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Exhibit 10.122
CORNERSTONE CARE LEASE
by and between
AHP OF COLORADO, INC.
"Landlord"
and
CORNERSTONE CARE INC.
"Tenant"
Dated as of June 13, 1995
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................1
ARTICLE II LEASE OF PROPERTY...........................................12
ARTICLE III TERM OF LEASE...............................................13
3.1 Term of Lease...................................................13
3.2 Option to Extend Term of Lease..................................13
ARTICLE IV RENT........................................................14
4.1 Payment of Landlord's Transaction Expenses......................14
4.2 Payment of Base Rent and Additional Charges.....................14
4.3 Base Rent.......................................................14
4.4 Rent Adjustment.................................................15
4.5 Additional Charges..............................................15
4.6 Triple Net Lease................................................15
ARTICLE V IMPOSITIONS.................................................19
5.1 Payment of Impositions..........................................19
5.2 Notice of Impositions...........................................20
5.3 Adjustment of Impositions.......................................20
5.4 Utility Charges.................................................21
5.5 Insurance Premiums..............................................21
ARTICLE VI TERMINATION OR ABATEMENT OF LEASE...........................21
ARTICLE VII OWNERSHIP OF PROPERTY.......................................22
7.1 Ownership of the Property.......................................22
7.2 Tenant's Personal Property; Security Interest...................22
ARTICLE VIII CONDITION AND USE OF PROPERTY...............................23
8.1 Condition of the Property.......................................23
8.2 Use of the Property.............................................24
8.3 Landlord to Grant Easements.....................................25
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8.4 Hazardous Substances............................................25
ARTICLE IX LEGAL REQUIREMENTS AND INSURANCE
REQUIREMENTS.......................................29
9.1 Compliance with Legal Requirements, Insurance
Requirements and Instruments....................................29
9.2 Covenants Regarding Legal Requirements..........................29
ARTICLE X CONDITION OF THE PROPERTY...................................29
10.1 Maintenance and Repair..........................................29
10.2 Encroachments and Restrictions..................................31
ARTICLE XI CAPITAL ADDITIONS...........................................32
11.1 Construction of Capital Additions...............................32
11.2 Capital Additions Financed or Paid for by Landlord..............32
11.3 Capital Additions Paid for by Tenant............................34
11.4 Disposition of Capital Additions upon Expiration or
Termination of Lease............................................35
11.5 Non-Capital Additions...........................................35
11.6 Salvage.........................................................35
11.7 No Liens on Landlord's Interest.................................35
ARTICLE XII LIENS.......................................................35
ARTICLE XIII CONTESTS....................................................36
ARTICLE XIV INSURANCE...................................................37
14.1 Central Insurance Requirements..................................37
14.2 Replacement Cost................................................38
14.3 Additional Insurance............................................39
14.4 Waiver of Subrogation...........................................39
14.5 Form of Insurance...............................................39
14.6 Change in Limits................................................39
14.7 Blanket Policy..................................................40
14.8 No Separate Insurance...........................................40
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ARTICLE XV INSURANCE PROCEEDS..........................................40
15.1 Handling of Insurance Proceeds..................................40
15.2 Reconstruction in the Event of Damage or
Destruction Covered by Insurance................................41
15.3 Reconstruction in the Event of Damage or
Destruction Not Covered by Insurance............................42
15.4 Payment of Proceeds on Tenant's Property and
Capital Additions Paid by Tenant................................43
15.5 Handling of Business Interruption Insurance.....................43
15.6 Restoration of Tenant's Property................................43
15.7 Abatement of Rent...............................................43
15.8 Damage Near End of Term.........................................43
15.9 Termination of Option to Purchase...............................44
15.10 Waiver..........................................................44
ARTICLE XVI CONDEMNATION................................................44
16.1 Definitions.....................................................44
16.2 Parties' Rights and Obligations.................................45
16.3 Total Taking....................................................45
16.4 Allocation of Portion of Award..................................45
16.5 Partial Taking..................................................46
16.6 Temporary Taking................................................46
ARTICLE XVII DEFAULTS AND REMEDIES.......................................47
17.1 Events of Default...............................................47
17.2 Certain Remedies................................................49
17.3 Termination.....................................................50
17.4 Application of Funds............................................51
17.5 Landlord's Right to Cure Tenant's Default.......................51
17.6 NHI's Right to Cure.............................................51
17.7 Waiver..........................................................51
ARTICLE XVIII CURE BY TENANT OF LANDLORD DEFAULTS.........................52
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ARTICLE XIX PURCHASE OF PROPERTY BY TENANT..............................52
19.1 Purchase of the Property........................................52
19.2 Failure to Close Purchase.......................................53
ARTICLE XX HOLDING OVER................................................53
ARTICLE XXI RISK OF LOSS................................................53
ARTICLE XXII LIABILITY OF PARTIES........................................54
22.1 Indemnification by Tenant.......................................54
22.2 Indemnification by Landlord.....................................55
22.3 Continuing Liability............................................55
ARTICLE XXIII ASSIGNMENT..................................................55
23.1 Assignment and Subletting.......................................55
23.2 Attornment......................................................56
23.3 Sublease Limitation.............................................56
ARTICLE XXIV INFORMATION FROM TENANT.....................................57
24.1 Officer's Certificates..........................................57
24.2 Financial Information...........................................57
24.3 Licensing Information...........................................58
ARTICLE XXV APPRAISALS OF THE PROPERTY AND
OPTIONS.....................................................58
25.1 Appraisers......................................................58
25.2 Method of Appraisal.............................................59
ARTICLE XXVI OPTIONS TO PURCHASE.........................................59
26.1 Landlord's Option to Purchase Tenant's Personal
Property; Transfer of Licenses..................................59
26.2 Tenant's Option to Purchase the Property........................60
26.3 Tenant's Right of First Refusal.................................61
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ARTICLE XXVII FACILITY MORTGAGE...............................................61
ARTICLE XXVIII LIMITATION OF LIABILITY........................................62
ARTICLE XXIX ADDITIONAL COVENANTS OF TENANT...................................62
29.1 Additional Negative Covenants...................................62
29.2 Additional Affirmative Covenants................................64
29.3 Security for the Lease..........................................66
ARTICLE XXX MISCELLANEOUS............................................67
30.1 Landlord's Right to Inspect.....................................67
30.2 No Waiver.......................................................67
30.3 Remedies Cumulative.............................................68
30.4 Acceptance of Surrender.........................................68
30.5 No Merger of Title..............................................68
30.6 Conveyance by Landlord..........................................68
30.7 Quiet Enjoyment.................................................68
30.8 Notices.........................................................69
30.9 Survival of Terms; Applicable Law...............................70
30.10 Exculpation of Landlord's Officers and Agents...................70
30.11 Transfers Following Termination.................................70
30.12 Tenant's Waivers................................................71
30.13 Memorandum of Lease.............................................71
30.14 Arbitration.....................................................71
30.15 Modifications...................................................71
30.16 Attorneys' Fees.................................................71
30.17 Brokers.........................................................71
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CORNERSTONE CARE MANOR LEASE
This CORNERSTONE CARE LEASE (the "Lease") is executed as of June 13,
1995, by and between AHP OF COLORADO, INC., a Colorado corporation, having its
principal office at 6400 South Fiddler's Green Circle (Suite 1800), Xxxxxxxxx,
Xxxxxxxx 00000, as Landlord, ("Landlord") and CORNERSTONE CARE, INC., a Colorado
corporation, having, its principal office at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, as Tenant ("Tenant").
RECITALS
Signature Health Care Corporation, a Delaware corporation ("Signature")
and Landlord have entered into the Assignment Agreement of even date herewith
(the "Assignment"), pursuant to which Signature has assigned to Landlord all of
Signature's rights under the Purchase and Sale Agreement dated April 11, 1995
between Signature and Colorado National Bank to acquire certain real and
personal property utilized in connection with the operations of "Arkansas Manor,
" a 120 bed long-term care property located in Denver, Colorado (" Arkansas
Manor") and " Cornerstone Care Center," a 153 bed long-term care property in
Lakewood, Colorado ("Cornerstone") (collectively, Arkansas Manor and Cornerstone
are the "Colorado Properties"), and related facilities, including, but not
limited to, the Property (as defined in Article II). Landlord desires to lease
Cornerstone to Tenant who desires to hire the same from Landlord pursuant to
this Lease.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Lease, unless otherwise expressly provided in
this Agreement or the context in which such term is used indicates a contrary
intent, (a) the terms defined in this Article shall have the meanings ascribed
to them in this Article, (b) all accounting terms not otherwise defined in this
Article shall have the meanings ascribed to them in accordance with generally
accepted accrual method accounting principles at the time applicable, (c) all
references in this Lease to designated "Articles," Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Lease and (d) the
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words "herein, "hereof" and "hereunder" and other words of similar import refer
to this Lease as a whole and not to any particular Article, Section or other
subdivision.
"ACH TRANSFER" shall mean the method of electronic payment initiated by
Tenant through Tenant's financial institution utilizing the National Automated
Clearinghouse Association system.
"ADDITIONAL CHARGES" shall have the meaning ascribed to such term in
Section 4.5.
"AFFILIATE" of any person or entity (the "Subject") shall mean (a) any
person which, directly or indirectly, controls or is controlled by or is under
common control with the Subject, (b) any person owning, beneficially, directly
or indirectly, ten percent (10%) or more of the outstanding capital stock,
shares or equity interests of the Subject or (c) any officer, director,
employee, general partner or trustee of the Subject or any person controlling,
controlled by or under common control with the Subject (excluding trustees and
persons serving in similar capacities who are not otherwise an Affiliate of the
Subject). As used in this definition, the term "person" means and includes
governmental agencies and authorities, political subdivisions, individuals,
corporations, limited liability companies, general partnerships, limited
partnerships, stock companies or associations, joint ventures, associations,
trusts, banks, trust companies, land trusts, business trusts and any other
entity of any form whatsoever, and "control" (including the correlative meanings
of the terms "controlled by" and "under common control with"), as used with
respect to any person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
person, through the ownership of voting securities, partnership interests or
other equity interests, or through any other means.
"AHP" shall mean American Health Properties, Inc., a Delaware
corporation.
"ARKANSAS MANOR LEASE" shall mean that certain lease entered into
between Landlord and Arkansas Manor, Inc., a Colorado corporation, as of June
13, 1995 with respect to that certain property known as Arkansas Manor, a 120
bed long-term care property located in the City and County of Denver, Colorado,
"ASSIGNMENT" shall have the meaning ascribed thereto in the Recitals to
this Lease.
"AWARD" shall have the meaning ascribed to such term in Section 16. 1
(c).
"BASE RENT" shall mean, with respect to the Fixed Term, the amount of
$485,248.20 per year.
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"BUSINESS DAY" shall mean any day on which banking institutions in
Denver, Colorado are open for the conduct of normal banking business.
"CAPITAL ADDITIONS" shall mean (a) one or more new buildings located on
the Land or to be used, directly or indirectly, as part of the Facilities, one
or more additional structures annexed to any portion of any of the Improvements,
(c) the material expansion of existing Improvements, (d) the construction of a
new wing or new story on existing Improvements, or (e) any expansion,
construction, renovation or conversion of existing Improvements to (i) increase
the bed or service capacity of the Facilities or (ii) change the purpose for
which the Facilities are utilized. Notwithstanding anything to the contrary
contained in Article XI, in the event it is necessary to xxxxx or otherwise take
corrective action with respect to the existence of a Hazardous Substance (as
hereinafter defined) located in, on or under the Property or in the
Improvements, such abatement or corrective action shall not be deemed to be a
Capital Addition and shall be the sole responsibility of Tenant at its sole cost
and expense.
"CAPITAL ADDITIONS COST" shall mean the cost of any Capital Additions
made by Tenant, whether paid for by Tenant or Landlord. Such cost shall include
(a) the costs of constructing the Capital Additions, including site preparation
and improvement, materials, labor, supervision, developer and administrative
fees, the costs of design, engineering and architectural services, the costs of
fixtures, the costs of construction financing (including but not limited to
capitalized interest) and other similar costs approved in writing by Landlord,
(b) if agreed to by Landlord in writing in advance, the purchase price and other
acquisition costs, or applicable around lease rental payable for any period such
around lease is in effect to and including the date upon which such Capital
Addition is completed and occupied or in operation, as the case may be, of any
land which is acquired or leased for the purpose of placing thereon all or any
portion of the Capital Additions or for providing means of access thereto, or
parking facilities therefor (including the costs of surveying the same and
recording, title insurance and escrow fees and charges), (c) insurance premiums,
real estate taxes, water and sewage charges and other carrying charges for such
Capital Additions during their construction, (d) fees and expenses of legal
counsel, (e) any documentary transfer or similar taxes, (f) any applicable
regulatory or administrative fees and charges, and any costs, charges, fees or
expenses paid or incurred in connection with obtaining any applicable permits,
licenses, franchises, authorizations, certificates of need, certificates of
occupancy and similar authorizations and entitlements and (g) all other
reasonable costs and expenses of Landlord or Tenant, as applicable, and any
lending institution which has committed to finance the Capital Additions,
including, but not limited to, (i) the fees and expenses of their respective
legal counsel, (ii) any printing,
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duplicating and messenger expenses, (iii) any filing, registration and recording
taxes and fees, (iv) any documentary transfer or similar taxes, (v) any title
insurance charges and appraisal fees, (vi) any rating agency fees and (vii) any
commitment or similar fees charged by any lending institution financing or
offering to finance any portion of such Capital Additions.
"CASH FLOW" shall mean, for any period of determination, an amount
equal to the sum of the amounts for such period of (i) net income before income
taxes, (ii) depreciation, amortization and other similar non-cash charges,
including depreciation and interest expense related to the Equipment, (iii) Base
Rent and (iv) Additional Rent.
"CHECK PAYMENT DATE" shall mean that certain day five Business Days
prior to the first day of each calendar month occurring during the Term hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMENCEMENT DATE" shall have the meaning ascribed to such term in
Section 3. 1.
"CONDEMNATION" shall have the meaning ascribed to such term in Section
16.1(a).
"CONDEMNOR" shall have the meaning ascribed to such term in Section
16.1(d).
"CONSOLIDATED FINANCIALS" shall mean, for any fiscal year (or other
accounting period) for Tenant and Guarantors and Affiliates thereof statements
of earnings and retained earnings and of changes in financial position for such
period and for the period from the beginning of the respective fiscal year to
the end of such period and the related balance sheet as at the end of such
period, together with the notes thereto, all in reasonable detail and setting
forth in comparative form the corresponding figures for the corresponding period
in the preceding fiscal year (or period), all of which shall be prepared in
accordance with Generally accepted accounting principles.
"DATE OF TAKING" shall have the meaning ascribed to such term in
Section 16.1(b).
"XXXXXXX XXXXX LEASE" shall mean that certain lease entered into
between Landlord and Xxxxxxx Xxxxx, Inc., a Colorado corporation, as of June 30,
1995 with respect to that certain property known as Xxxxxxx Xxxxx, a 64 bed
long-term care property located in Douglas, Arizona.
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"ENCUMBRANCE" shall have the meaning ascribed to such term in Article
XXVII.
"EQUIPMENT" shall have the meaning given to that term in the Purchase
Agreement.
"EVENT OF DEFAULT" shall have the meaning ascribed to such term in
Section 17.1.
"EXTENDED TERM" shall have the meaning ascribed to such term in Section
3.2.
"FACILITY" shall mean the health care facility presently operated on
the Land, or with Landlord's consent, such other general health care facility,
general health and rehabilitation hospital, psychiatric hospital, nursing home,
retirement center, congregate living facility, health care related apartments or
hotel, medical office building, or other medical facility with treatment,
diagnostic, or surgical facilities for inpatient or outpatient care (which may
include but is not limited to acute care inpatient facilities, skilled nursing
facilities, intermediate care facilities, home health agencies, ambulatory care
clinics or similar facilities) offering other related health care products and
services being operated or proposed to be operated on the Land from time to time
in accordance with the Provisions of this Lease.
"FACILITY MORTGAGE" shall have the meaning ascribed to such term in
Section 14.1.
"FAIR MARKET ADDED VALUE" shall mean the Fair Market Value (hereinafter
defined) of the Property (including all Capital Additions without regard to the
source of payment for such Capital Additions) less the Fair Market Value of the
Property determined as if no Capital Additions which were paid for by Tenant (to
the extent not reimbursed by Landlord) had been constructed.
"FAIR MARKET RENTAL" shall mean, with respect to the Property
(including any Capital Additions or portions thereof paid for by Landlord) the
rental paid on a net basis as provided in Section 4.6 hereof which a willing
tenant not compelled to rent would pay to a willing landlord not compelled to
lease for the highest and best medical use and occupancy of such property
permitted pursuant to this Lease for the term in question, assuming that Tenant
is not in default under this Lease. For purposes of this Lease, Fair Market
Rental shall be determined in accordance with the appraisal procedures set forth
in Article XXV.
"FAIR MARKET VALUE" shall mean, with respect to the Property, including
all Capital Additions, the price that a willing buyer not compelled to buy would
pay to a willing seller not compelled to sell such property, assuming that (a)
this Lease is not in effect, (b) that the Property had been exposed for sale in
the market for
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a reasonable period of time, (c) that such seller must pay any closing costs and
title insurance premiums with respect to such sale and (d) that the Property is
fully licensed by all governmental agencies having jurisdiction thereof, is and
will continue to be operated for the Primary Intended Use and is otherwise a
going concern. For purposes of this Lease, Fair Market Value shall be determined
in accordance with the appraisal procedures set forth in Article XXV.
"FAIR MARKET VALUE PURCHASE PRICE" shall mean the Fair Market Value of
the Property less the Fair Market Added Value.
"FISCAL YEAR" shall mean the 12-month period commencing January 1 and
terminating December 31.
"FIXED CHARGES" shall mean the amount equal to the sum of Base Rent
plus principal and interest payments on debt.
"FIXED TERM" shall have the meaning ascribed to such term in Section
3.1.
"FIXTURES" shall have the meaning ascribed to such term in clause (d)
of Article II.
"GUARANTORS" shall mean Signature Health Care Corporation and Yankee
Creek Management Services LLC.
"HAZARDOUS SUBSTANCES" shall mean those substances, materials, and
wastes listed in the United States Department of Transportation Table (49 CFR
172 101) or by the Environmental Protection Agency as hazardous substances (40
CFR Part 302) and amendments thereto, or such substances, materials and wastes
which are or become regulated under any applicable local, state or federal law
including, without limitation, any material, waste or substance which is (i)
hydrocarbons, petroleum and petroleum products, (ii) asbestos, (iii)
polychlorinated biphenyls, (iv) formaldehyde, (v) radioactive substances, (vi)
flammables and explosives, (vii) described as a "hazardous substances pursuant
to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C.
Section 1321 or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C
Section 1317), (viii) defined as a "hazardous waste" pursuant to Section 1004 of
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42
U.S.C. Section 6903), (ix) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et. seq. (42 U.S.C. Section 9601), as the
same may be amended from time to time, or (x) any other substance, waste or
material which could presently or at any time in the future cause a detriment to
or impair the value or beneficial use of the Land or other Property (which, for
purposes of this definition shall include all air, soils, ground water, surface
water and soil vapor) or constitute or cause a health,
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safety or environmental hazard on, under or about the Land or other Property or
to any person who may enter on, under, or about the Land or other Property or
require remediation at the behest of any governmental agency.
"IMPACTED FACILITY" shall have the meaning specified in Section 15.2.
"IMPOSITIONS" shall mean all taxes (including without limitation all
real property taxes imposed upon the Land, Improvements or other portions of the
Property, including, but not limited to all tangible and intangible personal
property, ad valorem, sales, use, single business, gross receipts, transaction
privilege, documentary stamp (if any are associated with this Lease or the
transactions contemplated hereby), rent or similar taxes relating to or imposed
upon Landlord, any portion of the Property, Tenant or its business conducted
upon the Land), assessments (including without limitation all supplemental real
property tax assessments or assessments for public improvements or benefit,
whether or not commenced or completed prior to the date hereof and whether or
not to be completed within the Term), ground rents, water, sewer or other rents
and charges, excises, tax levies, fees (including without limitation license,
permit, franchise, inspection, authorization and similar fees) and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character or nature whatsoever
with respect to or connected with the Property or the business conducted thereon
by Tenant (including all interest, penalties and fines thereon due to any
failure or delay in payment thereof) which at any time prior to, during or with
respect to the Term hereof may be assessed or imposed on or with respect to, or
may be a lien upon (a) Landlord's interest in the Property, (b) the Property or
any part thereof or any Rent therefrom or any estate, right, title or interest
therein, (c) Landlord's capital invested in the State as represented by the
Property, or (d) any occupancy, operation, use or possession of, or sales from,
or activity conducted on or in connection with the Property or the leasing or
use of the Property or any part thereof by Tenant. Impositions shall not include
(1) any tax based on net income (whether denominated as a franchise, capital
stock or other tax) imposed upon Landlord or any other person, whether imposed
on "net taxable earned surplus" or otherwise, (2) any transfer tax imposed upon
Landlord or any other person or (3) any tax imposed with respect to the sale,
exchange or other disposition by Landlord of any Property or the proceeds
thereof, nor any tax, assessment, tax levy or charge described in the first
sentence of this paragraph which is in effect at any time during the Term hereof
to the extent such tax, assessment, tax levy or charge is totally or partially
repealed, unless a tax, assessment, tax levy or charge set forth in clause (1)
or (2) is levied, assessed or imposed expressly in lieu thereof, in which case
the substitute tax, assessment, tax levy or charge shall be deemed to be an
Imposition.
