1
Exhibit 10.1
FORM OF HCRI LEASE AGREEMENT
BETWEEN
[____________________________], INC.
AND
FINANCIAL CARE INVESTORS OF [____________], LLC
SEPTEMBER 22, 1998
BALANCED CARE, [_________]
[_______________]
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TABLE OF CONTENTS
SECTION PAGE
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ARTICLE 1: LEASED PROPERTY, TERM AND DEFINITIONS......................................................... 1
1.1 Leased Property........................................................................ 1
1.2 Term................................................................................... 2
1.3 Definitions............................................................................ 2
ARTICLE 2: RENT ....................................................................................... 11
2.1 Construction Base Rent and Construction Fee............................................ 11
2.2 Construction Lease Advances............................................................ 11
2.3 Conversion to Initial Term............................................................. 11
2.4 Base Rent.............................................................................. 11
2.5 Increase of Lease Rate and Base Rent................................................... 11
2.6 Additional Rent........................................................................ 12
2.7 Place of Payment of Rent............................................................... 12
2.8 Net Lease.............................................................................. 12
2.9 No Termination, Abatement, Etc......................................................... 12
2.10 Computational Method................................................................... 13
ARTICLE 3: IMPOSITIONS AND UTILITIES.................................................................... 13
3.1 Payment of Impositions................................................................. 13
3.2 Definition of Impositions.............................................................. 14
3.3 Escrow of Impositions.................................................................. 14
3.4 Utilities.............................................................................. 14
3.5 Discontinuance of Utilities............................................................ 15
3.6 Business Expenses...................................................................... 15
3.7 Permitted Contests..................................................................... 15
ARTICLE 4: INSURANCE.................................................................................... 16
4.1 Property Insurance..................................................................... 16
4.2 Liability Insurance.................................................................... 17
4.3 Builder's Risk Insurance............................................................... 17
4.4 Insurance Requirements................................................................. 17
4.5 Replacement Value...................................................................... 18
4.6 Blanket Policy......................................................................... 18
4.7 No Separate Insurance.................................................................. 18
4.8 Waiver of Subrogation.................................................................. 19
4.9 Mortgages.............................................................................. 19
4.10 Escrows................................................................................ 19
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ARTICLE 5: INDEMNITY.................................................................................... 19
5.1 Tenant's Indemnification............................................................... 19
5.2 Environmental Indemnity; Audits........................................................ 21
5.3 Limitation of Landlord's Liability..................................................... 21
ARTICLE 6: USE AND ACCEPTANCE OF PREMISES............................................................... 22
6.1 Use of Leased Property................................................................. 22
6.2 Acceptance of Leased Property.......................................................... 22
6.3 Conditions of Use and Occupancy........................................................ 22
ARTICLE 7: REPAIRS AND MECHANICS' LIENS................................................................. 22
7.1 Maintenance............................................................................ 22
7.2 Required Alterations................................................................... 23
7.3 Mechanic's Liens....................................................................... 23
7.4 Replacements of Fixtures and Personal Property......................................... 23
ARTICLE 8: DEFAULTS AND REMEDIES........................................................................ 24
8.1 Events of Default...................................................................... 24
8.2 Remedies............................................................................... 26
8.3 Right of Set-Off....................................................................... 29
8.4 Performance of Tenant's or Developer's Covenants....................................... 29
8.5 Late Payment Charge.................................................................... 29
8.6 Interest............................................................................... 29
8.7 Litigation; Attorneys' Fees............................................................ 29
8.8 Escrows and Application of Payments.................................................... 30
8.9 Remedies Cumulative.................................................................... 30
8.10 Limitation of Remedies During Construction Term........................................ 30
ARTICLE 9: DAMAGE AND DESTRUCTION....................................................................... 30
9.1 Notice of Casualty..................................................................... 30
9.2 Substantial Destruction................................................................ 31
9.3 Partial Destruction.................................................................... 32
9.4 Restoration............................................................................ 32
9.5 Insufficient Proceeds.................................................................. 32
9.6 Not Trust Funds........................................................................ 33
9.7 Landlord's Inspection.................................................................. 33
9.8 Landlord's Costs....................................................................... 33
9.9 No Rent Abatement...................................................................... 33
ARTICLE 10: CONDEMNATION................................................................................ 34
10.1 Total Taking........................................................................... 34
(ii)
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10.2 Partial Taking......................................................................... 34
10.3 Condemnation Proceeds Not Trust Funds.................................................. 34
ARTICLE 11: TENANT'S PROPERTY........................................................................... 35
11.1 Tenant's Property...................................................................... 35
11.2 Requirements for Tenant's Property..................................................... 35
ARTICLE 12: RENEWAL OPTIONS.............................................................................. 36
12.1 Renewal Options........................................................................ 36
12.2 Effect of Renewal...................................................................... 36
12.3 Effect of Non-Renewal or Expiration of Lease........................................... 37
ARTICLE 13: OPTION TO PURCHASE.......................................................................... 38
13.1 Option to Purchase..................................................................... 38
13.2 Option Price........................................................................... 38
13.3 Fair Market Value...................................................................... 38
13.4 Closing................................................................................ 40
13.5 Failure to Close Option................................................................ 40
13.6 Failure to Exercise Option to Purchase and Renewal Option.............................. 40
ARTICLE 14: NEGATIVE COVENANTS.......................................................................... 40
14.1 No Debt................................................................................ 40
14.2 No Liens............................................................................... 41
14.3 No Guaranties.......................................................................... 41
14.4 No Transfer............................................................................ 41
14.5 No Dissolution......................................................................... 41
14.6 No Change in Management or Operation................................................... 41
14.7 No Investments......................................................................... 41
14.8 Contracts.............................................................................. 41
14.9 Subordination of Payments to Affiliates................................................ 41
14.10 Change of Location or Name............................................................. 42
ARTICLE 15: AFFIRMATIVE COVENANTS....................................................................... 42
15.1 Perform Obligations.................................................................... 42
15.2 Proceedings to Enjoin or Prevent Construction.......................................... 42
15.3 Documents and Information.............................................................. 42
15.4 Compliance With Laws................................................................... 43
15.5 Broker's Commission.................................................................... 44
15.6 Existence and Change in Ownership...................................................... 44
15.7 Financial Covenants.................................................................... 44
15.8 Transfer of License.................................................................... 45
(iii)
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15.9 Post-Closing Obligations............................................................... 45
ARTICLE 16: ALTERATIONS, CAPITAL IMPROVEMENTS, AND SIGNS................................................ 45
16.1 Prohibition on Alterations and Improvements............................................ 45
16.2 Approval of Alterations................................................................ 45
16.3 Permitted Alterations.................................................................. 45
16.4 Requirements for Permitted Alterations................................................. 46
16.5 Ownership and Removal of Permitted Alterations......................................... 46
16.6 Signs.................................................................................. 47
ARTICLE 17: EARNOUT LEASE ADVANCE....................................................................... 47
17.1 Earnout Lease Advance.................................................................. 47
17.2 Conditions to Earnout Lease Advance.................................................... 47
17.3 Use of Earnout Lease Advance........................................................... 47
ARTICLE 18: ASSIGNMENT AND SALE OF LEASED PROPERTY...................................................... 47
18.1 Prohibition on Assignment and Subletting............................................... 47
18.2 Requests for Landlord's Consent to Assignment, Sublease or Management Agreement........ 48
18.3 Agreements with Residents.............................................................. 49
18.4 Terms Applicable to all Assignments, Subleases or Management Agreements................ 49
18.5 Collateral Assignment.................................................................. 49
18.6 Effectiveness.......................................................................... 49
18.7 Sale of Leased Property................................................................ 50
18.8 Assignment by Landlord................................................................. 50
ARTICLE 19: HOLDOVER AND SURRENDER...................................................................... 50
19.1 Holding Over........................................................................... 50
19.2 Surrender.............................................................................. 50
ARTICLE 20: LETTER OF CREDIT............................................................................ 50
20.1 Terms of Letter of Credit.............................................................. 50
20.2 Replacement Letter of Credit........................................................... 50
20.3 Draws.................................................................................. 51
20.4 Partial Draws.......................................................................... 51
20.5 Substitute Letter of Credit............................................................ 52
20.6 Reduction in Letter of Credit Amount................................................... 52
20.7 Cost of Letter of Credit............................................................... 52
ARTICLE 21: QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND
(iv)
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ESTOPPEL CERTIFICATES........................................................................... 52
21.1 Quiet Enjoyment........................................................................ 52
21.2 Subordination.......................................................................... 52
21.3 Attornment............................................................................. 53
21.4 Estoppel Certificates.................................................................. 53
ARTICLE 22: REPRESENTATIONS AND WARRANTIES.............................................................. 54
22.1 Organization and Good Standing......................................................... 54
22.2 Power and Authority.................................................................... 54
22.3 Enforceability......................................................................... 55
22.4 Government Authorizations.............................................................. 55
22.5 Financial Statements................................................................... 55
22.6 Condition of Facility.................................................................. 55
22.7 Compliance with Laws................................................................... 55
22.8 No Litigation.......................................................................... 55
22.9 Consents............................................................................... 56
22.10 No Violation........................................................................... 56
22.11 Reports and Statements................................................................. 56
22.12 ERISA.................................................................................. 56
22.13 Chief Executive Office................................................................. 56
22.14 Other Name or Entities................................................................. 57
22.15 Parties in Possession.................................................................. 57
22.16 Access................................................................................. 57
22.17 Utilities.............................................................................. 57
22.18 Condemnation and Assessments........................................................... 57
22.19 Zoning................................................................................. 57
22.20 Pro Forma Statement.................................................................... 57
22.21 Environmental Matters.................................................................. 57
22.22 Leases and Contracts................................................................... 58
22.23 No Default............................................................................. 58
22.24 Project Budget......................................................................... 58
22.25 Tax Status............................................................................. 58
ARTICLE 23: FUTURE PROJECTS; COTERMINOUS FINANCINGS..................................................... 58
23.1 Project Submissions.................................................................... 58
23.2 Coterminous Financings................................................................. 59
ARTICLE 24: SECURITY INTEREST........................................................................... 59
24.1 Collateral............................................................................. 59
24.2 Additional Documents................................................................... 60
24.3 Notice of Sale......................................................................... 60
24.4 Pledge of Accounts to Others........................................................... 60
24.5 Financing of Fixtures, Furniture and Equipment......................................... 60
(v)
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ARTICLE 25: MISCELLANEOUS............................................................................... 60
25.1 Notices................................................................................ 60
25.2 Advertisement of Leased Property....................................................... 61
25.3 Entire Agreement....................................................................... 61
25.4 Severability........................................................................... 61
25.5 Captions and Headings.................................................................. 61
25.6 Governing Law.......................................................................... 61
25.7 Memorandum of Lease.................................................................... 61
25.8 Waiver................................................................................. 61
25.9 Binding Effect......................................................................... 61
25.10 Power of Attorney...................................................................... 61
25.11 No Offer............................................................................... 62
25.12 Modification........................................................................... 62
25.13 Landlord's Modification................................................................ 62
25.14 No Merger.............................................................................. 62
25.15 Laches................................................................................. 63
25.16 Limitation on Tenant's Recourse........................................................ 63
25.17 Construction of Lease.................................................................. 63
25.18 Counterparts........................................................................... 63
25.19 [Intentionally Deleted]................................................................ 63
25.20 Custody of Escrow Funds................................................................ 63
25.21 Landlord's Status as a REIT............................................................ 63
25.22 Exhibits............................................................................... 63
25.23 WAIVER OF JURY TRIAL................................................................... 64
25.24 CONSENT TO JURISDICTION................................................................ 64
25.25 Attorney's Fees and Expenses........................................................... 64
25.26 Survival............................................................................... 65
25.27 Access to Records...................................................................... 65
25.28 Granting of Easements and Rights-of-Way................................................ 65
ARTICLE 26: SUBSTITUTION OF LEASED PROPERTY............................................................. 65
26.1 Right of Substitution.................................................................. 65
26.2 Conditions to Substitution............................................................. 65
26.3 Conveyance of Existing Facility........................................................ 68
26.4 Expenses............................................................................... 69
EXHIBIT A: LEGAL DESCRIPTION
EXHIBIT B: PERMITTED EXCEPTIONS
EXHIBIT C: DOCUMENTS TO BE DELIVERED
EXHIBIT D: TENANT'S CERTIFICATE AND FACILITY FINANCIAL REPORTS
(vi)
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EXHIBIT E: GOVERNMENT AUTHORIZATIONS TO BE OBTAINED; ZONING PERMITS
EXHIBIT F: PENDING LITIGATION
EXHIBIT G: LIST OF LEASES AND CONTRACTS
(vii)
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FORM OF HCRI LEASE AGREEMENT
This Lease Agreement ("Lease" or "Agreement") is made effective
as of the 22nd day of September, 1998 (the "Effective Date") between
[________________], INC., a corporation organized under the laws of the State of
Pennsylvania ("Landlord"), having its principal office located at Xxx XxxXxxx,
Xxxxx 0000, X.X. Xxx 0000, Xxxxxx, Xxxx 00000, and FINANCIAL CARE INVESTORS OF
[_________], LLC, a limited liability company organized under the laws of the
State of Delaware ("Tenant"), having its chief executive office located at 0000
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
R E C I T A L S
A. As of the date hereof, Landlord acquired the land described
in Exhibit A attached hereto ("Land").
B. Landlord desires to lease the Leased Property (defined
below) to Tenant and Tenant desires to lease the Leased Property from Landlord
upon the terms set forth in this Lease.
C. Tenant desires to cause BCC Development and Management Co.
("Developer") to construct a [__]-unit personal care facility ("Facility") on
the Land. Landlord has agreed to pay for the development and construction costs
of the Facility up to a maximum amount of $[________].00 subject to the terms
and conditions of this Lease and the Construction Disbursing Agreement between
Landlord and Developer.
NOW, THEREFORE, Landlord and Tenant agree as follows:
ARTICLE 1: LEASED PROPERTY, TERM AND DEFINITIONS
1.1 Leased Property. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the following property:
(a) The land described in Exhibit A attached hereto (the
"Land").
(b) All buildings, structures, and other improvements,
including without limitation, sidewalks, alleys, utility pipes, conduits, and
lines, parking areas, and roadways, now or hereafter situated upon the Land (the
"Improvements").
(c) All easements, rights and other appurtenances relating to
the Land and Improvements (the "Appurtenances").
(d) All permanently affixed equipment, machinery, fixtures,
and other items of real and personal property, including all components thereof,
located in, or used in connection with, and permanently affixed to or
incorporated into the Improvements, including
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without limitation, all furnaces, boilers, heaters, electrical equipment,
heating, plumbing, lighting, ventilating, refrigerating, incineration, air and
water pollution control, waste disposal, air-cooling and air-conditioning
systems and apparatus, sprinkler systems and fire and theft protection
equipment, and built-in oxygen and vacuum systems, all of which, to the greatest
extent permitted by law, are hereby deemed by the parties hereto to constitute
real estate, together with all replacements, modifications, alterations and
additions thereto but specifically excluding all items included within the
category of Personal Property as defined below (collectively the "Fixtures").
(e) All machinery, equipment, furniture, furnishings, movable
walls or partitions, computers, trade fixtures, consumable inventory and
supplies, and other personal property used or useful in Tenant's business on the
Leased Property, and the replacements therefor, except items, if any, included
within the definition of Fixtures (collectively the "Personal Property").
SUBJECT, HOWEVER, to all easements, liens, encumbrances, restrictions,
agreements, and other title matters existing as of the date hereof as listed on
Exhibit B attached hereto (the "Permitted Exceptions").
1.2 Term. The Construction Term of this Lease commences on the
Effective Date and expires on the Conversion Date. The initial term ("Initial
Term") of this Lease commences on the day after the Conversion Date and expires
at 12:00 Midnight Eastern Time on the thirteenth anniversary of the Term
Commencement Date (the "Expiration Date"); provided, however, that [i] Tenant
has one or more options to renew the Lease pursuant to Article 12, and [ii] the
Initial Term may be extended from time to time pursuant to Article 23.
1.3 Definitions. Except as otherwise expressly provided, [i] the
terms defined in this section have the meanings assigned to them in this section
and include the plural as well as the singular; [ii] all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as of the time applicable; [iii] the
words "herein", "hereof", and "hereunder" and similar words refer to this Lease
as a whole and not to any particular section; and [iv] any capitalized term not
defined in this Agreement which is defined in the Construction Agreement shall
have the meaning set forth in the Construction Agreement.
"ADA" means the federal statute entitled Americans with Disabilities
Act, 42 U.S.C.Section 12101, et seq.
"Affiliate" means any person, corporation, partnership, limited
liability company, trust, or other legal entity that, directly or indirectly,
controls, or is controlled by, or is under common control with Tenant. "Control"
(and the correlative meanings of the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such entity.
"Affiliate" includes, without limitation, Financial Care Investors, LLC.
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"Annual Facility Budget" means Tenant's projection of what the Annual
Facility Financial Statements will be for the next fiscal year.
"Annual Financial Statements" means [i] for Tenant, an unaudited
balance sheet, cash flow statements, and statement of income for the most recent
fiscal year; [ii] for the Facility, an unaudited Facility Financial Statement
for the most recent fiscal year; and [iii] for Guarantor, an audited balance
sheet and statement of income for the most recent fiscal year. Following the
closing of the Guarantor Option, the "Annual Financial Statements" shall mean an
audited balance sheet and statement of income of Guarantor for the most recent
fiscal year on an individual facility and consolidated basis.
"Asset Purchase Option" means the option of Guarantor to purchase all
of the assets of Tenant and each Phase Tenant subject to the terms and
conditions of the Shortfall Funding Agreement.
"Base Rent" has the meaning set forth in Section 2.4, as increased from
time to time pursuant to Section 2.5.
"Business Day" means any day other than a Saturday, Sunday, or national
holiday.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"Closing" means the closing of the purchase of the Leased Property by
Landlord and the lease of the Leased Property to Tenant.
"Commencement Date" means the Effective Date if such date is the first
day of a month, and if it is not, the first day of the first month following the
Effective Date.
"Commitment" means the commitment letter for the Lease dated September
22, 1998.
"Construction Agreement" means the Construction Disbursing Agreement
between Developer and Landlord dated the date hereof.
"Construction Base Rent" has the meaning set forth in Section 2.1.
"Construction Fee" has the meaning set forth in Section 2.1.
"Construction Rate" means the Base Rate announced from time to time by
National City Bank (Cleveland) or the successor bank with which Landlord
maintains its primary line of credit; the Lease Rate for the Construction Term
shall be adjusted to reflect each change in the Construction Rate.
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"Construction Term" means the term of this Lease commencing on the
Effective Date and expiring on the Conversion Date.
"Conversion Date" means the date when the Facility is completed and the
final disbursement of the Lease Amount has been made pursuant to Section 3.3 of
the Construction Agreement.
"Credit Facility" means the credit facility in an amount up to
$150,000,000.00 the terms of which are set forth in the Commitment. The Credit
Facility consists of multiple phases of funding.
"Current Phase" means the phase of funding under the Credit Facility
which is applicable to this Lease. This Lease is part of the first phase.
"Earnout Lease Advance" has the meaning set forth in Section 17.1.
"Effective Date" means the date of this Lease.
"Environmental Laws" means all federal, state, and local laws,
ordinances and policies the purpose of which is to protect human health and the
environment, as amended from time to time, including but not limited to [i]
CERCLA; [ii] the Resource Conservation and Recovery Act; [iii] the Hazardous
Materials Transportation Act; [iv] the Clean Air Act; [v] Clean Water Act; [vi]
the Toxic Substances Control Act; [vii] the Occupational Safety and Health Act;
[viii] the Safe Drinking Water Act; and [ix] analogous state laws and
regulations.
"Equity Loan" means any loan extended by Landlord to Tenant for working
capital purposes pursuant to the terms of the Equity Loan Documents.
"Equity Loan Documents" means the Loan Agreement, Note, and Security
Agreement executed by Tenant in connection with the Equity Loan.
"Equity Option" means the option of Guarantor to purchase all of the
equity in Tenant and each Phase Tenant subject to the terms and conditions of
the Option Agreement.
"Event of Default" has the meaning set forth in Section 8.1.
"Expiration Date" has the meaning set forth in Section 1.2.
"Extended Term" has the meaning set forth in Section 12.3(a).
"Facility" means the [__]-unit personal care facility to be known as
Balanced Care, [________] and located on the Leased Property.
"Facility Financial Statement" means a financial statement for the
Facility which shall include the balance sheet, statement of
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income, statement of cash flows, statement of shareholders' equity, occupancy
census data (including payor mix) and a comparison of the actual financial data
versus the Annual Facility Budget for the applicable period.
"Facility Uses" means the uses relating to the operation of the
Facility as a 60-unit personal care facility. Facility Uses may also include
Alzheimer's care and rehabilitation therapy.
"Fair Market Value" has the meaning set forth in Section 13.3.
"Financial Statements" means the annual, quarterly and year to date
financial statements of Tenant and Guarantor that were submitted to Landlord
prior to the Effective Date.
"Government Authorizations" means all permits, licenses, approvals,
consents, and authorizations required to comply with all Legal Requirements,
including but not limited to, [i] zoning permits, variances, exceptions, special
use permits, conditional use permits, and consents; [ii] the permits, licenses,
provider agreements and approvals required for licensure and operation of a
60-unit personal care facility; [iii] environmental, ecological, coastal,
wetlands, air, and water permits, licenses, and consents; [iv] curb cut,
subdivision, land use, and planning permits, licenses, approvals and consents;
[v] building, sign, fire, health, and safety permits, licenses, approvals, and
consents; and [vi] architectural reviews, approvals, and consents required under
restrictive covenants.
"Guarantor" means Balanced Care Corporation, a corporation organized
under the laws of the State of Delaware.
"Guarantor Affiliate" means any person, corporation, partnership,
limited liability company, trust, or other legal entity that, directly or
indirectly, controls, or is controlled by, or is under common control with
Guarantor. "Control" (and the correlative meanings of the terms "controlled by"
and "under the common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such entity. "Guarantor Affiliate" includes, without limitation, BCC
Development and Management Co.
"Guarantor Option" means the Asset Purchase Option and the Equity
Option, individually and collectively.
"Guarantor Option Agreement" means individually and collectively, any
agreements setting forth the terms and conditions of the Asset Purchase Option
or the Equity Option, including but not limited to the Shortfall Funding
Agreement and the Option Agreement.
"Guaranty" means the Guaranty entered into by Guarantor and any
amendments thereto or substitutions or replacements therefor.
"Hazardous Materials" means any substance [i] the presence of which
poses a hazard to the health or safety of persons on or about the Land including
but not limited to asbestos containing materials; [ii] which requires removal or
remediation under any Environmental Law, including without limitation any
substance which is toxic, explosive, flammable, radioactive, or
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otherwise hazardous; or [iii] which is regulated under or classified under any
Environmental Law as hazardous or toxic including but not limited to any
substance within the meaning of "hazardous substance", "hazardous material",
"hazardous waste", "toxic substance", "regulated substance", "solid waste", or
"pollutant" as defined in any Environmental Law.
"Impositions" has the meaning set forth in Section 3.2.
"Improvements" has the meaning set forth in the Construction Agreement.
"Increaser Rate" means [i] in any Lease Year in which the nationwide
Consumer Price Index for all urban consumers increases by a percentage that is
less than 20%, 25 basis points per year for the Initial Term and 25 basis points
per year for each Renewal Term; and [ii] in all other Lease Years, 30 basis
points per year for the Initial Term and 30 basis points per year for each
Renewal Term.
"Initial Rate Index" means the yield to maturity quoted in the Wall
Street Journal on the applicable Rate Determination Date for the most actively
traded United States Treasury Notes having the nearest equivalent maturity date
to the Expiration Date.
"Initial Term" has the meaning set forth in Section 1.2.
"Issuer" means a financial institution reasonably satisfactory to
Landlord issuing the Letter of Credit and such Issuer's successors and assigns.
Any "Issuer" shall have a Lace Financial Service Rating of "C+" or higher at all
times throughout the Term.
"Landlord Affiliate" means any person, corporation, partnership,
limited liability company, trust, or other legal entity that, directly or
indirectly, controls, or is controlled by, or is under common control with
Landlord. "Control" (and the correlative meanings of the terms "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such entity. "Landlord Affiliate" includes, without limitation, HCRI Texas
Properties, Ltd., HCRI Pennsylvania Properties, Inc., HCRI Overlook Green, Inc.,
HCRI Nevada Properties, Inc., HCRI Louisiana Properties, L.P., Health Care REIT,
Inc., HCRI Tennessee Properties, Inc., HCRI Tennessee Properties, L.P., and HCN
BCC Holdings, Inc.
