LEASE AGREEMENT
BETWEEN
THE HOMESTEAD OF MANHATTAN, L.C., AS LANDLORD,
AND
INTEGRATED LIVING COMMUNITIES OF MANHATTAN, INC., AS TENANT
AS OF AUGUST 20, 1996
EFFECTIVE AUGUST 29, 1996
TABLE OF CONTENTS
ARTICLE / SECTION PAGE
ARTICLE I
DEMISED PREMISES ............................................. 1
1.1 Demise of Premises ........................................... 1
1.2 Other Assets ................................................. 2
1.3 Assumed Name ................................................. 3
1.4 Delivery of Possession ....................................... 3
ARTICLE II
TERM ......................................................... 3
2.1 Term ......................................................... 3
2.2 Renewal Term ................................................. 3
2.3 Lease Term ................................................... 3
2.4 Lease Year ................................................... 3
ARTICLE III
RENTAL ....................................................... 4
3.1 Annual Rent .................................................. 4
3.2 Certain Adjustments to the Annual Rent ....................... 5
3.3 Certain Adjustments to the Annual Rent; Transfer Taxes;
Prorated Items ............................................... 5
3.4 Other Prorations ............................................. 6
ARTICLE IV
TITLE AND POSSESSION ......................................... 6
4.1 Title and Authority .......................................... 6
4.2 Leased Equipment ............................................. 6
4.3 Surrender of Possession ...................................... 6
4.4 Holding Over ................................................. 7
ARTICLE V
TAXES, ASSESSMENTS AND UTILITIES ............................. 7
5.1 Real Estate Taxes 7
5.2 Personal Property Taxes ...................................... 9
5.3 Sewer Use Fees ............................................... 9
5.4 Utilities ................................................... 9
ARTICLE VI
USE OF DEMISED PREMISES ...................................... 9
6.1 Use by Tenant ................................................ 9
6.2 Compliance with Laws ......................................... 9
(i)
6.3 Waste ........................................................ 10
6.4 License and Permits .......................................... 10
6.5 Landlord's Repairs ........................................... 10
6.6 Conflict with Insurance Policies ............................. 10
ARTICLE VII
EMINENT DOMAIN ............................................... 10
7.1 Permanent or Temporary Taking ................................ 10
7.2 Compensation ................................................. 10
7.3 Effect on this Lease of Permanent Taking ..................... 11
7.4 Effect on this Lease of Temporary Taking ..................... 11
7.5 Restoration .................................................. 12
ARTICLE VIII
ALTERATIONS, REPAIRS and TRADE FIXTURES ...................... 12
8.1 Repairs by Tenant Generally .................................. 12
8.2 Quality and Promptness of Repairs and Replacements;
Ownership of Replacements and Warranties ..................... 16
8.3 Liability of Landlord ........................................ 16
8.4 Removal of Personal Property ................................. 17
ARTICLE IX
SIGNS ........................................................ 17
ARTICLE X
ASSIGNMENT, SUBLETTING AND SUBORDINATION ..................... 17
10.1 Assignment or Subletting by Tenant 17
10.2 Leasehold Mortgages .......................................... 18
10.3 Subordination and Attornment ................................. 20
10.4 Sale by Landlord 22
10.5 Estoppel Certificates ........................................ 22
ARTICLE XI
DEFAULT ...................................................... 23
11.1 Default by Tenant23
11.2 Landlord's Rights and Remedies ............................... 23
11.3 Default by Landlord .......................................... 27
11.4 Delays ....................................................... 27
(ii)
ARTICLE XII
DAMAGE TO DEMISED PREMISES.......................................... 28
12.1 Major Damage ................................................ 28
12.2 Nonmajor Damage ............................................. 28
ARTICLE XIII
LANDLORD'S REPRESENTATIONS AND WARRANTIES ........................... 29
13.1 Organization and Standing of Landlord ....................... 29
13.2 Authority ................................................... 29
13.3 Binding Effect .............................................. 30
13.4 Absence of Conflicting Agreements ........................... 30
13.5 Consents .................................................... 30
13.6 Contracts ................................................... 30
13.7 Financial Statements ........................................ 31
13.8 Material Changes ............................................ 31
13.9 Licenses; Permits ........................................... 31
13.10 Title, Condition of Personal Property ....................... 32
13.11 Title, Condition of the Demised Premises .................... 33
13.12 Legal Proceedings ........................................... 35
13.13 Employees ................................................... 35
13.14 Collective Bargaining, Labor Contracts, Employment
Practices, etc .............................................. 35
13.15 ERISA ....................................................... 35
13.16 Insurance ................................................... 35
13.17 Relationships ............................................... 36
13.18 Assets Comprising the Demised Premises ...................... 36
13.19 Absence of Certain Events ................................... 36
13.20 Compliance with Laws ........................................ 37
13.21 Environmental Compliance .................................... 37
13.22 Tax Returns ................................................. 38
13.23 Encumbrances Created by this Agreement ...................... 38
13.24 Residents ................................................... 38
13.25 Zoning ...................................................... 38
13.26 Leases ...................................................... 38
13.27 Care of Residents; Deficiencies; Licensed Bed
and Rate Schedule ........................................... 39
13.28 Books and Records ........................................... 39
13.29 Intellectual Property ....................................... 39
13.30 No Misstatements or Omissions ............................... 39
13.31 Bankruptcy .................................................. 40
(iii)
ARTICLE XIV
TENANT'S REPRESENTATIONS, WARRANTIES AND COVENANTS .................. 40
14.1 Organization and Standing of Tenant .......................... 40
14.2 Authority .................................................... 40
14.3 Binding Effect ............................................... 41
14.4 Absence of Conflicting Agreements ............................ 41
14.5 Statement of Operations ...................................... 41
ARTICLE XV
INSURANCE, SUBROGATION AND INDEMNIFICATION .......................... 41
15.1 Comprehensive General Liability and
Professional Insurance to be Carried by Tenant ............... 41
15.2 Certificate of Insurance ..................................... 41
15.3 Other Coverage ............................................... 42
15.4 Indemnification of Landlord .................................. 42
15.5 Indemnification of Tenant .................................... 42
15.6 Fire, Extended Coverage and Additional Perils Insurance ...... 43
15.7 Waiver of Subrogation ........................................ 43
ARTICLE XVI
ARBITRATION ......................................................... 44
ARTICLE XVII
CERTAIN COVENANTS OF LANDLORD ....................................... 45
17.1 Covenant Not-To-Compete ...................................... 45
17.2 Pre-Commencement Date Financial Statements ................... 46
ARTICLE XVIII
MISCELLANEOUS PROVISIONS ............................................ 46
18.1 Notices ...................................................... 46
18.2 Understanding and Agreements ................................. 47
18.3 Amendment .................................................... 47
18.4 Construction ................................................. 47
18.5 Specific Performance ......................................... 47
18.6 Binding Effect on Successors ................................. 47
18.7 Lease (Short Form) ........................................... 47
18.8 Reading and Receipt of this Lease ............................ 48
18.9 Prohibition of Mechanics Liens ............................... 48
18.10 Brokerage or Agents Fees ..................................... 48
18.11 Captions and Indexes ......................................... 48
18.12 Pronouns ..................................................... 48
18.13 Drafting of this Lease ....................................... 48
18.14 Counterparts ................................................. 48
18.15 Quiet Enjoyment .............................................. 48
ARTICLE XIX
CONDITIONS PRECEDENT TO LEASE COMMENCEMENT .......................... 49
19.1 Representations and Warranties ............................... 49
19.2 Performance of Covenants; No Default ......................... 49
19.3 Delivery of Certificate ...................................... 49
19.4 Legal Matters ................................................ 49
19.5 Approvals .................................................... 49
19.6 Material Adverse Change ...................................... 50
19.7 Authorization Documents ...................................... 50
19.8 2 ............................................................ 50
19.9 Environmental Compliance ..................................... 50
19.10 Facility Purchase Option ..................................... 51
19.11 Non-Disturbance Agreement 51
ARTICLE XX
CERTAIN ADDITIONAL OBLIGATIONS OF LANDLORD .......................... 51
20.1 Discharge of Liabilities ..................................... 51
20.2 Accounts Receivable .......................................... 51
20.3 Employment of Existing Employees ............................. 51
20.4 Audited Financial Statements ................................. 51
20.5 Licenses ..................................................... 51
20.6 Collective Bargaining, Labor Contracts, etc .................. 51
20.7 Contracts and Personal Property Leases ....................... 51
20.8 Demised Premises ............................................. 51
20.9 Delivery of Notices .......................................... 51
ARTICLE XXI
EXTENSION OF COMMENCEMENT DATE AND TERMINATION ...................... 52
21.1 Termination .................................................. 52
21.2 Tenant's Remedies ............................................ 52
ARTICLE XXII
CONSTRUCTION AND DELIVERY OF POSSESSION ............................. 53
22.1 Construction, Delivery of Possession and
Commencement Date ............................................ 53
(v)
ARTICLE XXIII
GLOSSARY AND ADDITIONAL DEFINED TERMS ................................ 55
SIGNATURE PAGE ......................................................... 59
ACKNOWLEDGMENTS ........................................................ 60
GUARANTY OF LEASE ...................................................... 61
ACKNOWLEDGMENTS ........................................................ 62
(vi)
SCHEDULES
---------
195178-1
EXHIBITS/SCHEDULES
EXHIBIT A
DESCRIPTION OF THE LAND
EXHIBIT A-1
LOCATION OF LEASED IMPROVEMENTS
EXHIBIT B
LIST OF CERTAIN PERSONAL PROPERTY & FIXTURES
EXHIBIT C
LANDLORD'S CONSTRUCTION WORK
EXHIBIT D
OPTION AGREEMENT
EXHIBIT E
FORM OF SUBORDINATION, NON-DISTURBANCE
AND RECOGNITION AGREEMENT
SCHEDULE 13.4
SCHEDULE 13.5
SCHEDULE 13.6
SCHEDULE 13.8
SCHEDULE 13.9
SCHEDULE 13.10(a)
SCHEDULE 13.10(b)
SCHEDULE 13.11(a)
SCHEDULE 13.11(e)
SCHEDULE 13.11(j)
SCHEDULE 13.12
(vii)
SCHEDULES
---------
SCHEDULE 13.13
SCHEDULE 13.16
SCHEDULE 13.17
SCHEDULE 13.19
SCHEDULE 13.21
SCHEDULE 13.25
SCHEDULE 13.26
SCHEDULE 13.27(b)
SCHEDULE 13.27(c)
SCHEDULE 13.29
SCHEDULE 14.4
(viii)
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made and entered into as of the
20th day of August, 1996, effective August __, 1996, by and between THE
HOMESTEAD OF MANHATTAN, L.C., a Kansas limited liability company having an
address c/o The Homestead Company, L.C., 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxx 00000, Attention: Xx. Xxxx Xxxx, as landlord ("Landlord"), and INTEGRATED
LIVING COMMUNITIES OF MANHATTAN, INC., a Delaware corporation having an office
at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000, as tenant ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord is the owner of the hereinafter described real
property on which Landlord intends to construct the improvements and personal
property constituting the 46-bed and 35-unit assisted living facility known as
"The Homestead of Manhattan" (said real property and all improvements that may
from time to time be situated thereon and all Personal Property (as hereinafter
defined), are hereinafter called the "Facility"), situated at Manhattan, Kansas;
and
WHEREAS, Tenant or affiliates of Tenant are engaged in the management,
leasing and ownership of similar facilities and are experienced in various
phases of management, leasing and ownership thereof; and
WHEREAS, Landlord desires to lease the Facility to Tenant for the term
hereinafter provided, and Tenant desires to accept such lease upon the terms and
subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the rents, mutual covenants and
agreements set forth in this Lease, the parties agree as follows:
ARTICLE
DEMISED PREMISES
DEMISE OF PREMISES. Landlord hereby demises and leases to Tenant for
the term and upon the conditions provided in this Lease, and Tenant hereby
leases from Landlord, the following real and personal property (collectively,
the "Demised Premises"):
(a) the real property described in Exhibit A attached hereto and made a
part hereof (the "Land"), and
(b) all buildings, structures, fixtures and other improvements of every
kind, now or hereafter situated upon the Land, including, but not limited to,
the Facility, alleyways and connecting tunnels, sidewalks, utility pipes,
conduits and lines (on-site), and parking areas and
roadways appurtenant to such buildings and structures, specifically excluding
utility pipes, conduits and lines owned by utility providers, if any, as to
which, however, all of Landlord's right, title and interest thereto is hereby
leased and included (collectively, the "Leased Improvements"), and
(c) all easements, licenses, rights, privileges and appurtenances now
or hereafter relating to the Land and/or the Leased Improvements (collectively,
the "Related Rights"), and
(d) all equipment, machinery, fixtures, and other items of real and/or
personal property, including all components thereof, now or hereafter located
in, on or used in connection with, and permanently affixed to or incorporated
into the Land or the Leased Improvements, including, without limitation, if any,
all furnaces, boilers, heaters, electrical equipment, heating, plumbing,
lighting, ventilation, refrigeration, 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 property, together with
all replacements, modifications, alterations and additions thereto, specifically
excluding utility pipes, conduits and lines owned by utility providers, if any,
as to which, however, all of Landlord's right, title and interest thereto is
hereby leased and included (collectively, the "Fixtures"), and
(e) all equipment, machinery, furniture, furnishings, movable walls or
partitions, computers, trade fixtures, office equipment, operating supplies, or
other tangible real or personal property now or hereafter located, installed,
stored, used or usable in connection with the operation of the Facility and
removable without causing material damage to the Land or the Leased
Improvements, including, without limitation, all items of furniture,
furnishings, equipment, appliances, apparatus, and vehicles, together with all
replacements, modifications, alterations and additions thereto, specifically
excluding utility pipes, conduits and lines owned by utility providers, if any,
as to which, however, all of Landlord's right, title and interest thereto is
hereby leased and included, and also specifically excluding any personal
property owned by patients or residents, as to which, however, all of Landlord's
right, title and interest thereto is hereby leased and included (collectively,
the "Personal Property").
1.2 OTHER ASSETS. Effective on the Commencement Date (as hereinafter
defined) Landlord hereby transfers, assigns and conveys to Tenant for the term
hereinafter set forth and upon the conditions provided in this Lease, all of the
following assets (collectively, hereinafter called the "Other Assets"):
(a) all intangible property, assets and rights appurtenant or relating
to the ownership and/or operation of the Facility, including but not limited to,
licenses, permits and other governmental approvals from the applicable licensing
and certification agencies, to the extent assignable (collectively, the
"Intangibles"), and
2
(b) all patents, copyrights, trademarks, trade names, brand names,
service marks, logos, symbols, trade dress, designs or representations or
expressions of any thereof, or registrations or applications for registration
thereof, or any other inventions, trade secrets, technical information,
know-how, proprietary right or intellectual property appurtenant or relating to
the ownership and/or operation of the Facility (collectively, the "Trade
Rights").
1.3 ASSUMED NAME. Tenant shall have the exclusive right (but not the
obligation) to use and to register as the assumed business name for the Facility
the name "The Homestead of Manhattan" effective as of the Commencement Date of
this Lease and thereafter while this Lease is in effect.
1.4 DELIVERY OF POSSESSION . Landlord shall deliver exclusive
possession of the Demised Premises and the Other Assets to Tenant on the
Commencement Date. Notwithstanding anything to the contrary contained in this
Lease, Tenant shall have no obligations or liabilities under this Lease or as
tenant of the Demised Premises or with respect to the Other Assets, prior to
such delivery of possession and the Commencement Date.
ARTICLE II
TERM
2.1 TERM . Subject to Section 21.1 hereof, the term of this Lease shall
commence on the Commencement Date (as hereinafter defined), as such date may be
extended pursuant to the express provisions hereof. The term of this Lease shall
run from the Commencement Date and terminate at 12:00 midnight, on the last day
of the fifteen (15) Lease Year (as hereinafter defined) (the "Initial Term"),
unless extended as provided in Section 2.2 below.
2.2 RENEWAL TERM . If this Lease is still in effect and if no Event of
Default (as hereinafter defined) shall have occurred and be continuing Tenant
shall have the right to extend this Lease for three (3) additional consecutive
terms of five (5) years each (each a "Renewal Term"). A renewal option shall be
deemed exercised upon Tenant giving Landlord one hundred twenty (120) days
written notice prior to the expiration of the then current Lease Term. If Tenant
shall give notice of the exercise of an election in the manner and within the
time provided herein, the Lease Term shall be extended upon the giving of the
notice without the requirement of any action on the part of Landlord.
2.3 LEASE TERM . As used herein, "Lease Term" shall mean, prior to the
exercise by Tenant of any of its rights under Section 2.2 to extend the term of
this Lease, the Initial Term, and after the exercise by Tenant of any one or
more of such extension rights, "Lease Term" shall mean the Initial Term and each
Renewal Term as to which such right has been exercised. Except as otherwise
expressly provided in this Lease, all the agreements and conditions contained in
this Lease shall apply to each Renewal Term as to which such right has been
exercised.
2.4 LEASE YEAR . As used herein, "Lease Year" means any 12-month period
that commences on the Commencement Date, or any anniversary of the Commencement
Date, provided, however, if the Commencement Date occurs on a day other than the
first day of a month, then a
3
Lease Year shall commence on the first day of the first month following the
Commencement Date except that the first Lease Year shall include the period from
the Commencement Date through the last day of the month in which the
Commencement Date occurs.
ARTICLE III
RENTAL
3.1 ANNUAL RENT . Beginning on the Commencement Date of this Lease,
Tenant agrees to pay to Landlord rent at the annual rates set forth below, in
each case in monthly installments of one-twelfth thereof. The monthly rent
payments provided for herein shall be paid by Tenant in advance, without notice
or demand, on the first day of each month, and the rent for the calendar month
during which rent shall begin to accrue and for the last calendar month of the
Lease Term, shall be apportioned, if necessary. All rental payments to be made
to Landlord under this Lease shall be made to Landlord at the address stated in
Section 18.1 hereof or to such other person, firm, corporation or other entity
or at such other address as Landlord may designate by notice in writing to
Tenant.
3.1.1 Annual rent ("Annual Rent") shall be payable as follows:
during the first Lease Year at the annual rate of Two
Hundred Fifty-eight Thousand Five Hundred ($258,500)
Dollars; and during each Lease Year thereafter at the annual
rate equal to the product resulting from multiplying the
Annual Rent for the first Lease Year by a fraction the
numerator of which is the Price Index (as defined in Article
VIII) published for the first calendar month of the Lease
Year with respect to which the adjustment is being made, and
the denominator of which is the Base Price Index (as defined
in Article VIII); provided that the Annual Rent for the
Lease Year in question shall not be lower than the Annual
Rent for the immediately preceding Lease Year.
3.1.2 Annual Rent shall be paid in equal monthly installments and
shall be payable in advance, without demand, on the first
day of each calendar month during any Lease Year. All
payments of Annual Rent and all other payments to be made by
Tenant to Landlord pursuant to this Lease shall be paid in
lawful money of the United States of America and, except as
otherwise provided in this Lease, without discount, setoff
or abatement.
3.1.3 The obligations to pay Annual Rent and all other items of
rent under this Lease are separate and independent of each
and every other covenant and agreement contained in this
Lease, except as otherwise provided in this Lease to the
contrary including (but not limited to) provisions relating
to Tenant's right to an abatement of, or setoff or reduction
against, any such items of rent.
3.1.4 In the event that any monthly installment of Annual Rent is
not paid within fifteen (15) days after the date due, then,
in addition to any other rights or remedies available to
Landlord, interest shall accrue on such overdue payment at a
rate per annum equal to the lesser of (a) the maximum rate
of interest
4
permitted by law or (b) two percent (2%) above the "Prime Rate" of interest
quoted in The Wall Street Journal "Money Rates Column" from the date
originally due to the date of payment of the same.
3.2 CERTAIN ADJUSTMENTS TO THE ANNUAL RENT . Intentionally Deleted.
3.3 CERTAIN ADJUSTMENTS TO THE ANNUAL RENT; TRANSFER TAXES; PRORATED
ITEMS . On the Commencement Date, the following adjustments and prorations shall
be computed as of the Commencement Date with respect to the following items
(unless otherwise stated herein) and the initial monthly installments of Annual
Rent payable for the first Lease Year shall be adjusted, upward or downward as
appropriate, to reflect such prorations:
(a) TRANSFER TAXES. All state and local real estate transfer taxes and
fees payable in connection with this Lease or any of the transaction documents
(including, without limitation, the short form lease) relating hereto or the
recording thereof shall be borne by Landlord.
(b) REAL ESTATE TAXES, ETC. Real property taxes and all other ad
valorem public or governmental charges against the Demised Premises (including
charges for sewer, water, drainage or other services) assessed for a period in
which the Commencement Date occurs shall be adjusted and apportioned as of the
Commencement Date and paid thereafter by Tenant in accordance with Article V
hereof.
(c) PERSONAL PROPERTY TAXES. Personal property taxes attributable to
the value of the Personal Property and, if applicable, to the extent taxable,
the Other Assets for the period in which the Commencement Date occurs shall be
adjusted and apportioned as of the Commencement Date and paid thereafter by
Tenant in accordance with Article V hereof.