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"IMPROVEMENTS" shall have the meaning ascribed to such term in clause
(b) of Article II.
"INITIAL BASE RENT" shall mean the amount of Base Rent in the initial
year of the Term.
"INITIAL INVESTMENT COST" shall mean $4,856,124. 10.
"INSURANCE REQUIREMENTS" shall mean all terms and conditions of any
insurance policy required by this Lease and all requirements of the issuer of
any such insurance policy.
"LAND" shall mean all of that certain real property situated in
Jefferson County, State of Colorado and more particularly described in Exhibit A
attached hereto and incorporated herein by reference, and any other parcel of
land acquired or leased and made subject to this Lease in connection with a
Capital Addition.
"LANDLORD GROUP" shall mean any one or more of Landlord, AHP, any
Affiliate of Landlord or AHP and any shareholder of AHP.
"LANDLORD'S TOTAL INVESTMENT" shall mean an amount equal to the sum of
(y) the Initial Investment Cost and (z) all Capital Additions Costs pertaining
to the Property paid for by Landlord pursuant to Section 11.2 of the Lease.
"LANDLORD'S TRANSACTION EXPENSES" shall mean all reasonable
out-of-pocket expenses incurred by Landlord in connection with (i) the
preparation of this Lease, the Purchase Agreement and any Substitute Lease and
the instruments contemplated hereunder and thereunder, and any other instruments
required to be executed and delivered by Tenant to Landlord in connection,
herewith or therewith (whether or not the transactions hereby or thereby
contemplated shall be consummated) and (ii) the transactions contemplated to be
performed hereunder and thereunder, including but not limited to the reasonable
fees and disbursements of Landlord's legal counsel, title insurance premiums,
recording taxes and fees, survey fees, valuation or appraisal fees, engineering
fees and architects' fees.
"LEASE" shall mean this document, as the same may be amended from time
to time in accordance herewith.
"LEASE RESERVE FUND" shall have the meaning ascribed thereto in Section
29.3(c).
"LEASE YEAR" shall mean the period commencing on the Commencement Date
and ending on the first anniversary thereof, except that if the Commencement
date is other than the first day of a calendar month, the first Lease Year shall
end 12 months from the last day of the calendar month immediately preceding the
Commencement Date. Thereafter, each Lease Year shall be the 12
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month period beginning on the next day following expiration of the preceding
Lease Year. If the Term ends prior to the last day of a Lease Year, the final
Lease Year shall be deemed to end on the day the Term ends.
"LEASES" shall mean the Lease, the Arkansas Manor Lease, the Xxxxxxx
Xxxxx Lease and the Safford Care Lease, collectively.
"LEGAL REQUIREMENTS" shall mean all federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, common law, decrees and injunctions affecting the Property or the
maintenance, construction, use, alteration, occupancy or operation thereof,
whether now or hereafter enacted and in force (including any of the foregoing
which may require repairs, modifications or alterations in or to the Property),
all permits, licenses, certificates, franchises, authorizations, land use
entitlements, zoning and regulations relating thereto, and all covenants,
conditions, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Tenant (other than encumbrances
created by Landlord without the consent of Tenant), at any time in force
affecting the Property.
"MINIMUM REPURCHASE PRICE" shall mean the Initial Investment Cost, plus
the Capital Additions Cost of any Capital Additions financed or paid for by
Landlord, less the net amount (after deduction of all reasonable legal fees and
other costs and expenses, including without limitation expert witness fees,
incurred by Landlord in connection with obtaining any such proceeds or awards)
of any proceeds of insurance paid to and retained by Landlord in accordance with
Article XV of this Lease and of any Awards received by Landlord and not applied
to restoration of the Property in accordance with Article XVI of this Lease.
"NHI" shall mean National Health Investors, Inc.
"NOTICE" shall mean a notice given pursuant to Section 30.8 hereof.
"OFFICER'S CERTIFICATE" shall mean a certificate of Tenant signed by
the chief financial officer or another officer authorized so to sign by
resolutions adopted by the board of directors or the articles of incorporation
or by-laws of the general partner of the Tenant or by any other person whose
power and authority to act has been authorized by delegation in writing by the
chief financial officer of the general partner of the Tenant.
"OVERDUE RATE" shall mean, as of a specified date, a rate of interest
equal to the Prime Rate plus three percent, but in no event greater than the
maximum rate of interest then permitted under applicable law.
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"PAYMENT DATE" shall mean any due date for the payment of any
installment of Base Rent.
"PERMITTED ENCUMBRANCES" shall mean the matters, if any, set forth in
Exhibit B attached hereto and incorporated herein by reference.
A "PERSON" shall mean any natural person, corporation, limited
liability company, business trust, association, company, partnership or
government (or any agency or political subdivision thereof) or, for purposes of
the definition of "Change of Control" herein, any group acting in concert
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934).
"PRIMARY INTENDED USE" shall mean a long-term care facility licensed by
the State and such additional uses which are licensed or applied for on the date
hereof or are permitted by Landlord from time to time hereunder.
"PROPERTIES" shall mean the Property subject to the Leases,
collectively.
"PROPERTY" shall have the meaning ascribed to such term in Article II.
"PURCHASE AGREEMENT" shall have the meaning given to that term in the
Assignment.
"RENT" shall mean the Base Rent and Additional Charges.
"SAFFORD CARE LEASE" shall mean that certain lease entered into between
Landlord and Safford Care, Inc., a Colorado corporation, as of June 30, 1995
with respect to that certain property known as Safford Care Center, a 128 bed
long-term care property located in Safford, Arizona.
"SALE" shall have the meaning specified in Section 26.2.
"SECURITY AGREEMENT" shall mean the Security and Pledge Agreement of
even date between Tenant, as Debtor, and Landlord, as Secured Party.
"SECURITY LETTER OF CREDIT" shall have the meaning ascribed thereto in
Section 29.3.
"SIGNATURE GUARANTY" shall mean that certain Guaranty of even date
herewith executed by Signature Health Care Corporation in favor of Landlord.
"STATE" shall mean the State of Colorado.
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"TAKING" shall mean a taking or voluntary conveyance during the Term
hereof of all or any part of the Property, or any interest therein, right with
respect thereto or use thereof, as a result of, incidental to, or in settlement
of any condemnation or other eminent domain proceedings affecting such Property,
regardless of whether such Proceedings shall have actually been commenced.
"TANGIBLE NET WORTH" shall mean, as of the date of determination, the
sum of the following for Tenant and its consolidated subsidiaries, if any, on a
consolidated basis, determined in accordance with generally accepted accounting
principles (a) the amount of capital or stated capital (after deducting the cost
of any shares held in the applicable entity's treasury); plus (b) the amount of
capital surplus and retained earnings; or (c) in the care of a capital or
retained earnings deficit, minus the amount of such deficit and less (d) the
amount, if any, carried on the books of the entity and any consolidated
subsidiaries of the entity for goodwill, patents, trademarks, copyrights,
licenses, and other assets which are properly classified as intangible assets
under generally accepted accounting principles.
"TENANTS" shall mean Arkansas, Inc., Cornerstone Care, Inc., Xxxxxxx
Xxxxx, Inc. and Safford Care, Inc., collectively.
"TENANT'S PERSONAL PROPERTY" shall mean all machinery, equipment,
furniture, furnishings, movable walls or partitions, computers or other personal
property, and consumable inventory and supplies, including, without limiting the
generality of the foregoing, sterilizer units, scrub sinks, mail boxes, desks,
lamps, chairs, beds, bedstands, surgical lamps, water stills, fume hoods,
non-affixed cabinetry, tables, and similar movable equipment, owned by Tenant
and used or useful in Tenant's business on the Land, but in no event any items
included within the definition of Equipment or Fixtures.
"TERM" shall mean the Fixed Term and any Extended Terms, as the context
may require, unless earlier terminated pursuant to the Provisions of this Lease.
"TOTAL RENT" shall mean the sum of Base Rent and Additional Charges.
"TRANSFER PAYMENT DATE" shall mean the first Business Day of each
calendar month occurring during the Term hereof.
"UNAVOIDABLE DELAYS" shall mean delays due to strikes, lockouts,
inability to procure materials, power failures, acts of God, governmental
restrictions, enemy action, civil commotion, unavoidable casualty and other
causes beyond the control of the party responsible for performing an obligation
hereunder, provided
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that lack of funds shall not be deemed a cause beyond the control of either
party hereto.
"YANKEE CREEK GUARANTY" shall mean that certain Guaranty of even date
herewith executed by Yankee Creek Management Services LLC in favor of Landlord.
ARTICLE II
LEASE OF PROPERTY
Landlord hereby leases, demises and lets to Tenant, and Tenant hereby
hires, takes and leases from Landlord, upon the terms and subject to the
conditions hereinafter set forth, TO HAVE AND TO HOLD, all of Landlord's right,
title and interest in and to all of the following (the "Property"):
(a) the Land;
(b) all buildings, structures and other improvements of every kind,
including but not limited to the Facility, all buildings and structures
hereafter constructed upon the Land and all alleyways and connecting tunnels,
sidewalks, utility pipes, conduits and lines (on-site and off-site), parking
areas, roadways and other related on-site and offsite improvements appurtenant
to such buildings and structures presently or hereafter situated upon the Land,
and any and all Capital Additions paid for by Landlord pursuant to Section 11.2
of this Lease (the "Improvements");
(c) all machinery and equipment and all other tangible personal
property, fittings, appliances, apparatus, furniture, furnishings now and
hereafter located on, affixed to or used in connection with the Facility;
(d) all easements, licenses, rights-of-way and appurtenances relating
to the Land and the Improvements); and
(e) all "fixtures" as that term is defined in the State now and
hereafter located in, on or used and incorporated into the Land or Improvements
(the "Fixtures").
ARTICLE III
TERM OF LEASE
3.1 TERM OF LEASE. The initial term of this Lease shall commence on
June 13, 1995 ("Commencement Date"), and, unless extended or terminated earlier
in accordance with the provisions of this Lease, shall remain in effect until
June 30, 2005 (the "Fixed Term"). Notwithstanding the foregoing, if, for any
reason, through no fault of Landlord, Landlord cannot deliver possession of the
Property to Tenant on the Commencement Date, Landlord shall not be subject to
any liability, nor shall such failure affect the validity of this Lease or the
obligations of Tenant hereunder or
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extend the Term hereof, but in such case, Tenant shall not be obligated to pay
Rent or to perform any other obligation of Tenant under this Lease until
possession of the Property is tendered to Tenant.
3.2 OPTION TO EXTEND TERM OF LEASE.
(a) Subject to the provisions of Paragraph (c) below, Landlord hereby
grants to Tenant an option to extend the term of the Lease, for three additional
consecutive ten-year renewal terms (each, an "Extended Term," and collectively,
the "Extended Terms"). Each of the Extended Terms shall be upon the same terms
and conditions as those set forth for the Fixed Term except that Base Rent shall
be the then current Fair Market Rental which, unless otherwise mutually agreed
to by Landlord and Tenant, shall be determined by appraisal pursuant to the
provisions of Article XXV; provided that the annual Base Rent for each Extended
Term shall not be less than 102 1/2% of the sum of Base Rent payable during the
last year of the Fixed Term or preceding Extended Term, as the case may be. The
Base Rent for the Extended Term provided for herein for the second and each
subsequent Lease Year of the Extended Term shall be increased to an amount equal
to one hundred two and one-half percent (102 1/2%) of the Base Rent for the
preceding twelve month period, calculated by applying such percentage increases
on a cumulative basis to the Base Rent payable during each of the preceding
Lease Years. Each such option may only be exercised by Tenant if, at the time
such option is exercised, an Event of Default shall not exist and be continuing,
and shall be exercised by Tenant by delivery of Notice to that effect to
Landlord not less than 180 days but not more than 360 days prior to the date
upon which this Lease otherwise would terminate. Tenant's exercise of any option
to extend the term of this Lease for an extended term pursuant to this Section
3.2 shall constitute Tenants' irrevocable and binding commitment to lease the
Property on the terms stated in this Lease for the whole of such Extended Term.
If Tenant is unable to exercise any option due to the provisions of this Lease,
the time during which such option may be exercised shall not be extended or
enlarged. The failure of Tenant to exercise any of the options for the Extended
Terms within the respective times specified in this Section shall thereby
terminate any remaining such options.
(b) Time is strictly of the essence with respect to the requirement
that Tenant gives timely Notice of its exercise of any options hereunder,
including, but not limited to, the options for the Extended Terms, and Tenant's
failure timely to exercise any option strictly in accordance with its terms
shall constitute a material, irredeemable and incurable failure to satisfy a
condition precedent to the vesting of any rights in Tenant pursuant to such
option, and Tenant hereby expressly waives any right to claim relief from
forfeiture, or any other form of equitable relief, from consequences of an
untimely exercise of any such option strictly in
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accordance with its terms. The implied covenant of good faith and fair dealing
under this Lease shall not be construed to impose upon Landlord any obligation
to notify Tenant in advance of the impending deadline for the exercise of any
option hereunder, nor shall it obligate Landlord to excuse the tardy exercise of
any option however slight.
(c) Unless Landlord shall otherwise consent in its sole discretion,
Tenant's right to extend the Term of the Lease is subject to the condition that
upon any such extension, the terms of all of the other Leases will be extended
concurrently.
ARTICLE IV
RENT
4.1 PAYMENT OF LANDLORD'S TRANSACTION EXPENSES. On the Commencement
Date, Tenant shall pay to Landlord all Landlord's Transaction Expenses. Landlord
shall furnish Tenant with reasonable documentation concerning, Landlord's
Transaction Expenses.
4.2 PAYMENT OF BASE RENT AND ADDITIONAL CHARGES. During the Term,
Tenant shall pay to Landlord at the times specified herein, in lawful money of
the United States of America, without right of abatement, deduction,
counterclaim, defense, reduction, recoupment or offset, by wire transfer or ACH
Transfer of Federal Funds to such account or accounts as Landlord may designate
from time-to-time in a Notice or by check delivered to Landlord at the address
in Section 30.8, or at such other place as Landlord may designate in writing,
the Base Rent and the Additional Charges.
4.3 BASE RENT. Commencing on the first Business Day of the first full
calendar month occurring coincident with or after the Commencement Date, and
thereafter, for any Base Rent payment by wire transfer or ACH Transfer on the
Transfer Payment Date, and if by check, Base Rent payment is due on the Check
Payment Date, for the period beginning on the first Business Day and ending on
the last day of the Term hereof, Tenant shall pay to Landlord an amount
calculated by dividing, (x) Base Rent by (y) 12, provided that the first payment
of Base Rent shall include an additional payment for any partial calendar month
occurring between the Commencement Date and the date of the first payment of
Base Rent. Any payment of Base Rent for a period of less than one calendar month
shall be prorated based upon the number of days for which such Base Rent is due
divided by 30.
4.4 RENT ADJUSTMENT. The Base Rent provided for herein for the second
and each subsequent Lease Year of the Term shall be increased to an amount equal
to one hundred two and one-half percent (102 1/2%) of the Base Rent for the
preceding twelve month period, calculated by applying such percentage increases
on a
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cumulative basis to the Base Rent payable during each of the preceding Lease
Years.
4.5 ADDITIONAL CHARGES. Subject to Article XIII hereof, Tenant shall
pay and discharge as and when due and payable all Impositions and other amounts,
liabilities and obligations which Tenant assumes or agrees to pay under this
Lease. If Tenant fails or refuses to pay any of the items referred to in the
immediately preceding sentence, Tenant shall promptly pay and discharge every
fine, penalty, interest and cost which may arise or accrue for the non-payment
or late payment of such items. The aforementioned amounts, liabilities,
obligations, Impositions, fines, penalties, interest and costs are referred to
herein as "Additional Charges." The Additional Charges shall constitute Rent
hereunder. If any Rent (but as to Additional Charges, only those which are
payable directly to Landlord) shall not be paid on its due date, Tenant shall
pay to Landlord on demand, as an Additional Charge, a late charge to the extent
permitted by law, computed at the Overdue Rate on the amount of such Rent from
the due date of such Rent to the date such Rent is paid. Any payment by Tenant
of Additional Charges to Landlord pursuant to any requirement of this Lease
shall relieve Tenant of its obligation to pay such Additional Charges to the
entity to which they would otherwise be paid.
4.6 TRIPLE NET LEASE.
(a) TRIPLE NET LEASE. This Lease is what is commonly called a "net net
net lease", it being understood that Landlord shall receive all Rent as provided
in this Article free and clear of any and all Impositions, encumbrances,
charges, obligations or expenses of any nature whatsoever in connection with the
ownership and operation of the Property. In addition to the Rent reserved by
this Article, except as expressly provided herein to the contrary, Tenant shall
pay to the parties respectively entitled thereto all Impositions, insurance
premiums, operating charges, maintenance charges, construction costs and any
other charges, costs and expenses which arise or may be contemplated under any
provisions of this Lease during, the Term hereof. All of such charges, costs and
expenses shall constitute Rent, and upon the failure of Tenant to pay any such
costs, charges or expenses, Landlord shall have the same rights and remedies as
otherwise provided in this Lease for the failure of Tenant to pay Rent and
Landlord shall be indemnified and saved harmless by Tenant from and against the
same. It is the intention of the parties hereto that this Lease shall not be
terminable for any reason by the Tenant and that Tenant shall in no event be
entitled to any abatement of or reduction in Rent payable under this Lease
except as herein expressly provided. Any present or future law to the contrary
shall not alter this agreement of the parties.
(b) BANKRUPTCY. Tenant covenants and agrees that it shall remain
obligated under this Lease in accordance with its terms, and
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that Tenant shall not take any action to terminate, rescind or avoid this Lease,
notwithstanding the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceeding affecting
Landlord or any assignee of Landlord in any such proceeding and notwithstanding
any action with respect to this Lease which may be taken by any trustee or
receiver of Landlord or any such assignee in any such proceeding or by any court
in any such proceeding.
(i) In the event that Tenant shall file a petition, or an order for
relief is entered against Tenant, under Chapter 7, 9, 11 or 13 of the Bankruptcy
Code, 11 U.S.C.S. 101 et seq. (the "BANKRUPTCY CODE") and the trustee of Tenant
shall elect to assume this Lease for the purpose of assigning the same, such
assumption or assignment may only be made if all the conditions of subsections
(ii) and (iii) of this Section 4.8(b) are satisfied. If the trustee or
debtor-in-possession, as the case may be, shall fail to elect to assume this
Lease within 60 days after such trustee shall have been appointed, or the date
of filing of the petition, at Landlord's election (and in its sole and absolute
discretion) this Lease shall be deemed to have been rejected and, in such event,
Landlord shall thereupon immediately be entitled to possession of the Property
without further obligation to the trustee or Tenant, and this Lease shall be
canceled, but Landlord's right to be compensated for damages in the bankruptcy
proceedings shall survive such cancellation.
(ii) No election to assume this Lease shall be effective unless in
writing and addressed to Landlord and unless, in Landlord's business judgment,
all the following conditions, which Landlord and Tenant acknowledge to be
commercially reasonable, have been satisfied:
(A) The trustee (or Tenant, as debtor-in-possession) has cured or
has provided Landlord adequate assurance that:
(I) within ten days from the date of such assumption, the
trustee (or debtor-in-possession) will cure all monetary defaults under this
Lease; and
(II) within 30 days from the date of such assumption, the
trustee (or debtor-in-possession) will cure all non-monetary defaults under this
Lease or commence to cure within 30 days and thereafter diligently pursue to
completion.
(B) The trustee (or debtor-in-possession) has compensated, or has
provided to Landlord adequate assurance that within ten days from the date of
assumption Landlord will be compensated, for any pecuniary loss incurred by
Landlord arising from the default of the Tenant or the trustee (or the
debtor-in-possession) as recited in Landlord's written statement of pecuniary
loss sent to the trustee (or debtor-in-possession);
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(C) The trustee (or debtor-in-possession) has provided Landlord
with adequate assurance of the future performance of each of Tenant's
obligations under this Lease, provided that:
(I) the trustee (or debtor-in-possession) shall also deposit
with Landlord, as security for the timely payment of Rent, an amount equal to
(w) three months' Base Rent and (x) the last quarterly payment of Percentage
Rent and (y) the other monetary charges accruing under this Lease; and
(II) the obligations imposed upon the trustee (or
debtor-in-possession) shall continue with respect to Tenant after completion of
bankruptcy proceedings.