"Lease Advance" means any advance of funds by Landlord pursuant to the
terms of this Lease and Construction Agreement including any Earnout Lease
Advance.
"Lease Advance Amount" means the amount of any Lease Advance.
"Lease Advance Date" means the date on which Landlord makes a Lease
Advance.
"Lease Amount" is an aggregate concept and means the sum of the Lease
Advance Amounts outstanding at the applicable time.
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"Lease Documents" means [i] this Lease; [ii] the Construction
Agreement; [iii] the Collateral Assignment of Construction Contract; [iv] the
Collateral Assignment of Architect's Contract; [v] the Collateral Assignment of
Management Agreement and Consent of Manager to Collateral Assignment of
Management Agreement and Security Agreement; and [vi] all other documents and
instruments executed by Tenant, Manager or Developer and Landlord in connection
with the Lease.
"Lease Payments" means the sum of the Base Rent payments (as increased
from time to time) for the applicable period.
"Lease Rate" means the annual rate used to determine Construction Base
Rent and Base Rent for each Lease Advance. The Lease Rate for the Construction
Term is the Construction Rate, computed using the 365/360 method. The Lease Rate
for the Initial Term is the greater of [i] 10% or [ii] the sum of the Initial
Rate Index plus the Rate Spread applicable to the Initial Term, computed using
the 365/360 method. The Lease Rate for the Initial Term and any Renewal Term
includes any accrued Increaser Rate. The Lease Rate for the Initial Term and any
Renewal Term will be adjusted on each anniversary of the Term Commencement Date
as provided in Section 2.5. On each Renewal Date, the Lease Rate will be reset
for the Lease Amount as set forth in Section 12.2(c).
"Lease Year" means each consecutive period of 365 or 366 days
throughout the Term, except the Construction Term. The first Lease Year
commences on the Term Commencement Date and expires on the day before the first
anniversary of the Term Commencement Date.
"Leased Property" means, collectively, the Land, Improvements,
Appurtenances, Fixtures and Personal Property.
"Legal Requirements" means all laws, regulations, rules, orders, writs,
injunctions, decrees, certificates, requirements, agreements, conditions of
participation and standards of any federal, state, county, municipal or other
governmental entity, administrative agency, insurance underwriting board,
architectural control board, private third-party payor, accreditation
organization, or any restrictive covenants applicable to the development,
construction, condition and operation of the Facility by Tenant, including but
not limited to, [i] zoning, building, fire, health, safety, sign, and
subdivision regulations and codes; [ii] certificate of need laws (if
applicable); [iii] licensure to operate as a 60-unit personal care facility;
[iv] the ADA; [v] any Environmental Laws; and [vi] requirements, conditions and
standards for participation in third-party payor insurance programs.
"Letter of Credit" means an irrevocable and transferable Letter of
Credit in an amount initially equal to 5% of the Lease Amount and subject to
reduction as provided in Section 20.6, issued by Issuer in favor of Landlord as
security for the Lease and in form reasonably acceptable to Landlord, and any
amendments thereto or replacements or substitutions therefor.
"Manager" means BCC at corporation, Inc., a corporation organized under
the laws of the State of Delaware.
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"Material Obligation" means [i] any indebtedness secured by a security
interest in or a lien, deed of trust or mortgage on any of the Leased Property
(or any part thereof, including any Personal Property) and any agreement
relating thereto; [ii] any obligation or agreement that is material to the
construction or operation of the Facility or that is material to Tenant's
business or financial condition; [iii] any indebtedness or capital lease of
Tenant that has an outstanding principal balance of at least $50,000.00 and any
agreement relating thereto; [iv] any obligation to or agreement with the Issuer
relating to the Letter of Credit; and [v] any sublease of the Leased Property,
exclusive of occupancy agreements with residents of the Leased Property.
"Maximum Guarantied Amount" means an amount equal to [i] 89% of Project
Costs incurred at the time of the calculation of the Maximum Guarantied Amount,
minus [ii] any amounts previously paid by Guarantor, Developer or Tenant in
connection with the exercise by Landlord of its remedies under the Lease and
other Lease Documents, including but not limited to [a] indemnification payments
arising from any claim or loss asserted against Landlord resulting from the acts
or omissions of Developer, Guarantor or Tenant in connection with the
construction of the Facility including without limitation, insurance deductibles
actually paid by Guarantor, Developer or Tenant under insurance policies, [b]
amounts drawn by Landlord on the Letter of Credit, [c] amounts deposited with
Landlord under Section 2.5 of the Construction Agreement, and [d] amounts paid
by Guarantor under Section 8.2(l) of this Lease, plus [iii] 100% of all losses
suffered or incurred by Landlord exclusively in connection with the acquisition
of the Land.
"Maximum Lease Amount" means $[_________].00.
"Member" means Financial Care Investors, LLC, a limited liability
company organized under the laws of the State of Delaware.
"Option Agreement" means the Option Agreement between Member and
Guarantor dated the date hereof, and any amendments thereto or substitutions and
replacements therefor.
"Option Price" has the meaning set forth in Section 13.2.
"Option to Purchase" has the meaning set forth in Section 13.1.
"Overdue Rate" has the meaning set forth in Section 8.6.
"Periodic Financial Statements" means [i] for Tenant, an unaudited
balance sheet and statement of income of Tenant for the most recent quarter;
[ii] for the Facility, an unaudited Facility Financial Statement for the most
recent month; and [iii] for Guarantor, an unaudited balance sheet and statement
of income of Guarantor for the most recent quarter.
"Permitted Exceptions" means the exceptions to title set forth on
Exhibit B.
"Permitted Liens" means [i] liens granted to Landlord; [ii] liens
customarily incurred by Tenant in the ordinary course of business for items not
delinquent including mechanic's
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liens and deposits and charges under worker's compensation laws; [iii] liens for
taxes and assessments not yet due and payable; [iv] any lien, charge, or
encumbrance which is being contested in good faith pursuant to Section 3.7 of
this Agreement; [v] the Permitted Exceptions; and [vi] purchase money financing
and capitalized equipment leases for the acquisition of personal property
provided, however, that Landlord obtains a nondisturbance agreement from the
purchase money lender or equipment lessor in form and substance as may be
reasonably satisfactory to Landlord if [a] the original cost of the equipment
exceeds $75,000.00 or [b] the equipment constitutes any part of the Start-Up
Property.
"Phase Facility" means each facility leased by Landlord or any Landlord
Affiliate to Tenant or any Affiliate pursuant to a Phase Lease, whether now or
hereafter existing.
"Phase Lease" means each lease now or hereafter made between Landlord
or any Landlord Affiliate and Tenant or any Affiliate and which is included
within the Current Phase as amended, modified, extended or renewed from time to
time.
"Phase Tenant" means Tenant or any Affiliate that is a tenant under a
Phase Lease.
"Pro Forma Statement" means a financial forecast for the Facility for
the next 5 year period commencing on the anticipated date when the Facility
commences operations prepared in accordance with the standards for forecasts
established by the American Institute of Certified Public Accountants.
"Project Costs" means all costs of the Facility (exclusive of the costs
of acquisition of the Land) that are properly capitalized in accordance with
generally accepted accounting principles consistently applied.
"Purchase Notice" has the meaning set forth in Section 13.1.
"Rate Determination Date" means the date on which the value for the
Rate Index is established for computing any Lease Rate. For any Lease Advances
made during the Construction Term or Initial Term, the Rate Determination Date
is the day before the Lease Advance Date. For any Renewal Date, the Rate
Determination Date is the last Business Day of the current Term.
"Rate Index" means the rate index used from time to time to calculate
the Lease Rate during the Construction Term and the Initial Term. The Rate Index
is [i] the Construction Rate Index during the Construction Term; and [ii] the
Initial Rate Index during the Initial Term.
"Rate Spread" means the rate spread from time to time used to calculate
the Lease Rate applicable to any Lease Advance during the Initial Term. The Rate
Spread is 340 basis points for the Initial Term.
"Receivables" means [i] all of Tenant's rights to receive payment for
providing resident care and services as set forth in any accounts, contract
rights, and instruments, and [ii] those documents, chattel paper, inventory
proceeds, provider agreements, participation
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agreements, ledger sheets, files, records, computer programs, tapes, and
agreements relating to Tenant's rights to receive payment for providing resident
care services.
"Renewal Date" means the first day of each Renewal Term.
"Renewal Option" has the meaning set forth in Section 12.1.
"Renewal Rate" means the Lease Rate established for any Renewal Date as
set forth in Section 12.2(c).
"Renewal Term" has the meaning set forth in Section 12.1.
"Rent" has the meaning set forth in Section 2.3.
"Secured Obligations" means all of the obligations of Tenant, Manager
or Developer under the Lease Documents.
"Shortfall Funding Agreement" means the Shortfall Funding Agreement
between Tenant, Member, and Guarantor dated the date hereof, and any amendments
thereto or substitutions and replacements therefor.
"Start-Up Property" has the meaning set forth in Section 11.1.
"State" means the State of Pennsylvania.
"Tenant's Obligations" means all payment and performance obligations of
Tenant under this Lease and all documents executed by Tenant in connection with
this Lease.
"Tenant's Organizational Documents" means [i] for a corporate Tenant,
the Articles of Incorporation of Tenant certified by the Secretary of State of
the state of organization, as amended to date and the Bylaws of Tenant certified
by Tenant, as amended to date; [ii] for a partnership Tenant, the Partnership
Agreement of Tenant certified by Tenant, as amended to date and the Partnership
Certificate, certified by the appropriate authority, as amended to date; and
[iii] for a limited liability company Tenant, the Certificate of Formation of
Tenant certified by the Secretary of State of the state of organization, as
amended to date and the Operating Agreement of Tenant certified by Tenant, as
amended to date.
"Tenant's Property" has the meaning set forth in Section 11.1.
"Term" means the Construction Term, Initial Term and each Renewal Term.
"Term Commencement Date" means the first day of the first month after
the Conversion Date.
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"Working Capital Assurance Agreement" means the agreement between
Guarantor and Landlord under which Guarantor agrees to extend loans to Tenant
for working capital purposes.
"Working Capital Documents" means [i] the Transaction Documents as
defined in Appendix 1 to that certain Shortfall Funding Agreement among
Guarantor, Tenant, and the equity owners of Tenant; and [ii] the Working Capital
Assurance Agreement.
ARTICLE 2: RENT
2.1 Construction Base Rent and Construction Fee. Tenant shall pay
Landlord construction base rent ("Construction Base Rent") and a construction
fee ("Construction Fee") in arrears in consecutive monthly installments payable
on the first day of each month during the Construction Term commencing on the
Commencement Date. Landlord is authorized to make a Lease Advance each month for
payment of the Construction Base Rent and Construction Fee. The annual
Construction Base Rent for the Construction Term will be equal to the product of
the aggregate Lease Amount times the Construction Rate (adjusted for each change
in the Construction Rate), with the Lease Rate charged for each Lease Advance
Amount from the date such amount was disbursed. The annual Construction Fee for
the Construction Term will be equal to the product of the aggregate Lease Amount
times 250 basis points, with the Construction Fee charged for each Lease Advance
from the date such amount was disbursed. The Construction Base Rent and the
Construction Fee will be computed monthly based on the actual number of days
elapsed over a 360-day year (365/360 method). The Construction Base Rent and the
Construction Fee for any partial month shall be prorated.
2.2 Construction Lease Advances. Subject to the terms and upon the
conditions set forth in this Lease and the Construction Agreement, Landlord
shall disburse Lease Advances to Developer to pay for the development and
construction costs of the Facility up to the Maximum Lease Amount.
2.3 Conversion to Initial Term. Upon the Conversion Date, Landlord is
authorized to make Lease Advances for [i] all accrued and unpaid Construction
Base Rent and Construction Fees; [ii] Base Rent in advance for the balance of
the then current month; and [iii] all costs and expenses incurred by Landlord in
connection with the conversion to the Initial Term.
2.4 Base Rent. Tenant shall pay Landlord base rent ("Base Rent") in
advance in consecutive monthly installments payable on the first day of each
month during the Initial Term commencing on the Term Commencement Date. The Base
Rent for the Initial Term will be computed monthly and will be equal to 1/12th
of the sum of the products of each Lease Advance times the Lease Rate for each
Lease Advance. The Base Rent for each Renewal Term will be computed in
accordance with Section 12.2.
2.5 Increase of Lease Rate and Base Rent. Commencing on the first
anniversary of the Term Commencement Date and on each anniversary thereafter
throughout the Term (including any Renewal Term and Extended Term), the Lease
Rate will increase by the applicable Increaser Rate. On each date that the Lease
Rate is increased, the Base Rent will be increased
20
accordingly and will be equal to 1/12th of the sum of the products of each Lease
Advance times the Lease Rate (including the applicable Increaser Rate) for each
Lease Advance.
2.6 Additional Rent. In addition to Construction Base Rent or Base
Rent, Tenant shall pay all other amounts, liabilities, obligations and
Impositions which Tenant assumes or agrees to pay under this Lease and other
Lease Documents and any fine, penalty, interest, charge and cost which may be
added for nonpayment or late payment of such items (collectively the "Additional
Rent"). The Construction Base Rent, Base Rent and Additional Rent are
hereinafter referred to as "Rent". Landlord shall have all legal, equitable and
contractual rights, powers and remedies provided either in this Lease or by
statute or otherwise in the case of nonpayment of the Rent.
2.7 Place of Payment of Rent. Tenant shall make all payments of Rent at
the Landlord's address set forth in the first paragraph of this Lease or at such
other place as Landlord may designate from time to time.
2.8 Net Lease. This Lease shall be deemed and construed to be an
"absolute net lease", and Tenant shall pay all Rent and other charges and
expenses in connection with the Leased Property throughout the Term, without
abatement, deduction or set-off.
2.9 No Termination, Abatement, Etc. Except as otherwise specifically
provided in this Lease, Tenant shall remain bound by this Lease in accordance
with its terms. Tenant shall not, without the consent of Landlord, modify,
surrender or terminate the Lease, nor seek nor be entitled to any abatement,
deduction, deferment or reduction of Rent, or set-off against the Rent. Except
as expressly provided in this Lease, the obligations of Landlord and Tenant
shall not be affected by reason of [i] any damage to, or destruction of, the
Leased Property or any part thereof from whatever cause or any Taking (as
hereinafter defined) of the Leased Property or any part thereof; [ii] the lawful
or unlawful prohibition of, or restriction upon, Tenant's use of the Leased
Property, or any part thereof, the interference with such use by any person,
corporation, partnership or other entity, or by reason of eviction by paramount
title; [iii] any claim which Tenant has or might have against Landlord or by
reason of any default or breach of any warranty by Landlord under this Lease or
any other agreement between Landlord and Tenant, or to which Landlord and Tenant
are parties; [iv] any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceeding affecting
Landlord or any assignee or transferee of Landlord; or [v] any other cause,
whether similar or dissimilar to any of the foregoing, other than a discharge of
Tenant from any such obligations as a matter of law. Except as otherwise
specifically provided in this Lease, Tenant hereby specifically waives all
rights, arising from any occurrence whatsoever, which may now or hereafter be
conferred upon it by law [a] to modify, surrender or terminate this Lease or
quit or surrender the Leased Property or any portion thereof; or [b] entitling
Tenant to any abatement, reduction, suspension or deferment of the Rent or other
sums payable by Tenant hereunder. The obligations of Landlord and 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 this Lease or by termination of this Lease
other than by reason of an Event of Default.
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2.10 Computational Method. Landlord and Tenant acknowledge that all
rates under this Lease will be computed based on the actual number of days
elapsed over a 360-day year (365/360 method).
ARTICLE 3: IMPOSITIONS AND UTILITIES
3.1 Payment of Impositions. During the Construction Term, Landlord is
authorized to make Lease Advances to pay all Impositions. During the Initial
Term and any Renewal Term, Tenant shall pay, as Additional Rent, all Impositions
that may be levied or become a lien on the Leased Property or any part thereof
at any time (whether prior to or during the Term), without regard to prior
ownership of said Leased Property, before any fine, penalty, interest, or cost
is incurred; provided, however, Tenant may contest any Imposition in accordance
with Section 3.7. Tenant shall deliver to Landlord [i] not more than 5 days
after the due date of each Imposition, copies of the invoice for such Imposition
and the check delivered for payment thereof; and [ii] not more than 30 days
after the due date of each Imposition, a copy of the official receipt evidencing
such payment or other proof of payment satisfactory to Landlord. Tenant's
obligation to pay such Impositions shall be deemed absolutely fixed upon the
date such Impositions become a lien upon the Leased Property or any part
thereof. Tenant, at its expense, shall prepare and file all tax returns and
reports in respect of any Imposition as may be required by governmental
authorities. Tenant shall be entitled to any refund due from any taxing
authority if no Event of Default shall have occurred hereunder and be
continuing. Landlord shall be entitled to any refund from any taxing authority
if an Event of Default has occurred and is continuing. Any refunds retained by
Landlord due to an Event of Default shall be applied as provided in Section 8.8.
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 Leased
Property as may be necessary to prepare any required returns and reports. In the
event governmental authorities classify any property covered by this Lease as
personal property, Tenant shall file all personal property tax returns in such
jurisdictions where it may legally so file. Landlord, to the extent it possesses
the same, and Tenant, to the extent it possesses the same, will provide the
other party, upon request, with cost and depreciation records necessary for
filing returns for any property so classified as personal property. Where
Landlord is legally required to file personal property tax returns, Tenant will
be provided with copies of assessment notices indicating a value in excess of
the reported value in sufficient time for Tenant to file a protest. Tenant may,
upon notice to Landlord, at Tenant's option and at Tenant's sole cost and
expense, protest, appeal, or institute such other proceedings as Tenant may deem
appropriate to effect a reduction of real estate or personal property
assessments and Landlord, at Tenant's expense as aforesaid, shall fully
cooperate with Tenant in such protest, appeal, or other action. Tenant shall
reimburse Landlord for all personal property taxes paid by Landlord within 30
days after receipt of xxxxxxxx accompanied by copies of a xxxx therefor and
payments thereof which identify the personal property with respect to which such
payments are made. Impositions imposed in respect to the tax-fiscal period
during which the Term terminates shall be adjusted and prorated between Landlord
and Tenant, whether or not such Imposition is imposed before or after such
termination, and Tenant's obligation to pay its prorated share thereof shall
survive such termination.
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3.2 Definition of Impositions. "Impositions" means, collectively,
[i] taxes (including without limitation, all capital stock and franchise taxes
of Landlord imposed by the State or any governmental entity in the State due to
this lease transaction or Landlord's ownership of the Leased Property and the
income arising therefrom, or due to Landlord being considered as doing business
in the State because of Landlord's ownership of the Leased Property or lease
thereof to Tenant but only to the extent Tenant would have been obligated to pay
such taxes if Tenant rather than Landlord was the owner of the Leased Property),
all real estate and personal property ad valorem, sales and use, business or
occupation, single business, gross receipts, transaction privilege, rent or
similar taxes; [ii] assessments (including without limitation, all assessments
for public improvements or benefits, whether or not commenced or completed prior
to the date hereof and whether or not to be completed with the Term); [iii]
ground rents, water, sewer or other rents and charges, excises, tax levies, and
fees (including without limitation, license, permit, inspection, authorization
and similar fees); [iv] all taxes imposed on Tenant's operations of the Leased
Property, including without limitation, employee withholding taxes, income taxes
and intangible taxes; [v] all taxes imposed by the State or any governmental
entity in the State with respect to the conveyance of the Leased Property by
Landlord to Tenant or Tenant's designee, including without limitation,
conveyance taxes and capital gains taxes; and [vi] all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Leased Property or
any part thereof and/or the Rent (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 or Landlord's interest in the Leased Property or any
part thereof; [b] the Leased Property or any part thereof or any rent therefrom
or any estate, right, title or interest therein; or [c] any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Leased Property or the leasing or use of the Leased Property
or any part thereof. Tenant shall not, however, be required to pay any tax [y]
based on income or assets imposed on Landlord by any governmental entity other
than the capital stock and franchise taxes described in clause [i] above or [z]
based on the transfer of Landlord's interest in the Leased Property or equity of
Landlord to a party other than Guarantor or Guarantor Affiliate unless the
transfer occurs pursuant to an Event of Default.
3.3 Escrow of Impositions. If an Event of Default occurs and
while it remains uncured, Tenant shall, at Landlord's election, deposit with
Landlord on the first day of each month a sum equal to 1/12th of the Impositions
assessed against the Leased Property for the preceding tax year, which sums
shall be used by Landlord toward payment of such Impositions. Tenant, on demand,
shall pay to Landlord any additional funds necessary to pay and discharge the
obligations of Tenant pursuant to the provisions of this Section. The receipt by
Landlord of the payment of such Impositions by and from Tenant shall only be as
an accommodation to Tenant, the mortgagees, and the taxing authorities, and
shall not be construed as rent or income to Landlord, Landlord serving, if at
all, only as a conduit for delivery purposes.
3.4 Utilities. Tenant shall pay, as Additional Rent, all taxes,
assessments, charges, deposits, and bills for utilities, including without
limitation charges for water, gas, oil, sanitary and storm sewer, electricity,
telephone service, and trash collection, which may be charged against the
occupant of the Improvements during the Term. During the Construction Term,
23
Landlord is authorized to make Lease Advances for the charges described in the
preceding sentence. If an Event of Default occurs and while it remains uncured,
Tenant shall, at Landlord's election, deposit with Landlord on the first day of
each month a sum equal to 1/12th of the amount of the annual utility expenses
for the preceding Lease Year, which sums shall be used by Landlord to pay such
utilities. Tenant shall, on demand, pay to Landlord any additional amount needed
to pay such utilities. Landlord's receipt of such payments shall only be an
accommodation to Tenant and the utility companies and shall not constitute rent
or income to Landlord. Tenant shall at all times maintain that amount of heat
necessary to ensure against the freezing of water lines. Tenant hereby agrees to
indemnify and hold Landlord harmless from and against any liability or damages
to the utility systems and the Leased Property that may result from Tenant's
failure to maintain sufficient heat in the Improvements.
3.5 Discontinuance of Utilities. Landlord will not be liable for
damages to person or property or for injury to, or interruption of, business for
any discontinuance of utilities nor will such discontinuance in any way be
construed as an eviction of Tenant or cause an abatement of rent or operate to
release Tenant from any of Tenant's obligations under this Lease.
3.6 Business Expenses. Tenant shall promptly pay all expenses and
costs incurred in connection with the operation of the Facility on the Leased
Property, including without limitation, employee benefits, employee vacation and
sick pay, consulting fees, and expenses for inventory and supplies.
3.7 Permitted Contests. Tenant, on its own or on Landlord's
behalf (or in Landlord's name), but at Tenant's expense, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Imposition or
any Legal Requirement or insurance requirement or any lien, attachment, levy,
encumbrance, charge or claim provided that [i] in the case of an unpaid
Imposition, lien, attachment, levy, encumbrance, charge or claim, the
commencement and continuation of such proceedings shall suspend the collection
thereof from Landlord and from the Leased Property; [ii] neither the Leased
Property nor any Rent therefrom nor any part thereof or interest therein would
be in any immediate danger of being sold, forfeited, attached or lost; [iii] in
the case of a Legal Requirement, Landlord would not be in any immediate danger
of civil or criminal liability for failure to comply therewith pending the
outcome of such proceedings; [iv] in the case of a Legal Requirement and/or an
Imposition, lien, encumbrance or charge in excess of $50,000.00, Tenant shall
give such reasonable security as may be demanded by Landlord to insure ultimate
payment of the same and to prevent any sale or forfeiture of the affected Leased
Property or the Rent by reason of such nonpayment or noncompliance; provided,
however, the provisions of this Section shall not be construed to permit Tenant
to contest the payment of Rent (except as to contests concerning the method of
computation or the basis of levy of any Imposition or the basis for the
assertion of any other claim) or any other sums payable by Tenant to Landlord
hereunder; [v] in the case of an insurance requirement, the coverage required by
Article 4 shall be maintained; and [vi] if such contest be finally resolved
against Landlord or Tenant, Tenant shall, as Additional Rent due hereunder,
promptly pay the amount required to be paid, together with all interest and
penalties accrued thereon, or comply with the applicable Legal Requirement or
insurance requirement. Landlord, at Tenant's expense, shall execute and deliver
to Tenant such authorizations and other
24
documents as may be reasonably required in any such contest, and, if reasonably
requested by Tenant or if Landlord so desires, Landlord shall join as a party
therein. Tenant hereby agrees to indemnify and save Landlord harmless from and
against any liability, cost or expense of any kind that may be imposed upon
Landlord in connection with any such contest and any loss resulting therefrom.