(d) LICENSES, SERVICE CONTRACTS AND PERSONAL PROPERTY LEASES. All
prepayments made or payments due under any continuing Licenses (as defined in
Section 13.9), Contracts (as defined in Section 13.6), and Personal Property
Leases (as defined in Section 13.26) affecting the Demised Premises or Other
Assets, including, without limitation, parking, garbage removal, laundry and
maintenance agreements, shall be adjusted and apportioned as of the Commencement
Date. Tenant shall assume all such obligations under such continuing Licenses,
Contracts and Personal Property Leases which arise (and relate to the period) on
and after the Commencement Date. Notwithstanding anything to the contrary
contained in this Lease, Landlord shall terminate any and all service contracts,
leases and/or other agreements affecting or related to the Demised Premises
which are with any person or entity that is affiliated with Landlord, including
without limitation, any and all Contracts and/or Personal Property Leases other
than those designated by Tenant pursuant to Article XX hereof and Tenant shall
have no obligations or liabilities with respect thereto.
(e) UTILITIES. All prepayments made or payments due with respect to
utilities servicing the Demised Premises, including, without limitation, water,
sewer, electric, gas and utility bills, shall be adjusted and apportioned as of
the Commencement Date. Landlord shall use its best efforts to have all utility
meters read on the Commencement Date so as to accurately determine the proration
of current utility bills.
5
3.4 OTHER PRORATIONS . All other charges and fees customarily prorated
and adjusted in similar transactions in the locale in which the Demised Premises
are situated shall be prorated as of the Commencement Date in accordance with
such custom. However, nothing contained herein shall operate to subject Tenant
to any liability of Landlord, and Tenant does not assume any liability of
Landlord, except as specifically set forth in this Lease.
In the event that accurate prorations and other adjustments cannot be
made as of the Commencement Date because current bills or statements are not
obtainable (as, for example, utility bills), the parties shall prorate such
items upon receipt of the final xxxx or statement.
ARTICLE IV
TITLE AND POSSESSION
4.1 TITLE AND AUTHORITY . Landlord represents and warrants to Tenant
that Landlord owns the fee simple title to the Land, Leased Improvements,
Related Rights and Fixtures and Landlord owns marketable title to the Personal
Property and Other Assets, free and clear of all Liens (as defined in Section
13.10) other than as set forth on Schedules 13.10(a), 13.10(b) and 13.11(a), and
Landlord has the right and complete authority to enter into this Lease on the
terms and conditions and for the use and purposes herein stated. Said Schedules
13.10(a), 13.10(b), 13.11(a) and 13.11(b) shall each be updated to the extent
necessary on and as of the day preceding the Commencement Date.
4.2 LEASED EQUIPMENT . As of the Commencement Date, Landlord shall
furnish the Facility with the Personal Property and Fixtures (collectively, the
"Leased Equipment"), including, without limitation, those items of the Personal
Property and Fixtures set forth on Exhibit B hereto. Landlord shall have no
obligation to furnish the Facility with any Leased Equipment after the
Commencement Date. The Leased Equipment shall include all the personal property,
fixtures, equipment and furnishings necessary and appropriate for the operation
of the Facility by Tenant in accordance with the standards for operations
contemplated for the facility leased pursuant to that certain Lease Agreement,
dated as of June 18, 1996, between The Homestead of Garden City, L.C., as
landlord, and Integrated Living Communities at Garden City, Inc., as tenant; all
of such Leased Equipment being leased to Tenant pursuant to the terms of this
Lease. No additional rent, beyond Annual Rent provided for in Article III
hereof, shall be paid by Tenant for the Leased Equipment.
4.3 SURRENDER OF POSSESSION . At the end of the Lease Term, or upon the
earlier termination of this Lease, Tenant, at its sole cost and expense, shall
surrender the Demised Premises to Landlord in the same good condition and state
of repair as they were in at the Commencement Date, ordinary wear and tear and,
except as otherwise provided in this Lease, damage by fire or other casualty
excepted, and shall convey and transfer to Landlord such portion of the Other
Assets as shall not have been used, depleted or consumed in the ordinary course
of the operation of the Facility and, subject to Section 8.2 hereof, shall also
convey and transfer to Landlord any replacements and accessories thereto
acquired by Tenant during the Lease Term, to the extent the same continue in
existence at the end of the Lease Term.
6
4.4 HOLDING OVER . If Tenant remains in possession of the Demised
Premises after the expiration of the Lease Term, except as otherwise provided in
the Option Agreement (as hereinafter defined), such possession shall be as a
tenant at sufferance. During such occupancy, rent shall be payable equal to 150%
times the monthly amount of Annual Rent payable during the last month of the
Lease Term, and the provisions of this Lease shall be applicable and continue in
full force and effect. However, Landlord's acceptance of any rent payments and
the terms of this Section 4.4 shall not constitute a renewal of this Lease or
give Tenant any right to continue to occupy the Land on a month-to-month basis
or otherwise. Notwithstanding the foregoing, if Tenant is unable to surrender
the Demised Premises because Landlord fails to provide a qualified and duly
licensed operator (a "Proper Successor") for the Facility at the end of the
Lease Term to take over the operation and management of the Facility, Tenant
shall have the right, but shall not be obligated to, remain in possession of the
Demised Premises and continue to operate and manage the same if Tenant would be
legally prohibited from abandoning the Demised Premises or in Tenant's judgment,
abandoning the Demised Premises without a Proper Successor in place to continue
the operations of the Facility would jeopardize its (or its affiliates')
reputation as a provider of residential congregant, nursing and/or assisted
living facility care or could otherwise subject it (or its affiliates) to
liability. In the event Tenant remains in possession of the Demised Premises
pursuant to the immediately preceding sentence, Tenant shall (a) pay to Landlord
as gross rent during such occupancy 90% the Annual Rent payable by Tenant in the
last Lease Year of the Lease Term and (b) surrender possession of the Demised
Premises within ten (10) days after Landlord provides a Proper Successor to take
over the operation and management of the Facility.
ARTICLE V
TAXES, ASSESSMENTS AND UTILITIES
5.1 REAL ESTATE TAXES . Tenant, at its sole cost and expense, shall pay
when due all ad valorem general real estate taxes, betterment or other
assessments and transit taxes (collectively, "Impositions") which are assessed
against, levied, imposed upon, become a lien or become due and payable with
respect to or upon the Demised Premises, and no other property, and which first
become due and payable, or any installments thereof which become due and
payable, on and after the Commencement Date and during the Lease Term. Tenant
shall provide Landlord with copies of all receipts received in connection with
the payment of such taxes and assessments within twenty (20) days after
Landlord's request prior to the date interest or penalties on such taxes and
assessments would be imposed. Tenant shall have the right, at its sole cost and
expense and in good faith, to contest the amount or validity of any such
Imposition payable by Tenant under the terms of this Lease, provided, however,
that if at any time payment of any such Imposition shall become necessary to
prevent the tax sale of the Demised Premises or any portion thereof because of
nonpayment, then Tenant shall pay the same in sufficient time to prevent such
sale. Landlord shall join, at Tenant's sole cost and expense, in any proceedings
referred to above, and hereby agrees that the same may be brought in its name,
if the provisions of any law, rule or regulations at the time, in effect shall
require that such proceedings be brought by and/or in the name of Landlord or
any owner of the Demised Premises. Tenant shall be entitled to any refund of any
Impositions, and all penalties or interest thereon, received by Landlord which
shall have been paid by Tenant, or which shall have been paid by Landlord but
previously reimbursed in full by Tenant. Provided that no Event of Default shall
have occurred and be continuing, Landlord shall not, without Tenant's prior
approval, make or
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agree to any settlement, compromise or other disposition of any such proceedings
or discontinue or withdraw any such proceedings or accept any refund or other
adjustment of or credit for any Imposition as a result of any such proceedings.
Landlord hereby appoints Tenant the attorney-in-fact of Landlord for the purpose
of making all payments to be made by Tenant pursuant to any of the provisions of
this Lease to persons or entities other than Landlord. Notwithstanding anything
to the contrary contained in this Lease, if, by not later than thirty (30) days
prior to the final date for contesting the validity or amount of any real estate
taxes and assessments with respect to the last Lease Year of the Lease Term,
Tenant shall not have advised Landlord that Tenant intends to conduct such
contest, Landlord will have the right (but not the obligation) to contest the
validity and/or amount of such Impositions for the last Lease Year of the Lease
Term without the consent of Tenant, but at Landlord's sole cost and expense.
5.1.1 If at any time during the Lease Term the methods of taxation
of Impositions prevailing at the commencement of the Initial
Term hereof shall be altered so that in lieu of, or as a
supplement to, or a substitute for, the whole or any part of
the Impositions then levied, assessed or imposed on the
Demised Premises, any of the following are levied, assessed
or imposed:
(a) a tax, assessment, levy, imposition or charge, wholly or
partially as a capital levy or otherwise, on the rents received
therefrom; or
(b) a tax, assessment, levy (including but not limited to
any municipal, state or federal levy), imposition or charge
measured by or based in whole or in part upon the Demised
Premises and imposed upon Landlord; or
(c) a license fee measured by the rent payable under this
Lease;
then, in such event, all such taxes, assessments, levies, impositions, and
charges, or the part thereof so measured or based, shall be deemed to be
included in the Impositions payable by Tenant pursuant to this Section 5.1, to
the extent that such taxes, assessments, levies, impositions and charges would
be payable if the Demised Premises were the only property of Landlord subject
thereto, and Tenant shall pay and discharge the same as herein provided in
respect of the payment of general real estate taxes and assessments.
5.1.2 Impositions shall not include any income, excess profit,
estate, inheritance, succession, transfer, franchise,
capital or other tax or assessment upon Landlord or (unless
in substitution, as herein provided) upon the rentals
payable under this Lease, all of which shall be the sole
obligation of Landlord. The real estate taxes on the Demised
Premises during any year shall mean such amounts as shall be
finally determined, after deducting abatements, discounts,
refunds or rebates, if any, to the Impositions payable with
respect to the Demised Premises during said year.
5.1.3 Any Impositions which become due for the year in which
possession is given to Tenant but which are payable with
respect to a period prior to the Commencement Date shall be
prorated for the calendar year between
8
Landlord and Tenant as provided in Section 3.3 hereof and
such proration shall also occur at the end of the Lease Term
for the calendar year of termination.
5.1.4 If Landlord shall have the right to elect the period over
which any Impositions are payable, Landlord agrees to elect
and Tenant may make such payments over the longest period of
time available.
5.2 PERSONAL PROPERTY TAXES . Beginning on the Commencement Date,
Tenant, at its sole cost and expense, shall pay when due all personal property
taxes and assessments (if any) assessed against, levied, imposed upon, or which
would become a lien or become due and payable with respect to, or upon any of
Tenant's tangible or intangible personal property or the Leased Equipment or the
Other Assets, during the Lease Term. Tenant shall provide Landlord with copies
of all receipts received in connection with the payment of such taxes and
assessments not less than ten (10) days prior to the date interest or penalties
on such taxes and assessments would be imposed. Any personal property taxes and
assessments which become due for the year in which possession is given to Tenant
but which are payable with respect to a period prior to the Commencement Date
shall be prorated for the calendar year between Landlord and Tenant as provided
in Section 3.3 hereof and such proration shall also occur at the end of the
Lease Term for the calendar year of termination.
5.3 SEWER USE FEES . Beginning on the Commencement Date, Tenant, at its
sole cost and expense, shall pay when due all sewer use fees, rents, charges and
deposits assessed against, levied, imposed upon, or which would become a lien or
become due and payable with respect to, or upon the Demised Premises, during the
Lease Term. Tenant shall provide Landlord with copies of all receipts received
in connection with the payment of such fees, rents, charges and deposits not
less than ten (10) days prior to the date interest or penalties on such fees or
deposits would be imposed.
5.4 UTILITIES . Beginning on the Commencement Date, Tenant, at its sole
cost and expense, shall obtain in its name and pay when due all charges and
deposits for gas, water, electricity, cable television, trash, telephone,
communication services, and all other utilities used on or supplied to the
Demised Premises, during the Lease Term.
ARTICLE VI
USE OF DEMISED PREMISES
6.1 USE BY TENANT . Tenant shall use the Demised Premises for the
business purpose of a residential congregant, nursing care and/or assisted
living facility and all related and ancillary medical and therapeutic services,
and for no other purpose without Landlord's consent, which consent shall not be
unreasonably withheld or delayed.
6.2 COMPLIANCE WITH LAWS . Except as otherwise provided in this Section
6.2, and in Sections 8.1.4, 8.1.5, and 8.1.6, Tenant, in operating the Demised
Premises, at its sole cost and expense, shall comply with all applicable city,
county, state and federal building codes, ordinances, rules, regulations and
laws applicable to the Demised Premises, notices from the issuer
9
of the Facility's fire hazard or casualty policy, and each covenant, condition
or restriction of record which is a Permitted Exception (as hereinafter
defined).
Without limiting the generality of the foregoing provisions of this
Section 6.2, except as otherwise provided in this Lease, Tenant, at its cost and
expense, shall comply with all Environmental Laws (as hereinafter defined) that
are applicable to its operation of the Demised Premises, including, but not
limited to, the use, handling, treatment, storage, transportation and disposal
of any hazardous, toxic or infectious waste, material or substance (including
Medical Waste) and petroleum products, material or waste. Landlord, at its cost
and expense, shall comply with all Environmental Laws in connection with the
previous, present and/or future use, handling, treatment, storage,
transportation and disposal of any such waste, material, substance and products
at or on the Demised Premises by anyone other than Tenant, or its employees,
agents, contractors, invitees, residents, patients or clients.
6.3 WASTE . Tenant shall neither commit, nor permit the commission of
waste upon or against the Demised Premises, ordinary wear and tear excepted.
6.4 LICENSE AND PERMITS . Tenant at its sole cost and expense, shall
acquire and maintain all licenses and permits needed to operate the Demised
Premises for the then applicable use permitted herein. Tenant, as a provider of
residential care services, shall comply with all applicable rules, regulations,
laws, statutes, orders, ordinances and requirements, and will maintain its
certifications for reimbursement and licensure, and its accreditation, if
compliance with accreditation standards is required to maintain the operations
of the Facility.
6.5 LANDLORD'S REPAIRS . Landlord shall have no obligation to make
improvements, alterations, replacements or repairs to the Demised Premises,
except as may be expressly provided herein.
6.6 CONFLICT WITH INSURANCE POLICIES. Tenant shall not permit any use
of the Demised Premises which would invalidate any policy of insurance or which
would increase the premiums for any insurance policy carried by or for the
benefit of Landlord unless Tenant pays any such increase in premiums.
ARTICLE VII
EMINENT DOMAIN
7.1 PERMANENT OR TEMPORARY TAKING . If after the execution of this
Lease all or any part of the Demised Premises is acquired on a permanent or
temporary basis by any federal, state or local governmental agency, by means of
condemnation or threat of condemnation, or by reason of mutual agreement between
Landlord, Tenant, and said governmental agency, this Article VII shall control.
7.2 COMPENSATION . All compensation awarded for any taking (including,
but not limited to, loss of leasehold) shall belong to and be the property of
Landlord; provided, however, that Tenant shall be entitled to any portion of the
award made to Tenant for its loss of business,
10
depreciation to or for the cost of removal of stock, fixtures, equipment (other
than the Leased Equipment) or signs, moving expenses, relocation costs or any
other allowances to which Tenant may be legally entitled. This Lease shall not
preclude the right of Tenant to pursue an independent action for damages against
any governmental agency for said taking, provided, however that in no event
shall any resulting award to Tenant reduce the amount of the award to which
Landlord may be entitled. In any event, Landlord shall not be liable to Tenant
for any damages.
7.3 EFFECT ON THIS LEASE OF PERMANENT TAKING . In the event that the
whole of the Demised Premises is taken permanently by any method, then this
Lease shall terminate as of the date title to the Demised Premises vests in the
governmental agency. Such date of vesting shall operate as though it were the
date originally intended by the parties for expiration of this Lease and Tenant
shall pay Annual Rent and Landlord shall refund to Tenant any overpayments of
Annual Rent or other charges within five (5) days after the date of such vesting
and all other obligations hereunder accrued (prorated as appropriate) to the
date of such vesting.
In the event a substantial and material portion (as hereinafter
defined) of the Demised Premises are taken permanently, then Tenant shall have
the option to terminate this Lease by giving Landlord at least ninety (90) days'
written notice. If Tenant does not elect to terminate this Lease or if less than
a substantial and material portion of the Demised Premises are taken, then this
Lease shall terminate only as to the part of the Demised Premises taken and
Annual Rent shall be reduced for the remainder of the Lease Term by a just, fair
and equitable proportion of Annual Rent payable according to the size, nature
and extent of the property that is taken. Any adjustments or reductions in
Annual Rent, as contemplated by this Section shall take into account the
practical and economic effect of the taking in question on the operation of the
Demised Premises. In the event that a substantial and material part of the
Demised Premises is temporarily taken in excess of three hundred sixty-five
(365) consecutive days, then such taking shall be deemed a permanent taking for
purposes of this Lease. It shall be presumed that the taking is "substantial and
material" if (a) the Kansas Department of Health and Environment permanently
closes the Demised Premises whether in whole or in part because of such taking
for use as a nursing care and/or assisted living facility, or (b) if in Tenant's
reasonable business judgment the portion of the Demised Premises not so taken is
inadequate to continue to operate the Facility in a commercially profitable
manner as a nursing care and/or assisted living facility, as the case may be
according to the then actual use by Tenant.
In the event that the Demised Premises become landlocked by such taking
for a period in excess of three (3) consecutive days and reasonable alternative
access cannot be provided within five (5) days after such occurrence, then
Annual Rent shall xxxxx until access or reasonable alternative access is
provided to the Demised Premises; provided that if such access or reasonable
alternative access cannot be provided within thirty (30) days after such
occurrence, then Tenant shall have the right to terminate this Lease by written
notice to Landlord, which shall terminate this Lease sixty (60) days after such
notice.
7.4 EFFECT ON THIS LEASE OF TEMPORARY TAKING . In the event that all or
part of the Demised Premises are taken for a temporary use, Annual Rent shall be
reduced and abated by a just, fair and equitable proportion of Annual Rent
payable according to the size, nature and extent of the property that is taken.
Any adjustments or reductions in Annual Rent, as contemplated by this
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Section shall take into account the practical and economic effect of the taking
in question on the operation of the Demised Premises. Tenant shall continue to
perform all other conditions of this Lease as though the taking or condemnation
had not occurred, except to the extent that Tenant shall be prevented from doing
so by reason of the taking or condemnation and except for the abatement of
Annual Rent as provided herein. Neither party to this Lease shall have any right
to terminate this Lease by reason of a temporary taking of all or part of the
Demised Premises, except as stated in Section 7.3 above.
7.5 RESTORATION. If any building or improvement on the Demised Premises
or any replacement thereof shall be damaged or partially destroyed by any such
taking of less than all or substantially all thereof and this Lease shall not be
terminated by reason thereof, Tenant shall be entitled to receive such portion
of any award to which Landlord may be entitled, as will be sufficient to pay for
the costs of restoring and rebuilding such building(s) and improvement(s) and
within ninety (90) days after receipt by Tenant of such sum, Tenant shall
proceed with reasonable diligence to conduct any necessary demolition and to
repair, replace or rebuild, any remaining part of said building(s) and
improvement(s), or of any replacement thereof not so taken, so as to constitute
such remaining part thereof a complete, useable building in substantially the
same condition and repair as the building(s) and improvements were in prior to
any such taking; and Tenant shall hold that portion of any award received by
Tenant pursuant to this Section in trust to apply the same to the cost and
expense of such demolition, repairing, replacing and rebuilding. If the cost of
any work necessary to repair, replace or rebuild (including any necessary
demolition work) any damage to or destruction of the building(s) and
improvement(s) or any replacement or replacements thereof shall equal or exceed
an aggregate cost of One Hundred Thousand ($100,000) Dollars, the same shall be
conducted under the supervision of an architect or engineer selected by Tenant
and approved in writing by Landlord, which approval Landlord agrees shall not be
unreasonably withheld or delayed. Whenever pursuant to this Section Tenant is
entitled to receive the proceeds of an award in excess of $100,000 in amount for
the purpose of applying the same to the cost of demolishing, repairing,
replacing or rebuilding, such proceeds shall be paid to the Insurance Trustee
provided for in Article XV, to be disposed of by such Insurance Trustee in the
manner provided in Article XII.
ARTICLE VIII
ALTERATIONS, REPAIRS AND TRADE FIXTURES
8.1 REPAIRS BY TENANT GENERALLY .
8.1.1 Except as otherwise expressly provided in this Lease,
including without limitation, in this Article VIII and in
Articles VII, XII and XXII, Tenant shall be responsible for
the performance, at its sole cost and expense, of all
necessary repairs, replacements, alterations and
improvements, whether or not in order to comply with all
applicable laws, regulations and municipal ordinances,
(collectively, "Repairs") to the Demised Premises. This
obligation to perform Repairs shall include, at its sole
cost and expense, inspecting, keeping, maintaining,
repairing and replacing the interior, exterior, structural
and nonstructural improvements, alterations and other
components on the Demised Premises so as to keep the
improvements and interior decorations in
12
substantially the same condition as they were in on the
Commencement Date, subject to depreciation and ordinary wear
and tear, and in a safe condition, free from dirt, water,
snow, ice, refuse, trash and obstruction and shall also
include, but not be limited to, signs, glass, landscaping,
any air conditioning, heating, electrical, ventilating,
parking areas and driveways, plumbing systems, roof, walls
and all interior and exterior cleaning, painting, repairs
and replacements on or at the Demised Premises. Tenant shall
not voluntarily alter any structural part of the Leased
Improvements or demolish, remove, or materially and
permanently alter any permanent improvement in or on the
Land or make permanent additions thereto the cost of which,
in the case of any single alteration or addition, exceeds
$50,000 or, in the case of all such alterations or additions
in any Lease Year, exceeds in the aggregate $250,000,
without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed; provided,
however, that Landlord's consent shall not be required with
respect to any such Repairs which are required in order to
comply with applicable laws, regulations or municipal
ordinances or in the case of an emergency or any other
situation where bodily harm is threatened or Tenant is
exposed to liability if such Repairs are not made. In
addition, Tenant may perform any other non-structural
alterations and additions to the Demised Premises without
Landlord's consent so long as Tenant gives a copy of the
plans and specifications, if any, to Landlord within ten
(10) days prior to making such alterations and/or additions;
provided further that cosmetic modifications and decorations
that are substantially consistent with the quality of the
original materials and decorations that were used in the
Facility may be made by Tenant without any notification to
Landlord.