(D) Landlord has determined that the assumption of the Lease will
not:
(I) breach any provision in any agreement by which Landlord is
bound relating to the Property; or
(II) disrupt, in Landlord's reasonable judgment, the
reputation and profitability of the Property.
(E) For purposes of this subsection, "adequate assurance" shall
mean:
(I) Landlord shall determine that the trustee (or
debtor-in-possession) has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that the trustee (or debtor-in-possession) will have
sufficient funds to fulfill the obligations of Tenant under this Lease; and
(II) an order shall have been entered segregating sufficient
cash payable to Landlord, or there shall have been granted a valid and perfected
first lien and security interest in property of the Tenant or trustee (or
debtor-in-possession), acceptable as to value and kind to Landlord, to secure to
Landlord the obligation of the Trustee (or debtor-in-possession) to cure the
monetary or nonmonetary defaults under this Lease within the time periods set
forth above.
(III) If the trustee (or debtor-in-possession) has assumed the
Lease pursuant to all the provisions of subsections (i) and (ii) of this Section
4 8(b), for the purpose of assigning (or electing to assign) Tenant's interest
under this Lease or the estate created thereby to any other person, such
interest or estate may be so assigned only if Landlord shall acknowledge in
writing that the intended assignee has provided adequate assurance of future
performance of all the terms, covenants and conditions of this Lease to be
performed by Tenant. For purposes of this subsection (iii), "adequate assurance
of future performance" means
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that Landlord shall have ascertained that each of the following conditions has
been satisfied:
(A) the assignee has submitted a current financial statement
audited by a certified public accountant which shows tangible net worth and
working capital in amounts determined to be sufficient by Landlord to assure the
future performance by such assignee of Tenant's obligations under this Lease;
(B) if requested by Landlord, the assignee shall have obtained
guarantees in form and substance satisfactory to Landlord from one or more
persons who satisfy Landlord's standards of credit worthiness;
(C) Landlord has obtained all consents to waivers from any third
parties required under any lease, mortgage, financing arrangement or other
agreement by which Landlord is bound to enable Landlord to permit such
assignment;
(D) the assignee has deposited an adequate security deposit with
Landlord; and
(E) the assignee has demonstrated that its intended use of the
Property is consistent with the terms of this Lease and will not diminish the
reputation of the Facility, or violate any "exclusive" which has been granted by
Tenant to any permitted subtenant in the Property.
(iv) When, pursuant to the Bankruptcy Code, the trustee (or
debtor-in-possession) shall be obligated to pay reasonable use and occupancy
charges for the use of the Property or any portion thereof, such charges shall
not be less than the Rent.
(v) Neither Tenant's interest in the Lease, nor any lesser interest
of Tenant herein, nor any estate of Tenant hereby created, shall pass to any
trustee, receiver, assignee for the benefit of creditors or any other person by
operation of law or otherwise unless Landlord shall consent to such transfer in
writing. No acceptance by Landlord of rent or any other payments from any such
trustee, receiver, assignee or person shall be deemed to have waived, nor shall
it waive the need to obtain Landlord's consent to, or Landlord's right to
terminate this Lease for, any transfer of Tenant's interest under this Lease
without such consent.
(vi) Any person to whom this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to
have assumed all the obligations arising under this Lease on or after the date
of such assignment. Any such assignee shall, upon demand, execute and deliver to
Landlord an instrument confirming such assumption.
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ARTICLE V
IMPOSITIONS
5.1 PAYMENT OF IMPOSITIONS. Tenant shall pay, or cause to be paid, all
Impositions prior to delinquency and before any fine, penalty, interest or cost
may be added for non-payment (subject to Tenant's rights of contest pursuant to
the provisions of Article XIII). Such payments shall be made directly to the
authorities levying such Impositions, if possible. Tenant shall, promptly upon
request by Landlord, furnish to Landlord original or certified copies of
receipts or other reasonably satisfactory evidence of such payments. Tenant's
obligation to pay Impositions shall be deemed absolutely fixed upon the date
such Impositions become a lien upon the Property or any part thereof.
Notwithstanding the foregoing, if any such Imposition may, at the option of the
payor, lawfully be paid in installments (whether or not interest shall accrue on
the unpaid balance of such Imposition), and so long as no Event of Default shall
have occurred hereunder and be continuing, Tenant may pay the same (and shall
pay any accrued interest on the unpaid balance of such Imposition) in
installments, and in such event shall pay such installments (subject to Tenant's
right of contest pursuant to the provisions of Article XIII) as the same become
due and before any fine, penalty, premium, further interest or cost is added
thereto. Landlord shall, at its expense and to the extent required or permitted
by applicable laws and regulations, prepare and file all returns with respect to
Landlord's net income, gross receipts, sales, use, single business, transaction
privilege, rent, ad valorem and franchise taxes, and with respect to taxes on
Landlord's capital stock. Tenant shall, at its expense, and to the extent
required or permitted by applicable laws and regulations, prepare and file all
other tax returns and reports with respect to any Imposition as may be required
of Tenant by governmental agencies or authorities. If any refund shall be due
from any taxing authority with respect to any Imposition paid by Tenant, the
same shall be paid over to and retained by Tenant unless an Event of Default
shall have occurred hereunder and be continuing, in which case such refund shall
be paid over to and retained by Landlord. Any such funds retained by Landlord
due to an Event of Default shall be applied as provided in Article XVII.
Landlord and Tenant shall, each upon a request by the other, provide such
information as is maintained by the party to whom the request is made with
respect to the Property as may be reasonably necessary to prepare any required
returns or reports. If any governmental agency or authority classifies any
property covered by this Lease personal property, Tenant shall file all personal
property tax returns in such jurisdictions where it may legally so file.
Landlord, to the extent it possesses the same, and Tenant, to the extent it
possesses the same, will provide to the other party, promptly upon request, cost
and depreciation records reasonably necessary for filing, returns for any
property so classified as personal property. If Landlord is legally required to
file any personal property tax returns, Landlord shall
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provide Tenant with copies of any assessment notices with respect thereto in
sufficient time for Tenant to file a protest with respect thereto if it so
elects pursuant to Article XIII. If no Event of Default is then continuing,
Tenant may at its option and sole cost and expense, upon written notice to
Landlord, protest, appeal or institute such other proceedings as Tenant
reasonably may deem appropriate to effect a reduction of real estate or personal
property assessments so long as such action is conducted in good faith and with
due diligence. In such event, Landlord, at Tenant's sole cost and expense, shall
fully cooperate with Tenant in such protest, appeal, or other action. Tenant
hereby agrees to indemnify, defend, save and hold Landlord harmless from and
against any and all losses, demands, claims, obligations and liabilities against
or incurred by Landlord in connection with such cooperation by Landlord.
Xxxxxxxx by either party to the other for reimbursement of personal property
taxes shall be accompanied by copies of a xxxx therefor and evidence of payments
thereof which identify the personal property with respect to which such payments
have been made.
5.2 NOTICE OF IMPOSITIONS. Landlord shall give prompt Notice to Tenant
of all Impositions payable by Tenant hereunder of which Landlord at any time has
knowledge. Notwithstanding the foregoing, however, Landlord's failure to give
any such Notice shall in no way diminish Tenant's obligations hereunder to pay
such Impositions, but Landlord shall be responsible for any fine, penalty or
interest resulting from its failure to give such notice and any default by
Tenant hereunder shall be obviated for a reasonable time after Tenant receives
Notice of any Imposition which it is obligated to pay.
5.3 ADJUSTMENT OF IMPOSITIONS. Impositions imposed with respect to the
tax period during which the Term expires or terminates shall be adjusted and
prorated between Landlord and Tenant, whether or not such Imposition is imposed
before or after such expiration or termination, so that Tenant is only obligated
to pay that portion of such Imposition(s) pertaining to the tax period within
the Term. The obligation of Tenant to pay its prorated share of Impositions
shall survive expiration or earlier termination of this Lease.
5.4 UTILITY CHARGES. Tenant shall pay or cause to be paid all charges
for all utilities, including but not limited to electricity, power, gas, oil and
water, used in the Property during the Term.
5.5 INSURANCE PREMIUMS. Tenant shall pay or cause to be paid all
premiums for insurance coverage required to be maintained pursuant to Article
XIV.
ARTICLE VI
TERMINATION OR ABATEMENT OF LEASE
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Without limiting the generality of Section 4.6, Tenant, to the full
extent permitted by law, shall remain bound by this Lease in accordance with its
terms. Tenant shall not take any action without the prior written consent of
Landlord to modify, surrender or terminate this Lease. The obligations of
Landlord and Tenant hereunder shall be separate and independent covenants and
agreements, and Rent and all other sums shall continue to be payable by Tenant
hereunder in any event unless the obligation of Tenant to pay the same
terminates pursuant to the express provisions of this Lease or by termination of
this Lease (other than by reason of an Event of Default). Without limiting the
generality of the immediately preceding sentence, Tenant shall not seek or be
entitled to any abatement, deduction, deferment or reduction of Rent, or set-off
against Rent, nor shall the respective obligations of Landlord and Tenant be
otherwise affected by reason of: (a) any damage to, or destruction of, all or
any portion of the Property from whatever cause or any Taking of all or any
portion of the Property; (b) the lawful or unlawful prohibition of, or
restriction upon, Tenant's use of all or any portion of the Property, or the
interference with such use or with Tenant's quiet enjoyment of the Property by
any person or entity other than Landlord, or by reason of eviction by paramount
title; (c) any claim which Tenant has or may have against Landlord by reason of
any default or breach of any warranty by Landlord under this Lease or under any
other agreement between Landlord and Tenant or to which Landlord and Tenant are
parties; (d) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceeding,
affecting Landlord or any assignee or transferee of Landlord; or (e) any other
cause, whether similar or dissimilar to any of the foregoing (other than a
discharge of Tenant from any such obligations as a matter of law). Tenant hereby
specifically waives all rights, arising, from any occurrence whatsoever, which
(i) may now or hereafter be conferred upon it by law to modify, surrender or
terminate this Lease or quit or surrender all or any portion of the Property or
(ii) entitle Tenant to any abatement, reduction, suspension or deferment of Rent
or other sums payable by Tenant hereunder.
ARTICLE VII
OWNERSHIP OF PROPERTY
7.1 OWNERSHIP OF THE PROPERTY. As between Landlord and Tenant the
Property is, and throughout the Term shall continue to be, the property of
Landlord. Tenant has only the right to the exclusive possession and use of the
Property, upon the terms and subject to the conditions set forth in this Lease.
7.2 TENANT'S PERSONAL PROPERTY; SECURITY INTEREST. Tenant may, at its
expense, install, affix, assemble or place on the Property any items of Tenant's
Personal Property and may, subject to the conditions set forth below, remove
Tenant's Personal Property upon the expiration or earlier termination of this
Lease
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or in the ordinary course of business (other than a termination upon an Event of
Default) so long as any damage caused by such removal shall be promptly repaired
by Tenant. Notwithstanding the foregoing, in order to secure the payment and the
performance of all of Tenant's obligations under this Lease, Tenant hereby
grants to Landlord a security interest in (and hereby pledges and collaterally
assigns to Landlord) all of Tenant's rights, title and interest in and to
Tenant's Personal Property, all whether now existing or hereafter acquired and
hereby further agrees to execute and deliver to Landlord, forthwith after demand
by Landlord from time to time, any security agreement in a reasonable form
determined by Landlord and such additional writings and instruments, including
without limitation financing statements, as may be reasonably required by
Landlord for the purpose of effectuating the intent of this sentence and Tenant
agrees that Landlord shall have with respect to all Personal Property all rights
and remedies of a secured party under the Uniform Commercial Code as adopted in
the State, including, but not limited to, the right after the occurrence of an
Event of Default to use or sell Tenant's Personal Property, and Landlord shall
not be required to remove any of such Personal Property from the Property and in
no event shall Landlord be liable to Tenant for use of such Personal Property.
Pending disposition of such Personal Property by Landlord, Landlord shall be
entitled to use such Personal Property in connection with the operation (if any)
of the Facility. Tenant shall not permit the Property or Personal Property to
become subject to any liens or encumbrances of any kind without first obtaining
the prior written consent of Landlord, except for liens or encumbrances
permitted by Section 29.1(a). This Lease and the security interest granted
Landlord hereby shall be subordinate to any purchase money security interest or
capital lease permitted under Section 29. 1 (a). Landlord further agrees that
Tenant may lease Personal Property, and Landlord shall execute and deliver such
agreements as may be reasonably required by any permitted equipment lessor or
the holder of a permitted purchase money security interest to confirm that
Landlord's lien on the Personal Property in question is subordinate to the
rights of such equipment lessor or lender and in each case Tenant shall use its
best efforts to obtain from the holder of the purchase money debt or lessor of
Personal Property, as the case may be, its agreement to (i) notify Landlord or
its successors and assigns of any default by Tenant, (ii) allow Landlord or its
successors and assigns an opportunity to cure any default, (iii) recognize
Landlord or its successors and assigns as succeeding to Tenant's rights under
the agreement in question and to the undisturbed use of the equipment, provided
that Landlord fully complies with the terms of such agreement. Tenant shall
provide and maintain on the Property during the entire Term such Tenant's
Personal Property as shall be necessary to operate the Facility in compliance
with all licensure and certification requirements, in substantial compliance
with all Legal Requirements and Insurance Requirements and otherwise in
accordance with customary practice in the health care industry with respect to
the
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Primary Intended Use or other uses then conducted on the Property by Tenant and
permitted hereunder. All Tenant's Personal Property not removed by Tenant within
thirty days following the expiration or earlier termination of this Lease shall
be considered abandoned by Tenant and may be appropriated, sold, destroyed or
otherwise disposed of by Landlord without first Giving Notice thereof to Tenant
and without any payment or obligation to account to Tenant. Tenant shall, at its
sole cost and expense, restore the Property to the condition required by Section
10.1(d), including repair of all damage to the Property caused by the removal of
Tenant's Personal Property, whether effected by Tenant or Landlord, except that
caused by the gross negligence or willful misconduct of Landlord.
ARTICLE VIII
CONDITION AND USE OF PROPERTY
8.1 CONDITION OF THE PROPERTY. LANDLORD MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, AND SHALL BE SUBJECT TO NO LIABILITY WITH
RESPECT TO, NOR SHALL THE VALIDITY OF THIS LEASE BE AFFECTED BY ANY CLAIM,
DEMAND OR CAUSE OF ACTION REGARDING THE PROPERTY OR ANY PART THEREOF, EITHER AS
TO ITS DESIGN, CONDITION OR FITNESS FOR ANY PARTICULAR USE OR PURPOSE OR
OTHERWISE, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT
OR PATENT. TENANT ACKNOWLEDGES AND AGREES THAT THE PROPERTY HAS BEEN INSPECTED
BY TENANT, HAS BEEN APPROVED FOR OCCUPANCY BY ALL GOVERNMENT AGENCIES HAVING
JURISDICTION THEREOVER AND IS SATISFACTORY TO IT IN ALL RESPECTS, INCLUDING FOR
ITS PRIMARY INTENDED USE, AND THAT TENANT IS LEASING THE PROPERTY "AS IS" IN ITS
PRESENT CONDITION, AND SUBJECT TO (A) THE EXISTING STATE OF TITLE, INCLUDING ALL
COVENANTS, CONDITIONS, RESTRICTIONS, EASEMENTS, LICENSES, LEGAL REQUIREMENTS,
MORTGAGES, DEEDS OF TRUST, ASSIGNMENTS OF LEASES, FIXTURE FILINGS AND OTHER
FINANCING INSTRUMENTS AND ANY AND ALL OTHER MATTERS OF RECORD AND OTHERWISE
EXCEPT TO THE EXTENT ANY OF THE FOREGOING WERE CAUSED OR CREATED BY LANDLORD,
AND (B) MATTERS WHICH WOULD BE DISCLOSED BY AN INSPECTION OF THE PROPERTY OR BY
AN ACCURATE SURVEY OF THE LAND. TENANT WAIVES ANY AND ALL CLAIMS, DEMANDS AND
CAUSE OR CAUSES OF ACTION HERETOFORE OR HEREAFTER ARISING AGAINST LANDLORD WITH
RESPECT TO THE CONDITION OF THE PROPERTY.
8.2 USE OF THE PROPERTY.
(a) Tenant has obtained or duly applied for and shall maintain in
effect all permits, licenses, authorizations and approvals needed to use and
operate the Property and the Facility for Tenant's Primary Intended Use in
accordance with all Legal Requirements.
(b) Throughout the entire Term, Tenant shall use or cause to be
used the Property in accordance with its Primary Intended Use and for such other
uses as may be necessary in
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connection with or incidental to such use. Tenant shall not use the Property or
any portion thereof for any other purpose whatsoever without the prior written
consent of Landlord. The parties agree that Landlord's consent will not be
deemed to be unreasonably withheld if, in the reasonable opinion of Landlord,
the Tenant's proposed use of the Property will significantly alter the character
or purpose or detract from the value or operating efficiency of the Property, or
significantly impair the revenue-producing capability of the Property. No use
shall be made or permitted to be made of the Property and no acts shall be done
which violate any Legal Requirements or Insurance Requirements or which will
cause the cancellation of any insurance policy covering the Property or any part
thereof, nor shall Tenant sell or otherwise provide to patients therein, or
permit to be kept, used or sold in, about or under the Property any Hazardous
Substance (except in strict compliance with all Legal Requirements, but only as
may be necessary to the operation of the Facility, with respect to such
substances other than asbestos and hydrocarbons) or any other article which may
be prohibited by the Legal Requirements or Insurance Requirements. Tenant shall,
at its sole cost, comply with all of the requirements pertaining to the Property
of any insurance board, association, organization or company necessary for the
maintenance of the insurance required pursuant to this Lease,
(c) Tenant shall not commit or suffer to be committed any waste nor
shall Tenant cause or permit any nuisance on the Property.
(d) Tenant shall neither suffer nor permit all or any portion of
Tenant's Personal Property or the Property, including any Capital Addition
whether or not financed or paid for by Landlord, to be used in such a manner as
(i) may impair the owner's title thereto or to any portion thereof or (ii) may
make possible a claim or claims of adverse usage, adverse possession or implied
dedication of all or any portion of the Property to the public, except as is
necessary in the ordinary and prudent operation of the Property.
8.3 LANDLORD TO GRANT EASEMENTS. Subject to the provisions of this
Section 8.3, Landlord shall, from time to time so long, as no Event of Default
has occurred and is continuing, at the request of Tenant and at Tenant's sole
cost and expense (but subject to the approval of Landlord, which approval shall
not be unreasonably withheld or delayed), (a) grant easements and other rights
in the nature of easements burdening the Property for the benefit of real
property adjacent to the Land or for the exclusive use and enjoyment of persons
or entities specified by Tenant in such request but only as may be necessary for
the operations of the Facility; (b) dedicate or transfer unimproved portions of
the Property for road, highway or other public purposes but only as may be
necessary for the operation of the Facility; (c) execute petitioner to have the
Property annexed to any municipal
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corporation or utility district; and (d) execute amendments to any covenants,
conditions, restrictions and equitable servitudes affecting the Property, but
only if each such grant, dedication, transfer, petition or amendment is not
detrimental to the proper conduct of the business of Tenant on the Property and
does not materially reduce the value of the Property in Landlord's reasonable
discretion.
8.4 HAZARDOUS SUBSTANCES.
(a) All operations or activities upon, or any use or occupancy of
the Property, or any portion thereof, by Tenant, or any agent, contractor,
employee or subtenant of Tenant shall at all times during the Term be in all
respects in strict compliance with any and all Legal Requirements and Insurance
Requirements relating to Hazardous Substances, including, but not limited to,
the discharge and removal of Hazardous Substances. Tenant will keep the Property
free and clear of all Hazardous Substances other than those Hazardous Substances
which are necessary for the operation of the Facility (which Hazardous
Substances shall be handled, used and disposed of in strict compliance with the
Legal Requirements and Insurance Requirements) and Tenant shall pay all costs
required properly to use, handle and dispose of all Hazardous Substance and
shall keep the Property free and clear of any lien relating to Hazardous
Substances which may be imposed pursuant to the Legal Requirements and Insurance
Requirements. Neither Tenant, nor any agent, contractor, employee or subtenant
of Tenant shall allow the manufacture, storage, voluntary transmission or
presence of any Hazardous Substances over or upon the Property (except in strict
compliance with the Legal Requirements and Insurance Requirements). Landlord
shall have the right at any time with notice to Tenant to conduct an
environmental audit of the Property and Tenant shall cooperate in the conduct of
such environmental audit. Furthermore, neither Tenant, nor any agent,
contractor, employee or any subtenant of Tenant shall install or permit to be
installed in or on the Property friable asbestos or any substance containing
asbestos or similarly deemed hazardous by Governmental authorities or the Legal
Requirements respecting such materials, and with respect to any such materials
currently present in the Property, shall promptly either, subject to the terms
of the letter agreement of even date herewith between Landlord and Tenant, (x)
remove any material which such Legal Requirements deem hazardous and require be
removed, at its sole cost and expense, or (y) otherwise comply with the Legal
Requirements. Tenant shall promptly notify Landlord in writing of any order,
receipt of any notice of violation or noncompliance with any applicable law,
rule, regulation, standard or order, any threatened or pending action by any
regulatory agency or other governmental authority or any claims made by any
third party relating to Hazardous Substances on, emanations on or from, releases
on or from, or threats of releases on or from any of the Property and shall
promptly furnish Landlord with copies of any correspondence, notices or legal
pleadings in connection therewith.