ARTICLE 4: INSURANCE
4.1 Property Insurance. At Tenant's expense, Tenant shall
maintain in full force and effect a property insurance policy or policies
insuring the Leased Property against the following:
(a) Loss or damage commonly covered by a "Special Form"
policy insuring against physical loss or damage to the Improvements and Personal
Property, including but not limited to, risk of loss from fire and other
hazards, collapse, transit coverage, vandalism, malicious mischief, theft,
earthquake (if the Leased Property is in earthquake zone 1 or 2) and sinkholes
(if usually recommended in the area of the Leased Property). The policy shall be
in the amount of the full replacement value (as defined in Section 4.5) of the
Improvements and Personal Property and shall contain a deductible amount
acceptable to Landlord. Landlord shall be named as an additional insured. The
policy shall include a stipulated value endorsement or agreed amount endorsement
and endorsements for contingent liability for operations of building laws,
demolition costs, and increased cost of construction.
(b) If applicable, loss or damage by explosion of steam
boilers, pressure vessels, or similar apparatus, now or hereafter installed on
the Leased Property, in commercially reasonable amounts acceptable to Landlord.
(c) Consequential loss of rents and income coverage insuring
against all "Special Form" risk of physical loss or damage with limits and
deductible amounts acceptable to Landlord covering risk of loss during the first
9 months of reconstruction, and containing an endorsement for extended period of
indemnity of at least 6 months, and shall be written with a stipulated amount of
coverage if available at a reasonable premium.
(d) If the Leased Property is located, in whole or in part,
in a federally designated 100-year flood plain area, flood insurance for the
Improvements in an amount equal to the lesser of [i] the full replacement value
of the Improvements; or [ii] the maximum amount of insurance available for the
Improvements under all federal and private flood insurance programs.
(e) Loss or damage caused by the breakage of plate glass in
commercially reasonable amounts acceptable to Landlord.
(f) Loss or damage commonly covered by blanket crime
insurance including employee dishonesty, loss of money orders or paper currency,
depositor's forgery, and loss of property of patients accepted by Tenant for
safekeeping, in commercially reasonable amounts acceptable to the Landlord.
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4.2 Liability Insurance. At Tenant's expense, Tenant shall
maintain liability insurance against the following:
(a) Claims for personal injury or property damage commonly
covered by comprehensive general liability insurance with endorsements for
incidental malpractice, contractual, personal injury, owner's protective
liability, voluntary medical payments, products and completed operations, broad
form property damage, and extended bodily injury, with commercially reasonable
amounts for bodily injury, property damage, and voluntary medical payments
acceptable to Landlord, but with a combined single limit of not less than
$5,000,000.00 per occurrence.
(b) Claims for personal injury and property damage commonly
covered by comprehensive automobile liability insurance, covering all owned and
non-owned automobiles, with commercially reasonable amounts for bodily injury,
property damage, and for automobile medical payments acceptable to Landlord, but
with a combined single limit of not less than $5,000,000.00 per occurrence.
(c) Claims for personal injury commonly covered by medical
malpractice insurance in commercially reasonable amounts acceptable to Landlord.
(d) Claims commonly covered by worker's compensation
insurance for all persons employed by Tenant on the Leased Property. Such
worker's compensation insurance shall be in accordance with the requirements of
all applicable local, state, and federal law.
4.3 Builder's Risk Insurance. In connection with any
construction, Tenant shall maintain in full force and effect a builder's
completed value risk policy ("Builder's Risk Policy") of insurance in a
nonreporting form insuring against all "Special Form" risk of physical loss or
damage to the Improvements, including but not limited to, risk of loss from fire
and other hazards, collapse, transit coverage, vandalism, malicious mischief,
theft, earthquake (if Leased Property is in earthquake zone 1 or 2) and
sinkholes (if usually recommended in the area of the Leased Property). The
Builder's Risk Policy shall include endorsements providing coverage for building
materials and supplies and temporary premises. The Builder's Risk Policy shall
be in the amount of the full replacement value of the Improvements and shall
contain a deductible amount acceptable to Landlord. Landlord shall be named as
an additional insured. The Builder's Risk Policy shall include an endorsement
permitting initial occupancy.
4.4 Insurance Requirements. The following provisions shall apply to
all insurance coverages required hereunder:
(a) The form and substance of all policies shall be subject
to the approval of Landlord, which approval will not be unreasonably withheld.
(b) The carriers of all policies shall have a Best's Rating
of "A" or better and a Best's Financial Category of X or higher and shall be
authorized to do insurance business in the State.
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(c) Tenant shall be the "named insured" and Landlord shall be
an "additional insured" on each liability policy. On all property and casualty
policies, Landlord and Tenant shall be joint loss payees.
(d) Tenant shall deliver to Landlord certificates or policies
showing the required coverages and endorsements. The policies of insurance shall
provide that the policy may not be canceled or not renewed, and no material
change or reduction in coverage may be made, without at least 30 days' prior
written notice to Landlord.
(e) The policies shall contain a severability of interest
and/or cross-liability endorsement, provide that the acts or omissions of Tenant
or Landlord will not invalidate the coverage of the other party, and provide
that Landlord shall not be responsible for payment of premiums.
(f) All loss adjustment shall require the written consent of
Landlord and Tenant, as their interests may appear.
(g) At least 10 days prior to the expiration of each
insurance policy, Tenant shall deliver to Landlord a certificate showing renewal
of such policy and payment of the annual premium therefor and a current
Certificate of Compliance (in the form delivered at the time of closing)
completed and signed by Tenant's insurance agent.
4.5 Replacement Value. The term "full replacement value" means the
actual replacement cost thereof from time to time including increased cost of
construction endorsement, with no reductions or deductions. Tenant shall, in
connection with each annual policy renewal, deliver to Landlord a
redetermination of the full replacement value by the insurer or an endorsement
indicating that the Leased Property is insured for its full replacement value.
If Tenant makes any Permitted Alterations (as hereinafter defined) to the Leased
Property, Landlord may have such full replacement value redetermined at any time
after such Permitted Alterations are made, regardless of when the full
replacement value was last determined.
4.6 Blanket Policy. Notwithstanding anything to the contrary contained
in this Section, Tenant may [i] carry the insurance required by this Article
under a blanket policy of insurance, provided that the coverage afforded Tenant
will not be reduced or diminished or otherwise be different from that which
would exist under a separate policy meeting all of the requirements of this
Lease; and [ii] Tenant may meet the limits of liability for insurance by
maintaining a portion thereof as "excess" insurance under an umbrella policy.
4.7 No Separate Insurance. Tenant shall not take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article, or increase the amounts of any then existing
insurance, by securing an additional policy or additional policies, unless all
parties having an insurable interest in the subject matter of the insurance,
including Landlord and any mortgagees, are included therein as additional
insureds or loss payees, the loss is payable under said insurance in the same
manner as losses are payable under this Lease, and such
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additional insurance is not prohibited by the existing policies of insurance.
Tenant shall immediately notify Landlord of the taking out of such separate
insurance or the increasing of any of the amounts of the existing insurance by
securing an additional policy or additional policies.
4.8 Waiver of Subrogation. Each party hereto hereby waives any and
every claim which arises or may arise in its favor and against the other party
hereto during the Term for any and all loss of, or damage to, any of its
property located within or upon, or constituting a part of, the Leased Property,
which loss or damage is covered by valid and collectible insurance policies, to
the extent that such loss or damage is recoverable under such policies. Said
mutual waiver shall be in addition to, and not in limitation or derogation of,
any other waiver or release contained in this Lease with respect to any loss or
damage to property of the parties hereto. Inasmuch as the said waivers will
preclude the assignment of any aforesaid claim by way of subrogation (or
otherwise) to an insurance company (or any other person), each party hereto
agrees immediately to give each insurance company which has issued to it
policies of insurance, written notice of the terms of said mutual waivers, and
to have such insurance policies properly endorsed, if necessary, to prevent the
invalidation of said insurance coverage by reason of said waivers, so long as
such endorsement is available at a reasonable cost.
4.9 Mortgages. The following provisions shall apply if Landlord now or
hereafter places a mortgage on the Leased Property or any part thereof: [i]
Tenant shall obtain a standard form of lender's loss payable clause insuring the
interest of the mortgagee; [ii] Tenant shall deliver evidence of insurance to
such mortgagee; [iii] loss adjustment shall require the consent of the
mortgagee; and [iv] Tenant shall provide such other information and documents as
may be required by the mortgagee.
4.10 Escrows. After an Event of Default occurs hereunder, Tenant shall
make such periodic payments of insurance premiums in accordance with Landlord's
requirements after receipt of notice thereof from Landlord.
ARTICLE 5: INDEMNITY
5.1 Tenant's Indemnification. Tenant hereby indemnifies and agrees to
hold harmless Landlord, any successors or assigns of Landlord, and Landlord's
and such successor's and assign's directors, officers, employees and agents from
and against any and all demands, claims, causes of action, fines, penalties,
damages (including consequential damages), losses, liabilities (including strict
liability), judgments, and expenses (including, without limitation, reasonable
attorneys' fees, court costs, and the costs set forth in Section 8.7) incurred
in connection with or arising from: [i] the use or occupancy of the Leased
Property by Tenant or any persons claiming under Tenant; [ii] any activity,
work, or thing done, or permitted or suffered by Tenant in or about the Leased
Property; [iii] any acts, omissions, or negligence of Tenant or any person
claiming under Tenant, or the contractors, agents, employees, invitees, or
visitors of Tenant or any such person; [iv] any breach, violation, or
nonperformance by Tenant or any person claiming under Tenant or the employees,
agents, contractors, invitees, or visitors of Tenant or of any such person, of
any term, covenant, or provision of this Lease or any law, ordinance, or
governmental requirement of any kind including, without limitation, any failure
to comply with any applicable requirements
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under the ADA; [v] any injury or damage to the person, property or business of
Tenant, its employees, agents, contractors, invitees, visitors, or any other
person entering upon the Leased Property; and [vi] any construction,
alterations, changes or demolition of the Facility performed by or contracted
for Tenant or its employees, agents or contractors; provided, however, in no
event shall Landlord be indemnified or held harmless if the claim or loss has
resulted from the grossly negligent or willful acts or omissions of Landlord,
its employees and agents. If any action or proceeding is brought against
Landlord, its employees, or agents by reason of any such claim, Tenant, upon
notice from Landlord, will defend the claim at Tenant's expense with counsel
reasonably satisfactory to Landlord. All amounts payable to Landlord under this
section shall be payable on written demand and any such amounts which are not
paid within 10 days after demand therefor by Landlord shall bear interest at the
Overdue Rate. In case any action, suit or proceeding is brought against Tenant
by reason of any such occurrence, Tenant shall use its best efforts to defend
such action, suit or proceeding.
5.1.1 Notice of Claim. Landlord shall notify Tenant in writing of any
claim or action brought against Landlord in which indemnity may be sought
against Tenant pursuant to this section. Such notice shall be given in
sufficient time to allow Tenant to defend or participate in such claim or
action, but the failure to give such notice in sufficient time shall not
constitute a defense hereunder nor in any way impair the obligations of Tenant
under this section unless the failure to give such notice precludes Tenant's
defense of any such action.
5.1.2 Survival of Covenants. The covenants of Tenant contained in this
section shall remain in full force and effect after the termination of this
Agreement until the expiration of the period stated in the applicable statute of
limitations during which a claim or cause of action may be brought and payment
in full or the satisfaction of such claim or cause of action and of all expenses
and charges incurred by Landlord relating to the enforcement of the provisions
herein specified.
5.1.3 Reimbursement of Expenses. Unless prohibited by law, Tenant
hereby agrees to pay to Landlord all of the reasonable fees, charges and
reasonable out-of-pocket expenses related to the Facility and required hereby,
or incurred by Landlord in enforcing the provisions of this Agreement.
5.1.4 Limitation of Indemnification During Construction Term.
Notwithstanding any provision to the contrary contained in this Lease or the
other Lease Documents, in no event shall any party indemnified pursuant to
Sections 5.1 and 7.3 be entitled to indemnification or defenses (including
without limitation being held harmless) during the Construction Term which [i]
arise or are caused by the acts or omissions of parties other than Guarantor,
Developer or Tenant, or [ii] with respect to claims or other matters for which
indemnification or defenses are sought that arise as a result of the acts or
omissions of Tenant, Developer or Guarantor in connection with the completion of
construction of the Facility exceed the Maximum Guarantied Amount; provided,
however, [a] with respect to indemnification and defenses described in clause
[ii] of this section, Tenant, Developer and Guarantor may indemnify and defend
such indemnified parties up to the Maximum Guarantied Amount, [b] Guarantor,
Tenant and Developer shall indemnify and defend the indemnified parties without
regard to any limitation (except as expressly provided in Section
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5.1) for claims or losses resulting from the acts or omissions of Tenant,
Guarantor or Developer that are not related to the completion of construction of
the Facility, and [c] Guarantor, Tenant and Developer shall indemnify and defend
the indemnified parties without regard to any limitation for matters related to
fraud, willful acts, misapplication of funds or the bankruptcy of Tenant,
Guarantor or Developer.
5.2 Environmental Indemnity; Audits.
5.2.1 Indemnification. Tenant hereby indemnifies and agrees to hold
harmless Landlord, any successors to Landlord's interest in this Lease, and
Landlord's and such successors' directors, officers, employees and agents from
and against any losses, claims, damages (including consequential damages),
penalties, fines, liabilities (including strict liability), costs (including
cleanup and recovery costs), and expenses (including expenses of litigation and
reasonable consultants' and attorneys' fees) incurred by Landlord or any other
indemnitee or assessed against the Leased Property by virtue of any claim or
lien by any governmental or quasi-governmental unit, body, or agency, or any
third party, for cleanup costs or other costs pursuant to any Environmental Law.
Tenant's indemnity shall survive the termination of this Lease. Provided,
however, Tenant shall have no indemnity obligation with respect to [i] Hazardous
Materials first introduced to the Leased Property subsequent to the date that
Tenant's occupancy of the Leased Property shall have fully terminated; or [ii]
Hazardous Materials introduced to the Leased Property by Landlord, its agent,
employees, successors or assigns. If at any time during the Term of this Lease
any governmental authority notifies Landlord or Tenant of a violation of any
Environmental Law or Landlord reasonably believes that a Facility may violate
any Environmental Law, Landlord may require one or more environmental audits of
the Leased Premises, in such form, scope and substance as specified by Landlord,
at Tenant's expense. Tenant shall, within 30 days after receipt of an invoice
from Landlord, reimburse Landlord for all costs and expenses incurred in
reviewing any environmental audit, including without limitation, reasonable
attorneys' fees and costs.
5.3 Limitation of Landlord's Liability. Except for the grossly
negligent or willful acts or omissions of Landlord, its employees or agents,
Landlord, its agents, and employees, will not be liable for any loss, injury,
death, or damage (including consequential damages) to persons, property, or
Tenant's business occasioned by theft, act of God, public enemy, injunction,
riot, strike, insurrection, war, court order, requisition, order of governmental
body or authority, fire, explosion, falling objects, steam, water, rain or snow,
leak or flow of water (including water from the elevator system), rain or snow
from the Leased Property or into the Leased Property or from the roof, street,
subsurface or from any other place, or by dampness or from the breakage,
leakage, obstruction, or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, or lighting fixtures of the Leased
Property, or from construction, repair, or alteration of the Leased Property or
from any acts or omissions of any other occupant or visitor of the Leased
Property, or from any other cause beyond Landlord's control.
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ARTICLE 6: USE AND ACCEPTANCE OF PREMISES
6.1 Use of Leased Property. Tenant shall use and occupy the Leased
Property exclusively for the Facility Uses and for all lawful and licensed
ancillary uses, and for no other purpose without the prior written consent of
the Landlord. Tenant shall obtain and maintain (or cause to be obtained and
maintained) all approvals, licenses, and consents needed to use and operate the
Leased Property as herein permitted. Tenant shall deliver to Landlord complete
copies of surveys, examinations, certification and licensure inspections,
compliance certificates, and other similar reports issued to Tenant by any
governmental agency within 10 days after Tenant's receipt of each item.
6.2 Acceptance of Leased Property. Tenant acknowledges that [i] Tenant
and its agents have had an opportunity to inspect the Leased Property; [ii]
Tenant has found the Leased Property fit for Tenant's use; [iii] Landlord will
deliver the Leased Property to Tenant in "as-is" condition; [iv] Landlord is not
obligated to make any improvements or repairs to the Leased Property; and [v]
the roof, walls, foundation, heating, ventilating, air conditioning, telephone,
sewer, electrical, mechanical, elevator, utility, plumbing, and other portions
of the Leased Property are in good working order. Tenant waives any claim or
action against Landlord with respect to the condition of the Leased Property.
LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF
THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING
AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.
6.3 Conditions of Use and Occupancy. Tenant agrees that during the
Term it shall use and keep the Leased Property in a careful, safe and proper
manner; not commit or suffer waste thereon; not use or occupy the Leased
Property for any unlawful purposes; not use or occupy the Leased Property or
permit the same to be used or occupied, for any purpose or business deemed extra
hazardous on account of fire or otherwise; keep the Leased Property in such
repair and condition as may be required by the Board of Health, or other city,
state or federal authorities, free of all cost to Landlord; not permit any acts
to be done which will cause the cancellation, invalidation, or suspension of any
insurance policy; and permit Landlord and its agents to enter upon the Leased
Property at all reasonable times to examine the condition thereof.
ARTICLE 7: REPAIRS AND MECHANICS' LIENS
7.1 Maintenance. Tenant shall maintain, repair, and replace the Leased
Property, including without limitation, all structural and nonstructural repairs
and replacements to the roof, foundations, exterior walls, parking areas,
sidewalks, water, sewer, and gas connections, pipes, and mains. Tenant shall
pay, as Additional Rent, the full cost of maintenance, repairs, and
replacements. Tenant shall maintain all drives, sidewalks, parking areas, and
lawns on or about the Leased Property in a clean and orderly condition, free of
accumulations of dirt, rubbish, snow and ice. Tenant shall permit Landlord to
inspect the Leased Property at all reasonable times, and shall
31
implement all reasonable suggestions of the Landlord as to the maintenance and
replacement of the Leased Property.
7.2 Required Alterations. Tenant shall, at Tenant's sole cost and
expense, make any additions, changes, improvements or alterations to the Leased
Property, including structural alterations, which may be required by any
governmental authorities, including those required to maintain licensure or
certification under the Medicare and Medicaid programs (if so certified),
whether such changes are required by Tenant's use, changes in the law,
ordinances, or governmental regulations, defects existing as of the date of this
Lease, or any other cause whatever. All such additions, changes, improvements or
alterations shall be deemed to be Permitted Alterations and shall comply with
all laws requiring such alterations and with the provisions of Section 16.4.
7.3 Mechanic's Liens. Tenant shall have no authority to permit or
create a lien against Landlord's interest in the Leased Property, and Tenant
shall post notices or file such documents as may be required to protect
Landlord's interest in the Leased Property against liens. Subject to Landlord
making Lease Advances according to the terms of the Lease Documents, Tenant
hereby agrees to defend, indemnify, and hold Landlord harmless from and against
any mechanic's liens against the Leased Property by reason of work, labor,
services or materials supplied or claimed to have been supplied on or to the
Leased Property. Subject to Tenant's right to contest such lien pursuant to
Section 3.7 of this Lease, Tenant shall remove, bond-off, or otherwise obtain
the release of any mechanic's lien filed against the Leased Property within 10
days after the filing thereof. Tenant shall pay all expenses in connection
therewith, including without limitation, damages, interest, court costs and
reasonable attorneys' fees.
7.4 Replacements of Fixtures and Personal Property. Tenant shall not
remove Fixtures and Personal Property from the Leased Property except to replace
the Fixtures and Personal Property by other similar items of equal quality and
value. Items being replaced by Tenant may be removed and shall become the
property of Tenant and items replacing the same shall be and remain the property
of Landlord. Tenant shall execute, upon written request from Landlord, any and
all documents necessary to evidence Landlord's ownership of the Personal
Property and replacements therefor. Tenant may finance replacements for the
Fixtures and Personal Property by equipment lease or by a security agreement and
financing statement if [i] Landlord has consented to the terms and conditions of
the equipment lease or security agreement; and [ii] for Fixtures and Personal
Property [a] having a cost in excess of $75,000.00 or [b] constituting any part
of the Start-Up Property, the equipment lessor or lender has entered into a
nondisturbance agreement with Landlord upon terms and conditions reasonably
acceptable to Landlord, including without limitation, the following: [a]
Landlord shall have the right (but not the obligation) to assume such security
agreement or equipment lease upon the occurrence of an Event of Default under
this Lease; [b] the equipment lessor or lender shall notify Landlord of any
default by Tenant under the equipment lease or security agreement and give
Landlord a reasonable opportunity to cure such default; and [c] Landlord shall
have the right to assign its rights under the equipment lease, security
agreement, or nondisturbance agreement. Tenant shall, within 30 days after
receipt of an invoice from Landlord, reimburse Landlord for all costs and
expenses incurred in
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reviewing and approving the equipment lease, security agreement, and
nondisturbance agreement, including without limitation, reasonable attorneys'
fees and costs.
ARTICLE 8: DEFAULTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following shall be an event of default ("Event of Default") hereunder:
(a) Tenant fails to pay in full any installment of Rent, or
any other monetary obligation payable by Tenant under this Lease (including the
Option Price), within 10 days after such payment is due.
(b) Landlord gives Tenant three or more notices of
non-payment of Rent (after expiration of the 10 day grace period) in any Lease
Year.
(c) Tenant or Guarantor (where applicable) fails to comply
with any covenant set forth in Article 14, Section 15.6, Section 15.7 or Article
20 of this Lease.
(d) Tenant fails to observe and perform any other covenant,
condition or agreement under this Lease to be performed by Tenant and [i] such
failure continues for a period of 30 days after written notice thereof is given
to Tenant by Landlord; or [ii] if, by reason of the nature of such default, the
same cannot be remedied within said 30 days, Tenant fails to proceed with
diligence reasonably satisfactory to Landlord after receipt of the notice to
cure the same or, in any event, fails to cure such default within 75 days after
receipt of the notice. The foregoing notice and cure provisions do not apply to
any Event of Default otherwise specifically described in any other subsection of
Section 8.1.
(e) Tenant abandons or vacates the Leased Property or any
material part thereof or ceases to do business or ceases to exist for any reason
for any five or more days.
(f) [i] The filing by Tenant of a petition under 11 U.S.C. or
the commencement of a bankruptcy or similar proceeding by Tenant; [ii] the
failure by Tenant within 60 days to dismiss an involuntary bankruptcy petition
or other commencement of a bankruptcy, reorganization or similar proceeding
against Tenant, or to lift or stay any execution, garnishment or attachment of
such consequence as will impair its ability to carry on its operation at the
Leased Property; [iii] the entry of an order for relief under 11 U.S.C. in
respect of Tenant; [iv] any assignment by Tenant for the benefit of its
creditors; [v] the entry by Tenant into an agreement of composition with its
creditors; [vi] the approval by a court of competent jurisdiction of a petition
applicable to Tenant in any proceeding for its reorganization instituted under
the provisions of any state or federal bankruptcy, insolvency, or similar laws;
[vii] appointment by final order, judgment, or decree of a court of competent
jurisdiction of a receiver of a whole or any substantial part of the properties
of Tenant (provided such receiver shall not have been removed or discharged
within 60 days of the date of his qualification).
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(g) [i] Any receiver, administrator, custodian or other
person takes possession or control of any of the Leased Property and continues
in possession for 60 days; [ii] any writ against any of the Leased Property is
not released within 60 days; [iii] any final nonappealable judgment is rendered
or proceedings are instituted against the Leased Property or Tenant which affect
the Leased Property or any part thereof, which is not dismissed for 60 days
(except as otherwise provided in this Section); [iv] all or a substantial part
of the assets of Tenant or Guarantor are attached, seized, subjected to a writ
or distress warrant, or are levied upon, or come into the possession of any
receiver, trustee, custodian, or assignee for the benefit of creditors; [v]
Tenant or Guarantor is enjoined, restrained, or in any way prevented by court
order, or any proceeding is filed or commenced seeking to enjoin, restrain or in
any way prevent Tenant from conducting all or a substantial part of its business
or affairs; or [vi] except as otherwise permitted hereunder, a final notice of
lien, levy or assessment is filed of record with respect to all or any part of
the Leased Property or any property of Tenant located at the Leased Property and
is not dismissed, discharged, or bonded-off within 30 days.