8.1.1.1 The dollar amounts set forth in this paragraph
8.1.1 shall be adjusted and increased each Lease Year by an
amount equal to the product resulting from multiplying each
of said dollar amounts by a fraction the numerator of which
is the Price Index published for the first calendar month of
the Lease Year with respect to which the adjustment is being
made, and the denominator of which is the Base Price Index.
8.1.1.2 As used in this Lease the following terms shall
have the following respective meanings:
(i) "Price Index" shall mean the "Revised Consumer
Price Index for All Urban Consumers (the CPI-U) published by
the Bureau of Labor Statistics of the United States
Department of Labor, for All Cities area, All Items,
(1982-84=100)"; and
(ii) "Base Price Index" shall mean the Price Index
published for the calendar month in which the Commencement
Date occurs or if not published for such month, then the
closest preceding month for which a Price Index is
available.
8.1.1.3 In the event the Price Index shall hereafter be
converted to a different standard reference base or
otherwise revised, the determination of the adjusted dollar
amounts
13
hereunder shall be made with the use of such conversion
factor, formula or table for converting the Price Index as
may be published by the Bureau of Labor Statistics, or
Prentice Hall, Inc. or any other nationally recognized
publisher of similar statistical information. If at any time
during the Lease Term the Price Index shall no longer be
published by said Bureau, then any comparable index issued
by said Bureau or similar agency of the United States
issuing similar indices shall be used for the purposes of
making the adjustments under Article III and under this
Article VIII, the same, however, to be appropriately
adjusted in order to give effect to the intent of the
foregoing provisions of this Lease. In the event that the
U.S. Department of Labor, Bureau of Labor Statistics,
changes the publication frequency of the Price Index so that
a Price Index is not available to make a cost-of-living
adjustment as herein provided in Article III or this Article
VIII for the month specified, the cost-of-living adjustment
to be made thereunder shall be based on the percentage
difference between the Price Index for the closest preceding
month for which a Price Index is available and the Base
Price Index.
8.1.2 Tenant shall keep the Demised Premises free from any
mechanic's, materialman's, or similar liens and encumbrances
and any claims therefor in connection with any Repairs and
Tenant shall remove any such lien or encumbrance, by bond or
otherwise, within thirty (30) days after notice from
Landlord of the same. If Tenant fails to do so, Landlord may
pay the amount of such claim or take such other action as
Landlord deems reasonably necessary to remove such claim,
lien, or encumbrance after investigating the validity
thereof. The amount so paid and costs incurred by Landlord
shall be deemed additional rent under this Lease, payable on
demand, when accompanied by detailed information and
invoices regarding such amount. Nothing in this Lease shall
be deemed a consent by Landlord to the filing of any lien on
Landlord's interest in the Demised Premises and any such
liens shall attach solely to Tenant's interest in the
Demised Premises and shall in all respects be subordinate to
Landlord's interest in the Demised Premises. Tenant shall
not do anything or permit anything to be done upon the
Demised Premises which will materially and adversely affect
the safety or security of the Demised Premises, which will
increase the rate of fire or casualty insurance upon the
building or its contents, without Landlord's written
consent, which consent shall not be unreasonably withheld or
delayed, or which will cause structural damage to the
Demised Premises or any Leased Improvements. Except for
trade fixtures, any improvements made to the Demised
Premises shall become the property of Landlord, free of
charge, if affixed to the realty.
8.1.3 Tenant's obligation to perform Repairs shall also include
without limitation the repair and maintenance of Leased
Equipment and the replacement from time to time of obsolete,
damaged or unsightly Leased Equipment, so as to keep the
same in good operating condition consistent with a nursing
care or assisted living facility, whichever is being
operated at the Demised Premises at the time in question.
Notwithstanding anything to the contrary contained in this
Lease, any Leased Equipment which is leased or the subject
of a conditional sales agreement or other finance
arrangement at the
14
commencement of the Initial Term and any replacement(s) of
such Leased Equipment may be encumbered similarly during the
Lease Term.
8.1.4 Notwithstanding anything to the contrary contained in this
Lease, if Tenant is required to make any expenditures for
Repairs (whether or not in order to comply with all
applicable laws, regulations and municipal ordinances) to
the Demised Premises during the last two Lease Years of the
Lease Term (excluding Repairs that are required to be made
as a result of Tenant's, or Tenant's agents', employees' or
contractors' negligence or wilful misconduct), which
expenditures according to generally accepted accounting
principles ("GAAP") should be capitalized (such expenditures
being hereinafter collectively called "Capital
Expenditures") and if any such Capital Expenditure is a
Major Capital Expenditure (as hereinafter defined), Tenant
shall send to Landlord a notice of such circumstance, which
notice shall specify the nature of the repair, replacement,
alteration or improvement for which the Major Capital
Expenditure is being incurred (hereinafter called a "Capital
Improvement") and the estimated cost of such Capital
Improvement. Tenant shall only be obligated to pay that
portion ("Tenant's Share") of the cost of such Capital
Improvement as shall be equitably apportioned to it taking
into consideration the reasonable useful life (according to
GAAP) of such Capital Improvement and the unexpired Lease
Term and the cost of such Capital Improvement in excess of
Tenant's Share (such excess cost being hereinafter called
"Landlord's Share") shall be borne by Landlord. Tenant shall
only be obligated to make the Capital Improvement if, within
ten (10) business days after Landlord receives Tenant's
above-described notice, Tenant and Landlord agree on the
determination of Tenant's Share and Landlord's Share of such
Major Capital Expenditure and the manner in which Landlord
will pay and/or reimburse Landlord's Share to Tenant. If the
parties cannot agree on an equitable sharing of any such
Major Capital Expenditure or the manner of payment and/or
reimbursement, Tenant may (i) seek to have the matter
resolved by arbitration as elsewhere provided in this Lease
prior to undertaking to perform any such Capital
Improvement, (ii) perform any such Capital Improvement and
during and/or after the performance thereof seek to have the
matter resolved by arbitration as elsewhere provided in this
Lease, in which case immediately upon resolution of such
matter Landlord shall pay to Tenant and/or reimburse Tenant
for Landlord's Share of the cost thereof, or (iii) terminate
this Lease upon not less than thirty (30) days prior written
notice to Landlord. In the event that after allocating
Landlord's and Tenant's respective Shares of the cost of a
Capital Improvement, Tenant exercises a renewal option,
Tenant shall reimburse Landlord for the unamortized amount
of Landlord's Share of any such cost theretofore paid by
Landlord with interest thereon at the rate per annum set
forth in Article III hereof.
As used herein, a "Major Capital Expenditure" means any Capital
Expenditure which is required to be made during the last two Lease Years of the
Lease Term and which exceeds $25,000
15
individually, or which, when added to all other Capital Expenditures theretofore
incurred by Tenant during such period, exceeds $100,000.
8.1.5 Notwithstanding anything to the contrary contained in this
Lease, Tenant shall not be obligated to make or to pay for
any Repairs that are required as a result of the negligence
or wilful misconduct of Landlord, or any of its or its
affiliates' (which shall include an affiliate of The
Homestead Company, L.C. or of Xxxx Xxxx), employees, agents
or contractors or as provided in paragraph 8.1.6 below.
8.1.6 Landlord agrees that if at any time or times any
governmental authorities or insurance rating bureaus having
jurisdiction shall complain that the Demised Premises, or
any portion thereof, were not constructed in compliance with
any law, ordinance or regulation of any governmental
authority or insurance rating bureau having jurisdiction and
shall request compliance, then Landlord shall, upon receipt
of notice of such complaint, cause such repairs, alterations
or other work to be done so as to bring about the compliance
requested.
8.2 QUALITY AND PROMPTNESS OF REPAIRS AND REPLACEMENTS; OWNERSHIP OF
REPLACEMENTS AND WARRANTIES . All repairs and replacements made by Tenant shall
be made when reasonably necessary and within a reasonably prompt period of time;
shall be with new or like-new materials of at least equal or better value,
utility and condition to that which the same was in at the commencement of the
Initial Term, taking into consideration the quality of materials and workmanship
of the same, and shall be done in compliance with all applicable laws, codes,
ordinances, rules, regulations and statutes of the city, county, state and
federal governments.
Any such replaced Leased Equipment shall be and remain the property of
Landlord; provided, however, that if any item of Leased Equipment is replaced by
Tenant during the Lease Term at Tenant's sole cost and expense with an upgraded
item of Leased Equipment, then Tenant shall have the right prior to the end of
the Lease Term to either remove such upgraded item and replace the same with a
like item of Leased Equipment of equal or better quality, design and function as
existed on the Commencement Date.
Landlord agrees that it will give to Tenant the benefit of all
warranties and guarantees they may have received or be entitled to from any of
their contractors or materialmen with respect to the Demised Premises and that
Tenant may enforce the same either in Tenant's name or in Landlord's name.
8.3 LIABILITY OF LANDLORD . Except if caused by Landlord's breach of
this Lease or by the negligence or willful misconduct of Landlord or of any of
its affiliates' (which shall include an affiliate of The Homestead Company, L.C.
or of Xxxx Xxxx), employees, agents or contractors, all property belonging to
Tenant or any occupant of the Demised Premises shall be there at the risk of
Tenant or such other occupant only, and Landlord shall not be liable for theft
or misappropriation thereof, or loss or damage to any such property due to
vandalism, water, rain, snow, frost, fire, storm or accident, or by breakage,
stoppage or leakage of water, gas, heating or sewer pipes or plumbing, upon,
about or adjacent to the Demised Premises or by any other cause.
16
8.4 REMOVAL OF PERSONAL PROPERTY . Provided that Tenant has not
accepted an offer to purchase the Demised Premises and Other Assets pursuant to
the Right of First Refusal Agreement, dated of even date herewith, between
Landlord and Tenant (the "Right of First Refusal"), or has not exercised its
option to purchase the Demised Premises and Other Assets pursuant to a separate
Purchase Option Agreement by and among the parties hereto, executed of even date
herewith (the "Option Agreement"), upon the expiration or termination of this
Lease, Tenant, at its sole cost and expense, shall remove from the Demised
Premises all of Tenant's personal property and equipment. If any disfigurement
or damage results from such removal, repairs shall be made by Tenant at its
expense to restore the Demised Premises to its original condition, ordinary wear
and tear excepted.
If upon surrender to Landlord of possession of the Demised Premises,
Tenant, at its sole cost and expense, does not within ten (10) days after
Landlord's demand remove Tenant's personal property and equipment, Landlord, at
Landlord's election, shall have the right to treat Tenant's property as having
been abandoned by Tenant to Landlord without any payment or offset.
ARTICLE IX
SIGNS
Tenant shall have the right to place upon the Demised Premises such
sign or signs as it may desire, at Tenant's sole cost and expense. All signs
shall comply with all applicable federal, state and local statutes, rules,
regulations and ordinances. Tenant shall maintain such signs in a good state of
repair and shall repair any damage to the Demised Premises caused by the
erection, maintenance or removal at the termination of this Lease of such signs.
Upon the termination of this Lease, all signs of Tenant shall be removed in
accordance with Section 8.4.
ARTICLE X
ASSIGNMENT, SUBLETTING AND SUBORDINATION
10.1 ASSIGNMENT OR SUBLETTING BY TENANT. Except as hereinafter
provided, Tenant shall not assign, transfer, pledge, hypothecate or encumber
this Lease or any interest herein, or sublet the Demised Premises or any part
thereof or any right or privilege appurtenant thereto, or allow any person other
than Tenant and its agents, managers, concessionaires, licensees, employees,
residents, patients and medical staff to occupy or use the Demised Premises or
any part thereof without Landlord's prior written consent, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing,
Landlord's consent shall not be required for, and this Section 10.1 shall not
prohibit, (i) an assignment to a corporate parent, affiliate or subsidiary of
Tenant, or any joint venture, partnership or other entity, provided such
assignee is either Integrated Living Communities, Inc. ("ILCI") or is
"controlled" directly or indirectly by ILCI (the term "control" as used herein
shall be deemed to mean ownership of at least 50% of the outstanding voting
stock of a corporation, or other majority equity and voting interest if not a
corporation); (ii) an assignment in connection with the sale of ten percent
(10%) or more of ILCI's assets and (iii) an assignment in connection with a
merger or consolidation. Any unauthorized assignment or sublease shall be
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voidable and shall constitute a breach of this Lease at Landlord's option. No
assignment of this Lease shall be binding on Landlord until (a) a duplicate
original of such assignment, duly executed by the assignor shall be delivered to
Landlord, and (b) the assignee shall execute and deliver to Landlord an
instrument in and by which the assignee shall assume and agree to perform, from
and after the effective date of the assignment, all of the terms, covenants and
conditions of this Lease on Tenant's part to be performed. At least thirty (30)
days prior to the effectiveness of any assignment as to which Landlord's consent
is required, Tenant shall deliver to Landlord a package of relevant information
concerning the assignee. For purposes of this Lease, any sale or transfer of a
controlling interest in Tenant shall be deemed an assignment of this Lease. No
assignment, sale, transfer, pledge, hypothecation or encumbrance shall relieve
Tenant of any obligation contained in this Lease. Tenant shall pay all of
Landlord's reasonable costs and expenses (not in excess of $2,500), including
reasonable attorney's fees, incurred in connection with any assignment, sale,
transfer, pledge, hypothecation, encumbrance or sublease, for which Landlord's
consent is required.
10.2 LEASEHOLD MORTGAGES. Tenant shall have the right from time to time
to pledge, hypothecate, encumber or mortgage this Lease (each herein referred to
as a "leasehold mortgage"). Landlord hereby expressly agrees that the holder of
such leasehold mortgage shall be entitled to all of the rights, privileges and
powers afforded to the holder or holders of leasehold mortgages under this and
other Articles of this Lease.
10.2.1 Notwithstanding anything to the contrary contained in this
Lease, if so requested by the holder of any leasehold
mortgage, any notice from Landlord to Tenant shall be
simultaneously delivered to such leasehold mortgagee at his
or its address, and no notice of default or termination of
this Lease given by Landlord to Tenant shall be deemed
legally effective until and unless notice of such default
and notice of such termination shall have been given by
Landlord to such leasehold mortgagee. Such leasehold
mortgagee entitled to such notice shall have and be
subrogated to any and all rights of Tenant with respect to
any default hereunder by Tenant. Without impairing the
generality of the foregoing right of subrogation, it is
specifically agreed that any such leasehold mortgagee shall
have the right to appoint an arbitrator, in case Tenant
shall fail to make such appointment after written notice
from Landlord as provided in Article XVI hereof (a copy of
which notice shall have been simultaneously given to such
leasehold mortgagee), and, for this purpose, shall have an
additional period of fifteen (15) days to make such
appointment, and the arbitrator so appointed shall thereupon
be recognized in all respects as if he or she had been
appointed by Tenant.
10.2.2 Landlord will not accept any surrender, cancellation or
enter into any modification of this Lease without the prior
written consent thereto of the holder of any leasehold
mortgage who shall become entitled to notice as provided
above.
10.2.3 If, by reason of any default by Tenant, this Lease shall be
terminated at the election of Landlord prior to the stated
expiration thereof, Landlord will enter into a new lease of
the Demised Premises and the Other Assets with such
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leasehold mortgagee (i.e. the holder of a mortgage on this
Lease who shall become entitled to notice, as provided
above) or its nominee for the remainder of the term
effective as of the date of such termination, at the same
Annual Rent and upon the same terms, provisions, covenants
and agreements herein contained, subject, however, to the
rights, if any, of any parties then in possession of any
part of the Demised Premises, provided (a) said leasehold
mortgagee shall make written request upon Landlord for such
new lease within forty-five (45) days after the date of such
termination and such written request is accompanied by
payment to Landlord of all sums which would then be due to
Landlord under this Lease but for the termination thereof,
the amount of which Landlord agrees to advise such leasehold
mortgagee of in writing upon request; (b) said leasehold
mortgagee pays to Landlord, at the time of the execution and
delivery of said new lease, any and all sums and reasonable
expenses, including reasonable attorneys' fees, to which
Landlord shall have been subjected or paid by reason of such
default, the amount of which sums and expenses Landlord
agrees to advise such leasehold mortgagee of in writing upon
request, and (c) said leasehold mortgagee shall, on or
before execution and delivery of said new lease, perform and
observe all the other covenants and conditions herein
contained on Tenant's part to be performed and observed but
for such termination to the extent that Tenant shall have
failed to perform and observe the same, Landlord hereby
agreeing to advise such leasehold mortgagee in writing, upon
request, of the covenants and conditions which Tenant shall
have failed to perform and the extent of such failure. If
during such period of forty-five (45) days requests for such
new lease shall be made by more than one leasehold
mortgagee, then provided the provisions of this Section are
complied with, Landlord shall be required to execute and
deliver such new lease to that leasehold mortgagee (or the
nominee thereof) lowest in order of priority of lien who (i)
cures all defaults under all prior leasehold mortgages, (ii)
delivers to Landlord certificates or letters from the
holders of all prior leasehold mortgages which certify or
state that no default then exists under such prior leasehold
mortgages and (iii) executes and delivers, at the time of
the execution of such new lease, new mortgages to the
holders of all prior leasehold mortgages on this Lease
having the same terms and conditions, and securing the same
amounts, as such prior leasehold mortgages. Upon the
execution and delivery of such new lease, any subleases
which may have theretofore been assigned and transferred to
Landlord shall thereupon be assigned and transferred,
without recourse, by Landlord to the new tenant. Such new
lease shall have the same rights and priorities as this
Lease.
10.2.4 If Landlord shall elect to terminate this Lease by reason of
any default other than a default in the payment of money,
the then holder of any leasehold mortgage on this Lease who
shall have become entitled to notice, as provided in this
Article, shall not only have and be subrogated to any and
all rights of Tenant with respect to curing of any default
and have the right to obtain a new lease as above provided,
but shall also have the right to postpone and
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extend the specified date for the termination of this Lease,
as fixed by Landlord in a notice of termination, for a
period of not more than six (6) months (subject to extension
as provided below), provided such leasehold mortgagee shall
thereafter promptly cure all defaults which may be cured by
the payment of a sum of money and undertake to cure any
other then existing default of Tenant and shall forthwith
initiate steps to acquire Tenant's interest in this Lease by
foreclosure of its mortgage or otherwise. Such right shall
be exercised by such leasehold-mortgagee's giving Landlord
notice of the exercise of the same prior to the termination
date fixed in Landlord's notice of termination. If, before
the date specified for the termination of this Lease as
extended by such leasehold-mortgagee, Tenant shall be duly
removed from possession, and if an assumption of
performances and observance of the covenants and conditions
herein contained on Tenant's part to be performed or
observed shall be delivered to Landlord by the leasehold
mortgagee, or its nominee, then and in such event the
default under this Lease shall be deemed cured and removed;
and provided, further, that if at the end of said six (6)
month period such leasehold mortgagee shall be actively
engaged in steps to acquire Tenant's interest herein, the
time of such leasehold mortgagee to comply with the
provisions of this Article shall be extended for such
additional period or periods as shall be necessary to
complete such steps with diligence, provided that during
such extension no further default shall occur hereunder. Any
payment to be made or action to be taken by a leasehold
mortgagee under this Article as a prerequisite in obtaining
a new lease or keeping this Lease in effect shall be deemed
properly to have been made or taken by a leasehold mortgagee
if such payment is made or action taken by a nominee or
agent of such leasehold mortgagee.
10.3 SUBORDINATION AND ATTORNMENT . Landlord covenants, represents and
agrees that this Lease, as the same may be modified, amended or renewed, shall
not be subject or subordinate to any mortgage or mortgages now or hereafter
placed upon, or any other liens or encumbrances hereafter affecting, the fee
title of the Demised Premises except as otherwise expressly provided in this
Section 10.3, and that Landlord will promptly and fully pay when due all
indebtedness, and perform when required all obligations, secured by any such
mortgages or liens, and shall not commit or permit any default to occur
thereunder. In the event that for any reason whatsoever Landlord shall fail or
refuse to pay, satisfy and discharge any lien or mortgage encumbering the
Demised Premises not later than the date the same becomes due and payable,
Tenant shall have the right, but not the obligation, itself to pay, satisfy and
discharge the same, in which event (i) Tenant shall have the right to receive an
assignment of such mortgage (and the note secured thereby) and promptly
thereafter to institute foreclosure or other proceedings to enforce the same
(and the note secured thereby), it being agreed that if Tenant so acquires such
mortgage (and the note secured thereby) the same shall be deemed to be in
default by virtue of Landlord's failure to comply with the provisions of this
Section, which provisions shall be deemed for such purpose to be an agreement of
modification of such mortgage (and the note secured thereby); and (ii) any
amounts expended and expenses incurred by Tenant in paying, satisfying and
discharging such mortgage, and in bringing proceedings to foreclose or
otherwise, to enforce the same, including, without limitation, reasonable
attorneys' fees, to the extent not paid by Landlord to Tenant, together with
interest thereon at the rate per annum set
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forth in Section 3.1.4 hereof, shall be deductible by Tenant, together with
interest thereon at the rate aforesaid, from the installments of Annual Rent
thereafter falling due hereunder. The rights and remedies provided for in
subdivisions (i) and (ii) above shall be cumulative and not mutually exclusive.