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Landlord shall have the right, but shall not be obligated, to notify any
governmental authority of any state of facts which may come to its attention
with respect to Hazardous Substances on, released from or emanating on or from
any part of the Property.
(b) Without limiting Section 22.1, Tenant shall, with the right to
participate in the applicable proceedings, indemnify, protect, defend (with
counsel reasonably approved by Landlord) and hold Landlord, and the directors,
officers, shareholders, employees and agents of Landlord, harmless from any
claims (including, but not limited to, third party claims for personal injury or
real or personal property damage), or natural resources damage, actions,
administrative proceedings (including informal proceedings), judgments, damages,
punitive damages, penalties, fines, costs, liabilities (including sums paid in
settlements of claims), interest or losses, including reasonable attorneys' and
paralegals' fees and expenses (including any such fees and expenses incurred in
enforcing the covenants and obligations of Tenant under this Lease or collecting
any sums due hereunder), consultant fees, and expert fees, together with all
other costs and expenses of any kind or nature ("Costs") that arise directly or
indirectly from or in connection with the presence, suspected presence, release
or threatened release of any Hazardous Substance in or into or at, on, about,
under or within the Property, to the extent that such Costs are not attributable
to the gross negligence or willful misconduct of Landlord. The indemnification
provided in this Section 8.4(b) shall specifically apply to and include claims
or actions brought by or on behalf of employees or contractors of Tenant or
employees or contractors of Tenant, and Tenant hereby expressly waives any
immunity to which Tenant may otherwise be entitled under any industrial or
workers' compensation laws. In the event Landlord shall suffer or incur any such
Costs, Tenant shall pay to Landlord the total of all such Costs suffered or
incurred by Landlord upon demand therefor by Landlord. Without limiting the
Generality of the foregoing, the indemnification provided by this Section 8.4(b)
shall specifically cover Costs, including capital, operating and maintenance
costs, incurred in connection with any investigation or monitoring, of site
conditions, any cleanup, containment, remedial, removal or restoration work
required or performed by any federal, state or local governmental agency or
political subdivision or performed by any non-governmental entity or person
because of the presence, suspected presence, release or suspected release of any
Hazardous Substance in or into the air, soil, groundwater, surface water or soil
vapor at, on, about, under or within the Property (or any portion thereof), and
any claims of third parties for loss or damage due to such Hazardous Substance,
to the extent that such Costs are not attributable to the gross negligence or
willful misconduct of Landlord. In addition, such indemnification shall include,
but not be limited to, all loss or damage sustained by Landlord or any third
party to whom Landlord may be liable due to any Hazardous Substance (i) that is
present or suspected to be present on, about, under or within the Property or
(ii) that
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migrates, flows, percolates, diffuses or in any way moves onto, into or under
the air, soil, groundwater, surface water or soil vapor at, on, about, under or
within the Property, irrespective of whether such Hazardous Substance shall be
present or suspected to be present on, about, under or within the Property as a
result of any release, discharge, disposal, dumping, spilling or leaking
(accidental or otherwise) onto the Property or caused by any person or entity;
provided, however, that the indemnification obligation arising out of clauses
(i) and (ii) above shall apply solely to the extent that such loss or damage is
not attributable to the gross negligence or willful misconduct of Landlord.
(c) In the event any investigation or monitoring of site conditions
or any clean-up, containment, restoration, removal or other such work ("Remedial
Work") is required under any applicable Legal Requirements, including, but not
limited to, any judicial order or order of any governmental entity, or in order
to comply with any agreements affecting the Property because of, or in
connection with, any occurrence or event described in Section 8.4(b), Tenant
shall perform or cause to be performed the Remedial Work in compliance with such
law, regulation, order or agreement and subject to the final review and approval
of Landlord, which approval shall not be unreasonably withheld or delayed;
provided, however, that Tenant may withhold such performance pursuant to a good
faith dispute regarding the application, interpretation or validity of the law,
regulation, order, or agreement, subject to the requirements of Section 8.4(d);
provided, further, however, that Landlord shall reasonably cooperate with Tenant
to the extent necessary to deliver such authorizations as may be required in
order for Tenant to perform its obligations under this Section 8.4(c). All
Remedial Work shall be performed by one or more contractors, selected by Tenant
and approved in advance in writing by Landlord, which approval shall not be
unreasonably withheld or delayed, and under the supervision of a consulting
engineer, selected by Tenant and approved in advance in writing, by Landlord,
which approval shall not be unreasonably withheld or delayed. All costs and
expenses of Remedial Work shall be paid by Tenant, including, but not limited
to, the charges of such contractors and consulting engineer, and Landlord's
reasonable attorneys' and paralegals' fees and other costs incurred in
connection with the monitoring or review of such Remedial Work. In performing
its obligations hereunder, Tenant shall be subrogated to any rights Landlord may
have under any indemnifications or warranties from any present, future or former
owners, tenants or occupants or users of the Property, to the extent available.
In the event Tenant shall fail timely to commence, diligently to prosecute to
completion or to complete to Landlord's reasonable satisfaction any necessary
Remedial Work, Landlord may, but shall not be required to, cause such Remedial
Work to be performed, and all costs and expenses thereof paid or incurred by
Landlord in connection therewith shall be Costs within the meaning of Section
8.4(b). Landlord's disapproval of or dissatisfaction with any Remedial Work
shall be
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deemed to be reasonable so long as Landlord's requirements for any Remedial Work
are consistent with the then current requirements and standards imposed by
prudent institutional investors in connection with their management of real
property. All such Costs shall be due and payable upon demand therefor by
Landlord. If Tenant fails to perform its obligations hereunder, Landlord shall
be subrogated to any rights Tenant may have under any indemnifications from any
present, future or former owners, tenants or other occupants or users of the
Property relating to the matters covered by this Section 8.4.
(d) Notwithstanding any provision of this Section 8.4 to the
contrary, but without limiting the provisions of Article XIII, Tenant shall be
permitted to contest or cause to be contested, subject to compliance with the
requirements of this Section 8.4(d) and Article XIII, by appropriate action any
Remedial Work requirement, and Landlord shall not perform such requirement on
its behalf, so long as Tenant has given Landlord written notice that Tenant is
contesting or shall contest or cause to be contested the same, and Tenant
actually contests or causes to be contested the application, interpretation or
validity of the law, regulation, order or agreement pertaining to the Remedial
Work by appropriate proceedings conducted in good faith with due diligence,
provided that such contest shall not subject Landlord to civil liability nor
jeopardize Landlord's interest in the Property or affect in any way the payment
of any sums to be paid to Landlord. Tenant shall give such security or
assurances as may be reasonably required by Landlord to insure compliance with
the Legal Requirements pertaining to the Remedial Work (and payment of all
costs, expenses, interest and penalties in connection therewith) and to prevent
any sale, forfeiture or loss by reason of such nonpayment or noncompliance.
(e) The provisions of this Section may be enforced by Landlord
without regard to any other rights and remedies Landlord may have against Tenant
under this Lease and without record to any limitations on Landlord's recourse as
may be otherwise provided in this Lease Tenant agrees that, notwithstanding any
provision in this Lease to the contrary, a separate action or actions to enforce
Tenant's obligations under this Section 8.4 may be brought and prosecuted
against Tenant. Any costs and other payments required to be paid by Tenant to
Landlord under this Section 8.4 which are not paid on demand therefor shall
thereupon be considered delinquent Tenant shall pay to Landlord immediately upon
demand therefor interest on such overdue amounts, from the date when due until
paid, at the Overdue Rate.
ARTICLE IX
LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS
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9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS AND
INSTRUMENTS. Subject to the rights of Tenant as provided in Article XIII
relating to permitted contests, Tenant, at its sole cost and expense, shall
promptly (a) comply with all applicable Legal Requirements and Insurance
Requirements with respect to the use, operation, maintenance, repair and
restoration of the Property, whether or not compliance therewith. shall require
structural chance in any of the Improvements or interfere with the use and
enjoyment of the Property, and (b) procure, maintain and comply with all
appropriate licenses, certificates of need, provider agreements and other
permits, licenses, franchises and authorizations required for any use of the
Property and Tenant's Personal Property then being made, and for the proper
erection, installation, operation and maintenance of the Property or any part
thereof, including without limitation any Capital Additions.
9.2 COVENANTS REGARDING LEGAL REQUIREMENTS. Tenant covenants and agrees
that it shall not use the Property, or Tenant's Personal Property for any
purpose which violates the Legal Requirements. Tenant has obtained or duly
applied for and shall maintain all appropriate licenses, certificates, permits,
provider agreements, franchises, authorizations and approvals necessary to
operate the Property in its customary manner for the Primary Intended Use, and
any other use conducted on the Property by Tenant and permitted by Landlord
hereunder Tenant may, however, contest the legality or applicability of any such
Local Requirement as provided in Article XIII hereof.
ARTICLE X
CONDITION OF THE PROPERTY
10.1 MAINTENANCE AND REPAIR.
(a) Tenant, at its sole cost and expense, shall keep the Property
and all private roadways, sidewalks and curbs appurtenant thereto and which are
under Tenant's control in good order, condition and repair and, except as
otherwise expressly provided to the contrary in Article XIV, XV, or XVI with
reasonable promptness, shall make all necessary and appropriate repairs and
replacements thereto of every kind and nature, whether interior or exterior,
structural or nonstructural, ordinary or extraordinary, patent or latent,
foreseen or unforeseen, or arising by reason of a condition existing prior to
the commencement of the Term of this Lease and regardless of the cause
necessitating repair. Tenant shall also be obligated at its expense to make all
repairs, modifications and renovations necessary to comply with all licensing,
safety and health and building code, regulations applicable to the Property so
that it can be legally operated for its Primary Intended Use. All repairs by
Tenant shall, to the extent reasonably achievable, be at least equal in quality
to the original work. Tenant shall not take or omit to take any action, the
taking or omission of which might
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materially impair the value or the usefulness of all or any portion of the
Property for the Primary Intended Use. Tenant shall give Landlord ten days prior
written notice of any repair, replacement, modification or renovation pursuant
to this Section the cost of which exceeds $200,000 and, prior to commencing any
such repair, replacement, modification or renovation, shall provide to Landlord
either (i) a lien payment and completion bond in form and substance and issued
by a surety reasonably acceptable to Landlord or (ii) a payment and completion
guaranty in form and substance and executed by a guarantor reasonably acceptable
to Landlord, as Tenant may elect.
(b) Landlord shall not under any circumstances be required to make
any repairs, replacements, alterations, restorations or renewals of any nature
or description to the Property, whether interior or exterior, structural or
non-structural, ordinary or extraordinary, patent or latent, foreseen or
unforeseen, or to make any expenditure whatsoever with respect thereto, in
connection with this Lease, nor shall Landlord under any circumstances be
required to maintain the Property in any other way, except as specifically
provided herein. Tenant hereby waives, to the fullest extent permitted by law,
the right to make repairs at the expense of Landlord pursuant to any law or
equitable principle in effect at the time of the execution of this Lease or
hereafter enacted. Landlord shall have the right to give, record and post, as
appropriate, notices of non-responsibility under any mechanic's lien laws now or
hereafter existing, and any other notices of a similar nature that Landlord may
reasonably elect to give, record or post from time to time during the Term.
(c) Nothing, contained in this Lease, and no action or inaction by
Landlord, shall be deemed or construed in any manner as (i) constituting the
consent or request of Landlord, expressed or implied, to any contractor,
subcontractor, laborer, materialman or vendor to or for the performance of any
labor or services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to all or any
portion of the Property or (ii) giving Tenant any right, power or permission to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such a manner as would permit
the making of any claim against Landlord with respect thereto, or to make any
agreement that may create, or in any way may be the basis for the assertion of
any right, title, interest, lien, claim or other encumbrance upon the estate of
Landlord in all or any portion of the Property.
(d) Unless Landlord conveys title to any of the Property to Tenant
pursuant to the provisions of this Lease, Tenant shall, upon the expiration or
earlier termination of this Lease, vacate and surrender the Property to Landlord
in the condition in which the Property was originally received from Landlord,
except as repaired, rebuilt, restored, altered or added to as permitted or
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required by the provisions of this Lease, and except for ordinary wear and tear
(but subject to the obligation of Tenant under this Section to maintain the
Property in good order, condition and repair during the entire Term of this
Lease) and except for damage or destruction by casualty or condemnation which
Tenant is not required to repair by the provisions of this Lease.
10.2 ENCROACHMENTS AND RESTRICTIONS. If any of the Improvements shall
at any time during the Term violate any agreement or condition contained in any
lawful covenant, condition, restriction, equitable servitude or other agreement
affecting all or any portion of the Property, or shall impair the rights of
others under any easement or right-of-way burdening the Property, provided that
such agreement, covenant, condition, restriction or easement has not been
created by Landlord, then promptly upon the request of Landlord, or at the
behest of any person affected by violation or impairment and in such case, in
the event of an adverse final determination, Tenant shall either (a) obtain
valid and effective waivers or settlements of all claims, liabilities and
damages resulting from each such encroachment, violation or impairment, whether
the same shall affect Landlord or Tenant, provided that Landlord shall consent
to all such settlements or waivers or (b) make such changes in the Improvements
and take such other actions as Tenant in the reasonable and good faith exercise
of its judgment deems practicable to remove such encroachment and to end such
violation or impairment, including, if necessary, the alteration of any of the
Improvements provided that Landlord shall consent to all such alterations and
the changes are not the result of any condition created solely by Landlord. With
respect to any encroachments identified on the ALTA surveys of the Property
delivered by Tenant to Landlord pursuant to the Purchase Agreement, Landlord
agrees that it shall not require Tenant to obtain a waiver of or otherwise
correct any such encroachment unless and until an affected third party notifies
Landlord of its objection to any such encroachment. In any event Tenant shall,
subject to Landlord's consent, take all such actions as may be necessary in
order to be able to continue the operation of the Improvements for the Primary
Intended Use substantially in the manner and to the extent the Improvements were
operated prior to the assertion of such violation or impairment. Tenant shall
not be responsible for any claims covered by Landlord's title insurance policy,
and Landlord agrees that any proceeds recovered under such title insurance
policy shall be made available to Tenant to remedy the claimed violation or
restriction.
ARTICLE XI
CAPITAL ADDITIONS
11.1 CONSTRUCTION OF CAPITAL ADDITIONS.
(a) If no Event of Default shall have occurred and be continuing,
Tenant may, subject to the terms and conditions
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contained in this Article, construct or install Capital Additions on the
Property with the prior written approval of Landlord, which approval shall not
be unreasonably withheld or delayed as expressly provided herein. Tenant shall
not be permitted to create any Encumbrance on the Property in connection with
any such Capital Addition.
(b) Prior to commencing construction of any Capital Addition,
Tenant shall submit to Landlord in writing a proposal setting, forth in
reasonable detail any proposed Capital Addition and shall provide to Landlord
such plans and specifications, permits, licenses, contracts and other
information concerning the proposed Capital Addition as Landlord may reasonably
request. Without limiting the generality of the foregoing, such proposal shall
indicate the approximate projected cost of constructing such Capital Addition,
the use or uses to which it will be put and a good faith estimate of the change,
if any, in the Gross Revenues that Tenant anticipates will be caused by such
Capital Addition.
(c) No Capital Addition shall be made which would tie in or connect
any Improvements with any other improvements on property adjacent to the
Property (and not part of the Property), including without limitation, tie-ins
of buildings or other structures or utilities unless Tenant shall have obtained
the prior written consent of Landlord, which consent Landlord may grant,
withhold or delay in its sole discretion. All proposed Capital Additions shall
be architecturally integrated and consistent with the Property.
11.2 CAPITAL ADDITIONS FINANCED OR PAID FOR BY LANDLORD.
(a) Tenant shall be required to request that Landlord provide or
arrange financing for any Capital Addition by providing to Landlord such
information about such Capital Addition as Landlord may reasonably request.
Landlord may, but shall be under no obligation to, meet the request, and within
60 days of receipt of such information, Landlord shall notify Tenant as to
whether it will finance the proposed Capital Addition and, if so, the terms and
conditions upon which it would do so, including the terms of any amendment to
this Lease (including, without limitation, the increase in Base Rent described
in clause (iii) of subparagraph (b), below to compensate Landlord for the
additional funds advanced by it). Notwithstanding the foregoing, Landlord shall
not finance the cost of any proposed Capital Addition if such cost is less than
$25,000. In no event shall the portion of the material, labor charges and
fixtures of the Capital Additions Cost be less than seventy-five percent (75%)
of the total amount of such cost. Tenant shall, within thirty (30) days of
Tenant's receipt of Landlord's affirmative notice that Landlord will finance the
proposed Capital Addition, give Landlord a notice accepting or rejecting
Landlord's proposed financing.
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(b) If Landlord finances the Capital Additions Cost of the proposed
Capital Addition, Tenant shall provide Landlord with the following (unless
waived by Landlord in writing):
(i) prior to any disbursement of funds, such information,
certificates, licenses, permits, authorizations, evidence of zoning and other
documents reasonably requested by Landlord, or by any third party lender with
whom Landlord has agreed or may agree to provide financing, as necessary to
confirm that Tenant will be able to use the Capital Addition upon completion
thereof in accordance with the Primary Intended Use for such Capital Addition,
including all required federal, state or local, Government licenses, permits,
authorizations and approvals;
(ii) prior to any disbursement of funds, an Officer's
Certificate and, if requested, a certificate from Tenant's architect, setting
forth in reasonable detail the projected (or actual, if available) Capital
Additions Cost;
(iii) prior to or coincident with the first disbursement of
funds, an amendment to this Lease (together with a memorandum thereof in
recordable form), duly executed and acknowledged, in form and substance
reasonably satisfactory to Landlord, providing for an increase in the Base Rent
equal to the product of (x) the Capital Additions Cost of such Capital Addition
and (y) 350 basis points in excess of the Ten-Year Treasury Rate, along with the
legal description of any land obtained in connection with such Capital Addition
and such other provisions as may be necessary or appropriate;
(iv) prior to or coincident with the first disbursement of
funds, a construction and development agreement setting, forth the terms for
Landlord's financing and Tenant's construction of such Capital Additions;
(v) prior to or coincident with payment for any land obtained
in connection with such Capital Addition, a deed conveying to Landlord title to
such land, or, if applicable, a ground lease on terms acceptable to Landlord,
which title or leasehold shall be free and clear of any liens, encumbrances or
other exceptions to or matters affecting title except those approved by
Landlord, and, upon completion of the Capital Addition, a final as-built survey
thereof reasonably satisfactory to Landlord;
(vi) during construction and following completion of the
Capital Addition, endorsements to any outstanding policy of title insurance
covering the Property, or commitments therefor reasonably satisfactory in form
and content to Landlord (x) updating the same without any additional exception
except such as may be reasonably permitted by Landlord and (y) adding to its
coverage any land acquired or leased in connection with such Capital Addition
and
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increasing the coverage thereof by an amount equal to the Fair Market Value of
the Capital Addition (except to the extent covered by the owner's policy of
title insurance referred to in subparagraph (vii) below);
(vii) following the advance of funds, if appropriate, (x) an
extended coverage owner's policy of title insurance insuring, fee simple title
to any land conveyed to Landlord pursuant to subparagraph (v), free and clear of
all liens and encumbrances except those approved by Landlord, and (y) a lender's
policy of title insurance reasonably satisfactory in form and substance to
Landlord and to any Lender with whom Landlord has agreed or may agree to provide
financing; and
(viii) during or following the advancement of funds, prints of
architectural and engineering drawings relating to the Capital Addition and such
other certificates (including, but not limited to, endorsements increasing the
insurance coverage, if any, at the time required by Section 14.1), documents,
opinions of counsel, appraisals, surveys, certified copies of duly adopted
resolutions of the board of directors of Tenant authorizing the execution and
delivery of the lease amendment, construction and development agreement and any
other instruments as may be reasonably required by Landlord and any lender from
whom Landlord has agreed or may agree to obtain financing.
(c) Any new mortgage or supplement to any existing mortgage
entered into by Landlord with any lending institution covering the Property or
any land referred to in subparagraph (iv) above shall be subject to the rights
of Tenant under this Lease, as this Lease may be amended from time to time.
