUMENT MAY BE
BROUGHT AND PROSECUTED IN SUCH COURT OR COURTS LOCATED IN THE COMMONWEALTH OF
MASSACHUSETTS AS IS PROVIDED BY LAW; AND TENANT CONSENTS TO THE JURISDICTION OF
SAID COURT OR COURTS LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS AND TO SERVICE
OF PROCESS BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR IN ANY
MANNER PROVIDED BY LAW.
24.15 WAIVER OF JURY TRIAL.
EXCEPT TO THE EXTENT PROHIBITED BY LAW WHICH CANNOT BE WAIVED, TENANT
HEREBY WAIVES TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR PROCEEDING OF ANY
NATURE WHATSOEVER ARISING UNDER, OUT OF OR IN CONNECTION WITH THE APPLICABLE
LEASE OR ANY OTHER TRANSACTION DOCUMENT AND IN CONNECTION WITH SUCH ACTION OR
PROCEEDING, WHETHER ARISING UNDER
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STATUTE (INCLUDING ANY FEDERAL OR STATE CONSTITUTION) OR UNDER THE LAW OF
CONTRACT, TORT OR OTHERWISE AND INCLUDING, WITHOUT LIMITATION, ANY CHALLENGE TO
THE LEGALITY, VALIDITY, BINDING EFFECT OR ENFORCEABILITY OF THIS PARAGRAPH OR
THE APPLICABLE LEASE OR ANY OTHER TRANSACTION DOCUMENTS.
24.16 GOVERNING LAW.
THE APPLICABLE LEASE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS (EXCLUDING RULES REGARDING CHOICE OF LAW) OF THE COMMONWEALTH OF
MASSACHUSETTS, EXCEPT AS TO MATTERS REGARDING THE INTERNAL AFFAIRS OF LANDLORD
AND ISSUES OF OR LIMITATIONS ON ANY PERSONAL LIABILITY OF THE SHAREHOLDERS AND
TRUSTEES OF LANDLORD FOR OBLIGATIONS OF LANDLORD, AS TO WHICH THE LAWS OF THE
STATE OF MARYLAND SHALL GOVERN AND EXCEPT TO THE EXTENT THAT MATTERS OF TITLE OR
RELATING TO INTERESTS IN REAL PROPERTY ARE REQUIRED TO BE GOVERNED BY THE LAWS
OF THE STATE.
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IN WITNESS WHEREOF, the parties have executed this Master Lease
Document as a sealed instrument as of the date first above written.
LANDLORD:
HEALTH AND RETIREMENT PROPERTIES TRUST,
a Maryland real estate investment trust
By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Its: President
TENANTS:
ECA HOLDINGS, INC.,
a Delaware Corporation
By: /s/
Its:_______________________
MARIETTA/SCC, INC.
a Georgia corporation
By: /s/
Its: _______________________
GLENWOOD/SCC, INC.
a Georgia corporation
By: /s/
Its: _______________________
Signature Pages to
Amended, Restated and Consolidated Master Lease Document
dated as of September 24, 1997
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DUBLIN/SCC, INC.
a Georgia corporation
By: /s/
Its: _______________________
COLLEGE PARK/SCC, INC.
a Georgia corporation
By: /s/
Its: _______________________
Signature Pages to
Amended, Restated and Consolidated Master Lease Document
dated as of September 24, 1997
EXHIBIT A
Collective Leased Properties
Omitted Exhibit
---------------
The following exhibit to the Amended, Restated and Consolidated Master
Lease Document has been omitted:
Exhibit Number Exhibit Title
-------------- -------------
A Collective Leased Property
The registrant agrees to furnish supplementally a copy of the foregoing
omitted exhibit to the Securities and Exchange Commission upon request.