(h) Any representation or warranty made by Tenant or
Guarantor in this Lease or any other document executed in connection with this
Lease, any guaranty of or other security for this Lease, or any report,
certificate, application, financial statement or other instrument furnished by
Tenant or Guarantor pursuant hereto or thereto shall prove to be false,
misleading or incorrect in any material respect as of the date made.
(i) Tenant, any Affiliate, Guarantor, or any Guarantor
Affiliate defaults on any indebtedness or obligation to Landlord or any Landlord
Affiliate or any agreement with Landlord or any Landlord Affiliate, including,
without limitation, any lease with Landlord or any Landlord Affiliate, the
Working Capital Documents, and the Equity Loan Documents, or Tenant or any
Guarantor defaults on any Material Obligation, and any applicable grace or cure
period with respect to default under such indebtedness or obligation expires
without such default having been cured. This provision applies to all such
indebtedness, obligations and agreements as they may be amended, modified,
extended, or renewed from time to time. Notwithstanding the foregoing, until
Guarantor closes the Guarantor Option, an Event of Default shall not arise as a
result of a default by Tenant, any Affiliate, Guarantor, or any Guarantor
Affiliate under other leases with Landlord or any Landlord Affiliate unless such
lease is a Phase Lease.
(j) Except pursuant to the Guarantor Option, the occurrence
of any change in Tenant's leasehold interest in the Leased Property, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld.
(k) Guarantor dissolves, terminates, files a petition in
bankruptcy, or is adjudicated insolvent under 11 U.S.C. or any other insolvency
law (provided, however, in the case of an involuntary bankruptcy petition or
other commencement of bankruptcy, reorganization or similar processing against
Guarantor, Guarantor shall have 60 days to dismiss such action), or fails to
comply with any covenant or requirement of such guarantor set forth in this
Lease or in the guaranty of such guarantor.
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(l) The license for the Facility or any other Government
Authorization, is canceled, suspended or otherwise invalidated, notice of
impending revocation proceedings is received and Tenant fails to diligently
contest such proceeding, or any reduction occurs in the number of licensed beds
or units at the Facility in excess of 5%.
(m) The occurrence of an Event of Default (after expiration
of any applicable grace or cure period) under the Construction Agreement.
8.2 Remedies. Landlord may exercise any one or more of the following
remedies upon the occurrence of an Event of Default:
(a) Landlord may re-enter and take possession of the Leased
Property without terminating the Lease, and lease the Leased Property for the
account of Tenant, holding Tenant liable for all costs of the Landlord in
reletting the Leased Property and for the difference in the amount received by
such reletting and the amounts payable by Tenant under the Lease.
(b) Landlord may terminate this Lease, exclude Tenant from
possession of the Leased Property and use efforts to lease the Leased Property
to others, holding Tenant liable for the difference in the amounts received from
such reletting and the amounts payable by Tenant under the Lease.
(c) Landlord may re-enter the Leased Property and have,
repossess and enjoy the Leased Property as if the Lease had not been made, and
in such event, Tenant and its successors and assigns shall remain liable for any
contingent or unliquidated obligations or sums owing at the time of such
repossession.
(d) Landlord may have access to and inspect, examine and make
copies of the books and records and any and all accounts, data and income tax
and other returns of Tenant insofar as they pertain to the Leased Property.
(e) If the Event of Default occurs during the Initial Term or
any Renewal Term, Landlord may accelerate all of the unpaid Rent hereunder for
the unexpired Initial Term or Renewal Term, as applicable, so that the aggregate
Rent for such unexpired period becomes immediately due and payable, subject to
Landlord's obligations under law to leave Tenant in possession of the Leased
Property.
(f) Landlord may take whatever action at law or in equity as
may appear necessary or desirable to collect the Rent and other amounts payable
under the Lease then due and thereafter to become due, or to enforce performance
and observance of any obligations, agreements or covenants of Tenant under this
Lease.
(g) With respect to the Collateral and Landlord's security
interest therein, Landlord may exercise all of its rights as secured party under
Article 9 of the Uniform Commercial Code as adopted in the State. Landlord may
sell the Collateral by public or private sale upon 10 days notice to Tenant.
Tenant agrees that a commercially reasonable manner of
35
disposition of the Collateral shall include, without limitation and at the
option of Landlord, a sale of the Collateral, in whole or in part, concurrently
with the sale of the Leased Property.
(h) Landlord may obtain control over and collect the
Receivables and apply the proceeds of the collections to satisfaction of the
Secured Obligations unless prohibited by law. Tenant and Manager appoint
Landlord or its designee as attorney for Tenant and Manager with powers [i] to
receive, to endorse, to sign and/or to deliver, in Tenant's name or Landlord's
name, any and all checks, drafts, and other instruments for the payment of money
relating to the Receivables, and to waive demand, presentment, notice of
dishonor, protest, and any other notice with respect to any such instrument;
[ii] to sign Tenant's name or Manager's name on any invoice or xxxx of lading
relating to any Receivable, drafts against account debtors, assignments and
verifications of Receivables, and notices to account debtors; [iii] to send
verifications of Receivables to any account debtor; and [iv] to do all other
acts and things necessary to carry out this Lease. Except for willful acts or
omissions, Landlord shall not be liable for any omissions, commissions, errors
of judgment, or mistakes in fact or law made in the exercise of any such powers.
At Landlord's option, Tenant and Manager shall [i] provide Landlord a full
accounting of all amounts received on account of Receivables with such frequency
and in such form as Landlord may require, either with or without applying all
collections on Receivables in payment of the Secured Obligations or [ii] deliver
to Landlord on the day of receipt all such collections in the form received and
duly endorsed by Tenant or Manager. At Landlord's request, Tenant or Manager
shall institute any action or enter into any settlement determined by Landlord
to be necessary to obtain recovery or redress from any account debtor in default
of Receivables. Landlord may give notice of its security interest in the
Receivables to any or all account debtors with instructions to make all payments
on Receivables directly to Landlord, thereby terminating Tenant's and Manager's
authority to collect Receivables. After terminating Tenant's and Manager's
authority to enforce or collect Receivables, Landlord shall have the right to
take possession of any or all Receivables and records thereof and is hereby
authorized to do so, and only Landlord shall have the right to collect and
enforce the Receivables. Prior to the occurrence of an Event of Default, at
Tenant's and Manager's cost and expense, but on behalf of Landlord and for
Landlord's account, Tenant or Manager shall collect or otherwise enforce all
amounts unpaid on Receivables and hold all such collections in trust for
Landlord, but Tenant and Manager may commingle such collections with Tenant's or
Manager's own funds, until Tenant's or Manager's authority to do so has been
terminated, which may be done only after an Event of Default. Notwithstanding
any other provision hereof, Landlord does not assume any of Tenant's or
Manager's obligations under any Receivable, and Landlord shall not be
responsible in any way for the performance of any of the terms and conditions
thereof by Tenant or Manager.
(i) Without waiving any prior or subsequent Event of Default,
Landlord may waive any Event of Default or, with or without waiving any Event of
Default, remedy any default.
(j) Landlord may terminate its obligation to disburse Lease
Advances.
(k) Landlord may enter and take possession of the Land and
Facility without terminating the Lease and complete construction and renovation
of the Improvements (or
36
any part thereof) and perform the obligations of Tenant or Developer under the
Lease Documents. Without limiting the generality of the foregoing and for the
purposes aforesaid, Tenant hereby appoints Landlord its lawful attorney-in-fact
with full power to do any of the following: [i] complete construction,
renovation and equipping of the Improvements in the name of Tenant; [ii] use
unadvanced funds remaining under the Maximum Lease Amount, or funds that may be
reserved, escrowed, or set aside for any purposes hereunder at any time, or to
advance funds in excess of the Maximum Lease Amount, to complete the
Improvements; [iii] make changes in the plans and specifications that shall be
necessary or desirable to complete the Improvements in substantially the manner
contemplated by the plans and specifications; [iv] retain or employ new general
contractors, subcontractors, architects, engineers, and inspectors as shall be
required for said purposes; [v] pay, settle, or compromise all existing bills
and claims, which may be liens or security interests, or to avoid such bills and
claims becoming liens against the Facility or security interest against fixtures
or equipment, or as may be necessary or desirable for the completion of the
construction and equipping of the Improvements or for the clearance of title;
[vi] execute all applications and certificates, in the name of Tenant, that may
be required in connection with any construction; [vii] do any and every act that
Tenant might do in its own behalf, to prosecute and defend all actions or
proceedings in connection with the Improvements; and [viii] to execute, deliver
and file all applications and other documents and take any and all actions
necessary to transfer the operations of the Facility to Landlord or Landlord's
designee. This power of attorney is a power coupled with an interest and cannot
be revoked.
(l) In the event that the undisbursed proceeds of the Maximum
Lease Amount are not sufficient to pay all unpaid items set forth on the Project
Budget (after adjustment for any permitted change orders), and Architect
certifies to Landlord and Developer that the Maximum Guarantied Amount (together
with the Maximum Lease Amount remaining to be advanced) will not be sufficient
to complete the Facility ("Architect's Certification"), Landlord shall have the
right to require Developer and Guarantor to pay to Landlord an amount equal to
the lesser of [i] the actual loss suffered by Landlord as a result of a failure
by Developer to complete the Facility for an amount equal to or less than the
Maximum Guarantied Amount (such loss to be the difference between [a] the Lease
Advances made as of the date of the Architect's Certification and the costs
incurred by Landlord in connection with the Facility, and [b] the fair market
value of the incomplete Facility at the time of the Architect's Certification as
determined by a MAI appraiser acceptable to Landlord and Guarantor), and [ii]
the Maximum Guarantied Amount, in which case Developer, Tenant and Guarantor
shall be dispossessed of the Facility, all rights of Developer, Tenant and any
other party (except Landlord) hereunder shall cease and terminate and all rights
of Tenant, Manager and Guarantor under the other Lease Documents shall cease and
terminate; provided, however, in such event, Guarantor shall nonetheless have
the right (exercised by written notice to Landlord given within no more than 7
days after Landlord has given notice to Guarantor of its election of remedies
provided in this subsection) to purchase the Facility in its then current
condition for an amount equal to all Lease Advances made by Landlord. In the
event Guarantor elects to so purchase the Facility, the closing shall occur on
that date which is 30 days after Guarantor's notice of its election to purchase,
and the transfer shall be accomplished in the manner provided in Article 13 of
the Lease.
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8.3 Right of Set-Off. Landlord may, and is hereby authorized by Tenant
to, at any time and from time to time without advance notice to Tenant (any such
notice being expressly waived by Tenant), set-off and apply any and all sums
held by Landlord, any indebtedness of Landlord to Tenant, and any claims by
Tenant against Landlord, against any obligations of Tenant hereunder and against
any claims by Landlord against Tenant, whether or not such obligations or claims
of Tenant are matured and whether or not Landlord has exercised any other
remedies hereunder. The rights of Landlord under this Section are in addition to
any other rights and remedies Landlord may have against Tenant.
8.4 Performance of Tenant's or Developer's Covenants. Landlord may
perform any obligation of Tenant or Developer which Tenant or Developer has
failed to perform within 5 days after Landlord has sent a written notice to
Tenant or Developer informing it of its specific failure. Tenant or Developer
shall reimburse Landlord on demand, as Additional Rent, for any expenditures
thus incurred by Landlord and shall pay interest thereon at the Overdue Rate (as
defined in Section 8.6).
8.5 Late Payment Charge. Tenant acknowledges that any default in the
payment of any installment of Rent payable hereunder will result in loss and
additional expense to Landlord in servicing any indebtedness of Landlord secured
by the Leased Property, handling such delinquent payments, and meeting its other
financial obligations, and because such loss and additional expense is extremely
difficult and impractical to ascertain, Tenant agrees that in the event any Rent
payable to Landlord hereunder is not paid within 10 days after the due date,
Tenant shall pay a late charge of 5% of the amount of the overdue payment as a
reasonable estimate of such loss and expenses, unless applicable law requires a
lesser charge, in which event the maximum rate permitted by such law may be
charged by Landlord. The 10 day grace period set forth in this Section shall not
extend the time for payment of Rent or the period for curing any default or
constitute a waiver of such default.
8.6 Interest. In addition to the late payment charge, any payment not
made by Tenant within 10 days after the due date shall thereafter bear interest
at the rate (the "Overdue Rate") of the greater of [i] 18.5% per annum; or [ii]
2.5% per annum above the Lease Rate then in effect; provided, however, that at
no time will Tenant be required to pay interest at a rate higher than the
maximum legal rate and, provided further, that if a court of competent
jurisdiction determines that any other charges payable under this Lease are
deemed to be interest, the Overdue Rate shall be adjusted to ensure that the
aggregate interest payable under this Lease does not accrue at a rate in excess
of the maximum legal rate. Tenant shall not be required to pay interest upon any
late payment fees assessed pursuant to Section 8.5.
8.7 Litigation; Attorneys' Fees. Within 5 days after Tenant has
knowledge of any litigation or other proceeding that may be instituted against
Tenant, against the Leased Property to secure or recover possession thereof, or
that may affect the title to or the interest of Landlord in the Leased Property,
Tenant shall give written notice thereof to Landlord. Tenant shall pay all
reasonable costs and expenses incurred by Landlord in enforcing or preserving
Landlord's rights under this Lease, whether or not an Event of Default has
actually occurred or has been declared and thereafter cured, including without
limitation, [i] the fees, expenses, and costs of any litigation,
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receivership, administrative, bankruptcy, insolvency or other similar
proceeding; [ii] reasonable attorney, paralegal, consulting and witness fees and
disbursements, whether in house counsel or outside counsel; and [iii] the
expenses, including without limitation, lodging, meals, and transportation, of
Landlord and its employees, agents, attorneys, and witnesses in preparing for
litigation, administrative, bankruptcy, insolvency or other similar proceedings
and attendance at hearings, depositions, and trials in connection therewith. All
such costs, charges and fees payable by Tenant shall be deemed to be Additional
Rent under this Lease.
8.8 Escrows and Application of Payments. As security for the
performance of the Secured Obligations, Tenant and Developer hereby assign to
Landlord all their respective rights, titles, and interests in and to all monies
escrowed with Landlord under this Lease and all deposits with utility companies,
taxing authorities and insurance companies; provided, however, that Landlord
shall not exercise its rights hereunder until an Event of Default has occurred.
Any payments received by Landlord under any provisions of this Lease during the
existence or continuance of an Event of Default shall be applied to the Secured
Obligations in the order which Landlord may determine.
8.9 Remedies Cumulative. Except as otherwise provided herein, the
remedies of Landlord herein are cumulative to and not in lieu of any other
remedies available to Landlord at law or in equity, and the use of any one
remedy shall not be taken to exclude or waive the right to use any other remedy.
8.10 Limitation of Remedies During Construction Term. Should an Event
of Default occur during the Construction Term, Landlord's remedies against
Tenant, Guarantor and Developer shall be limited to [i] those remedies described
in subsections (a), (b), (c), (f), (g), (h), (k), and (l) of Section 8.2, but in
no event shall the maximum amount for which Tenant, Developer and Guarantor may
be liable exceed the Maximum Guarantied Amount and [ii] subsection (d), (i), and
(j) of Section 8.2.
ARTICLE 9: DAMAGE AND DESTRUCTION
9.1 Notice of Casualty. If the Leased Property shall be destroyed, in
whole or in part, or damaged by fire, flood, windstorm or other casualty (a
"Casualty"), Tenant shall give written notice thereof to the Landlord within one
business day after the occurrence of the Casualty. Within 15 days after the
occurrence of the Casualty or as soon thereafter as such information is
reasonably available to Tenant, Tenant shall provide the following information
to Landlord: [i] the date of the Casualty; [ii] the nature of the Casualty;
[iii] a description of the damage or destruction caused by the Casualty
including the type of Leased Property damaged and the area of the Improvements
damaged; [iv] a preliminary estimate of the cost to repair, rebuild, restore or
replace the Leased Property; [v] a preliminary estimate of the schedule to
complete the repair, rebuilding, restoration or replacement of the Leased
Property; [vi] a description of the anticipated property insurance claim
including the name of the insurer, the insurance coverage limits, the deductible
amount, the expected settlement amount, and the expected settlement date; and
[vii] a description of the business interruption claim including the name of the
insurer, the insurance coverage limits, the deductible amount, the expected
settlement amount, and the expected settlement date. Within five
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days after request from Landlord, Tenant will provide Landlord with copies of
all correspondence to the insurer and any other information reasonably requested
by Landlord.
9.2 Substantial Destruction.
9.2.1 If the Improvements are substantially destroyed at any time other
than during the final 18 months of the Initial Term or any Renewal Term, Tenant
shall promptly rebuild and restore the Leased Property in accordance with
Section 9.4 and Landlord shall make the insurance proceeds available to Tenant
for such restoration. The term "substantially destroyed" means any casualty
resulting in the loss of use of 50% or more of the licensed beds at any one
Facility.
9.2.2 If the Improvements are substantially destroyed during the final
18 months of the Initial Term or any Renewal Term, Landlord may elect to
terminate this Lease or terminate this Lease and all Phase Leases, at Landlord's
option, and retain the insurance proceeds unless Tenant exercises its option to
renew as set forth in Section 9.2.3 or exercises its option to purchase as set
forth in Section 9.2.4. If Landlord elects to terminate, Landlord shall give
notice ("Termination Notice") of its election to terminate this Lease (or this
Lease and all Phase Leases, if elected by Landlord) within 30 days after receipt
of Tenant's notice of the damage. If Tenant does not exercise its option to
renew under Section 9.2.3 or its option to purchase under Section 9.2.4 within
15 days after delivery of the Termination Notice, this Lease (or this Lease and
all Phase Leases, if elected by Landlord) shall terminate on the 15th day after
delivery of the Termination Notice. If this Lease (or this Lease and all Phase
Leases, if elected by Landlord) is so terminated, Tenant shall be liable to
Landlord for all Rent and all other obligations accrued under this Lease through
the effective date of termination and each Phase Tenant shall be liable to
Landlord for all Rent and all other obligations accrued under its respective
Phase Lease through the effective date of termination.
9.2.3 If the Improvements are substantially destroyed during the final
18 months of the Initial Term or the first or second Renewal Term and Landlord
gives the Termination Notice, Tenant shall have the option to renew this Lease.
Tenant shall give Landlord irrevocable notice of Tenant's election to renew, and
each Phase Tenant shall give irrevocable notice of renewal, within 15 days after
delivery of the Termination Notice. If Tenant and each Phase Tenant elect to
renew, the Renewal Term will be in effect for the balance of the then current
Term plus a 5 year period. The Renewal Term will commence on the third day
following Landlord's receipt of Tenant's and each Phase Tenant's notice of
renewal. All other terms of this Lease for the Renewal Term shall be in
accordance with Article 12. The Leased Property will be restored by Tenant in
accordance with the provisions of this Article 9 regarding partial destruction.
9.2.4 If the Improvements are substantially destroyed during the final
18 months of the Initial Term or any Renewal Term and Landlord gives the
Termination Notice, Tenant shall have the option to purchase the Leased
Property. Tenant shall give Landlord notice of Tenant's election to purchase,
and if required by Landlord, each Phase Tenant shall give notice of its election
to purchase its respective Phase Facility, within 15 days after delivery of the
Termination Notice. If Tenant and each Phase Tenant elect to purchase their
respective Leased Property, the Option Price will be determined in accordance
with Section 13.2 and the Fair Market Value will be determined in accordance
with Section 13.3. For purposes of determining the Fair Market Value, the Leased
Property
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will be valued as if it had been restored to be equal in value to the Leased
Property existing immediately prior to the occurrence of the damage. All other
terms of the option to purchase shall be in accordance with Article 13. Landlord
shall hold the insurance proceeds until the closing of the purchase of the
Leased Property and at closing shall deliver the proceeds to Tenant.
9.3 Partial Destruction. If the Leased Property is not substantially
destroyed, then Tenant shall comply with the provisions of Section 9.4 and
Landlord shall make the insurance proceeds available to Tenant for such
restoration.
9.4 Restoration. Tenant shall promptly repair, rebuild, or restore the
Leased Property, at Tenant's expense, so as to make the Leased Property at least
equal in value to the Leased Property existing immediately prior to such
occurrence and as nearly similar to it in character as is practicable and
reasonable. Before beginning such repairs or rebuilding, or letting any
contracts in connection with such repairs or rebuilding, Tenant will submit for
Landlord's approval, which approval Landlord will not unreasonably withhold or
delay, plans and specifications meeting the requirements of Section 16.2 for
such repairs or rebuilding. Promptly after receiving Landlord's approval of the
plans and specifications and receiving the proceeds of insurance, Tenant will
begin such repairs or rebuilding and will prosecute the repairs and rebuilding
to completion with diligence, subject, however, to strikes, lockouts, acts of
God, embargoes, governmental restrictions, and other causes beyond Tenant's
reasonable control. Landlord will make available to Tenant the net proceeds of
any fire or other casualty insurance paid to Landlord for such repair or
rebuilding as the same progresses, after deduction of any costs of collection,
including attorneys' fees. Payments will be made against properly certified
vouchers of a competent architect in charge of the work and approved by
Landlord. Prior to commencing the repairing or rebuilding, Tenant shall deliver
to Landlord for Landlord's approval a schedule setting forth the estimated
monthly draws for such work. Landlord will contribute to such payments out of
the insurance proceeds an amount equal to the proportion that the total net
amount received by Landlord from insurers bears to the total estimated cost of
the rebuilding or repairing, multiplied by the payment by Tenant on account of
such work. Landlord may, however, withhold 10% from each payment until the work
is completed and proof has been furnished to Landlord that no lien or liability
has attached or will attach to the Leased Property or to Landlord in connection
with such repairing or rebuilding. Upon the completion of rebuilding and the
furnishing of such proof, the balance of the net proceeds of such insurance
payable to Tenant on account of such repairing or rebuilding will be paid to
Tenant. Tenant will obtain and deliver to Landlord a temporary or final
certificate of occupancy before the Leased Property is reoccupied for any
purpose. Tenant shall complete such repairs or rebuilding free and clear of
mechanic's or other liens, and in accordance with the building codes and all
applicable laws, ordinances, regulations, or orders of any state, municipal, or
other public authority affecting the repairs or rebuilding, and also in
accordance with all requirements of the insurance rating organization, or
similar body. Any remaining proceeds of insurance after such restoration will be
Tenant's property.
9.5 Insufficient Proceeds. If in the case of a casualty occurring
during the Initial Term or any Renewal Term, the proceeds of any insurance
settlement are not sufficient to pay the costs of such repair, rebuilding or
restoration in full, Tenant shall deposit with Landlord at Landlord's option,
and within 10 days of Landlord's request, an amount sufficient in Landlord's
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reasonable judgment to complete such repair, rebuilding or restoration. Tenant
shall not, by reason of the deposit or payment, be entitled to any reimbursement
from Landlord or diminution in or postponement of the payment of the Rent.
9.6 Not Trust Funds. Notwithstanding anything herein or at law or
equity to the contrary, none of the insurance proceeds paid to Landlord as
herein provided shall be deemed trust funds, and Landlord shall be entitled to
dispose of such proceeds as provided in this Article 9. Tenant expressly assumes
all risk of loss, including a decrease in the use, enjoyment or value, of the
Leased Property from any casualty whatsoever, whether or not insurable or
insured against.
9.7 Landlord's Inspection. During the progress of such repairs or
rebuilding, Landlord and its architects and engineers may, from time to time,
inspect the Leased Property and will be furnished, if required by them, with
copies of all plans, shop drawings, and specifications relating to such repairs
or rebuilding. Tenant will keep all plans, shop drawings, and specifications at
the building, and Landlord and its architects and engineers may examine them at
all reasonable times. If, during such repairs or rebuilding, Landlord and its
architects and engineers determine that the repairs or rebuilding are not being
done in accordance with the approved plans and specifications, Landlord will
give prompt notice in writing to Tenant, specifying in detail the particular
deficiency, omission, or other respect in which Landlord claims such repairs or
rebuilding do not accord with the approved plans and specifications. Upon the
receipt of any such notice, Tenant will cause corrections to be made to any
deficiencies, omissions, or such other respect. Tenant's obligations to supply
insurance, according to Article 4, will be applicable to any repairs or
rebuilding under this Section.