11.3 CAPITAL ADDITIONS PAID FOR BY TENANT. If Landlord does not finance
the cost of a Capital Addition under the terms of Section 11.2 and Tenant elects
nevertheless to construct or cause to be constructed such Capital Addition, (i)
Tenant shall not commence any construction with respect to such Capital Addition
without first obtaining, the prior written consent of Landlord (which Landlord
shall not unreasonably withhold so long as the proposed Capital Addition will
not, in Landlord's reasonable opinion, either (x) diminish the value of the
property or (y) impair the Facility's ability to produce Gross Revenues and
which consent shall be delivered to Tenant within 60 days of receipt by Landlord
of Tenant's written proposal with respect to such Capital Addition), and (ii)
Tenant shall pay the cost of such Capital Addition, and there shall be no
adjustment in the Rent by reason of any such Capital Addition.
11.4 DISPOSITION OF CAPITAL ADDITIONS UPON EXPIRATION OR TERMINATION OF
LEASE. Upon the expiration or earlier termination of this Lease, all Capital
Additions shall pass to and become the property of Landlord, free and clear of
all encumbrances.
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11.5 NON-CAPITAL ADDITIONS. Tenant shall have the right to make
additions, modifications or improvements to the Property which are not Capital
Additions from time to time as it, in its reasonable discretion, may deem to be
desirable for the Property's uses and purposes permitted hereunder, provided
that such action does not (i) significantly and adversely alter the character or
purpose or detract in any manner from the value or operating efficiency of the
Property, (ii) significantly impair the revenue-producing capability of the
Property, (iii) materially and adversely affect the ability of Tenant to comply
with the provisions of this Lease, or (iv) result in a violation of any of the
provisions of this Lease (including, but not limited to Articles XII or XXIX),
and provided that, if the cost of such non-capital additions, modifications or
improvements exceed $200,000 in any 12-month period, Tenant gives Landlord ten
days' prior Notice of such addition, modification or improvement. The cost of
such non-capital additions, modifications or improvements to the Property shall
be paid by Tenant, and all such non-capital additions, modifications and
improvements shall, without payment by Landlord at any time, be included under
the terms of this Lease, and upon expiration or earlier termination of this
Lease shall pass to and become the property of Landlord.
11.6 SALVAGE. All materials which are scrapped or removed in connection
with the construction of either Capital Additions permitted by Section 11.1,
non-capital additions permitted by Section 11.5, or repairs required by Article
X shall be or become the property of the party which paid for, or provided the
financing for such work.
11.7 NO LIENS ON LANDLORD'S INTEREST. In no event shall the interest of
Landlord be subject to liens for improvements made by Tenant, whether under
Article 10, this Article 11, Article 15 or otherwise, and Tenant shall notify
any and all contractors making any improvements, repairs or additions to any
portion of the Property that any lien to which such contractor may be entitled
pursuant to the laws of the State shall not extend to the interest of Landlord
in the Property.
ARTICLE XII
LIENS
Subject to the provisions of Article XIII relating to permitted
contests, Tenant shall not directly or indirectly create or allow to remain and
shall promptly discharge at its expense any lien, encumbrance, security
interest, attachment, title retention agreement or claim upon the Property or
any attachment, levy, claim or encumbrance in respect of Rent, not including,
however, (a) this Lease, (b) Permitted Encumbrances, (c) restrictions, liens and
other encumbrances which are consented to in writing by Landlord or expressly
permitted under Section 29.1(a) hereof, (d) liens for
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those taxes of Landlord which Tenant is not required to pay hereunder, (e)
subleases permitted by Article XXIII, (f) liens for Impositions or for sums
resulting from noncompliance with Legal Requirements so long as the same are not
yet payable or are payable without the addition of any fine or penalty and are
in the process of being contested as permitted by Article XIII, (g) liens of
mechanics, laborers, materialmen, suppliers or vendors for sums either disputed
or not yet due, provided that (i) the payment of such sums shall not be
postponed for more than five days after the completion of the action giving rise
to such lien and such reserve or other appropriate provisions as shall be
required by law or generally accepted accounting principles shall have been made
therefor or (ii) any such liens are in the process of being contested as
permitted by Article XIII, and (h) any liens which are the responsibility of
Landlord pursuant to the provisions of Article XXVII or are directly created or
permitted by Landlord.
ARTICLE XIII
CONTESTS
If no Event of Default has occurred and is then continuing, Tenant, on
its own or on Landlord's behalf (or in Landlord's name), but at Tenant's sole
cost and expense, upon ten days' prior Notice to Landlord, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
without prejudice to Landlord's rights hereunder the amount, validity or
application, in whole or in part, of any Imposition, Legal Requirement,
Insurance Requirement, lien, attachment, levy, encumbrance, charge or claim not
otherwise permitted by Article XII, provided that (a) in the case of an unpaid
Imposition, lien, attachment, levy, encumbrance, charge or claim, the
commencement and continuation of such proceedings shall suspend the collection
thereof from Landlord and from the Property, (b) neither the Property nor any
Rent therefrom nor any part thereof or interest therein would be subject to any
risk of being sold, forfeited, attached, foreclosed, or lost, (c) in the case of
a Legal Requirement, Landlord would not be in any danger of incurring any lien,
charge, fine, penalty, or other civil or criminal liability for failure to
comply therewith pending the outcome of such proceedings, (d) in the event that
any such contest shall involve a sum of money or potential loss in excess of
$100,000 then, in any such event, Tenant shall deliver to Landlord an Officer's
Certificate to the effect set forth in clauses (a), (b) and (c), to the extent
applicable, (e) in the case of a Legal Requirement or an Imposition, lien,
encumbrance or charge, Tenant shall give such reasonable security as may be
demanded by Landlord to insure ultimate payment of the same and to prevent any
loss or injury to Landlord, including but not limited to any sale or forfeiture
of the affected portion of the Property or the Rent by reason of such
non-payment or non-compliance; provided, however, the provisions of this Article
shall not be construed to permit Tenant to contest the payment of Rent (except
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as to contests concerning the method of computation or the basis of levy of any
Imposition) or any other sums payable by Tenant to Landlord hereunder, (f) in
the case of an Insurance Requirement, the coverage required by Article XIV shall
be maintained, and (g) if such contest be finally resolved against Landlord or
Tenant, Tenant shall, as Additional Charges due hereunder, promptly pay the
amount required to be paid, together with all interest and penalties accrued
thereon, or comply with the applicable Legal Requirement or Insurance
Requirement. Landlord, at Tenant's expense, shall execute and deliver to Tenant
such authorizations and other documents as may reasonably be required in any
such contest and, if reasonably requested by Tenant or if Landlord so desires,
Landlord shall join as a party therein. Tenant shall indemnify and save Landlord
harmless against any liability, cost or expense of any kind that may be imposed
upon Landlord in connection with any such contest and any loss resulting
therefrom.
ARTICLE XIV
INSURANCE
14.1 CENTRAL INSURANCE REQUIREMENTS. Tenant shall at all times maintain
policies of insurance insuring the Property, and all property located in or on
the Property, against the kind of risks and in the amounts of coverage described
below. All such insurance shall be written by companies of recognized
responsibility authorized to conduct an insurance business in the State. All
such insurance (other than insurance with respect to Tenant's Personal Property)
shall name Landlord as an additional insured. Proceeds of insurance policies
payable to compensate any loss shall be payable to Landlord or Tenant as
provided in Article XV. All such insurance shall name as an additional insured
or loss payee, as appropriate, the holder (a "Facility Mortgagee") of any
mortgage, deed of trust or other security agreement establishing any Encumbrance
placed on the Property in accordance with the provisions of Article XXVII
("Facility Mortgage") by way of a standard form of mortgagee's loss payable
endorsement. Any loss adjustment or other settlement in excess of $250,000 shall
require the written consent of Landlord and each Facility Mortgagee and any
other lender of Landlord or its Affiliates ("Landlord Lender") having any
contractual insurance requirements which would impact on the insurance
requirements of this Lease to the extent so required and Landlord has given
Tenant written notice thereof. Originals or certified copies of all insurance
policies obtained pursuant to this Article shall be deposited with Landlord and,
if requested, with any Facility Mortgagee(s) or Landlord Lender(s). The policies
on the Property, including the Improvements, Fixtures and Tenant's Personal
Property, shall insure against the following risks:
(a) loss or damage by fire, vandalism and malicious mischief,
extended coverage perils, and all physical loss perils insurance including but
not limited to sprinkler leakage, in an
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amount not less than 100% of the then full replacement cost thereof (as defined
below in Section 14.2) or such lesser amount as is approved by Landlord in
writing;
(b) loss or damage by explosion of steam boilers, pressure
vessels or similar apparatus, now or hereafter installed in either of the
Facility in such amounts with respect to any one accident as may be reasonably
requested by Landlord from time to time;
(c) business interruption or loss of rental under a rental
value insurance policy covering risk of loss during the lesser of the first 12
months of reconstruction or the actual reconstruction period necessitated by the
occurrence of any of the hazards described in Sections 14.1(a) or 14.1(b), in an
amount sufficient to prevent Landlord from becoming a coinsurer:
(d) claims for personal injury or property damage under a
policy of comprehensive general public liability insurance, in an amount not
less than one million dollars per occurrence with respect to bodily injury and
death and three million dollars with respect to property damage;
(e) claims arising out of medical malpractice in an amount not
less than one million dollars for each person and three million dollars for each
occurrence:
(f) flood (when the Property is located in whole or in part
within an area designated by an appropriate agency or authority of the United
States as a flood plain) and such other hazards and in such amounts as may be
customary for comparable properties in the area and as may be available from
insurance companies, insurance pools, or other appropriate companies authorized
to do business in the State; and
(g) During any period during which any Capital Addition is
under construction, course of construction insurance and all risks insurance in
such amounts as Landlord shall reasonably require.
14.2 REPLACEMENT COST. The term "full replacement cost" as used herein
shall mean the actual replacement cost of the Property requiring replacement
from time to time, less exclusions provided in a normal fire insurance policy.
If either party believes that full replacement cost (the then replacement cost
less such exclusions) has increased or decreased at any time during the Lease
Term, it may have such full replacement cost redetermined by the insurer then
providing the largest amount of fire insurance coverage carried on the Property.
14.3 ADDITIONAL INSURANCE. In addition to the insurance described in
Section 14.1, throughout the Term Tenant shall
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maintain such additional insurance as may be required from time to time by
Landlord provided that the types and amounts of any such additional insurance
required by Landlord is then customarily maintained by the operators of similar
health care facilities in the region in which the Facility is located. Tenant
shall further maintain adequate workers' compensation insurance coverage for all
persons employed by Tenant on the Property. Such workers' compensation insurance
shall be in accordance with the requirements of applicable local, state and
federal law.
14.4 WAIVER OF SUBROGATION. All insurance policies carried by Landlord
or Tenant covering the Property, the Fixtures, the Facility or Tenant's Personal
Property shall expressly waive any right of subrogation on the part of the
insurer against the other party. Landlord and Tenant agree that the respective
policies of insurance carried by them will include such waiver clauses or
endorsements so long as the same are obtainable without extra cost. If such
clauses and endorsements are only available upon the payment of an extra charge,
the other party, at its election, may pay the same, but shall not be obligated
to do so; provided that the Tenant shall at all times be obligated to carry the
policies of insurance required under this Article regardless of whether the
waiver of subrogation required under this Section 14.4 is available.
14.5 FORM OF INSURANCE. All of the policies of insurance referred to in
this Article shall be written in a form, and issued by insurance companies,
satisfactory to Landlord. Landlord agrees that it will not unreasonably withhold
or delay its approval as to the form of the policies or the insurance companies
selected by Tenant. Tenant shall pay all of the premiums therefor, and shall
deliver an original or certified copy of any policy, or renewal thereof, to
Landlord, any Facility Mortgagee and any Landlord Lender at least 10 days prior
to the expiration of the existing policy to which such renewal policy relates.
If Tenant either fails to effect such insurance as herein required or to pay the
premiums therefor, or to deliver such policies or certified copies thereof to
Landlord at the times required, Landlord shall be entitled, but shall have no
obligation, to effect such insurance and pay the premiums therefor, which
premiums shall be repayable to Landlord upon demand therefor in a Notice, and
failure by Tenant to repay the same shall constitute an Event of Default within
the meaning of Section 17.1(d). Each insurer mentioned in this Article shall
agree, by endorsement on the policy or policies issued by it, or by independent
instrument furnished to Landlord, that it will give to Landlord (and to any
Facility Mortgagee and Landlord Lender of which Tenant has notice, if required)
30 days prior written notice before such policy or policies expire, are altered
or are canceled.
14.6 CHANGE IN LIMITS. If either party shall at any time deem the
limits of the personal injury or property damage public
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liability insurance or malpractice insurance then carried by Tenant to be
insufficient or excessive, the parties shall endeavor in good faith to agree
promptly upon the proper and reasonable limits for such insurance to be carried,
and such insurance shall thereafter be carried with the limits thus agreed upon
until further change pursuant to the provisions of this Section.
14.7 BLANKET POLICY. Notwithstanding anything to the contrary contained
in this Article, Tenant's obligations to carry the insurance provided for herein
may be brought within the coverage of a so-called blanket policy or policies of
insurance carried and maintained by Tenant so long as (a) the coverage afforded
to Landlord is not reduced or diminished or otherwise altered from that which
would exist under a separate policy meeting all other requirements of this Lease
by reason of the use of such blanket policy of insurance and (b) the
requirements of this Article are otherwise satisfied.
14.8 NO SEPARATE INSURANCE. Tenant shall not obtain separate insurance
concurrent in form or contributing in the event of loss with that required in
this Article XIV to be furnished by, or which may reasonably be required to be
furnished by Tenant, nor shall Tenant increase the amount of any then existing
insurance by securing an additional policy or additional policies, unless all
parties having, an insurable interest in the subject matter of the insurance,
including in all cases Landlord and all Facility Mortgagees, are named therein
as additional insureds, and the loss is payable under said insurance in the same
manner as losses are payable under this Lease. Tenant shall immediately notify
Landlord of the obtaining of any such separate insurance or of the increasing of
any of the amounts of the then existing insurance.
ARTICLE XV
INSURANCE PROCEEDS
15.1 HANDLING OF INSURANCE PROCEEDS. Subject to Section 15.4 hereof,
all proceeds from any policy of insurance required by Article XIV of this Lease
(except Sections 14.1(d) and (e)) shall be paid to Landlord and held in trust by
Landlord (subject to the provisions of Section 15.7) and shall be made available
for reconstruction, repair or replacement, as the case may be, of any damage to
or destruction of all or any portion of the Property to which such proceeds
relate, and shall be paid out by Landlord from time to time subject to the
provisions hereof for the cost of such reconstruction, repair or replacement.
Any unused portion shall be retained by Landlord free and clear upon completion
of such repair and restoration but shall be applied by Landlord against Tenant's
obligations for Rent next coming due under this Lease. If neither Landlord nor
Tenant is required or elects to repair and restore, and the Lease is terminated
without purchase by Tenant as described in Section 15.2(a), then all such
insurance proceeds shall be
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retained by Landlord. All salvage resulting from any risk covered by insurance
shall belong to Landlord, except that any salvage relating to Tenant's Personal
Property shall be the property of Tenant.
15.2 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION COVERED BY
INSURANCE.
(a) Except as provided in Section 15.7, if during, the Term a
portion of the Property is totally or substantially destroyed by a risk covered
by the insurance described in Article XIV so that the Facility thereby is
rendered unsuitable for its Primary Intended Use (taking into account all
relevant factors, including but not limited to the number of useable beds, the
amount of square footage reasonably available for use by Tenant and the type and
amount of Gross Revenues lost) (the "Impacted Facility"), Tenant shall at its
option either (i) restore the Impacted Facility to substantially the same
condition as existed immediately before the damage or destruction or (ii)
acquire the Property from Landlord for a purchase price equal to the greater of
the Minimum Repurchase Price or the Fair Market Value Purchase Price of the
Property immediately prior to such damage or destruction, or (iii) terminate the
Lease with respect to the Property effective upon Landlord's receipt of the
insurance proceeds and any "Shortfall" (as hereinafter defined) and in such
event Landlord shall be entitled to retain or collect for its own benefit the
insurance proceeds, provided that, in the event the amount of the insurance
proceeds received by Landlord are less than the amounts which would be payable
in the aggregate under the insurance policies specified in Section 14.1(a) such
termination shall not be effective until Tenant pays Landlord the amount of such
shortfall ("Shortfall") in cash. If Tenant restores the Impacted Facility, the
insurance proceeds shall be paid out by Landlord to Tenant or its designee from
time to time as reasonably requested by Tenant to pay for the reasonable costs
of such restoration and any excess proceeds remaining after such restoration
shall be retained by Tenant. If Tenant acquires the Property, all applicable
insurance proceeds shall be the property of Tenant.
(b) Except as provided in Section 15.7, if during the Term,
the Improvements or Fixtures are partially destroyed due to a risk covered by
the insurance described in Article XIV but the Impacted Facility is not thereby
rendered unsuitable for the Primary Intended Use (taking into account all
relevant factors, including but not limited to the number of useable beds, the
amount of square footage reasonably available for use by Tenant and the type and
amount of Gross Revenues lost), Tenant shall restore the Impacted Facility to
substantially the same condition as existed immediately before the damage or
destruction. Such damage or destruction shall not terminate this Lease; provided
however, that if Tenant cannot, with reasonable diligence and within a
reasonable time, obtain all government approvals, including building permits,
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licenses, conditional use permits and any certificates of need, necessary to
perform all required repair and restoration work and to operate the Impacted
Facility in substantially the same manner and for the Primary Intended Use,
Tenant shall either (i) offer to purchase the Property for a purchase price
equal to the greater of the Minimum Repurchase Price or the Fair Market Value
Purchase Price immediately prior to such damage or destruction or (ii) continue
to operate under the Lease which shall remain in full force and effect and
Landlord shall be entitled to retain the insurance proceeds, less the amount
needed to restore the Property so that the portion of the Facility unaffected by
the casualty can be used as a complete architectural unit. If Tenant shall make
such offer and Landlord does not accept the same within 120 days of Landlord's
receipt of such offer, Tenant may either (x) withdraw such offer, in which case
this Lease shall remain in fall force and effect and Tenant shall proceed to
restore the Impacted Facility as soon as reasonably practicable to substantially
the same condition as existed immediately before such damage or destruction, or
(y) terminate this Lease after recovery by Landlord of all insurance proceeds
and the payment by Tenant of any Shortfall in cash. If Tenant so restores the
Impacted Facility, insurance proceeds shall,be paid out by Landlord from time to
time as reasonably requested by Tenant to pay for the reasonable costs of such
restoration, and any excess proceeds remaining after such restoration shall be
retained by Tenant.
(c) If Tenant elects to repair or restore any damage or
destruction to the Property and the cost of any such repair or restoration
exceeds the amount of proceeds received by Landlord from the insurance required
under Article XIV, Tenant shall contribute any and all excess amounts necessary
to repair or restore the Facility.
(d) If Landlord accepts Tenant's offer to purchase the
Property this Lease shall terminate as to the Property upon payment of the
purchase price therefor and Landlord shall thereupon remit to Tenant all
insurance proceeds pertaining to the Property less Landlord's reasonable
expenses, including attorneys' fees, and assign Landlord's rights in any
uncollected insurance proceeds to Tenant.
15.3 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION NOT COVERED
BY INSURANCE. Except as provided in Section 15.7 below, if during the Term
either of the Facility is totally destroyed or materially damaged (i) from a
risk not covered by insurance described in Article XIV but that would have been
covered if Tenant carried the insurance customarily maintained by, and generally
available to, the operators of reputable health care facilities in the region in
which the Facility is located, (ii) from a risk for which insurance coverage is
voided due to any act or omission by Tenant, or (iii) as result of an
earthquake, whether or not such damage or destruction renders the Impacted
Facility unsuitable for
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their Primary Intended Use (taking into account all relevant factors, including
but not limited to the number of useable beds, the amount of square footage
reasonably available for use by Tenant and the type and amount of Gross Revenues
lost), Tenant shall restore the Impacted Facility to substantially the same
condition as existed immediately before such damage or destruction and not
terminate this Lease. Otherwise, if the Facility is totally destroyed or
materially damaged by a risk not covered by insurance such that the Facility
shall be unusable for its Primary Intended Use, this Lease shall terminate
within 90 days of such destruction or damage, provided that the Tenant may elect
to restore the Impacted Facility, in which event, this Lease shall continue in
full force and effect. If such damage or destruction does not render the
Impacted Facility unusable for its Primary Intended Use, Tenant shall also
restore the Facility to substantially the same condition as existed immediately
before the damage or destruction.
15.4 PAYMENT OF PROCEEDS ON TENANT'S PROPERTY AND CAPITAL ADDITIONS
PAID BY TENANT. Notwithstanding any provision herein, all insurance proceeds
payable by reason of any loss of or damage to any of Tenant's Personal Property
or Capital Additions paid for by Tenant shall be paid to Tenant and Tenant shall
hold such insurance in trust to pay the cost of repairing or replacing damaged
Tenant's Personal Property or Capital Additions paid for by Tenant provided,
however, that if the damaged Tenant's Personal Property or Capital Additions
paid for by Tenant were no longer useful to Tenant's operations prior to their
destruction, Tenant shall not be obligated to repair or replace them.