Tenant agrees that upon request of Landlord in writing, it will subordinate the
lien of this Lease to the lien of any mortgage on the Demised Premises, and to
all renewals, modifications, amendments, consolidations, replacements and
extensions thereof, provided that Tenant shall be granted a subordination
non-disturbance and recognition agreement in substantially the form of Exhibit E
attached hereto (a "Subordination Agreement") from the holder(s) of such
mortgage. The receipt of a Subordination Agreement from the holder(s) of any
mortgage on the Demised Premises to which this Lease is subordinate is a
condition to the commencement of the Lease Term. Further, Tenant, as a part of
any Subordination Agreement, if requested, shall agree to attorn to the
holder(s) of such mortgage or to a purchaser at foreclosure or deed in lieu of
foreclosure, in a manner reasonably acceptable to the holder(s) of such mortgage
and Tenant. Landlord may not place any mortgage on the Demised Premises when the
aggregate annual debt service on such mortgage and all other mortgages on the
Demised Premises would exceed 90% of the Annual Rent which is then in effect or
will be in effect during the term of such mortgage, or when the aggregate
principal debt secured by said mortgage and all other mortgages on the Demised
Premises would exceed 80% of the fair market value of the Demised Premises.
Landlord shall give Tenant ten (10) days prior notice of the closing of any loan
to be secured by a mortgage on the Demised Premises.
10.3.1 If Tenant shall give Landlord any notice of a default or
breach by Landlord, Tenant agrees to give a similar written
notice to the holder(s) of record of any fee mortgage(s)
(provided Tenant has received written notice of said
mortgage(s), including the name(s) and address(es) of the
then holder(s) of such mortgage(s), in the manner provided
for in Article XVIII hereof for the giving of notices to
Tenant), by registered or certified mail, to such holders'
respective addresses specified in the aforementioned notice
to Tenant, or to any different address which they may
designate for the purpose by notice given to Tenant in the
aforesaid manner; and such holder(s) shall be permitted to
correct or remedy such breach or default within the same
time within which Landlord may do so, and with like effect
as if Landlord had done so. Tenant's failure to give to such
holder(s) the notice provided in this Section shall not be
deemed a default by Tenant under this Lease, but no notice
given by Tenant to Landlord of any default or breach by
Landlord shall be deemed legally effective until Tenant
shall have given such notice to the holder(s) of the first
fee mortgage at the time on the Demised Premises (provided
Tenant has received notice of said holder(s) as provided
above). In no event shall Tenant be required to give more
than one notice, to be sent to one address, in respect of
any one mortgage pursuant to this Section.
10.3.2 In the event that any fee mortgagee comes into possession or
ownership of the title to the Demised Premises, or acquires
the interest of Landlord by foreclosure of its mortgage) or
by proceedings on the bond or debt secured thereby, or
otherwise, Tenant agrees to attorn to such fee mortgagee as
its new landlord.
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10.4 SALE BY LANDLORD . Landlord covenants that it will not sell or
convey any right, title or interest in the Demised Premises prior to the first
anniversary of the Commencement Date, without Tenant's prior written consent. In
any event, any sale or conveyance of the Demised Premises or any part thereof,
shall be subject to the Option Agreement and the Right of First Refusal and
shall be made subject to this Lease.
10.4.1 In the event of a sale or transfer of the Demised Premises
by Landlord, with respect to either of which either Tenant's
consent has been obtained or is not required, the grantor or
transferor shall thereafter be entirely relieved of all
obligations thereafter to be performed by Landlord under
this Lease, provided that the purchaser or transferee on any
such sale or transfer has assumed and agreed pursuant to a
written instrument satisfactory to Tenant to perform,
observe and be bound by any and all covenants, conditions
and obligations of Landlord hereunder and under the Option
Agreement and the Right of First Refusal arising from and
after such sale or transfer and to be subject to all of the
rights of Tenant under this Lease and the Option Agreement
and the Right of First Refusal whether arising prior to or
after such sale or transfer, including without limitation
all setoff rights, and provided further that (i) any amount
then due and payable to Tenant or for which Landlord or the
then grantor or transferor would otherwise then be liable to
Tenant shall be paid to Tenant; (ii) the interest of the
grantor or transferor in any funds then in the hands of
Landlord or the then grantor or transferor in which Tenant
has an interest shall be turned over, subject to Tenant's
interest, to the then grantee or transferee; and (iii)
notice of such sale or transfer signed by Landlord or the
then grantor or transferor and by the then grantee or
transferee shall be delivered to Tenant together with a true
copy of the transfer document and a true copy of the written
assumption agreement.
10.5 ESTOPPEL CERTIFICATES . Tenant, upon request by Landlord or any
prospective or actual mortgagee or purchaser of the Facility, shall execute and
deliver to Landlord within ten (10) business days, after such request, an
estoppel certificate addressed to Landlord, and if requested by Landlord also to
such mortgagee or purchaser as is identified in Landlord's request, which
estoppel certificate shall state, to the extent true, the following facts: (a)
that a Lease, as attached to the estoppel certificate, is a true and correct
copy of this Lease and that this Lease has not been modified except as set forth
in such attachment or terminated; (b) that the Annual Rent in this Lease as so
modified has not been modified; (c) that there are no outside agreements that
would affect such mortgagee or purchaser or any of their rights under this Lease
or to the Demised Premises except as otherwise noted in the estoppel
certificate; (d) that to Tenant's knowledge there are no disputes existing as to
this Lease; (e) that to Tenant's knowledge Landlord has complied with the terms
of this Lease (as so amended) to the date of the estoppel certificate and is not
in default under any of its obligations contained in this Lease (as so amended)
(or if such is not the case, specifying the nature thereof) and Landlord has not
given Tenant notice of any default which remains uncured (or if such is not the
case, specifying the nature thereof); (f) that no Annual Rent has been paid more
than thirty (30) days in advance; (g) that Tenant has accepted possession of the
Demised Premises; (h) the dates through which Annual Rent has been paid; and (i)
any other terms reasonably acceptable to Tenant or reasonably required by any
actual or prospective mortgagee or purchaser. Notwithstanding the
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foregoing, Tenant shall not be obligated to furnish any such estoppel
certificate more often than two times during any Lease Year unless the request
for the same is being made in contemplation of the sale or mortgaging of the
Demised Premises and the prospective purchaser or mortgagee is requiring the
same.
ARTICLE XI
DEFAULT
11.1 DEFAULT BY TENANT . The occurrence of any one or more of the
following events shall constitute a "default" or "Event of Default" for the
purposes of this Lease:
(a) The failure of Tenant to pay any part of an Annual Rent payment due
under this Lease on or before its due date, which failure continues for ten (10)
days after the receipt of written notice from Landlord.
(b) Any assignment, transfer or sublease of this Lease or the Demised
Premises in violation of Article X hereof.
(c) The failure to occupy the Demised Premises on the Commencement Date
or the abandonment of the Demised Premises by Tenant.
(d) The failure of Tenant to perform any material covenant or
obligation contained herein other than the payment of Annual Rent, which failure
has not been corrected by Tenant within thirty (30) days following written
notice from Landlord specifying the covenant or obligation to be remedied, or if
the correction of same reasonably requires longer than thirty (30) days, if
Tenant shall not have commenced to correct the same within such thirty (30) day
period and thereafter proceed to cure the same in good faith, with diligence,
and within a reasonable period of time.
(e) If any representation or warranty made by Tenant under this Lease
shall prove to have been false in any material respect when made and the same
has not been corrected by Tenant within thirty (30) days following written
notice from Landlord specifying the representation or warranty in question, or
if the correction of same reasonably requires longer than thirty (30) days, if
Tenant shall not have commenced to correct the same within such thirty (30) day
period and thereafter be proceeding with reasonable diligence to correct the
same.
11.2 LANDLORD'S RIGHTS AND REMEDIES . Upon the happening of any Event
of Default and during the continuance thereof, Landlord, at its option, and
without further demand or notice, shall have the following rights and remedies
in addition to any rights provided by law, all of which shall be cumulative:
(a) Perform any covenant or obligation of Tenant and charge the
reasonable cost of the cure to the next installment or installments of Annual
Rent due.
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(b) Retake possession of the Demised Premises without terminating this
Lease and relet the Demised Premises or any part thereof to a third party. If
Landlord relets the Demised Premises (either for a term greater than, less than
or equal to the unexpired portion of the Lease Term) for an aggregate rent
during the portion of such new lease which is less than Annual Rent and other
charges which Tenant would pay hereunder for such period, Landlord may
immediately upon the making of such new lease, xxx for and recover the
difference between the aggregate rental provided for in said new lease for the
balance of the term coextensive with the Lease Term, and the Annual Rent which
Tenant would pay hereunder for such period, together with any reasonable
expenses to which Landlord may be put for brokerage commissions, placing the
Demised Premises in tenantable condition, and other related charges or expenses
accrued prior to the new lease or otherwise. In the event Landlord does not
collect the entire amount of the aggregate rental provided for in such new
lease, Landlord may xxx for and recover the difference between the amount of
such aggregate rental actually collected and the Annual Rent which Tenant would
pay hereunder. If such new lease or tenancy is made for a shorter term than the
balance of the Lease Term, or for a greater rental, any such action brought by
Landlord to collect the deficit for that period shall not bar Landlord from
thereafter suing for any loss accruing during the balance of the unexpired Lease
Term whether or not due to expiration or termination of the new lease.
(c) Give a thirty (30) day's notice of termination of this Lease
(regardless of whether Landlord prior to the giving of such notice shall have
accepted rent or any other payment, however designated, for the use and
occupancy of the Demised Premises from or on behalf of Tenant or from any other
person) to Tenant specifying such Event or Events of Default and stating that
this Lease and the Lease Term shall expire and terminate on the date specified
in such notice, which date shall be at least ten (10) days after the giving of
such notice. In the event such notice is given, this Lease and the Lease Term
and all rights of Tenant under this Lease shall expire and terminate upon the
date specified in such notice with the same effect as if the date specified in
such notice were the date originally set forth in this Lease for the expiration
of the term, but Tenant shall remain liable as provided below.
Upon any such expiration or termination of this Lease, Tenant shall
quit and peacefully surrender the Demised Premises to Landlord, and Landlord,
upon or at any time after any such expiration or termination, may, without
further notice, enter upon and re-enter the Demised Premises and possess and
repossess itself thereof, by summary proceedings, ejectment or otherwise, and
may dispossess Tenant and remove Tenant and all other persons and property from
the Demised Premises and may have, hold and enjoy the Demised Premises and the
right to receive all rental income of and from the same.
No such expiration or termination of this Lease, including the re-entry
of Landlord, shall relieve Tenant of its liability and obligations to pay the
Annual Rent theretofore accrued or thereafter accruing, as more particularly set
forth in paragraph (g) below, and such liability and obligations shall survive
any such expiration or termination.
(d) Tenant knowingly and voluntarily waives any and all rights of
redemption which Tenant may now have or hereafter acquire pursuant to statute or
court decision, except for notice as provided in this Article.
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(e) The rights and remedies given to Landlord in this Lease are
distinct, separate and cumulative, and no one of them, whether or not exercised
by Landlord, shall be deemed to be in exclusion of any of the others herein or
by law or in equity provided and the exercise by Landlord of any one or more of
the rights or remedies provided for in this Lease shall not preclude the
simultaneous or later exercise by Landlord of any or all other rights or
remedies.
(f) No receipt of monies by Landlord from Tenant, after the
cancellation or termination of this Lease in any lawful manner, shall reinstate,
continue or extend the Lease Term, or affect any notice theretofore given to
Tenant or operate as a waiver of the right of Landlord to enforce the payment of
Annual Rent then due or thereafter falling due, or operate as a waiver of the
right of Landlord to recover possession of the Demised Premises by proper suit,
action, proceeding or other remedy; it being agreed that, after the service of
notice to cancel or terminate as herein provided and the expiration of the time
therein specified, after the commencement of any suit, action, proceeding or
other remedy or after a final order or judgment for possession of the Demised
Premises, Landlord may demand, receive and collect any monies due, or thereafter
falling due, without in any manner affecting such notice, suit, action,
proceeding, order or judgment; and any and all such monies so collected shall be
deemed to be payments on account of the use and occupation of the Demised
Premises, or at the election of Landlord, on account of Tenant's liability
hereunder.
(g) In the event of the termination of this Lease as provided in this
Article or by operation of law or issuance of a dispossessory warrant or
otherwise, Tenant shall remain liable under this Lease for the payment of Annual
Rent and the observance and performance of all other covenants on its part to be
performed; and Landlord shall have the right to alter, change or remodel the
improvements on the Demised Premises and to lease or let the same, or portions
thereof, or not to lease or let the same, for such periods of time and at such
rentals and for such use and upon such covenants and conditions as Landlord may
elect, applying the net rentals or avails of such letting, if any, first to the
payment of Landlord's expenses in dispossessing Tenant and the costs or expenses
of making such improvements in the Demised Premises as may be necessary in order
to enable Landlord to relet the same, and then to the payment of any brokerage
commissions or other expenses of Landlord in connection with such reletting; and
the balance, if any, shall be applied by Landlord at least once a month, on
account of the payments due or payable by Tenant hereunder, if any, with the
right reserved to Landlord to bring such action(s) or proceeding(s) for the
recovery of any deficits remaining unpaid without being obliged to await the end
of the Lease Term for a final determination of Tenant's account, and the
commencement or maintenance of any one or more actions shall not bar Landlord
from bringing other or subsequent actions for further accruals pursuant to the
provisions of this Section. Any balance remaining, however, after full payment
and liquidation of Landlord's accounts for the remainder of the Lease Term as
aforesaid, shall be paid to Tenant with the right reserved to Landlord at any
time, if it has not theretofore terminated this Lease, to give notice to Tenant
of Landlord's election to cancel this Lease and discharge all the obligations
thereunder of either party to the other, and the giving of such notice and the
simultaneous payment by Landlord to Tenant of any credit balance in Tenant's
favor that may at such time be owing, shall constitute a final and effective
cancellation of this Lease and a discharge of the obligations thereof on the
part of either party to the other. Tenant agrees to pay, in addition to the rent
and other sums required to be paid hereunder, such additional sums as the court
may adjudge reasonable as attorneys' fees in any successful suit or action
instituted by Landlord to enforce the provisions of this Lease or the
collections of the amounts due Landlord hereunder. Should any rent collected by
Landlord be
25
insufficient to fully pay to Landlord a sum equal to all Annual Rent reserved
herein and other charges payable hereunder for the remainder of the Lease Term
originally demised, the balance or deficiency shall be paid by Tenant on the
rent days herein specified, that is, upon each of such rent days Tenant shall
pay to Landlord the amount of the deficiency then existing; and Tenant shall be
and remain liable for any such deficiency, and the right of Landlord to recover
from Tenant the amount thereof, or a sum equal to all such Annual Rent and
Additional Rent and other charges payable hereunder, if there shall be no
reletting, shall survive the issuance of any dispossessory warrant or other
cancellation or termination hereof, and Landlord shall be entitled to retain any
surplus; and Tenant hereby expressly waives any defense that might be predicated
upon the issuance of such dispossessory warrant or other cancellation or
termination hereof.
(h) In any of the circumstances mentioned in paragraph (g) of this
Section in which Landlord shall have the right to hold Tenant liable upon the
several rent days as therein provided, Landlord shall have the right to
election, in place and instead of holding Tenant so liable, forthwith to recover
against Tenant as damages for loss of the bargain and not as a penalty, in
addition to any other damages becoming due, an aggregate sum which, at the time
of the termination of this Lease or of the recovery of possession of the Demised
Premises by Landlord, as the case may be, represents the then present worth of
the excess (computed by discounting such excess at the simple rate of six (6%)
percent per annum), if any, of the aggregate of Annual Rent and all other
charges payable by Tenant hereunder that would have accrued for the balance of
the Lease Term over the aggregate rental value of the Demised Premises (such
rental value to be computed on the basis of a tenant paying not only a rent to
Landlord for the use and occupation of the Demised Premises, but also such
additional rent and other charges as are required to be paid by Tenant under the
terms of this Lease) for the balance of such Lease Term.
(i) Suit or suits for the recovery of the deficiency or damages
referred to above in paragraphs (g) and (h) of this Section, or for any
installment or installments of Annual Rent hereunder, or for a sum equal to any
such installment or installments may be brought by Landlord, from time to time
at Landlord's election, and nothing in this Lease contained shall be deemed to
require Landlord to await the date whereon this Lease or the Lease Term would
have expired by limitation had there been no such default by Tenant or no such
cancellation or termination.
(j) Landlord's failure to insist on the strict performance of and
compliance with each condition in this Lease shall neither constitute nor be
construed as constituting a waiver by Landlord of Landlord's rights under this
Article or by law, nor constitute nor be construed as consisting of a waiver by
Landlord of a second or subsequent default by Tenant of the same condition. In
the event litigation is commenced, it shall not be necessary for Landlord to
notify Tenant of any additional occurrences of default prior to proceeding as
permitted.
(k) In the event of the termination or expiration of this Lease, Tenant
shall cooperate with Landlord in the transfer to the subsequent operator of the
Facility of all licenses and permits required to continue to operate the
Facility as an assisted living facility or a nursing care facility, whichever
was being operated at the Facility by Tenant at the time of such termination or
expiration.
26
11.3 DEFAULT BY LANDLORD . If Landlord defaults in the observance or
performance of any covenant, condition or obligation in this Lease on its part
to be observed or performed, Landlord shall have thirty (30) days after
receiving written notice from Tenant stating the default complained of and
referring to the Article and Section in this Lease relied on by Tenant, to cure
or cause to be cured any such default, or if such default is not capable of
being cured within such thirty (30) days to commence to cure the same during
such thirty (30) days and thereafter proceed to cure the same in good faith,
with diligence, and within a reasonable period of time.
If Landlord fails to cure any such default or to diligently and in good
faith pursue the cure as provided for herein, or if any representation or
warranty made by or on behalf of Landlord in this Lease or in any document or
agreement delivered in connection with the transactions contemplated by this
Lease shall prove to have been false or incorrect or breached in any material
respect on the date as of which made, then Tenant may xxx Landlord for its
damages, including, without limitation, such additional sums as the court may
adjudge reasonable as attorneys' fees in any successful suit or action
instituted by Tenant to enforce the provisions of this Lease, and may further
obtain injunctive relief if necessary to maintain operation of the Demised
Premises or comply with applicable legal requirements of any governmental
authority. In addition, Tenant may at its option, without waiving any claim for
damages for breach of agreement, at any time thereafter cure such default for
the account of Landlord, and any amount paid or any contractual liability
incurred by Tenant in so doing shall be deemed paid or incurred for the account
of Landlord, and Landlord agrees to reimburse Tenant therefor or save Tenant
harmless therefrom; provided that Tenant may cure any such default as aforesaid
prior to the expiration of said thirty (30) day period if reasonably necessary
to cure a default under any mortgage or encumbrance which is a lien on the
Demised Premises, or to protect the Demised Premises or Tenant's interest
therein, or to prevent injury or damage to persons or property, or to enable
Tenant to conduct its business in the Demised Premises. If Landlord shall fail
to reimburse Tenant upon demand for any amount paid for the account of Landlord
hereunder or for any other sum payable to Tenant pursuant to this Lease, said
amount plus interest thereon at the rate per annum set forth in Section 3.1.4
hereof from the date of demand upon Landlord for payment, may be deducted by
Tenant from the next or any succeeding payments of Annual Rent due hereunder.
11.4 DELAYS . Whenever this Lease requires any act (other than the
payment of a liquidated sum of money, E.G., rental payments, taxes, utilities,
or any obligation that may be satisfied by the payment of a liquidated sum of
money) by Landlord or Tenant within a certain period of time or by a certain
time, the time for the performance of such act shall be extended by the period
of any delay caused by war, strikes, lockouts, civil commotion, storms, weather,
electrical blackouts, unpreventable material shortages, casualties, acts of God
or other conditions or events beyond the reasonable control of the obligated
party; provided, however, that written notice of such delay and the cause and
circumstances thereof shall be given to the other party promptly after the
commencement of such delay and such delay becoming known by the obligated party.
27
ARTICLE XII
DAMAGE TO DEMISED PREMISES
12.1 MAJOR DAMAGE . In the event that the Demised Premises are damaged
by fire or other casualty, and the damage or loss exceeds $50,000, then Tenant
shall promptly notify Landlord in writing of such an event. If the damage is to
an extent that there is Major Damage, as hereinafter defined, it shall be the
option of Tenant to cancel this Lease by written notice to Landlord within sixty
(60) days from the date of such Major Damage.