9.8 Landlord's Costs. Tenant shall, within 30 days after receipt of an
invoice from Landlord, pay the costs, expenses, and fees of any architect or
engineer employed by Landlord to review any plans and specifications and to
supervise and approve any construction, or for any services rendered by such
architect or engineer to Landlord as contemplated by any of the provisions of
this Lease, or for any services performed by Landlord's attorneys in connection
therewith.
9.9 No Rent Abatement. Rent will not xxxxx pending the repairs or
rebuilding of the Leased Property, but shall be offset against any rental
insurance proceeds received by Landlord.
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ARTICLE 10: CONDEMNATION
10.1 Total Taking. If, by exercise of the right of eminent domain or by
conveyance made in response to the threat of the exercise of such right
("Taking"), the entire Leased Property is taken, or so much of the Leased
Property is taken that the Leased Property cannot be used by Tenant for the
purposes for which it was used immediately before the Taking, then this Lease
will end on the earlier of the vesting of title to the Leased Property in the
condemning authority or the taking of possession of the Leased Property by the
condemning authority. All damages awarded for such Taking under the power of
eminent domain shall be the property of the Landlord, whether such damages shall
be awarded as compensation for diminution in value of the leasehold or the fee
of the Leased Property. If this Lease is terminated with respect to a Facility
subject to a taking as described in this section, Landlord may, at its option,
terminate each Phase Lease.
10.1.1 If the entire Leased Property is taken during the final 18
months of the Initial Term or any Renewal Term and Landlord elects to terminate
each Phase Lease, Tenant shall have the option to purchase each Phase Facility
(but not less than all Phase Facilities). Tenant shall give Landlord notice of
Tenant's election to purchase within 15 days after delivery of the notice of
Landlord's intent to terminate. If Tenant elects to purchase each Phase
Facility, the Option Price will be determined in accordance with Section 13.2
and the Fair Market Value will be determined in accordance with Section 13.3.
All other terms of the option to purchase shall be in accordance with Article
13.
10.2 Partial Taking. If, after a Taking, so much of the Leased Property
remains that the Leased Property can be used for substantially the same purposes
for which it was used immediately before the Taking, then [i] this Lease will
end as to the part taken on the earlier of the vesting of title to the Leased
Property in the condemning authority or the taking of possession of the Leased
Property by the condemning authority; [ii] at its cost, Tenant shall restore so
much of the Leased Property as remains to a sound architectural unit
substantially suitable for the purposes for which it was used immediately before
the Taking, using good workmanship and new, first-class materials; [iii] upon
completion of the restoration, Landlord will pay Tenant the lesser of the net
award made to Landlord on the account of the Taking (after deducting from the
total award, attorneys', appraisers', and other fees and costs incurred in
connection with the obtaining of the award and amounts paid to the holders of
mortgages secured by the Leased Property), or Tenant's actual out-of-pocket
costs of restoring the Leased Property; and [iv] Landlord shall be entitled to
the balance of the net award. The restoration shall be completed in accordance
with Sections 9.4, 9.5, 9.7, 9.8 and 9.9 with such provisions deemed to
apply to condemnation instead of casualty.
10.3 Condemnation Proceeds Not Trust Funds. Notwithstanding anything in
this Lease or at law or equity to the contrary, none of the condemnation award
paid to Landlord shall be deemed trust funds, and Landlord shall be entitled to
dispose of such proceeds as provided in this Article 10. Tenant expressly
assumes all risk of loss, including a decrease in the use, enjoyment, or value,
of the Leased Property from any Condemnation.
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ARTICLE 11: TENANT'S PROPERTY
11.1 Tenant's Property. Tenant shall install, place, and use on the
Leased Property such fixtures, furniture, equipment, inventory and other
personal property in addition to the Personal Property as may be required or as
Tenant may, from time to time, deem necessary or useful to operate the Leased
Property for its permitted purposes. All fixtures, furniture, equipment,
inventory, and other personal property installed, placed, or used on the Leased
Property which is owned by Tenant or leased by Tenant from third parties is
hereinafter referred to as "Tenant's Property". Those items of Tenant's Property
that are acquired as part of the initial equipping of the Facility shall be
called the "Start-Up Property".
11.2 Requirements for Tenant's Property. Tenant shall comply with all
of the following requirements in connection with Tenant's Property:
(a) Tenant shall, at Tenant's sole cost and expense,
maintain, repair, and replace Tenant's Property.
(b) Tenant shall, at Tenant's sole cost and expense, keep
Tenant's Property insured against loss or damage by fire, vandalism and
malicious mischief, sprinkler leakage, earthquake (if Leased Property is in
earthquake zone 1 or 2), and other physical loss perils commonly covered by fire
and extended coverage, boiler and machinery, and difference in conditions
insurance in an amount not less than 90% of the then full replacement cost
thereof. Tenant shall use the proceeds from any such policy for the repair and
replacement of Tenant's Property. The insurance shall meet the requirements of
Section 4.3.
(c) Tenant shall pay all taxes applicable to Tenant's
Property.
(d) If Tenant's Property is damaged or destroyed by fire or
any other cause, Tenant shall promptly repair or replace Tenant's Property
unless Landlord elects to terminate this Lease pursuant to Section 9.2.2.
(e) Unless an Event of Default or any event which, with the
giving of notice or lapse of time, or both, would constitute an Event of Default
has occurred, Tenant may remove Tenant's Property from the Leased Property from
time to time provided that [i] the items removed are not required to operate the
Leased Property for the Facility Uses (unless such items are being replaced by
Tenant); and [ii] Tenant repairs any damage to the Leased Property resulting
from the removal of Tenant's Property.
(f) Tenant shall not, without the prior written consent of
Landlord or as otherwise provided in this Lease, remove any Tenant's Property or
Leased Property. Tenant shall, at Landlord's option, remove Tenant's Property
upon the termination or expiration of this Lease and shall repair any damage to
the Leased Property resulting from the removal of Tenant's Property. If Tenant
fails to remove Tenant's Property within 30 days after request by Landlord, then
Tenant shall be deemed to have abandoned Tenant's Property, Tenant's Property
shall become the property of Landlord, and Landlord may remove, store and
dispose of Tenant's Property. In
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such event, Tenant shall have no claim or right against Landlord for such
property or the value thereof regardless of the disposition thereof by Landlord.
Tenant shall pay Landlord, upon demand, all expenses incurred by Landlord in
removing, storing, and disposing of Tenant's Property and repairing any damage
caused by such removal. Tenant's obligations hereunder shall survive the
termination or expiration of this Lease.
(g) Tenant shall perform its obligations under any equipment
lease or security agreement for Tenant's Property. For equipment loans or leases
for equipment having an original cost in excess of $75,000.00, and for equipment
constituting any part of the Start-Up Property, Tenant shall cause such
equipment lessor or lender to enter into a nondisturbance agreement with
Landlord upon terms and conditions acceptable to Landlord, including without
limitation, the following: [i] Landlord shall have the right (but not the
obligation) to assume such equipment lease or security agreement upon the
occurrence of an Event of Default by Tenant hereunder; [ii] such equipment
lessor or lender shall notify Landlord of any default by Tenant under the
equipment lease or security agreement and give Landlord a reasonable opportunity
to cure such default; and [iii] Landlord shall have the right to assign its
interest in the equipment lease or security agreement and nondisturbance
agreement. Tenant shall, within 30 days after receipt of an invoice from
Landlord, reimburse Landlord for all costs and expenses incurred in reviewing
and approving the equipment lease, security agreement and nondisturbance
agreement, including without limitation, reasonable attorneys' fees and costs.
ARTICLE 12: RENEWAL OPTIONS
12.1 Renewal Options. Tenant has the option to renew ("Renewal Option")
this Lease for three 5-year renewal terms (each a "Renewal Term"). Tenant can
exercise the Renewal Option only upon satisfaction of the following conditions:
(a) There shall be no uncured Event of Default, or any event
which with the passage of time or giving of notice would constitute an Event of
Default, at the time Tenant exercises its Renewal Option nor on the date the
Renewal Term is to commence.
(b) Tenant shall give Landlord irrevocable written notice of
renewal no later than the date which is [i] 90 days prior to the expiration date
of the then current Term; or [ii] 15 days after Landlord's delivery of the
Termination Notice as set forth in Section 9.2.3.
(c) Each Phase Tenant shall concurrently give irrevocable
notice of renewal for each Affiliate Lease.
(d) Guarantor shall have closed the Guarantor Option.
12.2 Effect of Renewal. The following terms and conditions will be
applicable if Tenant renews the Lease:
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(a) Effective Date. Except as otherwise provided in Section
9.2.3, the effective date of any Renewal Term will be the first day after the
expiration date of the then current Term. The first day of each Renewal Term is
also referred to as the Renewal Date.
(b) Lease Amount. Effective as of the Renewal Date, a single
Lease Amount will be computed by summing all Lease Advance Amounts (including
the Acquisition Amount).
(c) Lease Rate. Effective as of the Renewal Date, a single
Lease Rate will be computed equal to the Renewal Rate. The Renewal Rate for each
Renewal Term shall be the greater of [i] the sum of [a] the Lease Rate in effect
during the then current Lease Year plus [b] the Increaser Rate, or [ii] the fair
market rental lease rate for the Facility as determined according to the
provisions of this section. Landlord and Tenant shall attempt to determine the
fair market rental lease rate for the Facility by mutual agreement 180 days
prior to the expiration date for the then current Term. If the parties do not
agree on such lease rate within a 15 day period, appraisers shall be chosen as
provided in Section 13.3.2 to determine the fair market rental lease rate. The
appraisers shall be instructed to appraise the fair market value lease rate as a
financing lease rate for a health care facility of the same type as the Facility
and shall take into account the lease rate then being charged by Landlord to
tenants of comparable creditworthiness for comparable facilities. The appraised
rates submitted by the three appraisers shall be ranked from highest to lowest,
the rate (highest or lowest) which is furthest from the middle rate shall be
discarded, and the remaining two appraised rates shall be averaged to arrive at
the fair market rental lease rate.
(d) Base Rent. Effective as of the Renewal Date, the Base Rent
will be changed to equal 1/12th of the product of [i] the Lease Amount on the
Renewal Date times [ii] the new Lease Rate equal to the Renewal Rate.
(e) Other Terms and Conditions. Except for the modifications
set forth in this Section 12.2, all other terms and conditions of the Lease will
remain the same for the Renewal Term. The Lease Rate and Base Rent will increase
annually as set forth in Section 2.5.
12.3 Effect of Non-Renewal or Expiration of Lease. The following
terms and conditions will be applicable if Tenant does not renew this Lease or
exercise its Option to Purchase by the expiration date for the then current
Term:
(a) Extension of Current Term. The current Term will be
extended (the "Extended Term") for 120 days; provided, however, that the
Extended Term will expire on such earlier date of the closing of the sale
pursuant to the Option to Purchase.
(b) Lease Payments. During the Extended Term, Tenant shall
continue to make monthly payments of Rent (including Base Rent) based upon the
then existing Lease Rate.
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ARTICLE 13: OPTION TO PURCHASE
13.1 Option to Purchase. Landlord hereby grants to Tenant an option
to purchase ("Option to Purchase") all of the Leased Property (but not any part
thereof) in accordance with the terms and conditions of this Article 13. Tenant
may exercise its Option to Purchase only by giving an irrevocable notice of
Tenant's election to purchase the Leased Property ("Purchase Notice") in
accordance with the following:
(a) During the Initial Term or any Renewal Term, Tenant and
each Phase Tenant must give a Purchase Notice no earlier than the date which is
180 days, and no later than the date which is 90 days, prior to the expiration
date of the then current Term of this Lease and each Phase Lease.
(b) If the Improvements are substantially destroyed during the
final 18 months of the Initial Term or any Renewal Term, Tenant (and each Phase
Tenant if required by Landlord) must give a Purchase Notice within 15 days after
Landlord gives the Termination Notice pursuant to Section 9.2.4.
Tenant shall have no right to exercise the Option to Purchase other than in
accordance with subparagraph [a] or [b].
13.2 Option Price. The option price ("Option Price") will be an
amount equal to the greater of [i] the Lease Amount; or [ii] the Fair Market
Value. In addition to the Option Price, Tenant shall pay all closing costs and
expenses in connection with the transfer of the Leased Property to Tenant
including but not limited to the following: [a] real property conveyance or
transfer fees or deed stamps; [b] title search fees, title insurance commitment
fees, and title insurance premiums; [c] survey fees; [d] environmental
assessment fees; [e] recording fees; [f] attorneys' fees of Landlord's counsel;
[g] fees of any escrow agent; and [h] all amounts, costs, expenses, charges,
Additional Rent and other items payable by Tenant to Landlord including but not
limited to enforcement costs as set forth in Section 8.7.
13.3 Fair Market Value. The fair market value (the "Fair Market
Value") of the Leased Property shall be determined as follows.
13.3.1 The parties shall attempt to determine the Fair Market Value
by mutual agreement within 15 days after giving the Purchase Notice. However, if
the parties do not agree on the Fair Market Value within such 15 day period, the
following provisions shall apply.
13.3.2 Landlord and Tenant shall each give the other party notice of
the name of an acceptable appraiser 15 days after giving of the Purchase Notice.
The two appraisers will then select a third appraiser within an additional 5
days. Each appraiser must demonstrate to the reasonable satisfaction of both
Landlord and Tenant that it has significant experience in appraising properties
similar to the Leased Property. Within 5 days after designation, each appraiser
shall submit a resume to Landlord and Tenant setting forth such appraiser's
qualifications including education and experience with similar properties. A
notice of objections to the qualifications of any
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appraiser shall be given within 10 days after receipt of such resume. If a party
fails to timely object to the qualifications of an appraiser, then the appraiser
shall be conclusively deemed satisfactory. If a party gives a timely notice of
objection to the qualifications of an appraiser, then the disqualified appraiser
shall be replaced by an appraiser selected by the qualified appraisers or, if
all appraisers are disqualified, then by an appraiser selected by a commercial
arbitrator acceptable to Landlord and Tenant.
13.3.3 The Fair Market Value shall be determined by the appraisers
within 45 days after the selection of the appraisers as follows. Each of the
appraisers shall be instructed to prepare an appraisal of the Leased Property in
accordance with the following instructions:
The Leased Property is to be valued upon the three conventional
approaches to estimate value known as the Income, Sales Comparison
and Cost Approaches. Once the approaches are completed, the
appraiser correlates the individual approaches into a final value
conclusion.
The three approaches to estimate value are summarized as follows:
INCOME APPROACH: This valuation approach recognizes that the value
of the operating tangible and intangible asset can be represented by
the expected economic viability of the business giving returns on
and of the assets.
SALES COMPARISON APPROACH: This valuation approach is based upon the
principle of substitution. When a facility is replaceable in the
market, the market approach assumes that value tends to be set at
the price of acquiring an equally desirable substitute facility.
Since healthcare market conditions change and frequently are subject
to regulatory and financing environments, adjustments need to be
considered. These adjustments also consider the operating
differences such as services and demographics.
COST APPROACH: This valuation approach estimates the value of
the tangible assets only. Value is represented by the market
value of the land plus the depreciated reproduction cost of all
improvements and equipment.
In general, the Income and Sales Comparison Approaches are considered the best
representation of value because they cover both tangibles and intangible assets,
consider the operating characteristics of the business and have the most
significant influence on attracting potential investors.
The appraised values submitted by the three appraisers shall be ranked from
highest value to middle value to lowest value, the appraised value (highest or
lowest) which is furthest from the middle
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appraised value shall be discarded, and the remaining two appraised values shall
be averaged to arrive at the Fair Market Value.
13.3.4 In the event of any condemnation, similar taking or threat
thereof with respect to any part of the Leased Property or any insured or
partially insured casualty loss to any part of the Leased Property after Tenant
has exercised an Option to Purchase, but before settlement, the Fair Market
Value of the Leased Property shall be redetermined as provided in this
Section 13.3 to give effect to such condemnation, taking or loss.
13.3.5 Tenant shall pay, or reimburse Landlord for, all costs and
expenses in connection with the appraisals.
13.4 Closing. The purchase of the Leased Property by Tenant shall
close on a date agreed to by Landlord and Tenant which shall be not less than 60
days after Landlord's receipt of the Purchase Notice and not more than 75 days
after the Fair Market Value of the Leased Property has been determined. At the
closing, Tenant shall pay the Option Price and all closing costs in immediately
available funds and Landlord shall convey title to the Leased Property to Tenant
by a transferable and recordable special warranty deed and special warranty xxxx
of sale.
13.5 Failure to Close Option. If Tenant for any reason fails to
purchase the Leased Property after Tenant has given the Purchase Notice, then
Tenant shall pay Landlord all costs and expenses incurred by Landlord as a
result of the failure to close including costs of unwinding swap transactions or
other interest rate protection devices and preparing for the closing. Tenant
shall continue to be obligated as lessee hereunder for the remainder of the Term
(including the Extended Term as set forth in Section 12.3).
13.6 Failure to Exercise Option to Purchase and Renewal Option. If
Tenant for any reason does not exercise its Option to Purchase or Renewal Option
in accordance with the terms and conditions of this Lease before the expiration
of the then current Term, Tenant shall be deemed to have forfeited its
contribution and all proprietary and ownership interest in the Leased Property.
ARTICLE 14: NEGATIVE COVENANTS
Until the Secured Obligations shall have been performed in full,
Tenant and Guarantor covenant and agree that Tenant (and Guarantor where
applicable) shall not do any of the following without the prior written consent
of Landlord:
14.1 No Debt. Tenant shall not create, incur, assume, or permit to
exist any indebtedness other than [i] trade debt incurred in the ordinary course
of Tenant's business; [ii] indebtedness relating to the Letter of Credit; [iii]
indebtedness that is secured by any Permitted Lien; [iv] indebtedness to
Guarantor pursuant to the Working Capital Documents; and [v] indebtedness to
Landlord pursuant to the Equity Loan Documents.
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14.2 No Liens. Tenant shall not create, incur, or permit to exist
any lien, charge, encumbrance, easement or restriction upon the Leased Property
or any lien upon or pledge of any interest in Tenant, except for Permitted Liens
and liens granted pursuant to the Working Capital Documents and the Equity Loan
Documents.
14.3 No Guaranties. Tenant shall not create, incur, assume, or
permit to exist any guarantee of any loan or other indebtedness except for the
endorsement of negotiable instruments for collection in the ordinary course of
business.
14.4 No Transfer. Except pursuant to the Guarantor Option, Tenant
shall not sell, lease, sublease, mortgage, convey, assign or otherwise transfer
any legal or equitable interest in the Leased Property or any part thereof,
except for transfers made in connection with any Permitted Lien without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld.
14.5 No Dissolution. Except pursuant to the Guarantor Option,
Tenant, Manager or Guarantor shall not dissolve, liquidate, merge, consolidate
or terminate its existence or sell, assign, lease, or otherwise transfer
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired). Notwithstanding the
foregoing, Guarantor may merge with another entity provided that [i] Guarantor
is the surviving corporation; and [ii] following the merger, Guarantor can
satisfy all of the obligations of Guarantor under the Lease Documents, including
but not limited to the financial covenants in Section 15.7.
14.6 No Change in Management or Operation. No material change shall
occur in the management of Tenant or Manager or in the management or licensed
operation of the Facility. Balanced Care at Loyalsock, Inc. shall remain the
Manager of the Facility, and Balanced Care at Loyalsock, Inc. shall remain the
licensed operator of the Facility. Guarantor shall not make a change in its
President, Chief Operating Officer, or Chief Development Officer without giving
Landlord prior written notice (or in the case of death, written notice within a
reasonable time thereafter).
14.7 No Investments. Tenant shall not purchase or otherwise acquire,
hold, or invest in securities (whether capital stock or instruments evidencing
indebtedness) of or make loans or advances to any person, including, without
limitation, any Guarantor, any Guarantor Affiliate, any Affiliate, or any
shareholder, member or partner of Tenant, Guarantor, any Guarantor Affiliate, or
any Affiliate, except for cash balances temporarily invested in short-term or
money market securities.
14.8 Contracts. Tenant shall not execute or modify any material
contracts or agreements with respect to the Facility except for contracts and
modifications approved by Landlord. Contracts made in the ordinary course of
business and in an amount less than $250,000.00 shall not be considered
"material" for purposes of this paragraph.
14.9 Subordination of Payments to Affiliates. After the occurrence
of an Event of Default and until such Event of Default is cured, Tenant and
Guarantor shall not make any
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payments or distributions (including, without limitation, fees, principal,
interest, dividends, liquidating distributions, management fees, cash flow
distributions or lease payments) to Guarantor, Manager, any Affiliate, or any
shareholder, member or partner of Tenant, Guarantor, Manager, or any Affiliate.
Notwithstanding the foregoing, Guarantor shall be permitted to pay dividends to
shareholders and regularly scheduled salary and bonus payments (but no
extraordinary salary, bonuses, or other compensation).
14.10 Change of Location or Name. Tenant shall not change any of the
following: [i] the location of the principal place of business or chief
executive office of Tenant, or any office where any of Tenant's books and
records are maintained; or [ii] the name under which Tenant conducts any of its
business or operations.
ARTICLE 15: AFFIRMATIVE COVENANTS
15.1 Perform Obligations. Tenant shall perform or cause to be
performed all of its obligations under this Lease, the Government
Authorizations, the Permitted Exceptions, and all Legal Requirements.
15.2 Proceedings to Enjoin or Prevent Construction. If any
proceedings are filed seeking to enjoin or otherwise prevent or declare invalid
or unlawful Tenant's construction, occupancy, maintenance, or operation of the
Facility or any portion thereof, Tenant will cause such proceedings to be
vigorously contested in good faith, and in the event of an adverse ruling or
decision, prosecute all allowable appeals therefrom, and will, without limiting
the generality of the foregoing, resist the entry or seek the stay of any
temporary or permanent injunction that may be entered, and use all reasonable
commercial efforts to bring about a favorable and speedy disposition of all such
proceedings and any other proceedings.
15.3 Documents and Information.
15.3.1 Furnish Documents. Tenant shall periodically during the term
of the Lease deliver to Landlord the Annual Financial Statements, Periodic
Financial Statements and other documents described on Exhibit C within the
specified time periods. With each delivery of Annual Financial Statements and
Periodic Financial Statements (other than the monthly Facility Financial
Statement) to Landlord, Tenant shall also deliver to Landlord a certificate
signed by the Chief Financial Officer, general partner or managing member (as
applicable) of Tenant, an Annual Facility Financial Report or Quarterly Facility
Financial Report, as applicable, and a Quarterly Facility Accounts Receivable
Aging Report all in the form of Exhibit D. In addition, Tenant shall deliver to
Landlord the Annual Facility Financial Report and a Quarterly Facility Accounts
Receivable Aging Report (based upon internal financial statements) within 60
days after the end of each fiscal year.
15.3.2 Furnish Information. Tenant shall [i] promptly supply
Landlord with such information concerning its financial condition, affairs and
property, as Landlord may reasonably request from time to time hereafter,
including reporting formats used by Landlord and electronic filing and transfer;
[ii] promptly notify Landlord in writing of any condition or event that
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constitutes a breach or event of default of any term, condition, warranty,
representation, or provisions of this Agreement or any other agreement, and of
any material adverse change in its financial condition; [iii] maintain a
standard and modern system of accounting; [iv] permit Landlord or any of its
agent or representatives to have access to and to examine all of its books and
records regarding the financial condition of the Facility at any time or times
hereafter during business hours and after reasonable oral or written notice; and
[v] permit Landlord to copy and make abstracts from any and all of said books
and records.
15.3.3 Further Assurances and Information. Tenant shall, on request
of Landlord from time to time, execute, deliver, and furnish documents as may be
necessary to fully consummate the transactions contemplated under this
Agreement. Within 15 days after a request from Landlord, Tenant shall provide to
Landlord such additional information regarding Tenant, Tenant's financial
condition or the Facility as Landlord, or any existing or proposed creditor of
Landlord, or any auditor or underwriter of Landlord, may require from time to
time, including, without limitation, a current Tenant's Certificate and Facility
Financial Report in the form of Exhibit D. Upon Landlord's request, but not more
than once every three years, Tenant shall provide to Landlord, at Tenant's
expense, an appraisal prepared by an MAI appraiser setting forth the current
fair market value of the Leased Property.