15.5 HANDLING OF BUSINESS INTERRUPTION INSURANCE. Notwithstanding any
provision of this Article XV, proceeds from any policy of insurance required by
Section 14.1(c) shall be paid to the Landlord, and Landlord shall apply the
proceeds against any currently unpaid obligation or obligations of Tenant
hereunder in such amount or amounts as Landlord reasonably shall decide. Any
remaining, proceeds from such insurance, after giving effect hereto, shall be
paid to Tenant.
15.6 RESTORATION OF TENANT'S PROPERTY. Upon any restoration of the
Impacted Facility as provided in Section 15.2 or 15.3, Tenant shall either (i)
at Tenant's sole cost and expense, restore all alterations and improvements made
by Tenant, Tenant's Personal Property and all Capital Additions paid for by
Tenant, or (ii) at Tenant's sole cost and expense, replace such alterations and
improvements, Tenant's Personal Property or Capital Additions with improvements
or items of the same or better quality and utility in the operation of the
Property; provided, however, that if the damaged Tenant's Personal Property or
Capital Additions paid for by Tenant were no longer useful to Tenant's
operations prior to their destruction, Tenant shall not be obligated to replace
them.
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15.7 ABATEMENT OF RENT. Unless and until Tenant shall pay the purchase
price for the Property to Landlord in accordance with this Article XV (and this
Lease is thereby terminated or otherwise terminated as provided in this Article
XV), in the event of any damage or destruction of the Property, this Lease shall
remain in full force and effect and Tenant's obligation to make rental payments
and to pay all other charges required by this Lease shall not be abated by
reason of any damage or destructions to the Property or the subsequent loss of
Landlord's entitlement to the Property.
15.8 DAMAGE NEAR END OF TERM. Notwithstanding any provisions of this
Article XV to the contrary, if damage to or destruction of the Facility occurs
during the last 12 months of the then applicable term (whether Fixed or
Extended), if Tenant has not elected to extend such term, and if such damage or
destruction cannot be fully repaired and restored within six months immediately
following the date of loss, then Tenant shall have the right to terminate this
Lease by giving written Notice thereof to Landlord within 30 days after the date
of such damage or destruction, in which event, Landlord shall collect any
insurance proceeds to which it is entitled, and Tenant shall assign Tenant's
rights in any additional insurance proceeds. In the event that the Facility is
totally destroyed or damaged (i) from a risk not covered by insurance described
in Article XIV but that would have been covered if Tenant carried the insurance
customarily maintained by, and generally available to, the operators of
reputable health care facilities in the region in which the Facility is located,
(ii) from a risk for which insurance coverage is voided due to any act or
omission by Tenant, or (iii) as a result of an earthquake, whether or not such
damage or destruction renders the Facility unsuitable for its Primary Intended
Use (taking into account all relevant factors, including but not limited to the
number of useable beds, the amount of square footage reasonably available for
use by Tenant and the type and amount of Gross Revenues lost), then Tenant shall
pay to Landlord a sum equal to the amount reasonably necessary to repair such
damage or destruction.
15.9 TERMINATION OF OPTION TO PURCHASE. Any termination of this Lease
pursuant to this Article shall cause any option to purchase granted to Tenant
under this Lease and the right to extend the Term by any Extended Term to be
terminated and to be without further force or effect.
15.10 WAIVER. Tenant hereby waives any statutory rights of termination
which may arise by reason of any damage or destruction of the Facility which
Landlord is obligated to restore or may restore under any of the provisions of
this Lease.
ARTICLE XVI
CONDEMNATION
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16.1 DEFINITIONS.
For purposes of this Article XVI the following terms have the meanings
specified in this Section 16.1.
(a) "CONDEMNATION" means (a) the exercise of any governmental
power, whether by legal proceedings or otherwise, by a Condemnor, or (b) a
voluntary sale or transfer by Landlord with Tenant's consent (provided no Event
of Default has occurred and is continuing at such time) to any Condemnor, either
under threat of condemnation or while legal proceedings for condemnation are
pending.
(b) "DATE OF TAKING" means the first date the Condemnor has
the right to immediate possession of the property being condemned.
(c) "AWARD" means all compensation, sums and any other value
awarded, paid or received on a total or partial condemnation.
(d) "CONDEMNOR" means any public or quasi-public authority, or
private corporation or individual, having the power of condemnation.
16.2 PARTIES' RIGHTS AND OBLIGATIONS. If during the Term there is any
Taking of all or any part of the Property or of any interest in this Lease by
Condemnation, the rights and obligations of the parties with respect to such
Condemnation shall be determined by this Article.
16.3 TOTAL TAKING. If title to the whole of Tenant's interest in the
Property shall be taken or condemned by any Condemnor, this Lease shall cease
and terminate as of the Date of Taking. If title to less than the whole of the
Property shall be so taken or condemned, which nevertheless renders the Property
unsuitable for its Primary Intended Use (taking into account all relevant
factors, including but not limited to the number of useable beds, the amount of
square footage reasonably available for use by Tenant, and the type and amount
of Gross Revenues lost), Tenant and Landlord each shall have the option by
Notice to the other, at any time prior to the taking of possession by, or the
date of vesting of title in, such Condemnor, whichever first occurs, to
terminate this Lease as of such earlier to occur date. Upon such earlier to
occur date, if such Notice has been given, this Lease shall cease and terminate.
In either of such events, all Rent paid or payable by Tenant hereunder shall be
apportioned as of the date the Lease shall have been so terminated as aforesaid.
16.4 ALLOCATION OF PORTION OF AWARD. Subject to the rights of any
Facility Mortgagee, the total Condemnation Award made with respect to all or any
portion of the Property shall be distributed to Landlord and Tenant ratably in
accordance with the value of
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their respective interests in and to such Property as hereafter set forth in
this Section 16.4. All of the Award shall be the sole and exclusive property of
Landlord and shall be payable to Landlord, subject to the rights of any Facility
Mortgagee; provided that any portion of such Condemnation Award which is
expressly allocated by the Condemnor to the taking of Tenant's leasehold
interest in the Property, the taking of any Capital Additions (or any portion
thereof) paid for by Tenant, any loss of business by Tenant during the remaining
Term of this Lease, the taking of Tenant's Personal Property, or any removal and
relocation expenses of Tenant in any such proceedings shall be the sole property
of and payable to Tenant. In any Condemnation proceedings Landlord and Tenant
each shall seek their own Award in conformity herewith, at their own expense.
16.5 PARTIAL TAKING. If title to less than the whole of the Property
shall be taken or condemned, and the Property is still suitable for its then
Primary Intended Use, or if Tenant or Landlord shall be entitled (but shall not
elect) to terminate this Lease as provided in Section 16.3 hereof, Tenant at its
own cost and expense shall with all reasonable diligence restore the untaken
portion of any Improvements so that such improvements shall constitute a
complete architectural unit of the same general character and condition (as
nearly as may be possible under the circumstances) as the Improvements existing
immediately prior to such Condemnation or Taking. Landlord and Tenant shall each
contribute to the cost of restoration that part of their Award specifically
allocated to such restoration, if any (or if no such specific allocation is
made, a just, fair and reasonable portion of its Award as reasonably determined
by Landlord and Tenant or by arbitration in accordance with Section 28.14 if
Landlord and Tenant are unable to agree within 30 days of the Award), together
with any and all severance and other damages awarded for any taken improvements;
provided, however, the amount of such contribution shall not exceed such cost.
If such amounts are not sufficient to cover the cost of restoration Landlord and
Tenant shall contribute any additional amounts needed for restoration in
proportion to the amounts already contributed by them, provided that in no event
shall Landlord contribute any amount to such restoration in excess of its Award.
Thereafter, any excess restoration cost shall be borne solely by Tenant.
Landlord agrees that Tenant shall be entitled to an equitable abatement of Base
Rent in the event of a partial taking of the Property, but such abatement shall
be strictly limited to any amount of excess Award paid to Landlord after the
restoration cost has been paid.
16.6 TEMPORARY TAKING. If the whole or any part of the Property or of
Tenant's interest under this Lease shall be taken or condemned by any Condemnor
for its temporary use or occupancy for a period of not more than one
hundred-eighty (180) days, this Lease shall not terminate, and Tenant shall
continue to pay, in the manner and at the times herein specified, the full
amounts of Base
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Rent, Additional Rent, if any, and Additional Charges, provided that during any
such Temporary Taking, Tenant shall pay Additional Rent at a rate equal to the
average Additional Rent during the three immediately preceding Fiscal Years, (or
if three Fiscal Years shall not have elapsed, the average during the last
preceding Fiscal Years occurring during the Term). Except to the extent Tenant
may be prevented from so doing, pursuant to the terms of the order of the
Condemnor, Tenant shall continue to perform and observe all of the other terms,
covenants, conditions and obligations hereof on the part of the Tenant to be
performed and observed as though such Taking or Condemnation had not occurred.
Upon any such Taking or Condemnation described in this Section, the entire
amount of any such Award made for such Taking or Condemnation allocable to the
Term of this Lease, whether paid by way of damages, Rent or otherwise, shall be
paid to Tenant. Tenant covenants that upon the termination of any such Taking or
Condemnation set forth in this Section, Tenant will, at its sole cost and
expense (subject to any contribution by Landlord as set forth in Section 16.5),
restore the Property as nearly as may be reasonably possible to the condition in
which the same was immediately prior to such Taking or Condemnation, unless such
period of temporary use or occupancy shall extend beyond the expiration of the
Term, in which case Tenant shall not be required to make such restoration.
ARTICLE XVII
DEFAULTS AND REMEDIES
17.1 EVENTS OF DEFAULT. Any one or more of the following events shall
be deemed an "Event of Default" hereunder:
(a) Tenant shall fail to pay Rent payable by Tenant under this
Lease when the same becomes due and payable and such failure continues for 5
days after notice of such failure (except that Landlord shall not be required to
give more than one such notice in any 12-month period);
(b) Tenant shall violate the covenant described in Section
29.3(c) hereof;
(c) Any representation or warranty made by the Tenant in
connection with this Lease or the Security Agreement, or in any report,
certificate, financial statement or other instrument furnished in connection
herewith or therewith, from time to time, whether under Article XXIV of this
Lease or otherwise, shall prove to be false or misleading in any material
respect and shall not be remedied within 30 days after Tenant receives notice
thereof;
(d) Tenant shall fail to observe or perform any other term,
covenant or condition of this Lease and such failure is not cured by Tenant
within a period of 30 days after Notice thereof
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from Landlord, unless such failure cannot with due diligence be cured within a
period of 30 days, in which case such failure shall not be deemed to continue if
Tenant proceeds promptly and with due diligence to cure the failure and
diligently completes the curing thereof;
(e) Tenant or either of Guarantors shall: (i) admit in writing
its inability to pay its debts generally as they mature, (ii) make a general
assignment for the benefit of its creditors, (iii) have appointed a trustee,
receiver or liquidator pursuant to an order of a court of competent jurisdiction
of itself or of the whole or any part of its property which is not discharged in
sixty (60) days, (iv) terminate or suspend its business, (v) have any of its
assets executed upon, attached or judicially seized and such execution,
attachment or seizure is not vacated or set aside within sixty (60) days;
(f) Tenant or either of Guarantors shall: (i) file a voluntary
case under any applicable bankruptcy, insolvency, debtor relief or other similar
law or statute of the United States of America or any State thereof now or
hereinafter in effect ("BANKRUPTCY LAWS"), (ii) consent to or acquiesce in the
appointment of a receiver, liquidator, assignee, trustee, custodian or
sequestrator (or similar official of itself or of the whole or any part of its
property) which is not discharged in thirty (30) days, or (iii) fail generally
to pay its debts as they mature or become due;
(g) Tenant or either of Guarantors shall, on a petition filed
under any applicable Bankruptcy Laws against any of them, be adjudicated a
bankrupt or have an order for relief thereunder entered against it or fail to
oppose any such proceeding or if a court of competent jurisdiction shall enter
an order or decree appointing, without its consent, a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of itself or
of the whole or any part of its property and such judgment, order or decree
shall not be vacated or set aside or stayed within sixty (60) days from the date
of the entry thereof; or
(h) Tenant or either of Guarantors shall be liquidated or
dissolved, or shall voluntarily begin proceedings toward such liquidation or
dissolution, or shall, in any manner, permit the sale or divestiture of
substantially all of its assets;
(i) an Event of Default under the terms of the Security
Agreement shall occur and be continuing;
(j) Tenant or either of Guarantors shall fail to make when due
any scheduled payment with respect to indebtedness (other than indebtedness
which is subordinated to this Lease), unless such failure is being diligently
contested in accordance with the requirements of this Lease or any lease
pursuant to which it enjoys
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the use of any real or personal property and such failure shall continue for
five days following its receipt of written advice with respect thereto, if the
effect of such failure is (i) to accelerate the maturity of such indebtedness or
to require the prepayment thereof, (ii) to permit the holder or obligee thereof
(or any trustee on behalf of such holder or obligee) to cause such indebtedness
to become due prior to its stated maturity, (iii) to give the lessor the right
to terminate such lease or (iv) to have a material adverse effect on the
business, operations, properties or condition (financial or otherwise) of Tenant
or Guarantor; provided, however, that such effect in (i), (ii) or (iii) hereto
has a material adverse effect on the business, operations, properties or
condition (financial or otherwise) of Tenant or Guarantor.
(k) any Notification Event described in Section 29.2(c) shall
occur, which is reasonably likely to result in liability to the Tenant or either
of Guarantors having a material adverse effect on the business, operations,
properties or condition (financial or otherwise) of Tenant or either of
Guarantors;
(l) an Event of Default under the terms of the Cornerstone
Lease, the Xxxxxxx Lease or the Xxxxxxx Xxxxx Lease shall occur and be
continuing; or
(m) either Tenant or Signature sells, assigns or transfers a
controlling interest in Tenant or Signature or a controlling interest in
Tenant's operations of the Property (other than as permitted by Section 23 and
Section 29.1(d)) without the prior written consent of Landlord, which consent
shall not unreasonably be withheld.
No Event of Default (other than a failure to make a payment of money)
shall be deemed to exist under clause (d) above during any time the curing
thereof is prevented by an Unavoidable Delay, provided that upon the cessation
of such Unavoidable Delay, Tenant immediately shall remedy such default.
Tenant shall immediately notify Landlord and NHI of the occurrence of
any event set forth in subsections 17.1(b) through (m). Landlord shall provide
identical notice to NHI as it provides to Tenant of any event set forth in
subsection 17.1(a) through (m).
17.2 CERTAIN REMEDIES. Upon any Event of Default, Landlord shall have
all legal, equitable and contractual rights, powers and remedies provided either
in this Lease, at common law or in equity, or by statute or otherwise. Tenant
expressly acknowledges and agrees that the Landlord will also have the right of
injunction in accordance with applicable law.
Without limiting the foregoing, if an Event of Default occurs, is not
cured within the period, if any, for any such cure provided
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in Section 17.1, and is continuing Tenant shall, to the extent permitted by law
and if required by Landlord so to do, immediately surrender to Landlord the
Property and quit the same. Landlord may enter upon and repossess the Property
by reasonable force, summary proceedings, ejectment or otherwise, and may remove
Tenant and all other persons and any and all personal property from the Property
subject to rights of any residents or patients and to any requirement of law. No
such entry or repossession by Landlord shall be deemed an election by Landlord
to terminate this Lease unless specifically stated by Landlord in writing from
Landlord to Tenant. Thereafter Landlord shall use reasonable, good faith efforts
to relet the Property or otherwise mitigate Landlord's damages. Landlord may so
terminate Tenant's right of possession and may repossess the Premises without
liability for trespass or conversion, without demand or notice of any kind to
Tenant and without terminating this Lease, in which event Landlord may, but
shall be under no obligation to, relet the same for the account of Tenant for
such rent and upon such terms as shall be satisfactory to Landlord. For the
purpose of such reletting, Landlord is authorized to decorate or to make any
repairs, changes, alterations, or additions in or to the Premises that may be
necessary or convenient. If Landlord exercises the remedies provided in this
subparagraph, Tenant shall pay to Landlord, and Landlord shall be entitled to
recover from Tenant, an amount equal to the total of the following: (A) unpaid
Rent, plus interest at the Overdue Rate, owing under the Lease for all periods
of time that the Premises are not relet (including any period prior to
Landlord's repossession); plus (B) the reasonable costs of recovering
possession, and all of the reasonable costs and expenses of such decorations,
repairs, changes, alterations, and additions, and the reasonable expense of such
reletting, and of the collection of the rent accruing, therefrom to satisfy the
Rent provided for the Leave to be paid; plus (C) any deficiency in the rentals
and other sums actually received by Landlord from any such reletting from the
Rent required to be paid under this Lease with respect to the periods the
Premises are so relet, and Tenant shall satisfy and pay any such deficiency upon
demand therefor from time to time. Neither the repossession of the Property, the
failure of Landlord to relet the Property, nor the reletting of all or any
portion of the Property, shall relieve Tenant of its liability and obligation
hereunder, all of which shall survive any such repossession or reletting. Tenant
agrees that Landlord may file suit to recover any sums falling due under the
terms of this subparagraph from time to time; and that no delivery or recovery
of any portion due Tenant hereunder shall be a defense in any action to recover
any amount not theretofore reduced to judgment in favor of Landlord, nor shall
such reletting be construed as an election on the part of Landlord to terminate
this Lease unless specifically stated by Landlord in writing from Landlord to
Tenant. Notwithstanding, any such reletting without termination, Landlord may at
any time thereafter elect to terminate this Lease for such previous breach in
accordance with the procedure hereinafter provided.
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Without limiting, the foregoing, whether or not this Lease has been
terminated, Landlord shall have the right to offset against any Rent, damages,
or other sums of money owed by Tenant any advance Rent applicable to any time
period after the occurrence of the Event of Default.
17.3 TERMINATION. Upon the occurrence of any Event of Default, Landlord
may terminate this Lease by giving Tenant not less than ten days' Notice of such
termination during which time Tenant shall have the opportunity to cure any such
Event of Default. Upon the expiration of the time fixed in such Notice, unless
such Event of Default is cured, the Term shall terminate and all rights of
Tenant under this Lease shall cease. Landlord shall have all rights at law and
in equity available to Landlord as a result of Tenant's breach of this Lease. If
any litigation is commenced with respect to any alleged default under this Lease
whether under this Section 17.3 or under Section 17.2, the prevailing party in
such litigation shall receive, in addition to its damages incurred, its
reasonable attorneys' fees, and all costs and expenses incurred in connection
therewith. Neither the termination of this Lease pursuant to this Section 17.3,
the repossession of the Property, the failure of Landlord to relet the Property,
nor the reletting, of all or any portion of the Property, shall relieve Tenant
of its liability and obligations hereunder, all of which shall survive any such
termination, repossession or reletting. Upon any such termination, Tenant shall
forthwith pay to Landlord as damages a sum of money equal to the total of (A)
the costs of recovering the Premises, (B) the unpaid Rent due and payable at the
termination, plus interest thereon at the Overdue Rate, (C) the balance of the
Rent for the remainder of the term less the fair market rental value of the
Premises for such period, and (D) any other sum of money rental owed by Tenant
to Landlord and the amount of other damages suffered by Landlord as a result of
Tenant's default.
17.4 APPLICATION OF FUNDS. Any payments normally made to Tenant
hereunder which are made to and received by Landlord under any of the provisions
of this Lease during the continuance of any Event of Default shall be applied to
Tenant's obligations in the order which Landlord may determine or as may be
prescribed by applicable laws.
17.5 LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. If an Event of Default
occurs under this Lease and is not cured within the time provided under this
Lease with respect to such Event of Default, Landlord, without waiving or
releasing any obligation of Tenant, and without waiving any such Event of
Default, may (but shall be under no obligation to) at any time thereafter cure
such default for the account and at the expense of Tenant, and may, to the
extent permitted by law, enter upon the Property for such purpose and take all
such action thereon as, in Landlord's sole judgment, may be necessary or
appropriate with respect thereto. No such
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entry by Landlord on the Property shall be deemed an eviction of Tenant. All
sums so paid by Landlord and all reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) so incurred,
together with a late charge thereon computed at the Overdue Rate from the date
on which such sums or expenses are paid or incurred by Landlord until the date
reimbursed, shall be reimbursed by Tenant to Landlord on demand. The obligations
of Tenant and rights of Landlord contained in this Article shall survive the
expiration or earlier termination of this Lease.
17.6 NHI'S RIGHT TO CURE. If an Event of Default occurs under this
Lease, NHI may (but shall be under no obligation to) at any time thereafter cure
such default for the account and at the expense of Tenant.