The term "Major Damage" shall mean any damage wherein: (a) the
estimated cost of fully repairing the damage exceeds fifty percent (50%) of the
then full replacement value or (b) 25% or more of the improvements are rendered
unsuitable for occupancy or (c) the damage is caused by an event which is not
covered by the insurance policy which Tenant is required to carry pursuant to
Article XV hereof, and the estimated cost of fully repairing the damage exceeds
the net amount of insurance proceeds received by Tenant with respect thereto by
$50,000 or more. Annual Rent shall xxxxx in accordance with Section 12.2 if
Tenant is unable to use all or any part of the Demised Premises while repairs
are being made; provided, however, that any abatement so granted shall not
exceed the amount of the proceeds actually received by Landlord under any policy
of rent insurance carried for the benefit of Landlord.
If Tenant elects to terminate this Lease pursuant to this Section 12.1,
this Lease shall terminate fifteen (15) days after the date of notice, Tenant
shall surrender possession to Landlord, and all accrued rights under this Lease
shall survive termination.
12.2 NONMAJOR DAMAGE . Any other damage to the Facility from any
casualty or risk which does not qualify as Major Damage, shall be deemed to be
nonmajor. If Tenant does not elect to terminate this Lease under the Major
Damage provision in Section 12.1, or if the damage is nonmajor, then Tenant
shall, at its sole cost and expense, repair or rebuild the Facility to
substantially the same condition as existed immediately prior to the damage, in
accordance with applicable federal, state and local statutes, laws, ordinances
and codes and sufficient to meet licensure requirements of the State of Kansas
for assisted living facilities according to the actual use by Tenant. The
restoration shall be commenced within ninety (90) days after settlement shall
have been made with the insurance companies and the insurance monies shall have
been turned over to the Insurance Trustee (as hereinafter defined) or Tenant, as
the case may be, as provided in Article XV hereof and the necessary governmental
approvals shall have been obtained, and such work shall be completed as promptly
as reasonably possible. Tenant shall also restore any damaged Leased Equipment.
The Insurance Trustee shall, provided this Lease shall then be in full
force and effect, apply the net proceeds of any insurance to the payment of the
cost of such repairing or rebuilding as the same progresses, payments to be made
against properly certified vouchers of a competent architect in charge of the
work who is selected by Tenant and approved by Landlord, which approval shall
not be unreasonably withheld or delayed. The Insurance Trustee shall advance out
of such insurance proceeds toward each payment, to be made by or on behalf of
Tenant, an amount which shall bear the same proportion to such payment as the
whole amount received by the Insurance Trustee shall bear to the total estimated
cost of the repairing or rebuilding except, however, that the Insurance Trustee
shall withhold from each amount so to be paid by it ten percent (10%) thereof
until
28
the work of repairing or rebuilding shall have been substantially completed, and
proof furnished that no lien has attached or will attach to the Demised Premises
in connection with such repairs or rebuilding. If the total estimated cost of
the repairs or rebuilding shall exceed the amount of the net proceeds of such
insurance received by the Insurance Trustee, the Insurance Trustee shall be
entitled to require of Tenant that, before such repairing or rebuilding be
commenced, the Insurance Trustee be secured by a surety bond or cash equal to
the amount of the excess of such estimated cost over the net insurance proceeds
as security for the due completion, within a reasonable time, of such repairs or
rebuilding; and if Tenant makes a cash deposit as aforesaid, such cash deposit
shall be deemed to be part of the net insurance proceeds for the purpose of this
paragraph. The contract price fixed in Tenant's contract with the contractor who
or which will perform such repairing or rebuilding shall be deemed to be the
total estimated cost of such repairs or rebuilding for the purposes of this
paragraph. If the insurance proceeds shall exceed the cost of such repairs or
rebuilding, the balance remaining after payment of the cost of such repairs or
rebuilding shall be paid over and belong to Tenant.
In the event Tenant is unable to use all or any part of the Facility
while Tenant repairs or rebuilds same, then the Annual Rent shall be reduced and
abated by a just, fair and equitable proportion of the Annual Rent payable
according to the size, nature and extent of the property that is damaged, taking
into account the practical and economic effect of the damage in question on the
operation of the Demised Premises; provided, however, that there shall be no
such abatement in the event Tenant has not maintained insurance in accordance
with the provisions of Section 15.3. The abatement of the Annual Rent shall
commence with the date of the damage and continue until the repairs are
substantially completed. Other obligations of Tenant under this Lease shall not
xxxxx in any manner.
ARTICLE XIII
LANDLORD'S REPRESENTATIONS AND WARRANTIES
Landlord and Xxxx Xxxx each hereby represents and warrants to Tenant as
follows:
13.1 ORGANIZATION AND STANDING OF LANDLORD. Landlord is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Kansas. Copies of its articles of organization,
operating agreement and all amendments thereto to date (collectively, the
"Organizational Documents") have been delivered to Tenant, and are true,
complete and correct. Landlord has the power and authority to own the property
and assets now owned by it and to conduct the business presently being conducted
by it and as currently proposed to be conducted.
13.2 AUTHORITY . Landlord has the full, absolute and unrestricted
right, power and authority to make, execute, deliver and perform this Lease,
including all Schedules and Exhibits hereto, and the other instruments and
documents required or contemplated hereby and thereby ("Landlord's Transaction
Documents"). Such execution, delivery, performance and consummation have been
duly authorized by all necessary action (partnership, corporate, limited
liability company, trust or otherwise, as the case may be) on the part of
Landlord, its managing member (as hereinafter defined) and members, and all
consents of holders of indebtedness of Landlord have been obtained.
29
13.3 BINDING EFFECT. This Lease constitutes the legal, valid and
binding obligation of Landlord, enforceable against Landlord in accordance with
its terms and each of Landlord's Transaction Documents executed by Landlord
constitute the legal, valid and binding obligation of Landlord, enforceable
against Landlord in accordance with their respective terms.
13.4 ABSENCE OF CONFLICTING AGREEMENTS. None of the execution or
delivery of this Lease or any of Landlord Transaction Documents, the performance
by Landlord of its obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, conflicts with, or constitutes
a breach of or a default under (i) Landlord's Organizational Documents; or (ii)
any applicable law, rule, judgment, order, writ, injunction, or decree of any
court currently in effect; or (iii) any applicable rule or regulation of any
administrative agency or other governmental authority currently in effect; or
(iv) except as set forth on Schedule 13.4, any written or oral agreement,
indenture, contract or instrument to which Landlord or any managing member
thereof is now a party or by which any of them or the Demised Premises or Other
Assets are bound. Said Schedule 13.4 shall be updated to the extent necessary on
and as of the day preceding the Commencement Date.
13.5 CONSENTS. Except as set forth on Schedule 13.5, no authorization,
consent, approval, license, exemption by filing or registration with any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any other Person is or will be
necessary in connection with Landlord's execution, delivery and performance of
this Lease or any of Landlord Transaction Documents, or for the consummation of
the transactions contemplated hereby or thereby. Said Schedule 13.5 shall be
updated to the extent necessary on and as of the day preceding the Commencement
Date.
13.6 CONTRACTS.
(a) Schedule 13.6 sets forth a complete and correct list of all
agreements, contracts and commitments, whether written or oral, relating to the
Facility, its operation or the Other Assets by which Landlord or the Demised
Premises is bound (the "Contracts"). Landlord is not in default under any
Contract, except any such default that, either individually or in the aggregate,
would not have a Material Adverse Effect (as hereinafter defined), and there has
not been asserted, either by or against Landlord under any Contract, any notice
of default, set-off or claim of default which has not been cured. To the best
knowledge of Landlord, after due inquiry, none of the other parties to the
Contracts are affiliated with Landlord or are in default of any of their
respective obligations under the Contracts, and there has not occurred any event
which with the passage of time or the giving of notice (or both) would
constitute a default or breach under any Contract. All amounts payable by
Landlord under the Contracts are, or will at the Commencement Date, be on a
current basis. Except as set forth on Schedule 13.6, the Contracts are
assignable to Tenant without the consent of the remaining parties thereto and
each of the Contracts can be terminated without penalty by Landlord upon sixty
(60) or less days notice. Said Schedule 13.6 shall be updated to the extent
necessary on and as of the day preceding the Commencement Date.
----------
* , and the name and address of each contractor, subcontractor and
materialman that has performed work and supplied materials in connection
with the construction of the Facility
30
(b) Except as listed on Schedule 13.6, Landlord is not a party to or
liable in connection with and has not granted any written or express, oral or
implied:
(i) contract, agreement or commitment for the employment or retention
of, or collective bargaining, severance or termination agreement with, any
employee, consultant or agent or group of employees at the Demised
Premises; or
(ii) profit sharing, thrift, bonus, incentive, deferred compensation,
stock option, stock purchase, severance pay, pension, retirement,
hospitalization, insurance or other similar plan, agreement or arrangement
covering employees at the Demised Premises.
(iii) contract, agreement or commitment currently in effect for the
sale of any of Landlord's assets, properties or rights outside its ordinary
course of business (by sale of assets, sale of stock, merger or otherwise)
or any part of the Demised Premises;
(iv) contract, agreement or arrangement currently in effect which
contains any provisions requiring Landlord to indemnify or act for, or
guarantee the obligation of, any other person or entity;
(v) agreement restricting Landlord from conducting business anywhere
in the world;
(vi) partnership or joint venture agreement or similar arrangement or
agreement which is likely to involve a sharing of profits or future
payments with respect to Landlord's business at the Facility or any portion
thereof;
(vii) licensing, distributor, dealer, franchise, sales or
manufacturer's representative, agency or other similar contract, agreement,
arrangement or commitment for the Facility which involves consideration of
more than $10,000; or
(viii) agreement not made in the ordinary and normal course of
business of the Facility which involves consideration of more than $10,000.
13.7 FINANCIAL STATEMENTS . Intentionally Deleted.
13.8 MATERIAL CHANGES . Except as listed on Schedule 13.8, since the
date of the purchase of the Demised Premises by Landlord, there has not been any
material adverse change in the condition (financial or otherwise), of the
assets, properties or operations of the Demised Premises, or any damage or
destruction of the Demised Premises by fire or other casualty, whether or not
covered by insurance, and Landlord has operated the Demised Premises only in the
ordinary course of business. Landlord has identified and communicated to Tenant
all material information with respect to any fact or condition that might have a
Material Adverse Effect. Said Schedule 13.8 shall be updated to the extent
necessary on and as of the day preceding the Commencement Date.
13.9 LICENSES; PERMITS . Schedule 13.9 sets forth a description of each
license and all other governmental or other regulatory permits and approvals
relating to the operation of the
31
Demised Premises heretofore obtained and which is presently in effect
(collectively, the "Licenses"). The Licenses constitute all of the licenses,
permits, easements, rights or other authorizations of any Governmental Body or
any other Person that are necessary for the current operation of the Demised
Premises. Each License is final (the effectiveness of each not being subject to
the satisfaction of any conditions precedent), not subject to lapse,
termination, revocation or expiration for failure to meet any conditions or
requirements or otherwise, including without limitation the delivery of an
unqualified certificate of need or similar certificate or document. Landlord has
delivered to Tenant copies of all of the Licenses. Landlord owns, possesses or
has the legal right to use the Licenses, free and clear of all liens, pledges,
claims or other encumbrances of any nature whatsoever. Except as disclosed on
Schedule 13.9, Landlord has not received any notice of any claim or default or
any other claim or proceeding relating to any such License which has not been
cured or any notice of any threatened termination, lapse or revocation of any
License. Landlord is not in default under any License except any such default
that, either individually or in the aggregate, would not have a Material Adverse
Effect. The Demised Premises are fully and completely licensed by all
appropriate authorities for Landlord to carry on the business presently
conducted at the Demised Premises. No managing member, member, employee or
former employee of Landlord, or immediate family member of any managing member
or member, of Landlord, or any other person, firm or corporation owns or has any
proprietary, financial or other interest, direct or indirect, in whole or in
part in any such License owned, possessed or used in the operation of the
Demised Premises as now operated. Said Schedule 13.9 shall be updated to the
extent necessary on and as of the day preceding the Commencement Date.
13.10 TITLE, CONDITION OF PERSONAL PROPERTY .
(a) Except for the security interests listed and described on Schedule
13.10(a), Landlord has good title to all of the Leased Equipment, subject to no
mortgage, security interest, pledge, lien, conditional sales agreement, lease,
claim, encumbrance, easement, title exception or charge, or restraint on
transfer whatsoever (collectively, "Lien"). No other person has any right to the
use or possession of any of the Leased Equipment and, except as set forth on
Schedule 13.10(a), no currently effective financing statement with respect to
the Leased Equipment has been filed in any jurisdiction, and Landlord has not
signed any such financing statement or any security agreement authorizing any
secured party thereunder to file any such financing statement. During the five
(5) year period preceding the date hereof, Landlord has conducted its business
activities only under the corporate and/or trade name "The Homestead of
Manhattan." All of the Leased Equipment is in good operating condition and
repair and is functioning in the manner and for the purpose for which it was
intended and, to the best knowledge of Landlord, after due inquiry, is in
compliance with (and the operation thereof is in compliance with) all applicable
federal, state and local laws, rules and regulations, and is sufficient and
suitable to enable Tenant to operate the Demised Premises in a normal and
efficient manner. Said Schedule 13.10(a) shall be updated to the extent
necessary on and as of the day preceding the Commencement Date.
(b) Except as set forth on Schedule 13.10(b), none of the property used
by Landlord in connection with the operation of the Demised Premises is subject
to a conditional sale, security interest or similar arrangement. Schedule
13.10(b) sets forth a complete and correct description of each of the Personal
Property Leases relating to the Demised Premises as to which Landlord is a party
(together with all modifications or amendments thereto), the annual rental and
32
unexpired lease term thereby and all the information set forth thereon is
complete, correct and accurate. True, correct and complete copies of each of
said Personal Property Leases (together with all modifications or amendments
thereto) have been delivered to Tenant. All of said Personal Property Leases are
valid, binding and enforceable in accordance with their respective terms and are
in full force and effect. Landlord is not in default under any such lease, the
consequences of which, either in an individual case or in the aggregate, would
have a Material Adverse Effect, and there has not been asserted, either by or
against Landlord under any such lease, any notice of default, set-off, or claim
of default. The parties to such leases other than Landlord are not in default of
their respective obligations under any such lease, and there has not occurred
any event which with the passage of time or giving of notice (or both) would
constitute such a default or breach under any such lease. Except as otherwise
set forth on Schedule 13.10(b), each of said Personal Property Leases is
assignable to Tenant without the consent of the lessor of such property. Said
Schedule 13.10(b) shall be updated to the extent necessary on and as of the day
preceding the Commencement Date.
13.11 TITLE, CONDITION OF THE DEMISED PREMISES .
(a) Landlord has good and marketable title to the Demised Premises,
insurable by any reputable, licensed title company selected by Tenant at regular
rates, free and clear of all Liens of any kind whatsoever, other than those set
forth on Schedule 13.11(a) (the "Permitted Exceptions"). Said Schedule 13.11(a)
shall be updated to the extent necessary on and as of the day preceding the
Commencement Date.
(b) There are no leases or other agreements of Landlord, as lessor,
granting any third party the right to use or occupy any part of the Demised
Premises (except the rights of the residents and patients of the Demised
Premises) and no person, firm or entity other than Tenant has any ownership
interest or option or right of first refusal to acquire any ownership interest
in the Demised Premises or any building or improvements thereon.
(c) All buildings and other improvements comprising the Demised
Premises (including all roads, parking areas, curbs, sidewalks, sewers and other
utilities) have been completed and installed in accordance with applicable
requirements of all governmental authorities having jurisdiction thereof. Such
permanent certificates of occupancy and all other licenses, permits,
authorizations and approvals required by all governmental authorities having
jurisdiction and the requisite annual fire safety and life safety inspections as
were required to be issued or conducted for the buildings and other improvements
comprising the Demised Premises, have been issued, paid for and are in full
force and effect.
(d) The maintenance, operations and use of the buildings and other
improvements comprising the Demised Premises comply with and do not violate any
zoning, building or similar law, ordinance, order or regulation or any
certificate of occupancy issued for the Demised Premises; and no written notice
of any failure to comply with or violation of any federal, state, county or
municipal law, ordinance, order, regulation or requirement affecting the Demised
Premises shall have been issued by any governmental authority or agency. There
have been no changes to building, health or fire codes that would be applicable
to the Demised Premises; and there has been no change in the use of the Demised
Premises that would have caused any modifications to have been made to the
Demised Premises pursuant to any such building, health or fire codes.
33
(e) There is no plan, study or effort by any governmental authority or
agency which in any way affects or would affect the present use or zoning of the
Demised Premises or any part thereof. There are no assessments, except as set
forth on Schedule 13.11(e), or, to the best of Landlord's knowledge, proposed or
contemplated assessments, and there is no existing, or, to the best of
Landlord's knowledge, proposed or contemplated plan to widen, modify or realign
any street or highway, and there is no or existing, or, to the best of
Landlord's knowledge, proposed or contemplated eminent domain proceedings that
would affect the Demised Premises in any way whatsoever. Said Schedule 13.11(e)
shall be updated to the extent necessary on and as of the day preceding the
Commencement Date. No subdivision plan or plans (preliminary or otherwise) have
been, or will be filed by Landlord, with respect to the Demised Premises. The
Demised Premises are not located in areas designated by the Secretary of Housing
and Urban Development or any other governmental authority or agency as having
special flood or mud slide hazards.
(f) The buildings and other improvements comprising the Demised
Premises and all of their systems, including without limitation, the heating,
ventilation and air condition systems, and the plumbing, electrical, mechanical
and drainage systems, and roof are in good operating condition, repair and
working order, and have passed all previous safety and/or licensing inspections,
and such systems are adequate and sufficient for use in connection with an
assisted living facility, ordinary wear and tear expected.
(g) There is no proceeding pending to which Landlord is a party
relating to the assessed valuation of any portion of the Demised Premises and,
except as set forth on Schedule 13.11(e), no assessment for public improvements
has been made against the Demised Premises that remains unpaid.
(h) All public utilities required for the operation of the Demised
Premises either enter the Demised Premises through adjoining public streets, or
if they pass through adjoining private land, do so in accordance with valid
recorded easements held by Landlord which run for the benefit of the Land. The
Demised Premises are adjacent to and have direct access to each abutting street
located or identified on that certain survey of the Land, dated July, 1996,
prepared by Xxxxxx-Xxxxx, P.A. All streets adjoining or traversing the Demised
Premises have been dedicated to and accepted by the local municipal authorities.
(i) There are no easements traversing or contiguous to the Demised
Premises which are not disclosed on any schedule to this Lease or on any title
report delivered to Tenant, or which interfere with the intended use and
operation of the Demised Premises.
(j) All certificates of occupancy and other authorizations issued for
the Demised Premises have been set forth on Schedule 13.11(j). Landlord has not
received any notice of noncompliance from any governmental authority regarding
any of the improvements constructed at the Demised Premises or the use or
occupancy thereof. Said Schedule 13.11(j) shall be updated to the extent
necessary on and as of the day preceding the Commencement Date.
34
13.12 LEGAL PROCEEDINGS. Other than as set forth on Schedule 13.12,
there are no disputes, claims, actions, suits or proceedings, arbitrations or
investigations, either administrative or judicial, pending, or, to the best
knowledge of Landlord, after due inquiry, threatened or contemplated, and, to
the best knowledge of Landlord, after due inquiry, there is no basis therefor,
against or affecting the Demised Premises or Landlord's rights therein or
ability to consummate the transactions contemplated hereby, at law or in equity
or otherwise, before or by any court or governmental agency or body, domestic or
foreign, or before an arbitrator of any kind. Landlord has not received any
requests for information with respect to the transactions contemplated hereby
from any governmental agency. Said Schedule 13.12 shall be updated to the extent
necessary on and as of the day preceding the Commencement Date.
13.13 EMPLOYEES. Schedule 13.13 contains a complete and correct list of
the name, position, current rate of compensation and any vacation or holiday
pay, sick pay, personal leave and any other compensation arrangements or fringe
benefits, of each current employee, consultant and agent of Landlord (together
with a description of any specific arrangements or rights concerning such
persons) which are not reflected in any agreement or document referred to in
Schedule 13.6. Except as disclosed in Schedule 13.13, Landlord currently has no,
and has never had any, pension, profit sharing, bonus, incentive, welfare
benefit, sick leave or sick pay or other plan applicable to any of the employees
of the Demised Premises. Except as disclosed in Schedule 13.13, no such
employee, consultant or commission agent has any vested or unvested retirement
benefits or other termination benefits. Said Schedule 13.13 shall be updated to
the extent necessary on and as of the day preceding the Commencement Date.
13.14 COLLECTIVE BARGAINING, LABOR CONTRACTS, EMPLOYMENT PRACTICES,
ETC.
Intentionally Deleted.
13.15 ERISA. Intentionally Deleted.
13.16 INSURANCE. Schedule 13.16 contains a true and correct list of:
(a) all policies of fire, liability and other forms of insurance held or owned
by Landlord or otherwise in force and providing coverage for the Demised
Premises (including but not limited to medical malpractice insurance, and any
state sponsored plan or program for worker's compensation); (b) all bonds,
indemnity agreements and other agreements of suretyship made for or held by
Landlord or otherwise in force and relating to the Demised Premises, including a
brief description of the character of the bond or agreement and the name of the
surety or indemnifying party. Schedule 13.16 sets forth for each such insurance
policy the name of the insurer, the amount of coverage, the type of insurance,
the policy number, the annual premium and a brief description of the nature of
insurance included under each such policy and of any claims made thereunder
during the past two years. Such policies are owned by and payable solely to
Landlord and such policies or renewals or replacements thereof will be
outstanding and in full force and effect at the Commencement Date. All insurance
policies listed on Schedule 13.16 are in full force and effect, all premiums due
on or before the Commencement Date have been or will be paid on or before the
Commencement Date, Landlord has not been advised by any of its insurance
carriers of an intention to terminate or modify any such policies, nor has
Landlord failed to comply with any of the material conditions contained in any
such
35
policies. Said Schedule 13.16 shall be updated to the extent necessary on and as
of the day preceding the Commencement Date.