15.3.4 Material Communications. Tenant shall transmit to Landlord,
within 5 business days after receipt thereof, any material communication
affecting a Facility, this Lease, the Legal Requirements or the Government
Authorizations, and Tenant will promptly respond to Landlord's inquiry with
respect to such information. Tenant shall promptly notify Landlord in writing
after Tenant has knowledge of any potential, threatened or existing litigation
or proceeding against, or investigation of, Tenant, Guarantor, or the Facility
that may affect the right to operate the Facility or Landlord's title to the
Facility or Tenant's interest therein.
15.3.5 Requirements for Financial Statements. Tenant shall meet the
following requirements in connection with the preparation of the financial
statements: [i] all audited financial statements shall be prepared in accordance
with general accepted accounting principles consistently applied; [ii] all
unaudited financial statements shall be prepared in a manner substantially
consistent with prior audited and unaudited financial statements submitted to
Landlord; [iii] all financial statements shall fairly present the financial
condition and performance for the relevant period in all material respects; [iv]
the financial statements shall include all notes to the financial statements and
a complete schedule of contingent liabilities and transactions with Affiliates
or Guarantor Affiliates, as applicable; and [v] the audited financial statements
shall contain an unqualified opinion.
15.4 Compliance With Laws. Tenant shall comply with all Legal
Requirements and keep all Government Authorizations in full force and effect.
Tenant shall pay when due all taxes and governmental charges of every kind and
nature that are assessed or imposed upon Tenant at any time during the term of
the Lease, including, without limitation, all income, franchise, capital stock,
property, sales and use, business, intangible, employee withholding, and all
taxes and charges relating to Tenant's business and operations. Tenant shall be
solely responsible for compliance with all Legal Requirements, including the
ADA, and Landlord shall have no responsibility for such compliance.
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15.5 Broker's Commission. Tenant shall indemnify Landlord from
claims of brokers arising by the execution hereof or the consummation of the
transactions contemplated hereby and from expenses incurred by Landlord in
connection with any such claims (including attorneys' fees).
15.6 Existence and Change in Ownership. Tenant, Manager and
Guarantor shall maintain its existence throughout the term of this Agreement.
Except pursuant to the Guarantor Option, any change in the ownership of Tenant
or Manager, directly or indirectly, shall require Landlord's prior written
consent. Landlord's consent to a change in ownership of Tenant shall not be
unreasonably withheld.
15.7 Financial Covenants. The defined terms used in this section are
defined in Section 15.7.1. The method of calculating Net Worth and valuing
assets shall be consistent with the Financial Statements. The following
financial covenants shall be met throughout the term of this Lease:
15.7.1 Definitions.
(a) "Cash Flow" means the net income of Tenant as reflected on
the income statement of Tenant plus [i] the amount of the provision for
depreciation and amortization; plus [ii] the amount of the provision for
management fees; plus [iii] the amount of the provision for income taxes; plus
[iv] the amount of the provision for Rent payments and interest and lease
payments, if any; minus [v] an imputed management fee equal to 5% of revenues
(net of contractual allowances); and minus [vi] an imputed replacement reserve
of $250.00 per licensed bed at the Facility, per year.
(b) "Coverage Ratio" is the ratio of [i] Cash Flow for each
applicable period; to [ii] the Rent payments due pursuant to this Lease and all
other debt service and lease payments relating to the Leased Property for the
applicable period.
(c) "Net Worth" means an amount equal to the total
consolidated fair market value of the tangible assets of the person (excluding
good will and other intangible assets) minus the total consolidated liabilities
of such person.
15.7.2 Coverage Ratio. Tenant shall maintain a Coverage Ratio with
respect to the Facility of not less than 1.25 to 1.00, measured on a monthly
basis commencing on the date of the projected stabilized occupancy as set forth
in the Pro Forma Statement.
15.7.3 Net Worth. Guarantor shall maintain for each fiscal quarter a
Net Worth of at least $55,000,000.00 with cash and cash equivalents of at least
$5,000,000.00.
15.7.4 Current Ratio. Guarantor shall maintain for each fiscal
quarter a ratio of current assets to current liabilities of not less than 1.25
to 1.00.
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15.7.5 Debt to Equity Ratio. Guarantor shall maintain for each
fiscal quarter a ratio of total indebtedness to shareholders' equity of not more
than 2.50 to 1.00. The aggregate lease amount under all capitalized and
operating leases shall be included as indebtedness and all subordinated debt
shall be included as equity.
15.8 Transfer of License. If this Lease is terminated due to
expiration of the Term, pursuant to an Event of Default or for any reason other
than Tenant's purchase of the Leased Property, or if Tenant vacates the Leased
Property without termination of this Lease, Tenant shall execute, deliver and
file all documents and statements requested by Landlord to effect the transfer
of the Facility license and Government Authorizations to an entity designated by
Landlord, subject to any required approval of governmental regulatory
authorities, and Tenant shall provide to Landlord all information and records
required by Landlord in connection with the transfer of the license and
Government Authorizations.
15.9 Post-Closing Obligations. On or before December 15, 1998, the
open water well located on the Land shall be closed in accordance with
applicable standards. Landlord shall be provided with such documentation that
Landlord reasonably requires to evidence satisfaction of this obligation.
ARTICLE 16: ALTERATIONS, CAPITAL IMPROVEMENTS, AND SIGNS
16.1 Prohibition on Alterations and Improvements. Except for
Permitted Alterations (as hereinafter defined), Tenant shall not make any
structural or nonstructural changes, alterations, additions and/or improvements
(hereinafter collectively referred to as "Alterations") to the Leased Property.
16.2 Approval of Alterations. If Tenant desires to perform any Permitted
Alterations, Tenant shall deliver to Landlord plans, specifications, drawings,
and such other information as may be reasonably requested by Landlord
(collectively the "Plans and Specifications") showing in reasonable detail the
scope and nature of the Alterations that Tenant desires to perform. It is the
intent of the parties hereto that the level of detail shall be comparable to
that which is referred to in the architectural profession as "design development
drawings" as opposed to working or biddable drawings. Landlord agrees not to
unreasonably delay its review of the Plans and Specifications. Within 30 days
after receipt of an invoice, Tenant shall reimburse Landlord for all costs and
expenses incurred by Landlord in reviewing and, if required, approving or
disapproving the Plans and Specifications, inspecting the Leased Property, and
otherwise monitoring compliance with the terms of this Article 16. Tenant shall
comply with the requirements of Section 16.4 in making any Permitted
Alterations.
16.3 Permitted Alterations. Permitted Alterations means any one of
the following: [i] Alterations approved by Landlord; [ii] Alterations required
under Section 7.2; [iii] Alterations having a total cost of less than
$250,000.00; or [iv] repairs, rebuilding and restoration required or undertaken
pursuant to Section 9.4.
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16.4 Requirements for Permitted Alterations. Tenant shall comply
with all of the following requirements in connection with any Permitted
Alterations:
(a) The Permitted Alterations shall be made in accordance with
the Plans and Specifications approved by Landlord, if applicable.
(b) The Permitted Alterations and the installation thereof
shall comply with all applicable legal requirements and insurance requirements.
(c) The Permitted Alterations shall be done in a good and
workmanlike manner, shall not impair the value or the structural integrity of
the Leased Property, and shall be free and clear of all mechanic's liens.
(d) For any Permitted Alterations having a total cost of
$250,000.00 or more, Tenant shall deliver to Landlord a payment and performance
bond, with a surety acceptable to Landlord, in an amount equal to the estimated
cost of the Permitted Alterations, guaranteeing the completion of the work free
and clear of liens and in accordance with the approved Plans and Specifications,
and naming Landlord and any mortgagee of Landlord as joint obligees on such
bond.
(e) Tenant shall, at Tenant's expense, obtain a builder's
completed value risk policy of insurance insuring against all risks of physical
loss, including collapse and transit coverage, in a nonreporting form, covering
the total value of the work performed, and equipment, supplies, and materials,
and insuring initial occupancy. Landlord and any mortgagee of Landlord shall be
additional insureds of such policy. Landlord shall have the right to approve the
form and substance of such policy.
(f) Tenant shall pay the premiums required to increase the
amount of the insurance coverages required by Article 4 to reflect the increased
value of the Improvements resulting from installation of the Permitted
Alterations, and shall deliver to Landlord a certificate evidencing the increase
in coverage.
(g) Tenant shall, not later than 60 days after completion of
the Permitted Alterations, deliver to Landlord a revised "as-built" survey of
the Leased Property if the Permitted Alterations altered the Land or "footprint"
of the Improvements and an "as-built" set of Plans and Specifications for the
Permitted Alterations in form and substance satisfactory to Landlord.
(h) Tenant shall, not later than 30 days after Landlord sends
an invoice, reimburse Landlord for any reasonable costs and expenses, including
attorneys' fees and architects' and engineers' fees, incurred in connection with
reviewing and approving the Permitted Alterations and ensuring Tenant's
compliance with the requirements of this Section. The daily fee for Landlord's
consulting engineer is $750.00.
16.5 Ownership and Removal of Permitted Alterations. The Permitted
Alterations shall become a part of the Leased Property, owned by Landlord, and
leased to Tenant
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subject to the terms and conditions of this Lease. Tenant shall not be required
or permitted to remove any Permitted Alterations.
16.6 Signs. Tenant may, at its own expense, erect and maintain
identification signs at the Leased Property, provided such signs comply with all
laws, ordinances, and regulations. Upon the termination or expiration of this
Lease, Tenant shall, within 30 days after notice from Landlord, remove the signs
and restore the Leased Property to its original condition.
ARTICLE 17: EARNOUT LEASE ADVANCE
17.1 Earnout Lease Advance. Prior to the fourth anniversary of the
Effective Date, Landlord shall, at Guarantor's request, make a Lease Advance to
Tenant in an amount not to exceed ten percent (10%) of the Maximum Lease Amount
("Earnout Lease Advance") upon satisfaction of the Earnout Conditions (defined
below).
17.2 Conditions to Earnout Lease Advance. Landlord's obligation to
make a Lease Advance pursuant to Section 17.1 is subject to the following
conditions ("Earnout Conditions"): [i] the Facility achieves an Adjusted
Coverage Ratio (defined below) of 1.40 to 1.00 for four consecutive quarters
based on audited financial statements; [ii] the Lease Amount including the
Earnout Lease Advance is less than 90% of the appraised value of the Leased
Property; [iii] no Event of Default shall have occurred under any agreements
between Tenant, any Affiliate, Developer, Manager, Guarantor, or any Guarantor
Affiliate with Landlord or any Landlord Affiliate; [iv] no material adverse
change shall have occurred in the condition of Guarantor, the local market or
the assisted living industry; [v] Guarantor has exercised the Guarantor Option
in connection with the Lease and all Affiliate Leases; and [vi] to the extent
available from the title company insuring Landlord's title to the Leased
Property, Guarantor has provided, at Guarantor's expense, an endorsement to the
Title Policy increasing the amount of the coverage by the amount of the Earnout
Lease Advance. "Adjusted Coverage Ratio" means the ratio of [i] Cash Flow for
each applicable period; to [ii] rent payments due pursuant to this Lease
(assuming that the Earnout Lease Advance was made using a Blended Lease Rate
(defined below) and all other debt service and lease payments relating to the
Leased Property for the applicable period. The "Blended Lease Rate" shall mean
the rate determined by calculating the weighted average of [i] the existing
Lease Rate and [ii] the Lease Rate estimated by Landlord to be in effect at the
time that the Earnout Lease Advance is funded based upon Landlord's reasonable
estimate of the yield on comparative term United States Treasury Notes for the
remaining years left in Term at the time that funding of the Earnout Lease
Advance is anticipated.
17.3 Use of Earnout Lease Advance. If Guarantor has not previously
closed the Guarantor Option, the Earnout Lease Advance may be used only to pay
the Purchase Price or Asset Purchase Price as defined in the Guarantor Option
Agreement.
ARTICLE 18: ASSIGNMENT AND SALE OF LEASED PROPERTY
18.1 Prohibition on Assignment and Subletting. Tenant acknowledges
that Landlord has entered into this Lease in reliance on the personal services
and business expertise of
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Tenant and Guarantor. Except as provided in Section 18.1(a) below and except for
a leasehold mortgage lien granted by Tenant in favor of Guarantor pursuant to
the Working Capital Documents, Tenant may not assign, sublet, mortgage,
hypothecate, pledge, or transfer any interest in this Lease, or in the Leased
Property, in whole or in part, without the prior written consent of Landlord,
which Landlord may withhold in its sole and absolute discretion. The following
transactions will be deemed an assignment or sublease requiring Landlord's prior
written consent: [i] an assignment by operation of law; [ii] an imposition
(whether or not consensual) of a lien, mortgage, or encumbrance upon Tenant's
interest in the Lease; [iii] an arrangement (including but not limited to,
management agreements, concessions, licenses, and easements) which allows the
use or occupancy of all or part of the Leased Property by anyone other than
Tenant; and [iv] a change of ownership of Tenant (other than as provided in
Section 18.1(a) below). An assignment or sublease without the prior written
consent of Landlord will be void at the Landlord's option. Landlord's consent to
one assignment or sublease will not waive the requirement of its consent to any
subsequent assignment or sublease.
(a) Notwithstanding the foregoing Section 18.1, upon
Guarantor's exercise of the Guarantor Option, Guarantor or a wholly-owned
subsidiary of Guarantor may purchase the equity or assets of Tenant and succeed
to the interest of Tenant under the Lease Documents without the prior written
consent of Landlord provided that the following conditions are satisfied:
[i] Guarantor has concurrently exercised the Guarantor
Option in connection with the equity or assets of all Phase Tenants and is
obligated to close the Guarantor Option for Tenant and all Phase Tenants within
12 months after giving notice pursuant to the Guarantor Option Agreement of its
exercise of the Guarantor Option.
[ii] If a wholly-owned subsidiary of Guarantor succeeds
to the interest of Tenant, Guarantor shall guaranty the obligations of such
subsidiary under the Lease Documents in form and substance reasonably
satisfactory to Landlord, and Tenant shall be released from all liability under
the Lease Documents.
[iii] If the assignee has acquired the equity or assets
of Tenant without payment of the Purchase Price or Asset Purchase Price (as
defined in the Guarantor Option Agreement), such assignee shall pay the Equity
Loan in full on the effective date of the acquisition.
[iv] All conditions of this Article 18 are satisfied.
18.2 Requests for Landlord's Consent to Assignment, Sublease or
Management Agreement. If Tenant is required to obtain Landlord's consent to a
specific assignment, sublease, or management agreement, Tenant shall give
Landlord [i] the name and address of the proposed assignee, subtenant or
manager; [ii] a copy of the proposed assignment, sublease or management
agreement; [iii] reasonably satisfactory information about the nature, business
and business history of the proposed assignee, subtenant, or manager and its
proposed use of the Leased Property; and [iv] banking, financial, and other
credit information, and references about the proposed assignee,
57
subtenant or manager sufficient to enable Landlord to determine the financial
responsibility and character of the proposed assignee, subtenant or manager.
18.3 Agreements with Residents. Notwithstanding Section 18.1, Tenant
may enter into an occupancy agreement with residents of the Leased Property
without the prior written consent of Landlord provided that [i] the agreement
does not provide for lifecare services; [ii] Tenant may not collect rent for
more than one month in advance; and [iii] all residents of the Leased Property
are accurately shown in Tenant's accounting records.
18.4 Terms Applicable to all Assignments, Subleases or Management
Agreements. Any assignment, sublease or management agreement shall contain
provisions to the effect that [a] such assignment, sublease or management
agreement is subject and subordinate to all of the terms and provisions of this
Lease and to the rights of Landlord; [b] such assignment, sublease or management
agreement may not be modified without the prior written consent of Landlord not
to be unreasonably withheld or delayed; [c] if this Lease shall terminate before
the expiration of such assignment, sublease or management agreement, the
assignee, subtenant or manager thereunder will, at Landlord's option, attorn to
Landlord and waive any right the assignee, subtenant or manager may have to
terminate the assignment, sublease or management agreement or surrender
possession thereunder as a result of the termination of this Lease; [d] if the
assignee, subtenant or manager receives a written notice from Landlord stating
that Tenant is in default under this Lease, the assignee, subtenant or manager
shall thereafter pay all rentals or payments under the assignment, sublease or
management agreement directly to Landlord until such default has been cured, and
[e] Tenant or any guarantor shall not be released from its payment and
performance and obligations under this Lease, but rather Tenant, any guarantor,
and Tenant's assignee or sublessee will be jointly and severally liable for such
payment and performance unless Landlord agrees in writing to release such
parties from their respective obligations.
18.5 Collateral Assignment. Tenant hereby collaterally assigns to
Landlord, as security for the performance of the Secured Obligations hereunder,
and grants a security interest to Landlord in all of Tenant's right, title, and
interest in and to any assignment, sublease or management agreement now or
hereafter existing for all or part of the Leased Property. Tenant shall, at the
request of Landlord, execute such other instruments or documents as Landlord may
request to evidence this collateral assignment.
18.6 Effectiveness. Any assignment, sublease, or management
agreement shall not be effective until [i] a fully executed copy of the
instrument of assignment, sublease or management agreement has been delivered to
Landlord; [ii] in the case of an assignment, Landlord has received such
documents, instruments, affidavits, letter of credit amendments, proof of
licensure and amendments as Landlord may reasonably request in order to evidence
assignee's assumption and agreement to perform all of Tenant's obligations under
the Lease; [iii] except for an assignment pursuant to the Guarantor Option,
Tenant has paid to Landlord a fee in the amount of $2,500.00; and [iv] Landlord
has received reimbursement from Tenant or the assignee for all attorneys' fees
and expenses and all other reasonable out-of-pocket expenses incurred in
connection with determining whether to give its consent, giving its consent and
all matters relating to the assignment, sublease, or management agreement.
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18.7 Sale of Leased Property. If Landlord or any subsequent owner of
the Leased Property sells the Leased Property, its liability for the performance
of its agreements in this Lease will end on the date of the sale of the Leased
Property, and Tenant will look solely to the purchaser for the performance of
those agreements. For purposes of this Section, any holder of a mortgage or
security agreement which affects the Leased Property at any time, and any
landlord under any lease to which this Lease is subordinate at any time, will be
a subsequent owner of the Leased Property when it succeeds to the interest of
Landlord or any subsequent owner of the Leased Property.
18.8 Assignment by Landlord. Landlord may transfer, assign,
mortgage, collaterally assign, or otherwise dispose of Landlord's interest in
this Lease or the Leased Property.
ARTICLE 19: HOLDOVER AND SURRENDER
19.1 Holding Over. Should Tenant, with or without the express or
implied consent of Landlord, continue to hold and occupy the Leased Property
after the expiration of the Term, such holding over beyond the Term and the
acceptance or collection of Rent by the Landlord shall operate and be construed
as creating a tenancy from month-to-month and not for any other term whatsoever.
Said month-to-month tenancy may be terminated by Landlord by giving Tenant 10
days written notice, and at any time thereafter Landlord may re-enter and take
possession of the Leased Property.
19.2 Surrender. Except for [i] Permitted Alterations; [ii] normal
and reasonable wear and tear (subject to the obligation of Tenant to maintain
the Leased Property in good order and repair during the Term); and [iii] damage
and destruction not required to be repaired by Tenant, Tenant shall surrender
and deliver up the Leased Property at the expiration or termination of the Term
in as good order and condition as of the Commencement Date.
ARTICLE 20: LETTER OF CREDIT
20.1 Terms of Letter of Credit. As security for the performance of
the Secured Obligations hereunder, Tenant shall provide Landlord with the Letter
of Credit at the Closing. Tenant shall maintain the Letter of Credit in favor of
Landlord until the Secured Obligations are performed in full. The Letter of
Credit shall permit partial draws and shall permit drawing upon presentation of
a draft drawn on the issuer and a certificate signed by Landlord stating that an
Event of Default has occurred under this Lease. The Letter of Credit shall be
for an initial term of one year and shall be automatically renewed annually for
successive terms of at least one year unless Landlord receives notice from the
Issuer, by certified mail, at least 60 days prior to the expiry date then in
effect that the Letter of Credit will not be extended for an additional one-year
period.
20.2 Replacement Letter of Credit. Tenant shall provide a
replacement Letter of Credit which satisfies the requirements of Section 20.1
from an Issuer acceptable to Landlord within 30 days after the occurrence of any
of the following: [i] Landlord's receipt of notice from the Issuer that the
Letter of Credit will not be extended for an additional one-year period; [ii]
Landlord gives notice to Tenant that the Lace Financial Service Rating of the
Issuer is less than a "C+"; or
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[iii] Landlord gives notice to Tenant of the admission by Issuer in writing of
its inability to pay its debts generally as they become due, or Issuer's filing
of a petition in bankruptcy or petitions to take advantage of any insolvency
act, making an assignment for the benefit of its creditors, consenting to the
appointment of a receiver of itself or of the whole or any substantial part of
its property, or filing a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state thereof. Tenant's failure
to comply with the requirements of this Section shall be an immediate Event of
Default without any notice (other than as provided for in the section), cure or
grace period.
20.3 Draws. Landlord may draw under the Letter of Credit upon the
occurrence of an Event of Default hereunder. Any such draw shall not cure an
Event of Default. Landlord shall have the right, but not the obligation, to
apply all or any portion of the proceeds from the Letter of Credit to pay all or
any portion of [i] all Rent and other charges and expenses payable by Tenant
under this Lease; plus [ii] all expenses and costs incurred by Landlord in
enforcing or preserving Landlord's rights under this Lease or any security for
the Lease, including without limitation, [a] the fees, expenses, and costs of
any litigation, receivership, administrative, bankruptcy, insolvency, or other
similar proceeding; [b] attorney, paralegal, consulting and witness fees and
disbursements; and [c] the expenses, including without limitation, lodging,
meals and transportation of Landlord and its employees, agents, attorneys, and
witnesses in preparing for litigation, administrative, bankruptcy, insolvency,
or similar proceedings and attendance at hearings, depositions, and trials in
connection therewith.
With respect to any portion of the Letter of Credit proceeds that is
not applied to payment of the Secured Obligations, Landlord shall have the
option to either [i] deposit the proceeds into an interest-bearing account with
a financial institution chosen by Landlord ("LC Account"); or [ii] require
Tenant to obtain a replacement Letter of Credit satisfactory to Landlord, with
the Letter of Credit proceeds made available to Tenant to secure Tenant's
reimbursement obligation for the Letter of Credit. All interest accruing on the
LC Account shall be paid to Landlord and may, from time to time, be withdrawn
from the LC Account by Landlord. At any time and from time to time until the
Secured Obligations are performed in full, Landlord may apply all or any portion
of the funds held in the LC Account to payment of all or any portion of the
Secured Obligations. Within 10 days after any such payment from the LC Account,
Landlord shall give written notice to Tenant describing the amount of such
payment and how it was applied to the Secured Obligations.
Upon the occurrence of either [i] Landlord's receipt of a
replacement Letter of Credit that satisfies the requirements of Section 20.1 and
is issued by an Issuer acceptable to Landlord; or [ii] the date on which all of
the Secured Obligations are performed in full, Landlord shall pay the principal
balance of the LC Account (but not any accrued interest) to Tenant.
20.4 Partial Draws. Upon the occurrence of a monetary Event of
Default under this Lease, Landlord may, at its option, make a partial draw on
the Letter of Credit in an amount not to exceed the amount of Tenant's monetary
obligations under this Lease then past due. If Landlord then applies the
proceeds from such partial draw on the Letter of Credit to payment of all or any
portion of Tenant's monetary obligations then past due, Tenant shall, within 10
days after notice
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from Landlord of such partial draw and payment, cause the amount of the Letter
of Credit to be reinstated to the amount in effect prior to such partial draw.
Tenant's failure to comply with the requirements of this section shall be an
immediate Event of Default under the Lease Documents without any notice (other
than as provided for in this section), cure or grace period. Landlord's rights
under this Section 20.4 are in addition to, and not in limitation of, Landlord's
rights under Section 20.3.
20.5 Substitute Letter of Credit. Tenant may, from time to time,
deliver to Landlord a substitute Letter of Credit meeting the requirements of
this Agreement and issued by an Issuer acceptable to Landlord. Upon Landlord's
approval of the substitute Letter of Credit, Landlord shall release the previous
Letter of Credit to the Tenant.