17.7 WAIVER. If this Lease is terminated pursuant to the provisions of
this Article, Tenant waives, to the extent permitted by applicable law, (a) any
right of redemption, re-entry or repossession, (b) any right to trial by jury in
the event of summary proceedings to enforce the remedies set forth in this
Article, and (c) the benefit of any laws now or hereafter enforced exempting,
property from liability for rent or for debt.
ARTICLE XVIII
CURE BY TENANT OF LANDLORD DEFAULTS
Landlord shall be in default of its obligations under this Lease if
Landlord shall fail to observe or perform any term, covenant or condition of
this Lease on its part to be performed, and such failure shall continue for a
period of 30 days after Notice thereof from Tenant (or such shorter time as may
be necessary in order to protect the health or welfare of any patient or other
resident of the Property), unless such failure cannot be cured with due
diligence within a period of 30 days, in which case such failure shall not be
deemed to continue if Landlord, within said 30 day period, proceeds promptly and
with due diligence to cure the failure and diligently completes the curing
thereof. The time within which Landlord shall be obligated to cure any such
failure shall also be subject to extension of time due to the occurrence of any
Unavoidable Delay. If Landlord fails to commence or complete such cure as
provided herein, Tenant may cure such default, and for so long as Tenant
continues to pay Rent, Tenant shall have the right by separate and independent
action to pursue any claim it may have against Landlord for Landlord's failure
to cure such default.
ARTICLE XIX
PURCHASE OF PROPERTY BY TENANT
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19.1 PURCHASE OF THE PROPERTY. If Tenant purchases the Property from
Landlord pursuant to any of the terms of this Lease, Landlord shall, except as
otherwise expressly provided, upon receipt from Tenant of the applicable
purchase price, together with full payment of any unpaid Rent due and payable
with respect to any period ending on or before the date of such purchase,
deliver to Tenant an ALTA Owner Policy of Title Insurance or such equivalent
policy of title insurance as may be available in the State, together with such
endorsements, reinsurance agreements and direct access agreements as Tenant may
reasonably request, together with an appropriate special warranty deed or other
conveyance conveying marketable fee simple title in and to the Property to
Tenant in the condition set forth in Article XXVI, except that the Property
shall be free and clear of all mortgages and encumbrances other than (a) those
Tenant has agreed hereunder to pay or discharge, (b) those mortgages which
Tenant has agreed in writing to accept and to take title subject to on the date
the Property was originally conveyed to Landlord and which are not in default,
(c) encumbrances required to be imposed on the Property under Section 8.3, and
(d) any other encumbrances permitted to be imposed on the Property under the
provisions of Article XXVII which are assumable at no cost or expense to Tenant
or to which Tenant may take subject without cost or expense to Tenant. The
difference between the applicable purchase price and the total amount of the
encumbrances assumed or taken subject to, if a positive number, shall be paid in
cash to Landlord or as Landlord may direct, in federal or other immediately
available funds, unless otherwise mutually agreed by Landlord and Tenant;
provided, Landlord shall be obligated to pay to Tenant in cash any negative
difference between the applicable purchase price and the total amount of the
encumbrances so assumed or taken subject to by Tenant. All reasonable expenses
of conveying the Property to Tenant, including, without limitation, the cost of
the aforementioned title insurance and attorneys' fees incurred by Landlord in
connection with such conveyance and release, and documentary transfer and
similar taxes, recording fees and expenses of Tenant's counsel, shall be paid by
Tenant.
19.2 FAILURE TO CLOSE PURCHASE. The closing of any such sale shall be
contingent upon and subject to Tenant obtaining all required governmental
consents and approvals for such transfer. If such sale shall fail to be
consummated by reason of the inability of Tenant to obtain all such approvals
and consents, then this Lease shall remain in effect on a month-to-month basis
until the consummation of the purchase or until Tenant's inability to obtain the
approvals and consents is confirmed.
ARTICLE XX
HOLDING OVER
If Tenant for any reason remains in possession of the Property after
the expiration or earlier termination of the Term, such
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possession shall be a month-to-month tenancy during which time Tenant shall pay
to Landlord as rental each month one and one half (1-1/2) times the aggregate of
(i) one-twelfth of the aggregate total Base Rent payable with respect to the
last 12-month period of the Term just expired or terminated, (ii) all Additional
Charges accruing during, the month with respect to which such payment relates,
and (iii) all other sums, if any, payable by Tenant pursuant to the provisions
of this Lease with respect to the Property. During such period of month-to-month
tenancy, Tenant shall be obligated to perform and observe all of the terms,
covenants and conditions of this Lease, but shall have no rights hereunder other
than the right, to the extent given by law to month-to-month tenancies, to
continue its occupancy and use of the Property. Nothing contained herein shall
constitute the consent, express or implied, of Landlord to the holding over of
Tenant after the expiration or earlier termination of the Term.
ARTICLE XXI
RISK OF LOSS
During the Term of this Lease, Tenant shall bear the risk of loss or of
decrease in the enjoyment and beneficial use of the Property resulting from the
damage or destruction thereof by fire, the elements, casualties, thefts, riots,
wars or any other cause, or resulting from foreclosures, attachments, levies or
executions (other than those caused by Landlord and those claiming from, through
or under Landlord) and, in the absence of the cross negligence, willful
misconduct or breach of this Lease by Landlord, Landlord shall in no event be
responsible therefor nor shall any of the events mentioned in this Section
entitle Tenant to any abatement of Rent except as specifically provided in this
Lease.
ARTICLE XXII
LIABILITY OF PARTIES
22.1 INDEMNIFICATION BY TENANT. Notwithstanding the existence of any
insurance provided for in Article XIV, and notwithstanding the policy limits of
any such insurance, Tenant shall indemnify, defend, save and hold Landlord
harmless from and against any and all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses ("Claims") (including, without
limitation, reasonable attorneys' fees and expenses), to the extent permitted by
law, imposed upon, incurred by or asserted against Landlord arising out of,
connected with or incidental to:
(a) any Hazardous Substance located at, in, on, under or about the
Property due to the act or omission of Tenant, including any improvements,
repairs, handling, removal or other actions taken by Landlord in order to comply
with all rules and regulations
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promulgated by any applicable federal, state, or local government rule and
regulation with respect to any such Hazardous Substance or related problems that
Landlord becomes aware of;
(b) any accident, injury to or death of persons, or loss of or
damage to property, occurring on or about the Property or adjoining sidewalks,
alleys or roadways, including without limitation any claims of malpractice;
(c) any past, present or future use, misuse, non-use,
condition, management, maintenance or repair by Tenant of the Property or
Tenant's Personal Property and any litigation, proceeding or claim by
governmental entities or other third parties to which Landlord is made a party
or other participant related to the Property or Tenant's Personal Property or
such use, misuse, non-use, condition, management, maintenance or repair thereof,
including but not limited to any failure to perform obligations (other than
condemnation proceedings) to which Landlord is made a party;
(d) any Impositions which are the obligations of Tenant to pay
pursuant to the applicable provisions of this Lease:
(e) any failure on the part of Tenant to perform or comply
with any of the terms of this Lease; and
(f) the non-performance of any of the terms and provisions of
any and all existing, and future subleases of the Property to be performed by
Tenant thereunder.
22.2 INDEMNIFICATION BY LANDLORD. Landlord shall indemnify, defend,
save and hold Tenant harmless from and against any and all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) imposed
upon, incurred by or asserted against Tenant arising out of, connected with or
incidental to the sole or gross negligence or willful misconduct of Landlord;
provided, however, that Tenant's right to indemnification as provided herein,
shall be subject to the limitation set forth in Article XXVIII.
22.3 CONTINUING LIABILITY. Tenant's and Landlord's liability under this
Article shall survive any termination of this Lease and shall continue for the
term provided herein or as permitted by the laws of the State, whichever is
longer.
ARTICLE XXIII
ASSIGNMENT
23.1 ASSIGNMENT AND SUBLETTING. Subject to the provisions of Section
23.3 below and any other express conditions or limitations
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set forth in this Lease, Tenant may, without the consent of Landlord, (i) sublet
up to an aggregate of 25% of the rentable square footage of the Facility, to
concessionaires or other third party users or operators thereof, provided that
any subletting to any party shall not individually as to any one such
subletting, or in the aggregate, materially diminish the actual or potential
Additional Rent payable under this Lease or (ii) assign its rights hereunder to
a joint venture or partnership in which Tenant holds a controlling interest and,
in the case of a partnership, Tenant is a general partner. Except as otherwise
permitted in the immediately preceding sentence, a conveyance, transfer,
assignment or subletting of all or any portion of the Property shall not be
permitted unless the consent of Landlord is first obtained; provided, however,
that Landlord hereby acknowledges notice that NHI has a lien on Tenant's
leasehold estate under this Lease, and hereby consents to NHI or any nursing
home affiliate thereof becoming the Tenant hereunder upon any foreclosure of
such lien. Such consent by Landlord will not be unreasonably withheld if (x) the
assignee assumes all obligations of Lessee under the Lease in a writing in form
and content reasonably acceptable to Landlord, (y) such assignee meets the
financial covenants applicable to Tenant hereunder and demonstrates such fact to
Landlord's reasonable satisfaction, and (z) no Event of Default is in effect and
continuing hereunder. Landlord shall not unreasonably withhold its consent to
any subletting or assignment, provided that the assignee or sublessee has a
financial condition comparable to the greater of (i) Tenant's financial
condition as of the Commencement Date or (ii) Tenant's financial condition as of
the date of the proposed assignment or subletting and (w) in the case of a
subletting the sublessee shall comply with the provisions of Section 23.2, (x)
in the case of an assignment, (i) the assignee assumes in writing and agrees to
keep and perform all of the terms of this Lease on the part of Tenant to be kept
and performed, (ii) the assignee complies with the covenants set forth in
Section 28 hereof, (iii) the assignment causes no violation of any other
covenants under this Lease by Tenant or the assignee, and (iv) the assignee
becomes jointly and severally liable with Tenant for the performance thereof,
(y) an original counterpart of each such sublease and assignment and assumption,
duly executed by Tenant and such sublessee or assignee, as the case may be, in
form and substance satisfactory to Landlord, is delivered promptly to Landlord,
and (z) in case of either an assignment or subletting, Tenant remains primarily
liable, as principal rather than as surety, for the prompt payment of Rent and
for the performance and observance of all covenants and agreements to be
performed by Tenant hereunder. Tenant shall not, without Landlord's approval,
which Landlord may not unreasonably withhold, permit any person other than its
Affiliates, to own at any time 50% or more of the beneficial interest in Tenant.
23.2 ATTORNMENT. Tenant shall insert in each sublease permitted under
Section 23.1 provisions reasonably satisfactory to
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Landlord which provide for the benefit of Landlord that (a) such sublease is
subject and subordinate to all of the terms and provisions of this Lease and to
the rights of Landlord hereunder, (b) in the event this Lease shall terminate
before the expiration of such sublease, the sublessee thereunder will, at
Landlord's option, either attorn to Landlord and waive any right the sublessee
may have to terminate the sublease or surrender possession under such sublease,
and (c) in the event the sublessee receives Notice from Landlord or Landlord's
assignees, if any, stating that Tenant is in default under this Lease, the
sublessee shall thereafter be obligated to pay all rentals accruing under said
sublease directly to the party Giving such Notice, or as such party may
otherwise direct. All rentals received from the sublessee by Landlord or
Landlord's assignees, if any, as the case may be, shall be credited against the
amounts owed to Landlord under this Lease.
23.3 SUBLEASE LIMITATION. Anything contained in this Lease to the
contrary notwithstanding, Tenant shall not sublet the Property on any basis such
that the rental to be paid by the sublessee thereunder would be based, in whole
or in part, on either (a) the income or profits derived by the business
activities of the sublessee, or (b) any other formula such that any portion of
the sublease rental would fall to qualify as "rents from real property" within
the meaning of Section 856(d) of the Code, or any similar or successor provision
thereto.
ARTICLE XXIV
INFORMATION FROM TENANT
24.1 OFFICER'S CERTIFICATES. At any time and from time to time, upon
not less than 20 days Notice by Landlord, Tenant shall furnish to Landlord an
Officer's Certificate certifying that this Lease is unmodified and in fall force
and effect (or that this Lease is in full force and effect as modified and
setting forth the modifications), the date to which the Rent has been paid,
whether there exists any Event of Default or any situation which, with the
giving of notice, passage of time, or both, would constitute an Event of Default
hereunder based upon Tenant's current knowledge, whether Tenant contends that
Landlord is in default hereunder, and if Tenant so contends, the basis for such
contention, the date upon which the Term terminates, and such other information
as Landlord reasonably may request. Any such certificate furnished pursuant to
this Section 24.1 may be relied upon by Landlord, any prospective purchaser of
the Property, and any Facility Mortgagee or Landlord Lender.
24.2 FINANCIAL INFORMATION. Tenant shall furnish, the following
statements to Landlord:
(a) within 120 days after the end of each Fiscal Year, a
balance sheet and statements of revenues and expenses and changes
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in retained earnings and cash flows for Tenant, certified by independent public
accountants of recognized standing acceptable to Landlord, such statements to be
prepared in accordance with generally accepted accounting principles
consistently applied, to be for such Fiscal Year and the immediately preceding
Fiscal Year and to be in comparative columnar form; within 90 days after the end
of each Fiscal Year, Tenant shall provide unaudited preliminary financial
statements similar to those referred to above;
(b) within 120 days after the end of each Fiscal Year, a
schedule of capital expenditures or reserves therefor of Tenant for such Fiscal
Year as required by Section 29.2(a)(1) hereof;
(c) within 45 days after the end of each of the first three
fiscal quarters of each Fiscal Year, financial statements similar to those
referred to in clause (a) above, but only certified by the principal financial
or other appropriate officer of Tenant, as having been prepared in accordance
with generally accepted accounting principles consistently applied (but which
may exclude footnote disclosures), such financial statements to be for the
period from the beginning of such Fiscal Year (and immediately preceding Fiscal
Year) to the end of such quarter (and comparable quarter);
(d) concurrent with the statements furnished pursuant to
clauses (a) and (b) above, an Officer's Certificate stating that, after making,
due inquiry, Tenant is not in default in the performance or observance of any of
the terms of this Lease, or if Tenant shall be in default to its knowledge,
specifying all such defaults, the nature of such defaults, and the steps being
taken to remedy the same;
(e) within 30 days after the end of each month, financial
statements similar to those referred to in clause (a) together with operating
statistics but only certified by the principal financial or other appropriate
officer of Tenant, as having been prepared in accordance with generally accepted
accounting principles consistently applied; and
(f) with reasonable promptness, such other information
respecting the financial condition and affairs of Tenant as Landlord may
reasonably request from time to time.
24.3 LICENSING INFORMATION. Tenant shall promptly furnish to Landlord
complete copies of all surveys, examinations, inspections, compliance
certificates and similar reports of any kind issued to Tenant by any
governmental agencies or authorities having jurisdiction over the licensing of
the operation of the Property which are material to the Property or the
Facility, their ownership or operation.
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ARTICLE XXV
APPRAISALS OF THE PROPERTY AND OPTIONS
25.1 APPRAISERS. If at any time it becomes necessary to determine the
Fair Market Value, Fair Market Value Purchase Price or Fair Market Rental of the
Property for any purpose under this Lease, and the parties are unable to agree
thereupon, the party required or permitted to give Notice of such required
determination shall include in the Notice the name of a person selected to act
as appraiser on its behalf. Within ten days after such Notice, Landlord or
Tenant, as the case may be, shall by Notice to Tenant or Landlord, as the case
may be, either agree to the appointment of the appraiser identified in such
initial Notice, in which case such appraiser shall be the sole appraiser for
purposes of determining the Fair Market Value, Fair Market Value Purchase Price
or Fair Market Rental, as the case may be, or shall appoint a second person as
an appraiser on its behalf. Any appraiser appointed pursuant to this Section
must be a member of the American Institute of Real Estate Appraisers (or any
successor organization thereto). The appraiser(s) thus appointed shall, within
45 days after the date of the Notice appointing the first appraiser, proceed to
appraise the Property to determine the Fair Market Value, Fair Market Value
Purchase Price or Fair Market Rental thereof (as the case may be) as of the
relevant date (giving effect to the impact, if any, of inflation from the date
of their decision to the relevant date). In the case of two appraisers, except
as provided in Section 25.2, the two appraisals shall be averaged to determine
the Fair Market Value, Fair Market Value Purchase Price or Fair Market Rental,
as the case may be. In any event, the appraised value determined in accordance
with this Section shall be final and binding on Landlord and Tenant.
25.2 METHOD OF APPRAISAL. Any appraisal required or permitted by the
terms of this Lease shall be conducted in a manner consistent with sound
appraisal practice, taking into account each of the income, market and cost
appraisal methodologies. Notwithstanding the provisions of Section 25.1, if the
difference between the appraisal amounts determined by the appraisers appointed
pursuant to Section 25.1 exceeds ten percent of the lesser of such appraisal
amounts, then the two appraisers shall have 20 days to appoint a third
appraiser. If no such appraiser is appointed within such 20 days or within 90
days of the original request for a determination of Fair Market Value, Fair
Market Value Purchase Price or Fair Market Rental (as the case may be),
whichever is earlier, either Landlord or Tenant may apply to any court having
jurisdiction to have such appointment made by such court. Any appraiser
appointed by the original appraisers or by such court shall be instructed to
determine the Fair Market Value, Fair Market Value Purchase Price or Fair Market
Rental (as the case may be) within 45 days after the appointment of such
appraiser. The determination of the three appraisers which differs most in the
terms of dollar amount from the determinations of the other two
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appraisers shall be excluded, and 50% of the sum of the remaining two
determinations shall be the appraised value, which appraised value shall be
final and binding upon Landlord and Tenant as the Fair Market Value, Fair Market
Value Purchase Price or Fair Market Rental of the Property, as the case may be.
If the lowest and highest appraised values are equidistant in amount from the
middle appraised value, then such middle appraised value shall be the Fair
Market Value, Fair Market Value Purchase Price or Fair Market Rental (as the
case may be). The provisions of this Article shall be specifically enforceable
to the extent such remedy is available under applicable law, and any
determination hereunder shall be final and binding, upon the parties except as
otherwise provided by applicable law. Landlord and Tenant each shall pay the
fees and expenses of the appraiser appointed by it, and each shall pay one-half
of the fees and expenses of the third appraiser and one-half of all other costs
and expenses incurred in connection with each appraisal.
ARTICLE XXVI
OPTIONS TO PURCHASE
26.1 LANDLORD'S OPTION TO PURCHASE TENANT'S PERSONAL PROPERTY; TRANSFER
OF LICENSES. Provided Tenant has not exercised its option pursuant to Section
26.2 hereof, effective upon not less than ninety (90) days prior notice given at
any time within one hundred eighty (180) days prior to the expiration of the
Term of this Lease, or upon such shorter Notice as shall be reasonable if this
Lease is terminated prior to its expiration date, Landlord shall have the option
to purchase all (but not less than all) of Tenant's Personal Property, if any,
at the expiration or termination of this Lease, for an amount equal to the then
fair market value thereof, taking into account and with appropriate price
adjustments for, all equipment leases, conditional sale contracts, UCC-1
financing statements and other encumbrances to which such Tenant's Personal
Property is subject. Upon the expiration or termination of the Lease and such
purchase by Landlord, Tenant shall use good faith efforts, at Landlord's sole
cost and expense, to transfer and assign to Landlord or its designee, or assist
Landlord or its designee in obtaining, any contracts, licenses, and certificates
required for the then operation of the Facility.
26.2 TENANT'S OPTION TO PURCHASE THE PROPERTY. Provided no Event of
Default specified in Section 17.1(a) hereof nor any other material Event of
Default has occurred and is continuing, and provided Tenant simultaneously
exercises its option to purchase the Properties subject to the other Leases,
Tenant shall have the option exercisable on not less than one hundred eighty
(180) days nor more than three hundred sixty (360) days Notice to purchase the
Property, at the expiration of the Fixed Term, or at the expiration of any
Extended Term, at the greater of (y) the Fair Market Value of the Property as of
the date specified for transfer of the
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Property in such Notice or (z) the Total Investment Cost. Any such purchase of
the Property by Tenant will constitute a Sale, and will be subject to the
indemnification provisions of Section 22.1 hereof. Upon exercise by Tenant of
its option to purchase the Property, Landlord shall, at the election of Tenant,
either convey the Property as a sale of assets or as a sale of the stock of a
corporation whose sole assets consist of the Property.