13.17 RELATIONSHIPS . Except as disclosed on Schedule 13.17, Landlord
has not and no managing member or member thereof or any member of such Person's
immediate family has, or at any time within the last two (2) years has had, a
material ownership interest or claim in any business, corporate or otherwise,
that is a party to, or in any property that is the subject of, business
relationships or arrangements of any kind relating to the operation of the
Demised Premises or the operation of the Facility, by which Tenant or the
Demised Premises will be bound after the Commencement Date. Said Schedule 13.17
shall be updated to the extent necessary on and as of the day preceding the
Commencement Date.
13.18 ASSETS COMPRISING THE DEMISED PREMISES . The Land, Leased
Equipment, Contracts, Licenses and Other Assets (collectively, the "Assets")
listed on the Schedules to this Lease as owned by Landlord, represent all of the
real and personal property, licenses, permits and authorizations, contracts,
leases and other agreements that are necessary and material to the use and
operation of the Demised Premises as now used or operated or the operation of
the Facility.
13.19 ABSENCE OF CERTAIN EVENTS . Except as set forth on Schedule
13.19, from the date of this Lease to the Commencement Date Landlord will not
have (except for transactions directly with Tenant):
(a) sold, assigned or transferred any of its assets or properties,
except in the ordinary course of business consistent with past practice;
(b) mortgaged, pledged or subjected to any lien, pledge, mortgage,
security interest, conditional sales contract or other encumbrance of any nature
whatsoever any of the Assets other than the liens, if any, of current taxes not
yet due and payable;
(c) made or suffered any amendment or termination of any contract,
commitment, instrument or agreement materially relating to the Demised Premises;
(d) Intentionally Deleted;
(e) discharged or satisfied any lien or encumbrance, or paid any
material liabilities, other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge when due any liabilities, the
failure to pay or discharge which has caused or will cause any actual damage or
risk of loss to Landlord or the Demised Premises;
(f) Intentionally Deleted;
(g) made or suffered any amendment or termination of any material
contract, commitment or agreement to which it is a party or by which it is
bound, or cancelled, modified or waived any debts or claims held by it, other
than in the ordinary course of business consistent with past practice, or waived
any rights of substantial value, whether or not in the ordinary course of
business; or
36
(h) entered into any material transaction other than in the ordinary
course of business consistent with past practice.
Said Schedule 13.19 shall be updated to the extent necessary on and as of the
day preceding the Commencement Date.
13.20 COMPLIANCE WITH LAWS . Landlord has not received any claim or
notice that the Demised Premises are not in compliance with any applicable
federal, state, local or other governmental laws or ordinances, or any
applicable order, rule or regulation of any federal, state, local or other
governmental agency.
13.21 ENVIRONMENTAL COMPLIANCE .
(a) At any time during Landlord's ownership of the Demised Premises
and, to the best of Landlord's knowledge, after due inquiry, prior to Landlord's
ownership thereof:
(i) the Demised Premises has not been used for the disposal of any
industrial refuse or waste, including but not limited to potentially
infectious waste, blood-contaminated materials, or other wastes generated
in the course of resident treatment (collectively, "Medical Waste"), or for
the processing, manufacture, storage, handling, treatment or disposal of
any hazardous or toxic substance, material or waste;
(ii) no asbestos-containing materials have been used or disposed of in
or on the Demised Premises or used in the construction of the Demised Premises;
(iii) no machinery, equipment or fixtures containing poly-chlorinated
biphenyls ("PCBs") have been located on the Demised Premises;
(iv) no storage tanks for gasoline, petroleum, or any other substance
have been located on the Demised Premises;
(v) no toxic or hazardous substances or materials have been located on
the Demised Premises, which substances or materials, if found in or on the
Demised Premises, would subject the owner or occupant of the Demised
Premises to damages, penalties, liabilities or an obligation to remove such
substances or materials under any applicable federal, state or local law,
regulation or ordinance; and
(vi) no written notice from any governmental body has ever been served
upon Landlord, or any of its agents or representatives, or upon any prior
owner of the Demised Premises, claiming any violation of any federal, state
or local law, regulation or ordinance concerning the generation, handling,
storage, or disposal of Medical Waste, or the environmental state,
condition, or quality of the Demised Premises, or requiring or calling
attention to the need for any work, repairs, or demolition, on or in
connection with the Demised Premises in order to comply with any law,
regulation or ordinance concerning the environmental or healthful state,
condition or quality of the Demised Premises.
37
Schedule 13.21 lists all reports of healthcare and environmental
agencies received by Landlord during the last five (5) years from any
supervisory governmental authority with respect to the operations of the Demised
Premises. Said Schedule 13.21 shall be updated to the extent necessary on and as
of the day preceding the Commencement Date. Landlord has delivered copies of
each such report to Tenant.
(b) To the best knowledge of Landlord, after due inquiry, at all times
Landlord has complied, and is complying in all respects with all environmental
and related laws, ordinances and governmental rules and regulations applicable
to Landlord or to the Demised Premises, including, but not limited to, the
Resource Conservation and Recovery Act of 1976, as amended, the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, the
Federal Water Pollution Control Act, as amended by the Clean Water Act, and
subsequent amendments, the Federal Toxic Substances Control Act, as amended, and
all other federal, state and local laws, regulations and ordinances with respect
to the protection of the environment (collectively, "Environmental Laws"). The
foregoing representation and warranty applies to all aspects of the operation of
the Demised Premises, including, but not limited to, the use, handling,
treatment, storage, transportation and disposal of any hazardous, toxic or
infectious waste, material or substance (including Medical Waste) and petroleum
products, material or waste whether performed on any of Landlord's properties or
at any other location.
13.22 TAX RETURNS . Landlord has filed all federal, state, county and
local income, excise, real property and other tax returns and abandoned facility
reports (if any) to date that are due and required to be filed by it, and there
are no claims, liens, or judgments for taxes due from Landlord affecting the
Demised Premises or any of the Leased Equipment, and no basis for any such
claim, lien, or judgment exists.
13.23 ENCUMBRANCES CREATED BY THIS AGREEMENT . Neither the execution
and delivery of this Lease or the performance of any of the transaction
documents contemplated hereby, nor the consummation of the transactions
contemplated hereby or thereby, will create any Lien on any of the Leased
Equipment or Other Assets in favor of any Person.
13.24 RESIDENTS . Intentionally Deleted.
13.25 ZONING . Except as set forth in Schedule 13.25, there exists no
judicial, quasi-judicial, administrative or other proceeding which might
adversely affect the validity of the current zoning of the Land and Leased
Improvements, nor to the best of Landlord's knowledge, after due inquiry, is
there any threatened action or proceeding which could result in the modification
and termination of any such zoning. Said Schedule 13.25 shall be updated to the
extent necessary on and as of the day preceding the Commencement Date.
13.26 LEASES . Schedule 13.26 contains an (a) accurate and complete
list of each lease, and all Amendments thereto, of Personal Property
(collectively, the "Personal Property Leases") to which Landlord or the Demised
Premises is a party or by which Landlord or the Demised Premises is bound or
which were assigned or transferred to Landlord in connection with the Demised
Premises and (b) a list of all contracts providing for the installation or
maintenance of equipment
38
purchased or leased by Landlord relating to the Demised Premises or the
operation of the Facility. Said Schedule 13.26 shall be updated to the extent
necessary on and as of the day preceding the Commencement Date.
13.27 CARE OF RESIDENTS; DEFICIENCIES; LICENSED BED AND RATE SCHEDULE .
(a) Intentionally Deleted.
(b) Schedule 13.27(b) sets forth a true and complete list of all
violations and deficiencies found or alleged by any governmental authority with
respect to the Facility or Landlord within the past three (3) years. All such
violations and deficiencies have been fully remedied by Landlord or withdrawn by
the applicable governmental authority. No violations or deficiencies found or
alleged by any governmental authority with respect to the Facility or Landlord
(whether or not listed in Schedule 13.27 (b)) will, individually or in the
aggregate, result in any Adverse Effect or adversely effect Tenant, or its
operation of the Demised Premises after the Commencement Date or any of the
transactions contemplated hereby (including, without limitation, any adverse
effect upon any application for Tenant's operation of the Demised Premises).
Said Schedule 13.27(b) shall be updated to the extent necessary on and as of the
day preceding the Commencement Date.
(c) Schedule 13.27(c) sets forth (i) the number of licensed assisted
living beds at the Demised Premises, (ii) the current rates charged by the
Demised Premises to its residents and (iii) the number of beds or units
presently occupied in, and the occupancy percentage at, the Demised Premises,
including the current rates charged by the Demised Premises for each such
occupied bed or unit, and the information set forth thereon is complete and
correct in all material respects. Said Schedule 13.27(c) shall be updated to the
extent necessary on and as of the day preceding the Commencement Date.
13.28 BOOKS AND RECORDS . The books and records of the Demised Premises
set forth in all material respects all transactions affecting the Demised
Premises, and such books and records have been properly kept and maintained in a
manner consistent with sound business practice and are complete and correct in
all material respects.
13.29 INTELLECTUAL PROPERTY . Schedule 13.29 sets forth a list of all
patents, copyrights, trademarks, software and computer programs, corporate names
and other intellectual property rights, including the name "The Homestead of
Manhattan" and all derivations and variations thereof and any other tradenames
used in connection with the operation of the Demised Premises (collectively, the
"Intellectual Property") used by Landlord in connection with the Demised
Premises. Said Schedule 13.29 shall be updated to the extent necessary on and as
of the day preceding the Commencement Date.
13.30 NO MISSTATEMENTS OR OMISSIONS . None of the documents,
certificates, instruments or information furnished or to be furnished by
Landlord to Tenant or any of Tenant's representatives is or will be false or
misleading as to any material fact or omits or will omit to state a material
fact necessary to make any of the statements contained therein not misleading.
Landlord has provided to Tenant all material information related to the Leased
Equipment, the Other Assets and the Demised Premises.
39
13.31 BANKRUPTCY . No insolvency proceeding of any character,
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting
Landlord (other than as a creditor) or the Demised Premises or any of the Leased
Equipment or Other Assets are pending or are being contemplated by Landlord, or
are, to the best knowledge of Landlord, after due inquiry, being threatened
against Landlord by any other person, and Landlord has not made any assignment
for the benefit of creditors or taken any action in contemplation of or which
would constitute the basis for the institution of such insolvency proceedings.
Tenant acknowledges that the Demised Premises are under construction as
of the date of this Lease and that the Demised Premises have not been operated
by Landlord as an assisted living facility. Tenant further acknowledges that
certain of the representations and warranties made by Landlord and Xxxx Xxxx
herein assume by their nature that the construction of the Demised Premises has
been completed (the "Completion Warranties") and/or that Landlord has operated
the Demised Premises as an assisted living facility (the "Operational
Warranties"). Tenant agrees that the Completion Warranties shall not be
effective until such time as construction of the Demised Premises has been
completed. Upon completion of construction of the Demised Premises, the
Completion Warranties shall automatically become effective except to the extent
of any matters disclosed in the Schedules to this Lease. Tenant further agrees
that the Operational Warranties shall not be deemed to be effective unless
Landlord operates the Demised Premises as an assisted living facility prior to
the Commencement Date, and in such event the Operational Warranties shall
automatically become effective as of the Commencement Date except to the extent
of any matters disclosed in the Schedules to this Lease.
ARTICLE XIV
TENANT'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Tenant represents and warrants to Landlord, and covenants, as follows:
14.1 ORGANIZATION AND STANDING OF TENANT . Tenant is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Copies of its Articles of Incorporation and By-laws and all amendments
thereof to date, have been delivered to Landlord, and are complete and correct.
Tenant has the power and authority to own the property and assets now owned by
it and to conduct the business presently being conducted by it.
14.2 AUTHORITY . Tenant has the full, absolute and unrestricted right,
power and authority to make, execute, deliver and perform this Lease including
all Schedules and Exhibits hereto, and the other instruments and documents
required or contemplated hereby and thereby. Upon obtaining the consents and
approvals described in Section 19.5, such execution, delivery, performance and
consummation shall have been duly authorized by all necessary action, corporate
or otherwise, on the part of Tenant, its directors and shareholders and all
consents of holders of indebtedness of Tenant shall have been obtained.
40
14.3 BINDING EFFECT . This Lease and all related transaction documents
executed by Tenant constitute the legal, valid and binding obligation of Tenant,
enforceable against Tenant in accordance with their respective terms.
14.4 ABSENCE OF CONFLICTING AGREEMENTS . Neither the execution or
delivery of this Lease or any of the transaction documents related hereto by
Tenant nor the performance by Tenant of the transactions contemplated hereby and
thereby, conflicts with, or constitutes a breach of or a default under (i)
Tenant's articles of incorporation or by-laws; or (ii) any applicable law, rule,
judgment, order, writ, injunction, or decree of any court, currently in effect;
or (iii) any applicable rule or regulation of any administrative agency or other
governmental authority currently in effect; or (iv) except as set forth on
Schedule 14.4, any written or oral agreement, indenture, contract or instrument
to which Tenant or any shareholder thereof is now a party. Said Schedule 14.4
shall be updated to the extent necessary on and as of the day preceding the
Commencement Date.
14.5 STATEMENT OF OPERATIONS . Tenant shall furnish to Landlord a
statement of operations for the Demised Premises within ninety (90) days after
the end of each fiscal year for the Demised Premises. The statement of
operations shall include occupancy statistics and a statement of income and
expenses for the Demised Premises for the period which it covers, and shall be
certified by an officer of Tenant.
ARTICLE XV
INSURANCE, SUBROGATION AND INDEMNIFICATION
15.1 COMPREHENSIVE GENERAL LIABILITY AND PROFESSIONAL INSURANCE TO BE
CARRIED BY TENANT . Tenant before occupying the Demised Premises, at its sole
cost and expense, shall cause to be issued and kept in force during the Lease
Term, a policy or policies of comprehensive general liability and professional
liability insurance, including general liability and property damage and
including contractual liability under Tenant's indemnification obligations in
this Article, by the terms of which Tenant shall be insured against claims for
bodily injury, death and property damage as a result of an occurrence on the
Demised Premises, with minimum combined single limits of One Million Dollars
($1,000,000) per occurrence and Three Million Dollars ($3,000,000) per property,
with a Two Million Dollar ($2,000,000) umbrella policy. Landlord shall be named
as an additional insured or a loss payee, as applicable, under such policy or
policies of insurance. Tenant shall remain liable to Landlord for any deficiency
should such insurance under this Section 15.1 be insufficient to satisfy the
liability of Tenant under Section 15.4.
15.2 CERTIFICATE OF INSURANCE . Tenant, at its sole cost and expense,
shall carry all insurance required by this Article XV with a financially sound
and reputable insurer qualified to do business in the State of Kansas, and
Tenant shall cause each policy of insurance procured by it and required by this
Article to be endorsed to provide that each insurer shall have the right to
change or cancel the policy only after giving every insured party thereunder
thirty (30) days prior written notice by certified mail, return receipt
requested, of the insurer's intention to cancel or change the policy. All
insurance required to be carried by Tenant pursuant to the terms of this Lease
shall be effected under valid and enforceable policies issued by insurers rated
in Best's Insurance Guide, or any
41
successor thereto (or if there be none, an organization having a national
reputation) as having a general policyholder rating of not less than "B+".
At Landlord's request, Tenant, at its sole cost and expense, before
commencement of the Lease Term and upon each renewal of such insurance, shall
deliver to and deposit with Landlord certificates of insurance evidencing each
policy required by this Article. Upon request of Landlord, Tenant will furnish
or cause to be furnished to Landlord from time to time, a summary of the
insurance covering required by this Article XV in form and substance reasonably
acceptable to Landlord.
A party's obligation to carry the insurance provided herein may be
brought within the coverage of a so-called "blanket policy" or policies of the
insurance carrier maintained by such party or its affiliated business
organizations. However, the other party to this Lease must be named as an
additional insured thereunder as its interest may appear; and the requirements
set forth herein must be otherwise satisfied.
15.3 OTHER COVERAGE . Tenant, at its sole cost and expense, shall carry
and maintain throughout the Lease Term insurance for the benefit of Landlord and
Landlord's first fee mortgagee in such amount as shall be necessary to provide
coverage for loss of Annual Rent during the first twelve (12) months during
reconstruction following any damage or destruction of the Demised Premises.
Tenant, at its sole cost and expense, shall also carry and maintain throughout
the Lease Term insurance in a reasonable amount to provide coverage for loss or
damage to or from explosion of steam boilers, pressure vessels or similar
apparatus; and workers compensation and employer's liability insurance with a
limit of not less than the amount required by applicable state statute.
15.4 INDEMNIFICATION OF LANDLORD . Tenant assumes all risk and
responsibility for injury or death to persons and damage to property (damages to
the Demised Premises being waived to the extent of insurance proceeds paid to or
on behalf of Landlord) arising out of or in any way connected with or related to
Tenant's use and control of the Demised Premises (including matters relating to
Tenant's repair and/or alteration of the Demised Premises) and Tenant shall
defend, indemnify and hold harmless Landlord, its partners, officers, directors,
managing member, members and shareholders (collectively, the "Indemnified
Parties"), from and against any and all claims, losses, liabilities, actions,
proceedings and expenses (including reasonable attorneys' fees) imposed upon,
incurred by or asserted against any of the Indemnified Parties by reason of,
arising out of or in any way connected with Tenant's use or operation of the
Demised Premises or Other Assets, except to the extent such claims, losses,
liabilities, actions, proceedings and expenses (including attorneys' fees) arise
out of Landlord's negligence, willful misconduct or breach of this Lease. Tenant
shall at all times indemnify and hold harmless Landlord, its officers,
directors, managing member, members and shareholders, from and against any and
all claims, losses, liabilities, actions, proceedings and expenses (including
reasonable attorneys' fees) arising out of any inaccuracy in any representation
or breach of any warranty set forth in Article XIV hereof. The provisions of
this Section 15.4 shall survive the termination or expiration of this Lease.
15.5 INDEMNIFICATION OF TENANT . Landlord and Xxxx Xxxx shall at all
times jointly and severally defend, indemnify and hold harmless Tenant, its
officers, directors and shareholders (collectively, the "Tenant Indemnified
Parties"), from and against any and all claims, losses, liabilities,
42
actions, proceedings and expenses (including reasonable attorneys' fees) imposed
upon, incurred by or asserted against any of the Tenant Indemnified Parties by
reason of, arising out of or in any way connected with Landlord's use, ownership
or operation of the Demised Premises prior to the Commencement Date, except to
the extent such claims, losses, liabilities, actions, proceedings and expenses
(including reasonable attorney's fees) arise out of Tenants' negligence, willful
misconduct or breach of this Lease. Landlord and Xxxx Xxxx shall at all times
jointly and severally defend, indemnify and hold harmless the Tenant Indemnified
Parties from and against any and all claims, losses, liabilities, actions,
proceedings and expenses (including reasonable attorneys' fees) arising out of
any inaccuracy in any representation or breach of any warranty set forth in
Article XIII hereof. The provisions of this Section 15.5 shall survive the
termination or expiration of this Lease.
15.6 FIRE, EXTENDED COVERAGE AND ADDITIONAL PERILS INSURANCE . Tenant,
at its sole cost and expense, shall cause to be issued and kept in force during
the Lease Term, a policy or policies of fire, extended coverage and all risks
insurance by which Landlord and Tenant shall be insured against loss and damage
by fire, lightning, windstorm, hail and sprinkler damage, resulting from damage
to or destruction of the improvements, including equipment, fixtures,
furnishings and other personal property used in connection with the Demised
Premises and the Leased Equipment, if any, for its full replacement value
(exclusive of Land), less cost of excavation, foundation and footings, by
policies containing an agreed amount endorsement, demolition coverage (XCU
coverage) and ordinance or law coverage, such policy or policies to be written
on a replacement cost basis. Notwithstanding anything to the contrary, Landlord
shall at all times be entitled to insurance in an amount sufficient to avoid
being a coinsurer. All such insurance shall be carried in favor of Landlord and
Landlord's first fee mortgagee as their interest(s) may appear. Such insurance
may also be carried in favor of Tenant and the holder(s) of any leasehold
mortgages on this Lease, as their interests may appear; provided, however, that
any such policy shall effectively provide, if such provision be obtainable, that
Landlord's interest therein shall not be subject to cancellation by reason of
any act or omission of Tenant or any leasehold mortgagee. Notwithstanding
anything in this Lease to the contrary, all such fire and extended coverage and
other insurance policies covering damage to or destruction of buildings and
improvements on the Demised Premises shall effectively provide that any loss
payable thereunder shall be adjusted solely by Tenant and the leasehold
mortgagee(s), and that the proceeds of such insurance shall be payable to
Tenant, however, if in excess of One Hundred Thousand Dollars ($100,000), shall
be paid to and deposited with Landlord's first fee mortgagee, provided such
mortgagee is a bank, savings bank or trust company whose deposits are insured by
the FDIC, or insurance company, pension fund, credit company or real estate
investment trust, and such mortgagee has resources in excess of $100,000,000 (an
"Institutional Lender"), and if not then said proceeds shall be paid to and
deposited with any Institutional Lender of Tenant's selection, as insurance
trustee (the "Insurance Trustee"), which shall hold, apply and make available
the proceeds of such insurance as hereinafter provided in this Lease.