20.6 Reduction in Letter of Credit Amount. The amount of the Letter
of Credit may be reduced by Tenant from 5% of the Maximum Lease Amount to 2.5%
of the Maximum Lease Amount after all of the following conditions have been met:
[i] the Earnout Conditions have been satisfied; [ii] Guarantor has closed the
Guarantor Option; and [iii] no Events of Default has occurred and is continuing
under this Lease.
20.7 Cost of Letter of Credit. Tenant may at Tenant's option,
utilize funds allocated in the Project Budget from Lease Advances to [i] pay all
costs and expenses associated with the placement of the Letter of Credit; and
[ii] pledge as collateral with the Issuer sufficient funds to enable the Issuer
to so issue the Letter of Credit.
ARTICLE 21: QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND
ESTOPPEL CERTIFICATES
21.1 Quiet Enjoyment. So long as Tenant performs all of its
obligations under this Lease, Tenant's possession of the Leased Property will
not be disturbed by Landlord.
21.2 Subordination. Subject to the terms and conditions of this
section, this Lease and Tenant's rights under this Lease are subordinate to any
ground lease or underlying lease, first mortgage, first deed of trust, or other
first lien against the Leased Property, together with any renewal,
consolidation, extension, modification or replacement thereof, which now or at
any subsequent time affects the Leased Property or any interest of Landlord in
the Leased Property, except to the extent that any such instrument expressly
provides that this Lease is superior. The foregoing subordination provision is
expressly conditioned upon any lessor or mortgagee being obligated and bound to
recognize Tenant as the tenant under this Lease, and such lessor or mortgagee
shall have no right to disturb Tenant's possession, use and occupancy of the
Leased Property or Tenant's enjoyment of its rights under this Lease unless and
until an Event of Default occurs hereunder. Any foreclosure action or proceeding
by any mortgagee with respect to the Leased Property shall not affect Tenant's
rights under this Lease and shall not terminate this Lease unless and until an
Event of Default occurs hereunder. The foregoing provisions will be
self-operative, and no further instrument will be required in order to effect
them. However, Tenant shall execute, acknowledge and deliver to Landlord, at any
time and from time to time upon demand by Landlord, such documents as may be
requested by Landlord or any mortgagee or any holder of any mortgage or other
instrument described in this Section, to confirm or effect any such
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subordination, provided that any such document shall include a non-disturbance
provision as set forth in this section satisfactory to Tenant. Any mortgagee of
the Leased Property shall be deemed to be bound by the non-disturbance provision
set forth in this section. If Tenant fails or refuses to execute, acknowledge,
and deliver any such document within 20 days after written demand, Landlord may
execute acknowledge and deliver any such document on behalf of Tenant as
Tenant's attorney-in-fact. Tenant hereby constitutes and irrevocably appoints
Landlord, its successors and assigns, as Tenant's attorney-in-fact to execute,
acknowledge, and deliver on behalf of Tenant any documents described in this
Section. This power of attorney is coupled with an interest and is irrevocable.
21.3 Attornment. If any holder of any mortgage, indenture, deed of
trust, or other similar instrument described in Section 21.2 succeeds to
Landlord's interest in the Leased Property, Tenant will pay to such holder all
Rent subsequently payable under this Lease. Tenant shall, upon request of anyone
succeeding to the interest of Landlord, automatically become the tenant of, and
attorn to, such successor in interest without changing this Lease. The successor
in interest will not be bound by [i] any payment of Rent for more than one month
in advance; [ii] any amendment or modification of this Lease thereafter made
without its consent as provided in this Lease; [iii] any claim against Landlord
arising prior to the date on which the successor succeeded to Landlord's
interest; or [iv] any claim or offset of Rent against the Landlord. Upon request
by Landlord or such successor in interest and without cost to Landlord or such
successor in interest, Tenant will execute, acknowledge and deliver an
instrument or instruments confirming the attornment. If Tenant fails or refuses
to execute, acknowledge, and deliver any such instrument within 30 days after
written demand, then Landlord or such successor in interest will be entitled to
execute, acknowledge, and deliver any document on behalf of Tenant as Tenant's
attorney-in-fact. Tenant hereby constitutes and irrevocably appoints Landlord,
its successors and assigns, as Tenant's attorney-in-fact to execute,
acknowledge, and deliver on behalf of Tenant any such document. This power of
attorney is coupled with an interest and is irrevocable.
21.4 Estoppel Certificates. At the request of Landlord or any
mortgagee or purchaser of the Leased Property, Tenant shall execute,
acknowledge, and deliver an estoppel certificate, in recordable form, in favor
of Landlord or any mortgagee or purchaser of the Leased Property certifying, to
Tenant's knowledge, the following: [i] that the Lease is unmodified and in full
force and effect, or if there have been modifications that the same is in full
force and effect as modified and stating the modifications; [ii] the date to
which Rent and other charges have been paid; [iii] whether Tenant or Landlord is
in default or whether there is any fact or condition which, with notice or lapse
of time, or both, would constitute a default, and specifying any existing
default, if any; [iv] that Tenant has accepted and occupies the Leased Property;
[v] that Tenant has no defenses, set-offs, deductions, credits, or counterclaims
against Landlord, if that be the case, or specifying such that exist; and [vi]
such other information as may reasonably be requested by Landlord or any
mortgagee or purchaser. Any purchaser or mortgagee may rely on this estoppel
certificate. If Tenant fails to deliver the estoppel certificates to Landlord
within 20 days after the request of the Landlord, then Tenant shall be deemed to
have certified that to Tenant's knowledge, [a] the Lease is in full force and
effect and has not been modified, or that the Lease has been modified as set
forth in the certificate delivered to Tenant; [b] Tenant has not prepaid any
Rent or other charges except for the current month; [c] Tenant has accepted and
occupies the Leased
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Property; [d] neither Tenant nor Landlord is in default nor is there any fact or
condition which, with notice or lapse of time, or both, would constitute a
default; and [e] Tenant has no defenses, set-offs, deductions, credits, or
counterclaims against Landlord. Tenant hereby irrevocably appoints Landlord as
Tenant's attorney-in-fact to execute, acknowledge, and deliver on Tenant's
behalf any estoppel certificate to which Tenant does not object within 20 days
after Landlord sends the certificate to Tenant. This power of attorney is
coupled with an interest and is irrevocable. At the request of Tenant, Landlord
shall execute, acknowledge, and deliver an estoppel certificate, in recordable
form, in favor of Tenant certifying, to Landlord's knowledge, the following: [i]
that the Lease is unmodified and in full force and effect, or if there have been
modifications that the same is in full force and effect as modified and stating
the modifications; [ii] the date to which Rent and other charges have been
received by Landlord; [iii] whether Tenant or Landlord is in default or whether
there is any fact or condition which, with notice or lapse of time, or both,
would constitute a default, and specifying any existing default, if any; [iv]
that Landlord has no defenses, set-offs, deductions, credits, or counterclaims
against Tenant, if that be the case, or specifying such that exist; and [vi]
such other information as may reasonably be requested by Tenant. If Landlord
fails to deliver the estoppel certificate to Tenant within 20 days after the
request of the Tenant, then Landlord shall be deemed to have certified that to
Landlord's knowledge, [a] the Lease is in full force and effect and has not been
modified, or that the Lease has been modified as set forth in the certificate
delivered to Landlord; [b] Landlord has not received any prepaid Rent or other
charges except for the current month; [c] neither Tenant nor Landlord is in
default nor is there any fact or condition which, with notice or lapse of time,
or both, would constitute a default; and [d] Landlord has no defenses, set-offs,
deductions, credits, or counterclaims against Tenant. Landlord hereby
irrevocably appoints Tenant as Landlord's attorney-in-fact to execute,
acknowledge, and deliver on Landlord's behalf any estoppel certificate to which
Landlord does not object within 20 days after Tenant sends the certificate to
Landlord. This power of attorney is coupled with an interest and is irrevocable.
ARTICLE 22: REPRESENTATIONS AND WARRANTIES
Tenant hereby makes the following representations and warranties, as
of the Effective Date, to Landlord and acknowledges that Landlord is granting
the Lease in reliance upon such representations and warranties. Tenant's
representations and warranties shall survive the Closing and, except to the
extent made as of a specific date, shall continue in full force and effect until
the Secured Obligations have been performed in full.
22.1 Organization and Good Standing. Tenant is a limited liability
company, duly organized, validly existing and in good standing under the laws of
the State of Delaware and is qualified to do business in and is in good standing
under the laws of the State.
22.2 Power and Authority. Tenant has the power and authority to
execute, deliver and perform this Lease. Tenant has taken all requisite action
necessary to authorize the execution, delivery and performance of Tenant's
Obligations under this Lease.
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22.3 Enforceability. This Lease constitutes a legal, valid,
and binding obligation of Tenant enforceable in accordance with its terms,
except as enforceability may be limited by creditor's rights laws, equitable
principles, and the effect of judicial discretion.
22.4 Government Authorizations. The Land and the Plans and
Specifications conform in all material respects with all Legal Requirements for
the construction and development of the Facility. Upon completion of the
Facility in accordance with the Plans and Specifications, the Facility will
conform in all material respects to all Legal Requirements. All Government
Authorizations required to commence construction of the Facility have been
obtained.
22.5 Financial Statements. Tenant has furnished Landlord with
true, correct, and complete copies of the Financial Statements. The Financial
Statements fairly present the financial position of Tenant and Guarantor as
applicable, as of the respective dates and the results of operations for the
periods then ended in conformance with generally accepted accounting principles
applied on a basis consistent with prior periods. The Financial Statements and
other information furnished to Landlord are true, complete and correct and, as
of the Effective Date, no material adverse change has occurred since the
furnishing of such statements and information. As of the Effective Date, the
Financial Statements and other information do not contain any untrue statement
or omission of a material fact and are not misleading in any material respect.
Tenant and Guarantor are solvent, and no bankruptcy, insolvency, or similar
proceeding is pending or contemplated by or, to the knowledge of Tenant, against
Tenant or Guarantor.
22.6 Condition of Facility. To Tenant's knowledge, upon
completion of the Facility in accordance with the Plans and Specifications, all
of the mechanical and electrical systems, heating and air-conditioning systems,
plumbing, water and sewer systems, and all other items of mechanical equipment
or appliances will be in good working order, condition and repair, will be of
sufficient size and capacity to service the Facility for the Facility Uses, and
will conform with all applicable ordinances and regulations, and with all
building, zoning, fire, safety, and other codes, laws and orders. The
Improvements, including the roof and foundation, will be structurally sound and
free from leaks and other defects.
22.7 Compliance with Laws. To Tenant's knowledge, there is no
violation of, or noncompliance with, [i] any laws, orders, rules or regulations,
ordinances or codes of any kind or nature whatsoever relating to the Facility or
the ownership or operation thereof (including without limitation, building,
fire, health, occupational safety and health, zoning and land use, planning and
environmental laws, orders, rules and regulations); [ii] any covenants,
conditions, restrictions or agreements affecting or relating to the ownership,
use or occupancy of the Facility; or [iii] any order, writ, regulation or decree
relating to any matter referred to in [i] or [ii] above.
22.8 No Litigation. As of the Effective Date and except as
disclosed on Exhibit F, [i] there are no actions or suits, or any proceedings or
investigations by any governmental agency or regulatory body pending against
Tenant, Guarantor or the Facility; [ii] Tenant has not received notice of any
threatened actions, suits, proceedings or investigations against Tenant or the
Facility at law or in equity, or before any governmental board, agency or
authority which, if determined adversely to Tenant would materially and
adversely affect the
64
Facility or title to the Facility (or any part thereof), the right to operate
the Facility as presently operated, or the financial condition of Tenant or
Guarantor; [iii] there are no unsatisfied or outstanding judgments against
Tenant or the Facility; [iv] there is no labor dispute materially and adversely
affecting the operation or business conducted by Tenant, Guarantor, or the
Facility; and [v] Tenant does not have knowledge of any facts or circumstances
which might reasonably form the basis for any such action, suit, or proceeding.
22.9 Consents. The execution, delivery and performance of this
Lease will not require any consent, approval, authorization, order, or
declaration of, or any filing or registration with, any court, any federal,
state, or local governmental or regulatory authority, or any other person or
entity, the absence of which would materially impair the ability of Tenant to
operate the Facility for the Facility Uses except for the post-acquisition
filing for licensure of the Facility.
22.10 No Violation. The execution, delivery and performance of
this Lease [i] do not and will not conflict with, and do not and will not result
in a breach of Tenant's Organizational Documents; [ii] do not and will not
conflict with, and do not and will not result in a breach of, and do not and
will not constitute a default under (or an event which, with or without notice
or lapse of time, or both, would constitute a default under), any of the terms,
conditions or provisions of any agreement or other instrument or obligation to
which Tenant is a party or by which its assets are bound; and [iii] do not and
will not violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Tenant or the Facility.
22.11 Reports and Statements. All reports, statements,
certificates and other data furnished by or on behalf of Tenant or Guarantor to
Landlord in connection with this Lease, and all representations and warranties
made herein or in any certificate or other instrument delivered in connection
herewith and therewith, are true and correct in all material respects and do not
omit to state any material fact or circumstance necessary to make the statements
contained herein or therein, in light of the circumstances under which they are
made, not misleading as of the date of such report, statement, certificate or
other data. The copies of all agreements and instruments submitted to Landlord,
including, without limitation, all agreements relating to management of the
Facility, the Letter of Credit, and Tenant's working capital are true, correct
and complete copies and include all amendments and modifications of such
agreements.
22.12 ERISA. All plans (as defined in Section 4021(a) of the
Employee Retirement Income Security Act of 1974, as amended or supplemented from
time to time ("ERISA")) for which Tenant is an "employer" or a "substantial
employer" (as defined in Sections 3(5) and 4001(a)(2) of ERISA, respectively)
are in compliance with ERISA and the regulations and published interpretations
thereunder. To the extent Tenant maintains a qualified defined benefit pension
plan: [i] there exists no accumulated funding deficiency; [ii] no reportable
event and no prohibited transaction has occurred; [iii] no lien has been filed
or threatened to be filed by the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA; and [iv] Tenant has not
been deemed to be a substantial employer.
22.13 Chief Executive Office. Tenant maintains its chief
executive office and its books and records at the address set forth in the
introductory paragraph of this Agreement.
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22.14 Other Name or Entities. Except as disclosed herein, none
of Tenant's business is conducted through any corporate subsidiary,
unincorporated association or other entity and Tenant has not, within the six
years preceding the date of this Agreement [i] changed its name, [ii] used any
name other than the name stated at the beginning of this agreement, or [iii]
merged or consolidated with, or acquired any of the assets of, any corporation
or other business.
22.15 Parties in Possession. Except as disclosed on Exhibit B,
there are no parties in possession of any Leased Property or any portion thereof
as managers, lessees, tenants at sufferance, or trespassers.
22.16 Access. Except as disclosed in writing to Landlord,
access to the Land is directly from a dedicated public right-of-way without any
easement. To the knowledge of Tenant, there is no fact or condition which would
result in the termination or reduction of the current access to and from the
Land to such right-of-way.
22.17 Utilities. Except as disclosed in writing to Landlord,
there are available at the Land gas, municipal water, and sanitary sewer lines,
storm sewers, electrical and telephone services in operating condition which are
adequate for the operation of the Facility at a reasonable cost. Except as
disclosed in writing to Landlord, the Land has direct access to utility lines
located in a dedicated public right-of-way without any easement. As of the
Effective Date, there is no pending or, to the knowledge of Tenant, threatened
governmental or third party proceeding which would impair or result in the
termination of such utility availability.
22.18 Condemnation and Assessments. As of the Effective Date,
Tenant has not received notice of, and there are no pending or, to Tenant's
knowledge, threatened, condemnation, assessment or similar proceedings affecting
or relating to the Facility, or any portion thereof, or any utilities, sewers,
roadways or other public improvements serving the Facility.
22.19 Zoning. As of the Effective Date, [i] except as
disclosed in writing to Landlord, the use and operation of the Facility for the
Facility Uses is a permitted use under the applicable zoning code; [ii] except
as disclosed on Exhibit E hereto, no special use permits, conditional use
permits, variances, or exceptions have been granted or are needed for such use
of the Facility; [iii] the Land is not located in any special districts such as
historical districts or overlay districts; and [iv] the Facility once
constructed according to the Plans and Specifications will comply with all
applicable zoning laws, including but not limited to, dimensional, parking,
setback, screening, landscaping, sign and curb cut requirements.
22.20 Pro Forma Statement. Tenant has delivered to Landlord a
true, correct and complete copy of the Pro Forma Statement. The Pro Forma
Statement shows Tenant's reasonable expectation of the most likely results of
Facility operations for the next 5 year period commencing on the anticipated
date when the Facility commences operations.
22.21 Environmental Matters. During the period of Tenant's
ownership or possession of the Leased Property and, to Tenant's knowledge after
diligent inquiry, for the period
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prior to Tenant's ownership or possession of the Leased Property, [i] the Leased
Property is in compliance with all Environmental Laws; [ii] there were no
releases or threatened releases of Hazardous Materials on, from, or under the
Leased Property, except in compliance with all Environmental Laws; [iii] no
Hazardous Materials have been, are or will be used, generated, stored, or
disposed of at the Leased Property, except in compliance with all Environmental
Laws; [iv] asbestos has not been and will not be used in the construction of any
Improvements; [v] no permit is or has been required from the Environmental
Protection Agency or any similar agency or department of any state or local
government for the use or maintenance of any Improvements; [vi] underground
storage tanks on or under the Land, if any, have been and currently are being
operated in compliance with all applicable Environmental Laws; [vii] any
closure, abandonment in place or removal of an underground storage tank on or
from the Land was performed in compliance with applicable Environmental Laws and
any such tank had no release contaminating the Leased Property or, if there had
been a release, the release was remediated in compliance with applicable
Environmental Laws to the satisfaction of regulatory authorities; [viii] no
summons, citation or inquiry has been made by any such environmental unit, body
or agency or a third party demanding any right of recovery for payment or
reimbursement for costs incurred under CERCLA or any other Environmental Laws
and the Land is not subject to the lien of any such agency; and [ix] to the best
of Tenant's knowledge, the Environmental Assessment is true, complete and
accurate. "Disposal" and "release" shall have the meanings set forth in CERCLA.
22.22 Leases and Contracts. As of the Effective Date and
except as disclosed on Exhibit G, there are no leases or contracts (including
but not limited to, insurance contracts, maintenance contracts, construction
contracts, employee benefit plans, employment contracts, equipment leases,
security agreements, architect agreements, and management contracts) to which
Tenant or Guarantor is a party relating to any part of the ownership, operation,
possession, construction, management or administration of the Land or the
Facility.
22.23 No Default. As of the Effective Date, [i] there is no
existing Event of Default under this Lease; and [ii] no event has occurred
which, with the giving of notice or the passage of time, or both, would
constitute or result in such an Event of Default.
22.24 Project Budget. The Project Budget sets forth all
anticipated costs, direct and indirect, of developing and constructing the
Facility.
22.25 Tax Status. If Tenant is a partnership or limited
liability company, Tenant is taxable as a partnership under the Internal Revenue
Code and all applicable state tax laws.
ARTICLE 23: FUTURE PROJECTS; COTERMINOUS FINANCINGS
23.1 Project Submissions. If Tenant, Guarantor or any
Guarantor Affiliate chooses to submit certain future acquisition and development
projects to Landlord as provided in the Commitment, Tenant, Guarantor or any
Guarantor Affiliate shall comply with the terms of the Commitment.
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23.2 Coterminous Financings. All Phase Leases will be
coterminous and will have identical renewal dates and option exercise periods.
Accordingly, as each Phase Lease is closed, the current, Term, Expiration Date,
Renewal Date, and option exercise periods under this Lease will be extended to
be coterminous with the most recently closed Phase Lease.
ARTICLE 24: SECURITY INTEREST
24.1 Collateral. Tenant hereby grants to Landlord a security
interest in the following described property, whether now owned or hereafter
acquired by Tenant (the "Collateral"), to secure the payment and performance of
the Secured Obligations:
(a) All machinery, furniture, equipment, trade fixtures,
appliances, inventory and all other goods (as "equipment," "inventory" and
"goods" are defined for purposes of Article 9 ("Article 9") of the Uniform
Commercial Code as adopted in the State) and any leasehold interest of Tenant in
any of the foregoing, now or hereafter located in or on or used or usable in
connection with the Land, Improvements, or Fixtures and replacements, additions,
and accessions thereto, including without limitation those items which are to
become fixtures or which are building supplies and materials to be incorporated
into an Improvement or Fixture.
(b) All accounts, contract rights, general intangibles,
instruments, documents, and chattel paper [as "accounts", "contract rights",
"general intangibles", "instruments", "documents", and "chattel paper", are
defined for purposes of Article 9] now or hereafter arising in connection with
the business located in or on or used or usable in connection with the Land,
Improvements, or Fixtures, and replacements, additions, and accessions thereto.
(c) All franchises, permits, licenses, operating rights,
certifications, approvals, consents, authorizations and other general
intangibles regarding the use, occupancy or operation of the Improvements, or
any part thereof, including without limitation, certificates of need, state
health care facility licenses, and Medicare and Medicaid provider agreements, to
the extent permitted by law.
(d) Unless expressly prohibited by the terms thereof, all
contracts, agreements, contract rights and materials relating to the design,
construction, operation or management of the Improvements, including but not
limited to, plans, specifications, drawings, blueprints, models, mock-ups,
brochures, flyers, advertising and promotional materials and mailing lists.
(e) All ledger sheets, files, records, computer programs,
tapes, other electronic data processing materials, and other documentation
relating to the preceding listed property or otherwise used or usable in
connection with the Land and Improvements.
(f) The products and proceeds of the preceding listed
property, including without limitation cash and non-cash proceeds, proceeds of
proceeds, and insurance proceeds.
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24.2 Additional Documents. At the request of Landlord, Tenant
shall execute additional security agreements, financing statements, and such
other documents as may be requested by Landlord to maintain and perfect such
security interest.
24.3 Notice of Sale. With respect to any sale or other
disposition of any of the Collateral after the occurrence of an Event of
Default, Landlord and Tenant agree that the giving of 5 days notice by Landlord,
sent by overnight delivery, postage prepaid, to Tenant's notice address
designating the time and place of any public sale or the time after which any
private sale or other intended disposition of such Collateral is to be made,
shall be deemed to be reasonable notice thereof and Tenant waives any other
notice with respect thereto.
24.4 Pledge of Accounts to Others. Notwithstanding any
provision to the contrary contained herein or in the other Lease Documents,
after the closing of the Guarantor Option, the then current Tenant shall be
permitted to pledge to a lender providing one or more loans to Guarantor or any
Guarantor Affiliate all accounts and receivables from the Facility on a first
priority lien basis, in which case Landlord shall execute and deliver to such
lender a subordination or similar agreement in which [i] Landlord agrees to
subordinate its security interest in such accounts and receivables to such
lender; and [ii] Landlord agrees to such further provisions as may be reasonably
required by the lender and acceptable to Landlord. Landlord's obligation to
provide the subordination is subject to [i] Landlord's receipt and reasonable
approval of all financing documents; [ii] execution by Landlord and the lender
of an intercreditor agreement on reasonable terms acceptable to Landlord, and
[iii] Tenant's payment of all costs and expenses incurred by Landlord in
connection with the subordination including, without limitation, reasonable
attorney's fees and expenses.
24.5 Financing of Fixtures, Furniture and Equipment. In the
event that furniture, fixtures and equipment for the Facility are not included
in the Project Budget (as the same may be amended from time to time), then [i]
Tenant, Guarantor or Developer may finance the same using third party lease
and/or debt financing, and [ii] the security interests hereby granted to
Landlord in such furniture, fixtures and equipment shall be junior and
subordinate in all respects to such third party financing source subject to the
provisions of Section 11.2(g).
ARTICLE 25: MISCELLANEOUS
25.1 Notices. Landlord and Tenant hereby agree that all
notices, demands, requests, and consents (hereinafter "notices") required to be
given pursuant to the terms of this Lease shall be in writing, shall be
addressed to the addresses set forth in the introductory paragraph of this
Lease, and shall be served by [i] personal delivery; [ii] certified mail, return
receipt requested, postage prepaid; or [iii] nationally recognized overnight
courier. All notices shall be deemed to be given upon the earlier of actual
receipt or 3 days after mailing, or one business day after deposit with the
overnight courier. Any notices meeting the requirements of this Section shall be
effective, regardless of whether or not actually received. Landlord or Tenant
may change its notice address at any time by giving the other party notice of
such change.
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25.2 Advertisement of Leased Property. In the event the
parties hereto have not executed a renewal Lease within 120 days prior to the
expiration of this Lease, or Tenant has not exercised its Option to Purchase,
then Landlord or its agent shall have the right to enter the Leased Property at
all reasonable times for the purpose of exhibiting the Leased Property to others
and to place upon the Leased Property for and during the period commencing 120
days prior to the expiration of this Lease, "for sale" or "for rent" notices or
signs.
25.3 Entire Agreement. This Lease and the Construction
Agreement contains the entire agreement between Landlord and Tenant with respect
to the subject matter hereof. No representations, warranties, and agreements
have been made by Landlord except as set forth in this Lease.
25.4 Severability. If any term or provision of this Lease is
held or deemed by Landlord to be invalid or unenforceable, such holding shall
not affect the remainder of this Lease and the same shall remain in full force
and effect, unless such holding substantially deprives Tenant of the use of the
Leased Property or Landlord of the rents herein reserved, in which event this
Lease shall forthwith terminate as if by expiration of the Term.
25.5 Captions and Headings. The captions and headings are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Lease or the intent of any provision hereof.
25.6 Governing Law. This Lease shall be construed under the
laws of the State.
25.7 Memorandum of Lease. Tenant shall not record this Lease.
Tenant may, however, record a memorandum of lease approved by Landlord, in its
reasonable discretion.
25.8 Waiver. No waiver by Landlord of any condition or
covenant herein contained, or of any breach of any such condition or covenant,
shall be held or taken to be a waiver of any subsequent breach of such covenant
or condition, or to permit or excuse its continuance or any future breach
thereof or of any condition or covenant, nor shall the acceptance of Rent by
Landlord at any time when Tenant is in default in the performance or observance
of any condition or covenant herein be construed as a waiver of such default, or
of Landlord's right to terminate this Lease or exercise any other remedy granted
herein on account of such existing default.
25.9 Binding Effect. This Lease will be binding upon and inure
to the benefit of the heirs, successors, personal representatives, and permitted
assigns of Landlord and Tenant.
25.10 Power of Attorney. Effective upon [i] the occurrence and
during the continuance of an Event of Default, or [ii] termination of this Lease
for any reason other than Tenant's purchase of the Leased Property, Tenant
hereby irrevocably and unconditionally appoints Landlord, or Landlord's
authorized officer, agent, employee or designee, as Tenant's true and lawful
attorney-in-fact, to act for Tenant in Tenant's name, place, and stead, to
execute, deliver and file all applications and any and all other necessary
documents and statements to effect the issuance, transfer, reinstatement,
renewal and/or extension of the Facility license and all
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Governmental Authorizations issued to Tenant or applied for by Tenant in
connection with Tenant's operation of the Facility, to permit any designee of
Landlord or any other transferee to operate the Facility under the Governmental
Authorizations, and to do any and all other acts incidental to any of the
foregoing. Tenant irrevocably and unconditionally grants to Landlord as its
attorney-in-fact full power and authority to do and perform every act necessary
and proper to be done in the exercise of any of the foregoing powers as fully as
Tenant might or could do if personally present or acting, with full power of
substitution, hereby ratifying and confirming all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney is
coupled with an interest and is irrevocable prior to Tenant's purchase of the
Leased Property. Except in the case of an emergency, Landlord shall give Tenant
three business days prior written notice before acting on behalf of Tenant
pursuant to this power of attorney.
25.11 No Offer. Landlord's submission of this Lease to Tenant
is not an offer to lease the Leased Property, or an agreement by Landlord to
reserve the Leased Property for Tenant. Landlord will not be bound to Tenant
until Tenant has duly executed and delivered duplicate original leases to
Landlord, and Landlord has duly executed and delivered one of these duplicate
original leases to Tenant.
25.12 Modification. This Lease may only be modified by a
writing signed by Landlord, Tenant and Guarantor. All references to this Lease,
whether in this Lease or in any other document or instrument, shall be deemed to
incorporate all amendments, modifications and renewals of this Lease, made after
the date hereof. If Tenant requests Landlord's consent to any change in
ownership, merger or consolidation of Tenant or Guarantor, any assumption of the
Lease, or any modification of the Lease, Tenant shall provide Landlord all
relevant information and documents sufficient to enable Landlord to evaluate the
request. In connection with any such request, Tenant shall pay to Landlord a fee
in the amount of $2,500.00 (except as provided in Section 8.11 of the Loan
Agreement between Landlord and Member) and shall pay all of Landlord's
reasonable attorney's fees and expenses and other reasonable out-of-pocket
expenses incurred in connection with Landlord's evaluation of Tenant's request,
the preparation of any documents and amendments, the subsequent amendment of any
documents between Landlord and its collateral pool lenders (if applicable), and
all related matters.
25.13 Landlord's Modification. Tenant acknowledges that
Landlord may, subject to Article 21, mortgage the Leased Property or use the
Leased Property as collateral for a collateralized mortgage obligations or Real
Estate Mortgage Investment Companies (REMICS). If any mortgage lender of
Landlord desires any modification of this Lease, Tenant agrees to consider such
modification in good faith and to execute an amendment of this Lease if Tenant
finds such modification acceptable.
25.14 No Merger. The surrender of this Lease by Tenant or the
cancellation of this Lease by agreement of Tenant and Landlord or the
termination of this Lease on account of Tenant's default will not work a merger,
and will, at Landlord's option, terminate any subleases or operate as an
assignment to Landlord of any subleases. Landlord's option under this paragraph
will be exercised by notice to Tenant and all known subtenants of the Leased
Property.
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25.15 Laches. No delay or omission by either party hereto to
exercise any right or power accruing upon any noncompliance or default by the
other party with respect to any of the terms hereof shall impair any such right
or power or be construed to be a waiver thereof.
25.16 Limitation on Tenant's Recourse. Tenant's sole recourse
against Landlord, and any successor to the interest of Landlord in the Leased
Property, is to the interest of Landlord, and any such successor, in the Leased
Property. Tenant will not have any right to satisfy any judgment which it may
have against the Landlord, or any such successor, from any other assets of
Landlord, or any such successor. In this Section, the terms "Landlord" and
"successor" include the shareholders, venturers, and partners of "Landlord" and
"successor" and the officers, directors, and employees of the same. The
provisions of this Section are not intended to limit Tenant's right to seek
injunctive relief or specific performance.
25.17 Construction of Lease. This Lease has been prepared by
Landlord and its professional advisors and reviewed by Tenant and its
professional advisors. Landlord, Tenant, and their advisors believe that this
Lease is the product of all their efforts, that it expresses their agreement,
and agree that it shall not be interpreted in favor of either Landlord or Tenant
or against either Landlord or Tenant merely because of their efforts in
preparing it.
25.18 Counterparts. This Lease may be executed in multiple
counterparts, each of which shall be deemed an original hereof.
25.19 [Intentionally Deleted]
25.20 Custody of Escrow Funds. Any funds paid to Landlord in
escrow hereunder may be held by Landlord or, at Landlord's election, by a
financial institution, the deposits or accounts of which are insured or
guaranteed by a federal or state agency. The funds shall not be deemed to be
held in trust, may be commingled with the general funds of Landlord or such
other institution, and shall not bear interest.
25.21 Landlord's Status as a REIT. Tenant acknowledges that
Landlord (or a Landlord Affiliate) has now and may hereafter elect to be taxed
as a real estate investment trust ("REIT") under the Internal Revenue Code.
25.22 Exhibits. The following exhibits are attached hereto and
incorporated herein:
Exhibit A: Legal Description
Exhibit B: Permitted Exceptions
Exhibit C: Documents to be Delivered
Exhibit D: Certificate and Facility Financial Reports
Exhibit E: Government Authorizations to be Obtained; Zoning Permits
Exhibit F: Pending Litigation
Exhibit G: List of Leases and Contracts
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25.23 WAIVER OF JURY TRIAL. LANDLORD AND TENANT WAIVE TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY ONE OF THEM
AGAINST ONE OR BOTH OF THE OTHERS ON ALL MATTERS ARISING OUT OF THIS LEASE OR
THE USE AND OCCUPANCY OF THE LEASED PROPERTY (EXCEPT CLAIMS FOR PERSONAL INJURY
OR PROPERTY DAMAGE). IF LANDLORD COMMENCES ANY SUMMARY PROCEEDING FOR NONPAYMENT
OF RENT, TENANT WILL NOT INTERPOSE, AND WAIVES THE RIGHT TO INTERPOSE, ANY
COUNTERCLAIM IN ANY SUCH PROCEEDING.
25.24 CONSENT TO JURISDICTION. TENANT HEREBY IRREVOCABLY
SUBMITS AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR
FEDERAL COURT HAVING JURISDICTION OVER XXXXX COUNTY, OHIO OR
[____________________] FOR ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
MATTER ARISING FROM OR RELATED TO [I] THE COMMITMENT; [II] THIS LEASE; OR [III]
ANY DOCUMENT EXECUTED BY TENANT IN CONNECTION WITH THIS LEASE. TENANT HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT TENANT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR
PROCEEDING. TENANT AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
TENANT AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING
AGAINST LANDLORD OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PROPERTY OF
LANDLORD, CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THE COMMITMENT,
THIS LEASE OR ANY RELATED DOCUMENT IN ANY COURT OTHER THAN A STATE OR FEDERAL
COURT HAVING JURISDICTION OVER XXXXX COUNTY, OHIO OR
[______________________________].
TENANT HEREBY CONSENTS TO SERVICE OF PROCESS BY LANDLORD IN
ANY MANNER AND IN ANY JURISDICTION PERMITTED BY LAW. NOTHING HEREIN SHALL AFFECT
OR IMPAIR LANDLORD'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY
LAW, OR LANDLORD'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST TENANT OR THE
PROPERTY OF TENANT IN THE COURTS OF ANY OTHER JURISDICTION.
25.25 Attorney's Fees and Expenses. Tenant shall pay to
Landlord all reasonable costs and expenses incurred by Landlord in administering
this Lease and the security for this Lease, enforcing or preserving Landlord's
rights under this Lease and the security for this Lease, and in all matters of
collection, whether or not an Event of Default has actually occurred or has been
declared and thereafter cured, including but not limited to, [a] reasonable
attorney's and paralegal's fees and disbursements; [b] the fees and expenses of
any litigation, administrative, bankruptcy, insolvency, receivership and any
other similar proceeding; [c] court costs; [d] the expenses of Landlord, its
employees, agents, attorneys and witnesses in preparing for litigation,
administrative, bankruptcy, insolvency and other proceedings and for lodging,
travel, and attendance at meetings, hearings,
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depositions, and trials; and [e] consulting and witness fees incurred by
Landlord in connection with any litigation or other proceeding.
25.26 Survival. The following provisions shall survive
termination of the Lease: Article 9 (Damage and Destruction), Article 10
(Condemnation); Article 16 (Alterations); and Section 25.26 (Survival).
25.27 Access to Records. To the extent required by law,
Landlord shall (and, if Landlord carries out any of the duties under this Lease,
whether on Landlord's or Tenant's behalf, through a subcontract with a related
organization and such subcontract has a value or cost of Ten Thousand Dollars
($10,000) or more during any twelve (12) month period, such subcontract shall
contain a clause to the effect that the subcontractor shall) until the
expiration of four (4) years after the furnishing of services pursuant to this
Lease, make available, upon request by the Secretary of Health and Human
Services or upon the request by the U.S. Comptroller General, or any duly
authorized representative of either of them, the books, documents and records of
Landlord (or such subcontractor) that are necessary to verify the nature and
extent of such costs in connection with said services.
25.28 Granting of Easements and Rights-of-Way. From time to
time at the request of Tenant or Developer (but at no cost to Landlord),
Landlord shall execute and deliver, in recordable form, such easements,
rights-of-way and similar agreements as may be necessary or desirable for the
provision of utility and other services to the Facility.
ARTICLE 26: SUBSTITUTION OF LEASED PROPERTY
26.1 Right of Substitution. Subject to the conditions set
forth in this Article 26, Tenant will have the right to substitute one or more
comparable health care facilities (individually and collectively called a
"Substitute Facility") for the Facility ("Existing Facility").
26.2 Conditions to Substitution. The following are the
"Substitution Conditions":
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(a) Guarantor Option. Guarantor shall have closed the
Guarantor Option.
(b) Substitution Notice. Landlord must receive from
Tenant a written notice ("Substitution Notice") of the intent to exercise the
right of substitution at least 90 days prior to the proposed date of
substitution. The Substitution Notice shall include all material information
concerning the substitution including, but not limited to, the following: [i]
the reason for the proposed substitution; [ii] the proposed date of the
substitution; [iii] information regarding the proposed Substitute Facility
("Proposed Facility") including name, address, city, state, type, units, beds,
current owner, current operator, historical financial statements, proforma
financial statements, Medicaid and Medicare cost reports, and rate letters; [iv]
copy of acquisition documents, if any; and [v] the proposed Tenant.
(c) Commitment Fee. Tenant shall pay Landlord a
commitment fee in an amount equal to 1% of the acquisition amount for the
Substitute Facility.
(d) No Defaults. As of the applicable substitution date,
no Event of Default shall have occurred (excluding any default which has been
cured in accordance with the terms of this Lease or which has been waived, in
writing, by Landlord), nor any event which with the giving of notice or the
passage of time or both, would constitute such a default.
(e) Engineering and Inspection Reports. Landlord shall
have received engineering and inspection reports relating to the Proposed
Facility, reasonably satisfactory in all respects to Landlord.
(f) MAI Appraisal. Tenant shall have delivered to
Landlord an MAI appraisal of the Proposed Facility prepared by an appraiser
selected by Tenant and approved by Landlord, in form and substance reasonably
satisfactory to Landlord.
(g) Survey. Tenant shall have delivered to Landlord an
ALTA survey of the premises upon which the Proposed Facility is located
acceptable to Landlord and the Title Company.
(h) Compliance with Laws. Landlord shall be satisfied as
to compliance with [i] all applicable land use, zoning, subdivision and
environmental laws and regulations, [ii] all applicable health care licensure
laws and regulations and [iii] such other matters as Landlord reasonably deems
relevant (including, without limitation, whether the conveyance of the Proposed
Facility to Landlord may be avoided under the Bankruptcy Code).
(i) Title Commitment. Tenant shall have delivered to
Landlord a valid and binding owner's title insurance commitment issued by
Lawyers Title Insurance Corporation through its agent, Xxxxxx Xxxxxxxx in
Mansfield, Ohio ("Title Company"), in an amount equal to the acquisition amount
for the Proposed Facility, with such endorsements and affirmative coverages, and
in such form, as Landlord may reasonably require insuring Landlord's fee title
to the Proposed Facility, subject to no encumbrances except those approved or
assumed by Landlord.
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Arrangements satisfactory to Landlord shall have been made for the issuance of a
title insurance policy as of the substitution closing date.
(j) Environmental Assessment. Tenant shall have delivered
an environmental site assessment report for the Proposed Facility, in form and
substance reasonably acceptable to Landlord and prepared by an environmental
consultant reasonably acceptable to Landlord.
(k) Tax Opinion. Landlord shall have obtained, at
Tenant's cost, an opinion of Landlord's counsel, in form and substance
acceptable to Landlord, confirming that [i] the substitution of the Proposed
Facility for the Existing Facility will qualify as an exchange solely of
property of a like-kind under Section 1031 of the Internal Revenue Code
("Code"), in which, generally, except for "boot" such as cash needed to equalize
values or discharge indebtedness, no gain or loss is recognized to Landlord;
[ii] the substitution or sale will not result in ordinary recapture income to
Landlord pursuant to Code Section 1250(d)(4) or any other Code provision; [iii]
the substitution or sale will result in income, if any, to Landlord of a type
described in Code Section 856(c)(2) or (3) and will not result in income of the
types described in Code Section 856(c)(4) or result in the tax imposed under
Code Section 857(b)(6); and [iv] the substitution or sale, together with all
other substitutions and sales made or requested by Tenant, pursuant to any other
leases with Landlord or a Landlord Affiliate during the relevant time period,
will not jeopardize the qualification of Landlord as a real estate investment
trust under Code Section 856-860.
(l) Legal Opinion. Landlord shall have received opinions
of Tenant's counsel as to [i] the compliance of the Proposed Facility with land
use, zoning, subdivision and environmental laws and regulations; [ii] the
compliance of Tenant, the proposed substitution and the Proposed Facility with
applicable health care laws and regulations; [iii] the due authorization,
execution and enforceability of the Substitution Documents; and [iv] such other
matters are reasonably requested, in form and substance reasonably acceptable to
Landlord.
(m) Substitution Documents. Tenant and Guarantor shall
have executed and delivered, or caused to be executed and delivered, such
documents as are reasonably required by Landlord to effectuate the substitution
(collectively, the "Substitution Documents"), including, without limitation, [i]
a deed and xxxx of sale with full warranties (or such other deed form as is
customary in such geographic area) conveying to Landlord title to the Proposed
Facility free and clear of all liens and encumbrances, except those approved or
assumed by Landlord; [ii] a Lease ("Substitute Lease") duly executed,
acknowledged and delivered by Tenant, containing the same terms and conditions
as are contained in the Lease for the Existing Facility except that [a] the
legal description of the land shall refer to the Proposed Facility, [b] the
acquisition amount for the Proposed Facility shall be an amount equal to the
Lease Amount for the Existing Facility increased or decreased by any adjustments
agreed to by Landlord and Tenant ("Cash Adjustment"), [c] the rent inflation
adjustment (Increaser Rate) under the Substitute Lease in all respects shall
provide Landlord with a substantially equivalent yield at the time of the
substitution to that received from the Existing Facility, taking into account
the Cash Adjustment, if any, and any other relevant factors, and [d] such other
changes therein as may be necessary or appropriate under the
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circumstances shall be made; and [iii] UCC financing statements. The
Substitution Documents shall be based upon and contain the same terms and
conditions as are set forth in the Lease Documents in effect prior to the
substitution, except that such changes shall be made as may be necessary or
reasonably appropriate under the circumstances to effectuate the substitution
and secure the protection and priority of the property and security interests
conveyed and/or granted to Landlord.
(n) Other Information. Without limiting any other
provision contained herein, Tenant shall have delivered to Landlord such other
information and materials relating to Tenant and the Proposed Facility as
Landlord may reasonably request, including, without limitation, leases,
receipted bills, management agreements and other contracts, provider agreements,
cost reports, permits, evidence of legal and actual access to the Proposed
Facility, evidence of the availability and sufficiency of utilities servicing
the Proposed Facility, historical and current operating statements, detailed
budgets and financial statements and Landlord shall have found the same to be
satisfactory in all respects.
(o) Tenant. The Proposed Facility shall be leased by
Tenant or an Affiliate that is acceptable to Landlord; provided, however, that
in the event that the Proposed Facility is leased by any such Affiliate, [i]
said Affiliate shall execute and deliver to Landlord such Substitution Documents
as may be reasonably required by Landlord; and [ii] Landlord shall be provided
with such evidence as it may reasonably require to determine that the conveyance
of the Proposed Facility to Landlord does not constitute a fraudulent conveyance
under applicable federal or state law.
(p) Insurance Certificates. Tenant shall have delivered
to Landlord insurance certificates evidencing compliance with all of the
insurance requirements set forth in this Lease.
(q) Rent. Landlord shall have received all Rent due and
payable under the Existing Lease through the substitution closing date.
(r) Valuation. The acquisition amount for the Proposed
Facility shall not exceed 90% of the appraised value of the Proposed Facility.
If the equity value of the Existing Facility exceeds the equity value of the
Proposed Facility, then an adjustment will be made in the option price set forth
in the Substitute Lease so that Landlord will receive its bargained-for share of
appreciation in the value of the Existing Facility.
(s) Landlord's Approval. Landlord shall have determined
that the Proposed Facility satisfies all of Landlord's customary due diligence
and underwriting requirements based upon the standards then being applied to
similar customers and facilities.
26.3 Conveyance of Existing Facility. Upon satisfaction of the
Substitution Conditions and concurrently with the closing of the substitution
transaction, Landlord will convey the Existing Facility to the respective Tenant
or Tenant's designee by quitclaim deed and quitclaim xxxx of sale. The date that
the Existing Facility is conveyed by Landlord is referred to herein as the
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"Conveyance Date." In the event that [i] Tenant is contractually obligated to
convey the Existing Facility to an unrelated purchaser ("Purchaser") by a
specified closing date ("Contract Date"); [ii] the Substitution Conditions have
not been fully satisfied by the Contract Date; and [iii] Tenant has used its
best efforts to extend the Contract Date, including an offer to pay a reasonable
extension fee, but the Contract Date has not been extended to a date by which
the Substitution Conditions are fully satisfied, Tenant shall have the right to
require Landlord to convey the Existing Facility to the Purchaser subject to the
following terms and conditions:
(a) Tenant shall irrevocably identify the Substitute
Facility and notify Landlord thereof within 35 days after the Conveyance Date.
Tenant shall satisfy all Substitution Conditions and cause the Substitute
Facility to be conveyed to Landlord within 180 days after the Conveyance Date.
(b) Tenant acknowledges that Landlord intends to qualify
the sale of the Existing Facility as a like-kind exchange pursuant to Code
Section 1031. Tenant shall cooperate with Landlord in effectuating a qualifying
deferred like-kind exchange and shall require the Purchaser, pursuant to the
terms of the Purchase and Sale Agreement with Purchaser, to so cooperate and to
execute all documents reasonably requested by Landlord to effectuate a
qualifying deferred like-kind exchange.
(c) All proceeds from the sale of the Existing Facility
("Sale Proceeds") shall be deposited with a qualified intermediary specified by
Landlord to facilitate the accomplishment of the deferred like-kind exchange.
Upon conveyance of the Substitute Facility to Landlord, the Sale Proceeds shall
be disbursed for payment of the Substitute Facility purchase price with the
balance, if any, disbursed in accordance with the Cash Adjustment made pursuant
to Section 26.2(m).
(d) To compensate Landlord for the lost Rent during the
period from the Conveyance Date to the date that the Substitute Facility is
conveyed to Landlord ("Deferred Period"), Tenant shall pay to the qualified
intermediary, on a monthly basis, an amount equal to the Base Rent for the
Existing Facility that would otherwise be payable during the Deferred Period.
(e) If Tenant does not comply with the deadlines set
forth in Section 26.3(a), Tenant shall pay Landlord an early termination fee
equal to 10% of the Lease Amount for the Existing Facility that was conveyed by
Landlord, payable within ten days following the missed deadline date.
26.4 Expenses. Whether or not any proposed substitution is
consummated, Tenant shall pay all of the out-of-pocket expenses and other costs
incurred or expended by Landlord in connection with any proposed substitution
(collectively the "Substitution Expenses"), including, without limitation,
Landlord's reasonable attorneys' fees and expenses, appraisal costs,
out-of-pocket travel expenses, inspection fees, title insurance premiums and
other title fees, survey expenses, mortgage taxes, transfer, documentary stamp
and other taxes, search charges of any nature, recording, registration and
filing costs, brokers' fees and commissions, if any, escrow fees, fees and
expenses, if any, incurred in qualifying Landlord and maintaining its right to
do business
78
in the state where the Proposed Facility is located, the cost of obtaining,
preparing and recording a release of the Existing Facility from the lien of any
mortgage (other than the amount necessary to payoff such mortgage) and any other
costs expended or incurred by Landlord in connection with the preparation,
documentation and closing of the proposed substitution.
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All Substitution Expenses due and payable at the time of the closing of the
substitution transaction shall be paid by Tenant at closing. Any Substitution
Expenses that are not paid at closing shall be a demand obligation of Tenant to
Landlord and, if not paid within 15 days after demand, shall thereafter (to the
extent permitted by applicable law) bear interest at the Overdue Rate until the
date of payment.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Lease or caused the same to be executed by their respective duly authorized
officers as of the date first set forth above.
Signed and acknowledged
in the presence of LANDLORD:
Signature [ ]
------------------------------ ----------------------------
Print Name
------------------------------
By:
-------------------------------------
Signature
------------------------------ Title:
Print Name ------------------------------
------------------------------
TENANT:
Signature FINANCIAL CARE INVESTORS OF
------------------------------ [_____________], LLC
Print Name
------------------------------
By: Financial Care Investors, LLC, Member
Signature
------------------------------
Print Name By:
------------------------------ ---------------------------------
Title:
--------------------------
Tax I.D. No.:
---------------------------