15.7 WAIVER OF SUBROGATION . Each party to this Lease releases the
other party (which term as used in this Section includes the employees, agents,
officers, managing member, members and directors of the other party) from all
liability, whether for negligence or otherwise, in connection with loss covered
by any fire and/or extended coverage insurance policies, which the releasor
carries with respect to the Demised Premises, or any interest or property
therein or thereon (whether or not such insurance is required to be carried
under this Lease), but only to the extent that such loss is collected under said
fire and/or extended coverage insurance policies. Such release is also
43
conditioned upon the inclusion in the policy or policies of a provision whereby
any such release shall not adversely affect said policies, or prejudice any
right of the releasor to recover thereunder. Each party agrees that its
insurance policies aforesaid will include such a provision so long as the same
shall be obtainable without extra cost, or if extra cost shall be charged
therefor, so long as the party for whose benefit the clause or endorsement is
obtained shall pay such extra cost. If extra cost shall be chargeable therefor,
each party shall advise the other of the amount of the extra cost, and the other
party at its election, may pay the same, but shall not be obligated to do so.
ARTICLE XVI
ARBITRATION
If any controversy should arise between the parties in the performance,
interpretation or application of this Lease involving any matter, either party
may serve upon the other a written notice stating that such party desires to
have the controversy resolved by an arbitrator. If the parties cannot agree
within fifteen (15) days from the service of such notice upon the selection of
such arbitrator, an arbitrator shall be selected or designated by the American
Arbitration Association upon written request of either party hereto. Arbitration
of such controversy, disagreement, or dispute shall be conducted in accordance
with the Commercial Arbitration Rules then in force of the American Arbitration
Association and the decision and award of the arbitrator so selected shall be
binding upon Landlord and Tenant. The arbitration will be held in Dallas, Texas.
As a condition precedent to the appointment of any arbitrator, in any
non-monetary dispute, both parties shall be required to make a good faith effort
to resolve the controversy, which effort shall continue for a period of thirty
(30) days prior to any demand for arbitration. The cost of any such arbitration
shall be shared equally by the parties. Each party shall pay its own costs
incurred as a result of its participation in any such arbitration.
If the issue to be arbitrated is Landlord's or Tenant's alleged breach
of this Lease and as a result thereof, Landlord or Tenant has the right to
terminate this Lease, Tenant shall continue to lease the Demised Premises
pending the outcome of such arbitration, provided Landlord or Tenant may elect
to proceed without arbitration under its other remedies in this Lease.
44
ARTICLE XVII
CERTAIN COVENANTS OF LANDLORD
17.1 COVENANT NOT-TO-COMPETE .
(a) For a period of five (5) years from and after the Commencement Date
neither Landlord nor any corporation, partnership or other business entity or
person controlling, controlled by or under common control with Landlord
("Restricted Party"), shall, directly or indirectly, operate, manage, own,
control, finance or provide financing for, be a consultant for or enter into a
service contract with, any nursing home, hospital or licensed health care
facility or other person or entity of any type, licensed or unlicensed, existing
or to be constructed that provides assisted living care, nursing home care or
any other senior housing, or any entity existing or to be formed that competes
in any way with the Demised Premises (any such person or entity being herein
referred to as an "Operator"), that provides nursing home care, assisted living
care or senior housing, and which facility is located within twenty-five (25)
miles from the exterior boundaries of the Land.
(b) From and after the Commencement Date, no Restricted Party shall
disclose, directly or indirectly, to any person outside of Tenant's employ
without the express authorization of Tenant, any resident lists, pricing
strategies, resident files and records, proprietary data or trade secrets
relating to the Demised Premises or any financial or other information about the
Demised Premises not then in the public domain.
(c) For a period of five (5) years from and after the Commencement
Date, no Restricted Party shall solicit any of the physicians, customers,
vendors, suppliers, associates, employees, independent contractors, residents or
families of residents admitted to, or employed at the Demised Premises prior to
the Commencement Date, or by the Facility or by Tenant, to take any action or to
refrain from taking any action or inaction that would be disadvantageous to
Tenant or the Facility, including (but not limited to) the solicitation of their
respective physicians, suppliers, customers, vendors, associates, employees,
independent contractors, residents or families of residents to cease doing
business, or their association or employment with the Facility or Tenant.
(d) The Restricted Parties acknowledge that the restrictions contained
in this Section 17.1 are reasonable and necessary to protect the legitimate
business interests of Tenant and that any violation thereof by any of them would
result in irreparable harm to Tenant. Accordingly, the Restricted Parties agree
that upon the violation by any of them of any of the restrictions contained in
this Section 17.1, Tenant shall be entitled to obtain from any court of
competent jurisdiction a preliminary and permanent injunction as well as any
other relief provided at law, equity, under this Lease or otherwise. In the
event any of the foregoing restrictions are adjudged unreasonable in any
proceeding, then the parties agree that the period of time or the scope of such
restrictions (or both) shall be adjusted to such a manner or for such a time (or
both) as is adjudged to be reasonable.
Notwithstanding the foregoing, for purposes of this Section 17.1, any
advertisement prepared for and disseminated to the public in general, which
advertises the services of any facility of Landlord not otherwise in violation
of this Section 17.1 or advertises the need for
45
services to be supplied to such a Demised Premises, shall not be deemed to be an
inducement or solicitation with respect to any such residents, physicians,
suppliers or independent contractors.
17.2 PRE-COMMENCEMENT DATE FINANCIAL STATEMENTS . Intentionally
Deleted.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
18.1 NOTICE S. All notices, requests, demand or other communications
required or permitted under this Lease shall be in writing and shall be either
personally delivered evidenced by a signed receipt, transmitted by United States
certified mail, return receipt requested, postage prepaid, or by a nationally
recognized overnight delivery service, addressed as follows:
IF TO LANDLORD: c/o The Homestead Company, L.C.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Attention: Xx. Xxxx Xxxx
COPY TO: Foulston & Siefkin, L.L.P.
000 Xxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
IF TO TENANT: c/o Integrated Living Communities, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xx Xxxx
COPIES TO: Integrated Living Communities, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
and
Blass & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
All notices, requests, demands and other communications shall be
effective (i) upon personal delivery evidenced by a signed receipt, (ii) upon
five (5) calendar days after being deposited in the United States mail or (iii)
on the next business day following timely deposit with a nationally recognized
overnight delivery service, whichever occurs first. The time period in which a
response to any such notice, request, demand or other communication must be
given, however, shall
46
17.3 TITLE MATTERS. At its sole cost and expense, Landlord shall
deliver, or cause to be delivered, to Tenant: (i) promptly after the completion
of the construction of the Facility (a) final lien waivers from each contractor,
subcontractor and materialman that performed work or supplied materials in
connection with the construction of the Facility, (b) an "as built" survey of
the Demised Premises that shows a state of facts acceptable to Tenant and its
counsel prepared in accordance with ALTA standards by a surveyor licensed in the
State of Kansas, (c) an endorcesment to Tenant's leasehold owner's title
insurance policy reading in such "as built" survey, and (d) a bringdown of
Tenant's leasehold owner's title insurance policy showing only title exceptions
that are acceptable to Tenant and its counsel, and (ii) promptly after the
passage of four (4) months after the completion of the construction of the
Facility, a bringdown, of and endorsement to, Tenant's leasehold owner's title
insurance policy showing only title exceptions that are acceptable to Tenant and
its counsel.
46-A
commence to run from (i) the date of personal delivery evidenced by a signed
receipt, (ii) the date of receipt on the return receipt of the notice, request,
demand or other communication; provided, however, that if a party refuses
delivery of any such notice, request, demand or other communication sent by
certified mail, or fails or neglects, without reasonable cause, to accept
delivery after three (3) attempts to so deliver by postal authorities, it shall
be deemed received on the date of its last being deposited in the United States
mail, or (iii) the date of delivery by a nationally recognized overnight
delivery service. The parties hereto shall have the right, at any time and from
time to time during the Lease Term to change their respective addresses for
notices by giving the other party hereto written notice thereof.
18.2 UNDERSTANDING AND AGREEMENTS . This Lease constitutes the entire
understanding and agreements of whatsoever nature or kind existing between the
parties with respect to Tenant's lease of the Demised Premises and Other Assets
from Landlord.
18.3 AMENDMENT . This Lease may be amended at any time and from time to
time; provided, however, that no amendment to this Lease shall be legally
enforceable against Landlord or Tenant unless it is in writing, executed and
acknowledged by both Landlord and Tenant.
18.4 CONSTRUCTION . This Lease shall be construed in accordance with
the laws of the State of Kansas.
18.5 SPECIFIC PERFORMANCE . Landlord and Tenant for themselves and for
each person, business organization, association and corporation claiming by,
under or through either Landlord or Tenant, stipulate that both Landlord and
Tenant shall have the remedy of specific performance against the other.
Landlord and Tenant, for themselves and for each person, business
organization, association and corporation claiming by, under or through either
Landlord or Tenant, knowingly and voluntarily waive their rights to allege or
assert in or in any and all claims or counts for specific performance arising
out of or in any way connected with this Lease the defense that the other party
has an adequate remedy at law.
18.6 BINDING EFFECT ON SUCCESSORS . Except as otherwise provided for
herein, Landlord and Tenant expressly agree that, subject to the terms of this
Lease, all terms and conditions of this Lease shall extend to and be binding
upon or inure to the benefit of the heirs, executors, administrators, personal
representative, assigns and successors in interest of both the respective
parties hereto.
18.7 LEASE (SHORT FORM) . Landlord and Tenant shall execute and deliver
to each other an instrument, recordable in form setting forth the term and such
other information (other than rent) as may be necessary to constitute a "short
form lease" for recording purposes immediately upon execution of this Lease. Any
party, at its expense, shall have the right to record such short form lease for
the purpose of giving notice of Tenant's interest in the Demised Premises. This
Lease shall not be recorded.
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18.8 READING AND RECEIPT OF THIS LEASE . Landlord and Tenant stipulate
that each has read and understands the conditions in this Lease and by their
respective signatures below acknowledge the receipt of an executed copy of this
Lease.
18.9 PROHIBITION OF MECHANICS LIENS . Nothing in this Lease shall be
deemed or construed in any way as constituting the consent or request of
Landlord, expressed or implied, by inference or otherwise, to any contractor,
subcontractor, laborer, or materialman for the performance of any labor or the
furnishing of any materials for any specific improvements, alteration to, or
repair of the Demised Premises or any part thereof, nor as giving Tenant any
right, power, or authority to contract for or permit the rendering of any
services or the furnishing of any materials that would give rise to the filing
of any lien against the Demised Premises or any part thereof.
18.10 BROKERAGE OR AGENTS FEES . Landlord and Tenant represent to each
other that it has dealt with no broker in connection with this Lease or the
transactions contemplated hereby other than Southwest Retirement Properties (the
"Broker"), and Tenant shall pay any compensation, commissions or fees earned by
the Broker. Except for the fees payable to the Broker in connection with this
transaction, which fees are the sole responsibility of Tenant, each party agrees
to indemnify and hold the other harmless, including reasonable attorney's fees,
from all claims or actions brought by any broker or agent claiming to represent
the indemnifying party in this transaction for fees or commissions.
18.11 CAPTIONS AND INDEXES . Article or Section titles, captions or
indexes, contained in this Lease are inserted only as a matter of convenience
and reference, and in no way define, limit, extend or describe the scope of this
Lease, or the intent of any provision hereof.
18.12 PRONOUNS . All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons may require.
18.13 DRAFTING OF THIS LEASE . Landlord and Tenant have been
represented by attorneys in the negotiation and drafting of this Lease and all
of the parties to this Lease have influenced the language of this Lease.
Therefore, this Lease shall not be construed against any party to this Lease by
reason of drafting authorship.
18.14 COUNTERPARTS . This Lease may be executed in several
counterparts, each of which shall be deemed an original, and all of which shall
together constitute one and the same instrument.
18.15 QUIET ENJOYMENT . Landlord covenants that Tenant, paying the said
rental and performing the covenants and conditions in this Lease contained,
shall and may peaceably and quietly have, hold and enjoy the Demised Premises
and all rights of Tenant hereunder for the Lease Term, without any manner of
hindrance or molestation whatsoever from anyone claiming by, through or under
Landlord.
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ARTICLE XIX
CONDITIONS PRECEDENT TO LEASE COMMENCEMENT
Unless waived by Tenant in writing, neither the Lease Term nor Tenant's
obligations under this Lease shall commence unless and until each and every one
of the following conditions has been satisfied or fulfilled.
19.1 REPRESENTATIONS AND WARRANTIES .
Each of the representations and warranties contained in this Lease and
on any Schedule (as originally annexed to this Lease), list, certificate or
other document delivered pursuant to the provisions hereto or in any other
document or instrument delivered in connection herewith made by or on behalf of
Landlord and/or Xxxx Xxxx shall be true and correct in all material respects at
and as of the time made and on and as of the Commencement Date as though such
representations and warranties were made at and as of such time, except to the
extent affected by the transactions herein contemplated.
19.2 PERFORMANCE OF COVENANTS; NO DEFAULT .
Landlord shall have performed or complied in all material respects with
each of its agreements and covenants under this Lease (including, without
limitation, all of its obligations under Article XXII hereof) and under all
documents and instruments delivered in connection herewith required to be
performed or complied with by it prior to or at the Commencement Date of the
Lease Term. No default shall exist nor any condition or event that, constitutes
a "default" (as defined in Article XI of this Lease), or, with notice or lapse
of time or both, would constitute a default on the part of Landlord.
19.3 DELIVERY OF CERTIFICATE .
Landlord shall have executed and delivered to Tenant a certificate
signed by a duly authorized managing member of Landlord dated the Commencement
Date upon which Tenant may rely, certifying that the statements made in Sections
19.1 and 19.2, are true, correct and complete as of the Commencement Date.
19.4 LEGAL MATTERS . No suit, action, investigation, or legal or
administrative proceeding shall have been brought or shall have been threatened
by any person that questions the validity or legality of this Lease or the
transactions contemplated hereby.
19.5 APPROVALS .
(a) The consent or approval of all persons necessary for the
consummation of the transactions contemplated hereby including, without
limitation, all governmental, regulatory and other such agencies, shall have
been granted, including without limitation, the consents and approvals set forth
on Schedule 13.5 and any tax clearance or similar approval and all licenses,
certificates of need and other permits (including without limitation the
"Licenses") necessary for
49
Tenant to lease and operate the Facility shall have been issued, in Tenant's
name, and the effectiveness of each of the same shall not be subject to the
satisfaction of any conditions precedent;
(b) The consent of the Board of Directors of Tenant; and
(c) None of the foregoing consents or approvals (i) shall have been
conditioned upon the modification, cancellation or termination of any material
lease, contract, commitment, agreement, license, easement, right or other
authorization with respect to the Facility, or (ii) shall impose on Tenant any
material condition or provision or requirement with respect to the Facility or
its operation that is more restrictive than or different from the conditions
imposed upon such operation prior to the commencement of this Lease.
19.6 MATERIAL ADVERSE CHANGE . Since the date of this Lease there shall
not have been any material adverse change to (a) the assets, business,
operations, properties, condition (financial or otherwise) or reasonably
foreseeable prospects of Landlord, (b) the ability of Landlord to perform all or
any part of its obligations under this Lease or any document or agreement
contemplated hereby, (c) the Demised Premises or Other Assets or (d) the
operation of the Facility.
19.7 AUTHORIZATION DOCUMENTS . Tenant shall have received appropriate
authorizing documents and the Organizational Documents with respect to Landlord,
certified in a manner reasonably acceptable to Tenant including without
limitation, a certificate of the "managing member" (as defined in the
Organizational Documents) of Landlord certifying the authorization of Landlord's
execution and full performance of each of this Lease and all documents and
agreements executed by Landlord in connection herewith, the Organizational
Documents of Landlord and the incumbency of the managing member of Landlord.
19.8 COBRA . Intentionally Deleted.
19.9 ENVIRONMENTAL COMPLIANCE . Tenant shall have received, at its own
expense, a written report in form and substance acceptable to Tenant, from a
qualified geotechnical or engineering firm of Tenant's choice, concerning the
presence of hazardous substances, asbestos or asbestos-containing products,
radon and/or ureaformaldehyde insulation on or in the Facility. Such report
shall disclose at a minimum: (1) the results of a review of prior uses of the
Land disclosed by local public records; (2) contacts with local officials to
determine whether any records exist with respect to the disposal of hazardous
substances at the Land; (3) if deemed necessary by such engineering or
geotechnical firm, or by Tenant, soil samples and groundwater samples consistent
with good engineering practice; and (4) evaluation of the surrounding areas for
sensitive environmental receptors, such as drinking water xxxxx or aquifers,
hospitals and schools.
"Hazardous Substance" shall include (a) any material that may be
dangerous to health or the environment, either separately or in combination with
any other substance, when improperly stored, treated, disposed, or otherwise
managed, including without limitation "hazardous waste," "hazardous substances"
or "toxic substances," or any other contamination, emission, discharge, spill,
or release having an adverse effect on the environment (as such concepts or
terms are used and/or defined in any of the Environmental Laws); and (b) crude
or refined oil, including but not limited to waste oil.
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19.10 FACILITY PURCHASE OPTION. Landlord shall have executed and
delivered the Option Agreement in substantially the form of Exhibit D attached
hereto.
19.11 NON-DISTURBANCE AGREEMENT. Tenant shall be granted a
Subordination Agreement with respect to this Lease from the holder(s) of each
mortgage which is a lien on the Demised Premises on the date of this Lease.
ARTICLE XX
CERTAIN ADDITIONAL OBLIGATIONS OF LANDLORD
20.1 DISCHARGE OF LIABILITIES . Landlord shall pay all of its
liabilities and obligations which arise or accrue on or before the Commencement
Date with respect to the Facility, as and when the same shall become due and
payable.
20.2 ACCOUNTS RECEIVABLE . Intentionally Deleted.
20.3 EMPLOYMENT OF EXISTING EMPLOYEES . Intentionally Deleted.
20.4 AUDITED FINANCIAL STATEMENTS . Intentionally Deleted.
20.5 LICENSES. Landlord shall use its best efforts to deliver to Tenant
not later than ten (10) days from execution hereof copies of each of the
Licenses and of each of the applications therefor.
20.6 COLLECTIVE BARGAINING, LABOR CONTRACTS, ETC. Intentionally
Deleted.
20.7 CONTRACTS AND PERSONAL PROPERTY LEASES. Landlord shall deliver to
Tenant true, correct and complete copies of all of the Contracts and Personal
Property Leases no later than ten (10) days from execution hereof. Landlord
shall terminate as of the Commencement Date any and all of such Contracts and/or
Personal Property Leases, other than Contracts and/or Personal Property Lease,
if any, as shall be designated by Tenant in writing, as the Contracts and/or
Personal Property Leases which Tenant wants assigned to it as of the
Commencement Date.
20.8 DEMISED PREMISES. All public improvements ordered, commenced or
completed prior to the date of this Lease or prior to the Commencement Date
shall be paid for in full by Landlord prior to the Commencement Date; provided,
that if the same are payable in installments, Landlord shall pay all
installments that are due and payable prior to the Commencement Date and Tenant
shall pay all installments that are due and payable on or after the Commencement
Date.
20.9 DELIVERY OF NOTICES. Between the date hereof and the Commencement
Date, and during the Lease Term, Landlord shall, within five (5) days after its
receipt of any of the following, deliver to Tenant copies of (a) all notices of
any claim or default or any other claim or proceeding relating to any License
and all notices of any threatened termination, lapse or revocation of any
License, (b) all claims or notices that the Demised Premises, or any part
thereof, are not in compliance with any applicable federal, state, local or
other governmental laws or ordinances, or any applicable order, rule or
regulation of any federal, state, local or other governmental agency, and
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19.12 TITLE MATTERS. At its sole cost and expense, Landlord shall
deliver, or cause to be delivered, to Tenant: (i) final lien waivers from each
contractor, subcontractor and materialman that performed work or supplied
materials in connection with the construction of the Facility, (ii) an "as
built" survey of the Demised Premises that shows a state of facts acceptable to
Tenant and its counsel prepared in accordance with ALTA standards by a surveyor
licensed in the State of Kansas, (iii) an endorcesment to Tenant's leasehold
owner's title insurance policy reading in such "as built" survey, and (iv) a
bringdown of Tenant's leasehold owner's title insurance policy showing only
title exceptions that are acceptable to Tenant and its counsel.
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(c) all notices or claims of any violation of any federal, state or local law,
regulation or ordinance concerning the generation, handling, storage, or
disposal of Medical Waste, or the environmental state, condition, or quality of
the Demised Premises, or requiring or calling attention to the need for any
work, repairs, or demolition, on or in connection with the Demised Premises in
order to comply with any law, regulation or ordinance concerning the
environmental or healthful state, condition or quality of the Demised Premises.
ARTICLE XXI
EXTENSION OF COMMENCEMENT DATE AND TERMINATION
21.1 TERMINATION. Without limiting any of the rights of Tenant in this
Lease or as it may be otherwise lawfully entitled, it is agreed that the
commencement of the Lease Term is conditioned upon, and shall be subject to, the
satisfaction of all conditions precedent to Tenant's obligations hereunder,
including, without limitation, those conditions set forth in Article XIX hereof,
the verification by Tenant of the accuracy of all of Landlord's and Xxxx Xxxx'x
warranties and representations made herein and the due compliance by Landlord of
all of its agreements set forth herein and elsewhere in this Lease which are to
be performed prior to the Commencement Date. If, on or before the Commencement
Date, Tenant, in its sole judgment, shall determine that any of said conditions
precedent have not been satisfied, or that Landlord's or any of Xxxx Xxxx'x
representations or warranties are untrue or that Landlord has not complied with
any of said agreements, then the Tenant may elect to either (i) extend the
Commencement Date for a period or periods not in excess of ninety (90) days in
the aggregate, during which time Landlord shall use its best efforts to satisfy
the condition, complete its required performance and otherwise cure the defect
or non-compliance; or (ii) terminate this Lease, by notice to Landlord. If at
the end of any extended period or periods for the Commencement Date said defect
or non-compliance has not been cured to Tenant's reasonable satisfaction, Tenant
may terminate this Lease by notice to Landlord. If this Lease is terminated, as
aforesaid, Landlord shall cause any deposits, pre-payments or other sums
theretofore delivered or paid by Tenant hereunder to be refunded to Tenant, with
all interest earned thereon, and Landlord shall pay up to $15,000 of the cost of
any survey obtained, any title search made, any insurance commitment issued by
Tenant's title insurance company, and any other expenses, including but not
limited to legal fees, incurred by Tenant, in connection with this Lease.
21.2 TENANT'S REMEDIES. If Landlord fails to comply with any of the
provisions of this Lease then, in addition to all other legal remedies available
to Tenant by reason of Landlord's default, Tenant shall have the right to obtain
specific performance of Landlord's obligations hereunder. Each and every
covenant, representation and warranty of Landlord and Xxxx Xxxx made herein
shall survive and continue after the Commencement Date. Nothing contained herein
shall be deemed to restrict or limit Tenant in any way from offsetting against
or deducting from any Annual Rent or other payments to be made to Landlord
herein, the amount of any costs or damages incurred by Tenant as a result of or
arising out of the breach by Landlord of any covenant, agreement, representation
or warranty made by Landlord or Xxxx Xxxx in this Lease; provided that the
amount to be offset against or deducted from any particular payment shall not
exceed ten (10%) percent of such payment, with the balance of any such amount to
be offset against or deducted from subsequent payments subject to such cap and
carry forward provisions.
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ARTICLE XXII
CONSTRUCTION AND DELIVERY OF POSSESSION
22.1 CONSTRUCTION, DELIVERY OF POSSESSION AND COMMENCEMENT DATE .
(a) Landlord agrees to improve, construct and install upon the Demised
Premises in the location designated on Exhibit A-1 annexed hereto, the Leased
Improvements containing not less than 22,450 square feet of interior floor
space, and consisting of 35 units and 46 beds, which Leased Improvements shall
be part of the Demised Premises that shall be provided to Tenant by Landlord as
a "turnkey" operation, as hereinafter provided in this Lease. Landlord agrees
that the work described as "Landlord's Construction Work" in Exhibit C annexed
hereto will be completed at its own cost and expense.
(b) All work required to be performed by Landlord pursuant to this
Lease shall be performed in a good and workmanlike manner, with new materials of
good quality. The Demised Premises shall be left at the completion of such work
in a safe, clean and tenantable condition and in reasonably good order and
repair. Landlord shall perform all work provided for in this Lease in compliance
and conformity with all applicable construction and building codes and with
every applicable requirement of (i) any statute, law, ordinance, regulation or
order, now or hereafter made by any governmental authorities; (ii) any board of
fire underwriters, rating bureau or similar organizations having jurisdiction;
and (iii) all carriers of insurance on the Demised Premises and on the work
provided for in this Lease. For a period of fifteen (15) months following the
Commencement Date, Landlord, at its expense, shall remedy any defect or make any
repairs or replacements made necessary by its failure to perform the work
required to be performed by it pursuant to this Lease, including any failure to
perform such work in a good and workmanlike manner and with new materials of
good quality. During the eleventh (11th) month after the Commencement Date,
Landlord and Tenant shall create a written list of such defects, repairs or
replacements that Landlord can present to its contractors for remedial action
within the twelve (12) month warranty period provided by such contractors to
Landlord; provided that nothing in this sentence derogates the fifteen (15)
month warranty provided by Landlord to Tenant in the immediately preceding
sentence. Landlord shall obtain all necessary building permits so as to allow
Landlord to perform Landlord's Construction Work and ready the Demised Premises
for Tenant's use and occupancy.
(c) Landlord agrees that as part of Landlord's Construction Work the
Demised Premises shall be connected to the electric and gas lines serving the
municipality wherein the Demised Premises are located and to the water and sewer
system of said municipality.
(d) Landlord agrees that Landlord's Construction Work shall be
completed and possession of the Demised Premises shall be delivered to Tenant
(the term "delivery of possession of the Demises Premises" being hereinafter
defined) on or before February 28, 1997, subject to extension of not more than
one hundred eighty (180) days in the aggregate for periods of time that are
deemed excusable delays pursuant to Section 11.4 of this Lease (herein referred
to as "Excusable Delays").
(e) Further, should Landlord fail to diligently pursue such work and to
complete Landlord's Construction Work in accordance with the provisions of this
Article, Tenant
53
may, without prejudice to the exercise of any other remedy, at its election,
either (i) extend further time to Landlord within which to properly complete
Landlord's Construction Work, or (ii) commence and/or complete Landlord's
Construction Work or correct such work, as the case may be, and deduct and
offset Tenant's entire cost of so doing, together with interest thereon from the
date of expenditure thereof at the annual rate set forth in Section 3.1.4
hereof, from any Annual Rent or other amounts payable under this Lease. At the
expiration of any extended period or periods granted by Tenant as aforesaid,
Tenant shall have the same rights of extension or self help.
Landlord and Xxxx Xxxx shall at all times jointly and severally defend,
indemnify and hold harmless the Tenant Indemnified Parties from and against all
actions, claims, demands, costs, damages, penalties and expense of any kind
which may be brought, made or incurred by reason of any work performed on or
about the Demised Premises by or on behalf of or at the direction of Landlord,
including, without limitation any loss of business or profits from the Demised
Premises or any costs and expenses incurred in the operation of Tenant's
business at the Demised Premises by reason of or resulting from interference
with Tenant's business operations by the performance of Landlord's Construction
Work. Landlord shall carry a policy of insurance, insuring Landlord and Tenant
against public liability on an occurrence basis with limits not less than Three
Million ($3,000,000) Dollars combined coverage for personal injury and against
property damage with a limit of at least Five Hundred Thousand ($500,000)
Dollars, which insurance shall be in effect at all times when any work is being
performed by or on behalf of Landlord on or about the Demised Premises;
provided, however, that Landlord may cause its contractor to carry such
insurance. On or before the date of this Lease with respect to Landlord's
Construction Work, and before commencing any such work at other times, Landlord
shall furnish Tenant with a certificate of insurance evidencing compliance with
the foregoing insurance requirements.
(f) Provided (x) Landlord's Construction Work has been completed and
all equipment and facilities required to be furnished by Landlord are in good
working order, and (y) all utilities and sewer facilities have been connected to
the Demised Premises and are operable, Landlord shall be deemed to have
"delivered possession of the Demised Premises" to Tenant on the fifth day
following Tenant's receipt of written notice from Landlord of the completion of
the items set forth in clauses (x) and (y) in this paragraph (f), provided that
said notice is accompanied by:
(i) a final, non-conditional Certificate of Occupancy, or its
equivalent, and all necessary licenses and permits, issued by the
appropriate governmental authorities, permitting Tenant's use and occupancy
of the Demised Premises for the purposes herein described, including,
without limitation, any necessary licenses or permits for the operation of
the Demised Premises as an assisted living facility; and
(ii) a board of fire underwriter's certificate with respect to the
electrical installations in the Demised Premises and such other
certificates as are customarily obtained for similar types of buildings and
improvements.
For purposes of this Lease, the "Commencement Date" shall be deemed to be the
date upon which Tenant officially opens the Demised Premises for business, or
five (5) days after Landlord's delivery of possession of the Demised Premises to
Tenant as aforesaid, whichever first occurs. Landlord and Tenant agree that
delivery of possession of the Demised Premises shall not be deemed to have
54
occurred until exclusive possession of the Demised Premises shall have been
delivered to Tenant with the completion of Landlord's Construction Work (except
such non-substantial and non-material portions thereof as Landlord shall have by
reason of Excusable Delays been unable to complete, provided the failure to
complete said items does not interfere with Tenant's full use and enjoyment of
the Demised Premises and further provided that said incomplete items are
thereafter completed within thirty (30) days, said Demised Premises to be in
broom clean condition.
(g) Tenant's acceptance of possession of the Demised Premises shall not
be deemed a waiver by Tenant of any failure by Landlord to complete and perform
Landlord's Construction Work in compliance with the provisions of this Lease.
(h) If Tenant submits to Landlord a written list of items which
Landlord is obligated to complete or correct pursuant to the final plans and
specifications for Landlord's Construction Work, Landlord shall have a period of
thirty (30) days from the date of said notice to complete such work, failing
which Tenant shall have the right to complete such work at Landlord's cost and
expense, and Tenant may deduct and offset from any Annual Rent or other sums
thereafter due Landlord an amount equal to Tenant's cost and expense in
performing such work, together with interest thereon from the date of
expenditure at the annual rate set forth in Section 3.1.4 hereof, if Landlord
does not reimburse Tenant on demand therefor. It is expressly understood and
agreed, however, that Tenant's failure to submit such list to Landlord or its
failure to include any item of incomplete or incorrect work on any such list
shall not be deemed a waiver of any of Tenant's rights with respect to such
incomplete or incorrect work, Landlord hereby agreeing that it shall be
Landlord's obligation to complete or correct the same in any event. The
foregoing provisions of this subsection shall also be applicable to any
supplementary list submitted by Tenant to Landlord after the initial list, which
supplementary list may include, without limitation, latent or other defects not
readily ascertainable in the course of Tenant's initial inspection of the
Demised Premises. Tenant agrees to use its best efforts to furnish the initial
list to Landlord prior to the expiration of ninety (90) days after the opening
of the Demised Premises for the conduct of business.
ARTICLE XXIII
GLOSSARY AND ADDITIONAL DEFINED TERMS
Whenever used in this Lease the following terms shall have the
respective meanings ascribed to them below:
"Annual Rent" shall have the meaning set forth in Section 3.1.1.
"Assets" shall have the meaning set forth in Section 13.18.
"Broker" shall have the meaning set forth in Section 18.10.
"Capital Expenditures" shall have the meaning set forth in Section
8.1.4.
"Capital Improvement" shall have the meaning set forth in Section
8.1.4.
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"Commencement Date" shall have the meaning set forth in Section
22.1(f).
"Contracts" shall have the meaning set forth in Section 13.6.
"default" shall have the meaning set forth in Section 11.1.
"Demised Premises" shall have the meaning set forth in Section 1.1.
"Event of Default" shall have the meaning set forth in Section 11.1.
"Environmental Laws" shall have the meaning set forth in Section
13.21(b).
"Excusable Delays" shall have the meaning set forth in Section 22.1(d).
"Facility" - first page
"Fixtures" shall have the meaning set forth in Section 1.1(d).
"GAAP" shall have the meaning set forth in Section 8.1.4.
"ILCI" shall have the meaning set forth in Section 10.1.
"Impositions" shall have the meaning set forth in Section 5.1.
"Indemnified Parties" shall have the meaning set forth in Section 15.4.
"Initial Term" shall have the meaning set forth in Section 2.1.
"Institutional Lender" shall have the meaning set forth in Section
15.6.
"Insurance Trustee" shall have the meaning set forth in Section 15.6.
"Intangibles" shall have the meaning set forth in Section 1.2(a).
"Intellectual Property" shall have the meaning set forth in Section
13.29.
"Land" shall have the meaning set forth in Section 1.1(a).
"Landlord's Construction Work" shall have the meaning set forth in
Section 22.1(a).
"Landlord's Share" shall have the meaning set forth in Section 8.1.4.
"Landlord's Transaction Documents" shall have the meaning set forth in
Section 13.2.
"Leased Equipment" shall have the meaning set forth in Section 4.2.
56
"Leased Improvements" shall have the meaning set forth in Section
1.1(b).
"Lease Term" shall have the meaning set forth in Section 2.3.
"Lease Year" shall have the meaning set forth in Section 2.4.
"leasehold mortgage" shall have the meaning set forth in Section 10.2.
"Licenses" shall have the meaning set forth in Section 13.9.
"Lien" shall have the meaning set forth in Section 13.10(a).
"Major Capital Expenditure" shall have the meaning set forth in
paragraph after Section 8.1.4.
"Major Damage" shall have the meaning set forth in paragraph after
Section 12.1.
"Material Adverse Effect" shall mean, with respect to any Person, any
material adverse effect upon, as the case may be, (a) the assets, business,
operations, properties, condition (financial or otherwise) or reasonably
foreseeable prospects of Landlord, (b) the ability of Landlord to perform all or
any part of its obligations under this Lease or any document or agreement
contemplated hereby, (c) the Demised Premises or Other Assets, or (d) the
operation of the Facility.
"Medical Waste" shall have the meaning set forth in Section 13.21(a)(i)
"Money Rates Column" shall have the meaning set forth in Section 3.1.4.
"Operator" shall have the meaning set forth in Section 17.1(a).
"Option Agreement" shall have the meaning set forth in Section 8.4.
"Other Assets" shall have the meaning set forth in Section 1.2.
"PCBs" shall have the meaning set forth in Section 13.21(a)(iii).
"Permitted Exceptions" shall have the meaning set forth in Section
13.11(a).
"Person" or "person" shall include (without limitation) any manner of
association, business trust, company, corporation, limited liability company,
estate, governmental or other authority, joint venture, natural person,
partnership, limited liability partnership, trust or other entity.
"Personal Property" shall have the meaning set forth in Section 1.1(e).
"Personal Property Leases" shall have the meaning set forth in Section
13.26.
"Price Index" shall have the meaning set forth in Section 8.1.1.2(i).
57
"Prime Rate" shall have the meaning set forth in Section 3.1.4.
"Proper Successor" shall have the meaning set forth in Section 4.4.
"Related Rights" shall have the meaning set forth in Section 1.1(c).
"Renewal Term" shall have the meaning set forth in Section 2.2.
"Repairs" shall have the meaning set forth in Section 8.1.1.
"Restricted Party" shall have the meaning set forth in Section 17.1(a).
"Right of First Refusal" shall have the meaning set forth in Section
8.4.
"Subordination Agreement" shall have the meaning set forth in Section
10.3.
"Tenant Indemnified Parties" shall have the meaning set forth in
Section 15.5.
"Tenant's Share" shall have the meaning set forth in Section 8.1.4.
58
"Trade Rights" shall have the meaning set forth in Section 1.2(b).
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
duly executed as a sealed instrument on the day and year first above written.
LANDLORD:
THE HOMESTEAD
OF MANHATTAN, L.C.
Attest: By: /s/ Xxxx Xxxx
-------------------------------- ----------------------------
Name: Name:
Title: Title:
TENANT:
INTEGRATED LIVING COMMUNITIES
OF MANHATTAN, INC.
Attest: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxx
-------------------------------- -----------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxxx X. Xxxx
Title: SUP/COO Title: President/CEO
AS TO SECTIONS AND PROVISIONS
SPECIFICALLY IDENTIFYING XXXX XXXX:
/s/ Xxxx Xxxx
--------------------------
XXXX XXXX
ACKNOWLEDGMENTS
STATE OF Kansas )
) SS:
COUNTY OF Sedgwick )
This Lease was acknowledged before me on August 21, 1996, by Xxxx Xxxx,
as Manager of THE HOMESTEAD OF MANHATTAN, L.C., a Kansas limited liability
company.
/s/ Xxxx X. Xxxx
[Notary seal] ----------------------------------
Notary Public
My appointment expires:
STATE OF Florida )
) SS:
COUNTY OF Cllier )
This Lease was acknowledged before me on August 29, 1996, by Xxxxxx X.
Xxxx, as President/CEO of INTEGRATED LIVING COMMUNITIES OF MANHATTAN, INC., a
Delaware corporation.
/s/ Xxxxxx Xxxxxxxx
[Notary seal] ----------------------------------
Notary Public
My appointment expires:
STATE OF Kansas )
) SS:
COUNTY OF Sedgwick )
This Lease was acknowledged before me on August 29, 1996, by
XXXX XXXX.
/s/ Xxxx X. Xxxx
[Notary seal] ----------------------------------
Notary Public
My appointment expires:
GUARANTY OF LEASE
FOR VALUE RECEIVED, and in consideration for THE HOMESTEAD OF
MANHATTAN, L.C., a Kansas limited liability company having an address c/o The
Homestead Company, L.C., 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxx 00000,
Attention: Xx. Xxxx Xxxx ("Landlord") entering into the foregoing lease
agreement (the "Lease") with INTEGRATED LIVING COMMUNITIES OF MANHATTAN, INC., a
Delaware corporation having an office at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxxxx 00000 ("Tenant"), the undersigned, INTEGRATED HEALTH SERVICES, INC.
("IHS") and INTEGRATED LIVING COMMUNITIES, INC. ("ILC"), each a Delaware
corporation having an office at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxxxxxxx
00000 (jointly and severally "Guarantor"), jointly and severally guarantee to
Landlord, the payment in full of all Annual Rent and Impositions (as such
capitalized terms are defined in the Lease) which accrues under the Lease during
the Initial Term and/or the Renewal Term (each as defined in the Lease) and
remains due and owing after the giving of any requisite notice to Tenant and the
expiration of all applicable grace periods under the Lease. Notwithstanding the
foregoing, IHS shall have no further liability under this guaranty once ILC, the
sole shareholder of Tenant, has achieved a net worth of not less than Fifty-five
Million Dollars ($55,000,000), determined in accordance with generally accepted
accounting principles, as shown on ILC's most recent financial statement, which
shall be prepared and certified to by the chief financial officer of ILC.
Guarantor shall furnish to Landlord a copy of its Quarterly Report on
Form 10-Q within thirty (30) days after the end of each fiscal quarter of
Guarantor, and a copy of its Annual Report on Form 10-K within ninety (90) days
after the close of each fiscal year of Guarantor. The foregoing shall only apply
to ILC after IHS is released as a guarantor hereunder.
INTEGRATED HEALTH SERVICES, INC.
By:________________________________
Name:
Title:
INTEGRATED LIVING COMMUNITIES, INC.
By:________________________________
Name:
Title:
ACKNOWLEDGMENTS
STATE OF MARYLAND )
) SS:
COUNTY OF_________)
This Guaranty of Lease was acknowledged before me on August __, 1996,
by __________________________________, as __________________________________ of
INTEGRATED HEALTH SERVICES, INC., a Delaware corporation.
----------------------------------
Notary Public
My appointment expires:
STATE OF MARYLAND )
) SS:
COUNTY OF ________)
This Guaranty of Lease was acknowledged before me on August __, 1996,
by ______________________________________, as __________________________________
of INTEGRATED LIVING COMMUNITIES, INC., a Delaware corporation.
----------------------------------
Notary Public
My appointment expires:
EXHIBIT A
DESCRIPTION OF THE LAND
EXHIBIT A-1
LOCATION OF LEASED IMPROVEMENTS
EXHIBIT B
[LIST OF SELECTED PERSONAL
PROPERTY & FIXTURES]
EXHIBIT C
(LANDLORD'S CONSTRUCTION WORK)
SEE REFERENCES IN ARTICLE XXII
The description of the final plans and specifications are annexed to this
Exhibit C.
All labor and materials necessary to complete the Leased Improvements and other
improvements to be constructed or being constructed on the Land in accordance
with said final plans and specifications and the provisions of this Lease, shall
be known as "Landlord's Construction Work".
Unless Tenant shall expressly agree in writing that any requirements of said
final plans and specifications shall be waived or altered, every requirement of
said final plans and specifications shall be complied with by Landlord. No
employee or agent of Tenant, other than an officer of Tenant, has any authority
to waive or alter any requirements of said final plans and specifications. If
there shall be any inconsistency or conflict among the requirements of the
within Lease, this Exhibit C and said final plans and specifications, Landlord
shall notify Tenant thereof as soon as Landlord shall discover such
inconsistency or conflict. In any event, unless Tenant shall notify Landlord in
writing to the contrary, the most stringent requirement shall control in the
case of any such inconsistency or conflict.
Landlord at all times assumes and accepts sole responsibility for the structural
and engineering design of the Demised Premises and all appurtenances thereto and
the quality and fitness of all materials or fixtures used therein. The review by
Tenant of said final plans and the specifications or the approval of any
suggestions with respect thereto shall not constitute an opinion or
representation by Tenant with respect to the sufficiency of the structural or
engineering design of the Demised Premises or the quality or fitness of any
materials or fixtures used therein or impose any present or future liability or
responsibility upon Tenant therefor.
Prior to the date of this Lease, Landlord shall furnish Tenant with a detailed
timetable setting forth Landlord's schedule therefor. Landlord agrees to furnish
Tenant with revisions of said timetable whenever reasonably required during the
course of construction.
OFF-SITE IMPROVEMENTS BY LANDLORD
Landlord's Construction Work includes road improvements and the other off-site
improvements listed below. This is in addition to any off-site improvements
elsewhere referred to in the Lease and in said final plans and specifications.
EXHIBIT D
OPTION AGREEMENT
EXHIBIT E
FORM OF SUBORDINATION, NON-DISTURBANCE
AND RECOGNITION AGREEMENT
SCHEDULE ____
[ATTACH SCHEDULES]