If Tenant shall timely and properly exercise the foregoing option, the
sale of the Property shall be consummated through an escrow to be opened with a
mutually acceptable title or escrow company and shall close within ten Business
Days following the expiration of the Fixed Term or Extended Term in connection
with which Tenant exercised such purchase option. The purchase price of the
Property (net of the principal balance of any Facility Mortgage placed on the
Property by Landlord and expressly assumed by Tenant) shall be deposited into
escrow by wire transfer of Federal Funds at least two business days prior to
close of escrow and shall be paid to Landlord at close of escrow by wire
transfer of Federal Funds to such account as Landlord shall designate. Tenant
acknowledges and agrees that it shall purchase the Property from Landlord "AS
IS" and subject to all faults, defects in title and other matters whatsoever,
including, but not limited to, all matters of record other than Facility
Mortgage not expressly assumed by Tenant and any other liens, encumbrances,
attachments, levies or claims encumbering, at the instance of Landlord, the
Property, all of which shall be removed of record prior to purchase. Landlord
shall be conclusively deemed not to have made any warranty or representation
regarding the title, condition or other status of the Property. All title
insurance premiums and other closing costs associated with the purchase of the
Property by Tenant pursuant to this Section shall be paid by Tenant.
26.3 TENANT'S RIGHT OF FIRST REFUSAL. In the event that at any time
during the Term or the Extended Term, Landlord should receive an offer to
acquire its interest in the whole or any portion of the Property, and if such
offer is acceptable to Landlord, or if Landlord should make an offer to sell,
convey or transfer the whole or any portion of its interest in the Property, the
Tenant shall have, and Landlord does hereby grant to Tenant, the right of first
refusal to acquire Landlord's interest in the Property under the same terms and
conditions as such offer; provided, however, that if such offer to acquire or to
sell, convey or transfer all or any portion of the Property is part of an offer
to acquire other property from Landlord, in addition to all or any portion of
the Landlord's interest in the Property, Tenant may exercise the right of first
refusal granted in this Section 26.3 only by agreeing, to acquire all of the
property which is the subject of the offer on the same terms, conditions and
payment timetable as in the original offer. Upon receipt of any such acceptable
offer or upon transmittal of any offer, Landlord shall certify a complete, true
and correct copy of such offer to Tenant
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including all of the terms thereof. Tenant shall have a period of 20 days from
the date of the receipt of such certification to exercise such right of first
refusal by Notice to Landlord within such period. Failure to exercise the right
with respect to any particular offer shall not terminate the right with respect
to any other offer. If Tenant refuses to acquire the Property pursuant hereto
and Landlord sells the Property to a third party, such sale shall provide that
it is subject to the rights of Tenant under this Lease.
ARTICLE XXVII
FACILITY MORTGAGE
Without the consent of Tenant, Landlord may, subject to the terms and
conditions set forth below in this Section, from time to time, directly or
indirectly, create or otherwise cause to exist any lien, encumbrance, security
interest or title retention agreement ("Encumbrance") upon the Property, or any
portion thereof or interest therein, whether to secure any borrowing or other
means of financing or refinancing provided that the principal amount of such
borrowing, financing or refinancing does not exceed 80% of the then Fair Market
Value of the Property. Any such Encumbrance (i) shall contain the right to
prepay (whether or not subject to a prepayment penalty, which penalty shall be
paid by Landlord), (ii) shall provide that it is subject to the rights of Tenant
under this Lease, including the rights of Tenant to acquire the Property
pursuant to the applicable provisions of this Lease, provided, however, that
Tenant agrees that it will not unreasonably withhold its consent to any request
by Landlord that Tenant subordinate this Lease to any mortgage or deed of trust
that may hereafter from time to time be recorded on the Property, and to any and
all advances made or to be made thereunder, and to renewals, replacements and
extensions thereof and (iii) shall be paid in full and released and reconveyed
in the event Tenant purchases the Property pursuant to this Lease, unless Tenant
elects to assume such Encumbrance. Any such subordination, however, shall be
subject to the condition precedent that the mortgagee under such mortgage or the
beneficiary under such deed of trust enter into a written nondisturbance and
attornment agreement with Tenant, in form and content satisfactory to Tenant,
whereunder it is agreed that in the event of a sale or foreclosure under such
mortgage or deed of trust, the purchaser of the Property (including the
mortgagee or beneficiary under such mortgage or deed of trust), shall acquire or
hold the Property subject to this Lease so long as Tenant is not in default
hereunder, and so long as Tenant recognizes such purchaser as the landlord under
this Lease and agrees, if requested to do so, to attorn to such purchaser and,
if instructed to do so by such purchaser, to make rental payments directly to
it.
ARTICLE XXVIII
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LIMITATION OF LIABILITY
Tenant specifically agrees that neither AHP nor Landlord nor any
officer, shareholder, employee or agent of AHP or Landlord (each of which shall,
for purposes of this Article XXVIII, be considered an Affiliate of Landlord)
shall be held to any personal liability, jointly or severally, for any
obligation of, or claims against Landlord, Tenant agreeing to look solely to
Landlord's equity interest in the Property for recovery of any judgment from
Landlord. The provisions contained in the foregoing sentence are not intended
to, and shall not, limit any right that Tenant might otherwise have to obtain
injunctive relief against Landlord or Landlord's successors in interest, or any
action not involving the personal liability of Landlord (original or successor).
In no event shall Landlord (original or successor) or any Affiliate of Landlord
be required to respond in monetary damages from Landlord's assets other than
Landlord's equity interest in the Property. Furthermore, except as Otherwise
expressly provided herein, in no event shall Landlord or any Affiliate of
Landlord (original or successor) ever be liable to Tenant for any indirect or
consequential damages suffered by Tenant from whatever cause.
ARTICLE XXIX
ADDITIONAL COVENANTS OF TENANT
29.1 ADDITIONAL NEGATIVE COVENANTS. Tenant covenants and agrees with
Landlord that, during the Term hereof, Tenant shall not, either directly or
indirectly:
(a) LIENS. Incur, create, assume or permit to exist any mortgage,
pledge, lien, charge or other encumbrance of any nature whatsoever (including
conditional sales or other title retention agreements) on any property or other
assets now owned or hereafter acquired by Tenant, including, but not limited to,
Tenant's leasehold interest under this Lease and Tenant's Personal Property,
other than:
(i) deposits or pledges to secure payment of workmen's
compensation, unemployment insurance, old age pensions or other social security;
(ii) liens for taxes or assessments or other governmental
charges or levies if not yet due and payable, or if in good faith being
contested or litigated, provided that a reserve against such taxes, assessments,
charges and levies deemed adequate by Landlord shall be maintained and Tenant
shall furnish security reasonably satisfactory to Landlord for the payment of
such taxes, assessments, charges and levies;
(iii) liens in favor of Landlord or NHI;
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(iv) purchase money security interests securing the payment of
not more than 75% of the purchase price of any item of personal property;
(v) security interests in accounts receivable under working
capital lines of credit securing indebtedness not exceeding 80% of the net book
value of such accounts receivable;
(vi) judgments and other similar liens, provided that the
execution or other enforcement of such liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings in accordance with the requirements of this Lease;
(vii) liens constituting renewals, extensions or replacements
of liens described in the foregoing clauses, but only, in the case of each such
renewal, extension or replacement lien, to the extent of the principal amount of
the obligation so secured at the time of the extension, renewal or replacement,
and to the extent that such renewal, extension or replacement lien is limited to
all or part of the property that secured the lien extended, renewed or replaced;
and
(viii) liens being, contested in accordance with the
provisions of Article XIII.
(b) CASH FLOW COVERAGE RATIO. Unless Tenant is in full compliance
with the provisions of Section 3.1 of the Security Agreement, Tenant shall not
permit the ratio of: (a) Cash Flow to (b) Total Rent reserved for any calendar
quarter to be less than 1.75 to one; provided, however, that the failure to
maintain either of such ratios shall not constitute an event of default if the
Lease Reserve Fund is (i) then maintained in an amount equal to six months
Initial Base Rent or (ii) reinstated to an amount equal to six months Initial
Base Rent within thirty (30) days after Tenant delivers to Landlord financial
statements indicating such failure.
(c) SALE OF ASSETS. Sell, lease, transfer or otherwise dispose of
all or any substantial part of its properties or assets, except for (x)
properties that are no longer useful in its business or have been replaced and
(y) during any 12-month period, Properties with an aggregate market value of up
to $500,000.
(d) CONSOLIDATION OR MERGER. Consolidate with or merge into any
other corporation or partnership or permit any other corporation or partnership
to merge into it unless after giving pro forma effect to the merger, based on
its and the disappearing corporation's financial statements for, in each case,
its most recently completed fiscal year or quarter, there is no violation of any
of the covenants of this Lease to be observed or performed by Tenant.
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(e) GUARANTEES. Guarantee or otherwise incur liability for the
obligations of others except for endorsement of negotiable instruments for
deposit or collection.
(f) DIVIDENDS. Declare or pay any dividend or make any distribution
unless (i) Tenant is not in default under the Lease and (ii) the Lease Reserve
Fund is maintained in an amount equal to six months Initial Base Rent, or,
Signature shall have a Tangible Net Worth of not less than $5,000,000.
(g) MANAGEMENT FEE. Pay any person or entity a management or
advisory fee in connection with the management and operation of the Facility in
any Fiscal Year unless Tenant is not in default under the Lease and the
obligation to pay such management fee is subordinated to the payment obligations
under the Lease and such person or entity provides a guaranty of the obligations
of the Leases.
29.2 ADDITIONAL AFFIRMATIVE COVENANTS. Tenant covenants and agrees with
Landlord that, during the Term hereof, Tenant shall:
(a) Maintenance of Properties and Intangible Assets.
(i) Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence and, except as permitted
in Section 29.1(d), with such exceptions, if any, as are not material in the
aggregate, to obtain and, having obtained, preserve, renew and keep in full
force and effect all customary accreditation, rights, licenses and permits and,
with such exceptions, if any, as are not material in the aggregate, comply with
all laws and regulations applicable to it and conduct and operate the Facility
in substantially the manner, with such changes as may from time to time be
considered by management as necessary or appropriate, in which it is presently
conducted and operated, and at all times, with such exceptions as are not
material in the aggregate, to obtain, maintain, preserve and protect all
necessary franchises, provide agreements, contract rights, trademarks and trade
names used or useful in its operations and preserve all its assets which are
used or useful in the conduct of its operations, and keep the same in working
order and condition, and, with such exceptions as are not material in the
aggregate, from time to time to make, or cause to be made, all necessary
repairs, renewals, replacements, betterments and improvements thereto, so that
the operation of the Facility may be properly and advantageously conducted at
all times. Tenant shall maintain the Facility in good condition and repair
pursuant to an annual capital expenditure budget or reserve of not less than
$300 per Facility bed with any such reserves to be expended within three years
of the reserve, and all such reserves to be expended during the Term. Without
limiting the Generality of the foregoing, Tenant shall use or cause the Property
to be used for the Primary Intended Use and only for such other uses as may be
necessary in connection
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with or incidental to said use or as may be agreed to by Landlord in its sole
and absolute determination. With such exceptions as are not material in the
aggregate, no use shall be made or permitted to be made of the Property and no
acts shall be done which violate any Legal Requirements or Insurance
Requirements or which will cause the cancellation of any insurance policy
covering the Property or any part thereof or any provider agreements. Tenant
shall comply in all material respects with all Legal Requirements and all of the
requirements pertaining to the Property of any insurance board, association,
organization or company necessary for the maintenance of the insurance required
pursuant to this Lease.
(ii) Tenant, immediately upon obtaining knowledge of facts
which are reasonably likely to result in an action by any Federal, state or
local agency (or the staff thereof) to revoke, withdraw or suspend any permit,
license, conditional use permit, variance certificate, certificate of need,
letter of nonreviewability, provider agreement or other governmental approval,
or an action of any other type, which would have a material adverse effect on
the Tenant or the operations of the Facility, shall notify the Landlord thereof
immediately.
(b) OBLIGATIONS AND TAXES. With such exceptions as are not material
individually or in the aggregate, none of which exceptions results in the
creation of a lien prohibited by this Lease on any property of Tenant, pay all
indebtedness and obligations in accordance with customary trade practices and
pay and discharge promptly all taxes, assessments and governmental charges or
levies imposed on it or upon its income and profit, or upon any of its property,
real, personal or mixed, or upon any part thereof, before the same shall become
in default, as well as pay before they shall become in default all lawful claims
for labor, material and supplies or otherwise which, if unpaid, might become a
lien or charge upon such Property or any part thereof.
(c) PENSION PLANS. Tenant shall notify Landlord within ten business
days of the occurrence of any of the following events ("NOTIFICATION EVENTS")
with respect to Tenant's Plans and within ten days of obtaining knowledge of any
Notification Event with respect to Plans of its Affiliates: (i) the termination
of a Plan, unless such Plan can be terminated without material adverse effect on
the business, properties or condition (financial or otherwise) of Tenant or its
Affiliates; (ii) the failure to make contributions to any of Tenant's Plans
(including any Multiemployer Plans) in a timely manner and in sufficient amount
to comply with the requirements of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"); (iii) the failure to comply with all material
requirements of ERISA and the Code which relate to such Plans and Multiemployer
Plans (as defined by ERISA), the failure with which to comply would have a
material adverse effect on the business, properties or condition (financial or
otherwise) of
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Tenant or its Affiliates; (iv) receipt by Tenant of any notice of the
institution of any proceeding or other action which may directly result in the
termination of any Plans or Multiemployer Plans; (v) a Termination Event or
Reportable Event (as defined by ERISA) with respect to a Plan; and (vi) any
event or condition which would cause the lien provided for in Section 4068 of
ERISA to attach to the assets of Tenant. Tenant shall not fail to make any
payments to any Multiemployer Plan that Tenant may be required to make under any
agreement relating to any Multiemployer Plan, ERISA or any other law pertaining
thereto, except for any payments being contested in good faith in accordance
with Article XIII with respect to which Tenant has established adequate reserves
or which, if not made, would not have a material adverse effect on the business,
properties or condition (financial or otherwise) of Tenant or its Affiliates.
29.3 SECURITY FOR THE LEASE.
(a) SECURITY AGREEMENT. On or before the Commencement Date, Tenant
shall execute and deliver to Landlord the Security Agreement.
(b) ABSOLUTE ASSIGNMENT. Tenant shall, on or before the
Commencement Date, execute and deliver to Landlord an absolute assignment of
subleases and rents pursuant to which Tenant shall assign to Landlord, subject
to a license to Tenant to retain so long as no Event of Default is continuing,
all of Tenant's rights, title and interest in any subleases and assignments
permitted under this Lease and the proceeds thereof.
(c) LEASE RESERVE FUND. As security for the timely and faithful
performance by Tenant of each and every one of Tenant's obligations under this
Lease, Tenant shall, on the Commencement Date and thereafter as provided in
Section 3.1 of the Security Agreement, create and maintain the Lease Reserve
Fund referred to in Section 3.1 of the Security Agreement in an amount equal to
six months Initial Base Rent (the "Lease Reserve Fund"). Notwithstanding any
contrary provision of this Section 29.3(c), Tenant shall maintain the Lease
Reserve Fund in a reduced amount equal to the amount of the Initial Base Rent
for three months, if, for each of the four consecutive full calendar quarters
most recently completed (during the Term), (i) (x) Tenant's Cash Flow is at
least 1.75 times (y) Total Rent, (ii) Guarantors' Cash Flow is at least 2.5
times Fixed Charges, and (iii) Guarantors have maintained a tangible net worth
of at least $5,000,000, all as reflected in financial statements prepared in
accordance with generally accepted accounting principals as set forth in an
Officer's Certificate delivered not later than sixty (60) days after the end of
such most recent quarter. Such Officer's Certificate shall be accompanied by an
appropriate cash flow statement and a compilation report thereon, without
material qualification, of Tenant's independent public accountants. If
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Tenant delivers financial information to Landlord pursuant to Section 24.2
hereof which indicates that Tenant has failed to maintain the financial
conditions therein and herein for the most recent period of two consecutive
calendar quarters, Tenant shall within ten (10) business days reinstate the
Lease Reserve Fund to the full amount of six months Initial Base Rent, and
Tenant's failure so to do shall be deemed an immediate Event of Default
hereunder, without requirement of demand therefor by Landlord or the giving of
any Notice, and, in such event, Landlord shall have the right to draw the entire
balance of the Lease Reserve Fund and apply the proceeds against any obligation
or obligations of Tenant hereunder in such amount or amounts as Landlord, in its
sole discretion, shall decide and exercise any other remedies permitted Landlord
hereunder, at law or in equity. Landlord shall not be deemed to hold the Lease
Reserve Fund in trust, but shall not commingle such funds with other assets of
Landlord. Tenant shall not be entitled, to any interest with respect, to any
such funds held by Landlord.
ARTICLE XXX
MISCELLANEOUS
30.1 LANDLORD'S RIGHT TO INSPECT. Landlord and its authorized
representatives may, at any time and from time to time, upon reasonable notice
to Tenant, inspect the Property during usual business hours subject to any
security, health, safety or patient business confidentiality requirements of
Tenant or any governmental agency, or created by any Insurance Requirement or
Legal Requirement relating, to the Property.
30.2 NO WAIVER. No failure by Landlord or Tenant to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
provided hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such breach, shall constitute a waiver of any such breach
or of any such term. To the extent permitted by applicable law, no waiver of any
breach shall affect or alter this Lease, which shall continue in full force and
effect with respect to any other then existing or subsequent breach.
30.3 REMEDIES CUMULATIVE. To the extent permitted by law, each legal,
equitable or contractual right, power and remedy of Landlord or Tenant now or
hereafter provided either in this Lease or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power
and remedy the exercise or beginning of the exercise by Landlord or Tenant of
any one or more of such rights, powers and remedies shall not preclude the
simultaneous or subsequent exercise by Landlord or Tenant of any or all of such
other rights, powers and remedies.
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30.4 ACCEPTANCE OF SURRENDER. No surrender to Landlord of this Lease or
of all or any portion of or interest in the Property shall be valid or effective
unless agreed to and accepted in writing by Landlord, and no act by Landlord or
any representative or agent of Landlord, other than such a written acceptance by
Landlord, shall constitute an acceptance of any such surrender by Tenant.
30.5 NO MERGER OF TITLE. There shall be no merger of this Lease or of
the leasehold estate created hereby if the same person, firm, corporation or
other entity acquires, owns or holds, directly or indirectly, this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, and the fee estate in the Property.
30.6 CONVEYANCE BY LANDLORD. If Landlord or any successor owner of the
Property conveys the Property in accordance with the terms hereof (other than as
security for a debt), and the grantee or transferee of the Property expressly
assumes all obligations of Landlord hereunder arising or accruing, from and
after the date of such conveyance or transfer, Landlord or such successor owner,
as the case may be, thereupon shall be released from all liabilities and
obligations of Landlord under this Lease.
If Tenant assigns the Lease in accordance with the terms hereof,
Landlord consents to such assignment pursuant to Section 23.1 and the assignee
expressly assumes all obligations of Tenant hereunder arising or accruing from
and after the date of such conveyance or transfer, Tenant and Guarantors
thereupon shall be released from their respective liabilities and obligations of
Tenant under this Lease.
30.7 QUIET ENJOYMENT. So long as Tenant pays all Rent as the same
becomes due and fully complies with all of the terms of this Lease and fully
performs its obligations hereunder, Landlord warrants, represents and covenants
that Tenant shall peaceably and quietly have, hold and enjoy the Property for
the Term hereof, free of any claim or other action by Landlord or anyone
claiming, by, through or under Landlord, but subject to all liens and
encumbrances of record as of the date hereof or hereafter consented to by
Tenant. Except as otherwise provided in this Lease, no failure by Landlord to
comply with the foregoing covenant shall give Tenant any right to cancel or
terminate this Lease or xxxxx, reduce or make a deduction from or offset against
the Rent or any other sum payable under this Lease, or to fail or refuse to
perform any other obligation of Tenant hereunder. Notwithstanding the foregoing,
Tenant shall have the right, by separate and independent action, to pursue any
claim it may have against Landlord as a result of a breach by Landlord of the
covenant of quiet enjoyment contained in this Section.
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30.8 NOTICES. All notices, demands, requests, consents, approvals and
other communications ("NOTICE" or "NOTICES") hereunder shall be in writing and
delivered by personal delivery, courier or messenger service, express or
overnight mail, or by registered or certified mail, return receipt requested and
postage prepaid, addressed to the respective parties as follows:
If to Tenant: Cornerstone Care, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
If to Landlord: AHP of Colorado, Inc.
c/o American Health Properties, Inc.
0000 Xxxxx Xxxxxxx'x Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
If to NHI: National Health Investors, Inc.
City Center
000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxx 00000
or to such other address as either party may hereafter designate. Personally
delivered Notices sent by courier or messenger service or by express or
overnight mail shall be effective upon receipt, and Notices given by mail shall
be complete at the time of deposit in the U.S. mail system, but any prescribed
period of Notice and any right or duty to do any act or make any response within
any prescribed period or on a date certain after the service of such Notice
given by mail shall be extended five (5) days.
30.9 SURVIVAL OF TERMS; APPLICABLE LAW. Anything contained in this
Lease to the contrary notwithstanding, all claims against, and liabilities of,
Tenant or Landlord arising prior to any date of termination of this Lease shall
survive such termination for two years, except for third party claims based on
alleged tortious actions and omissions of Tenant during the term of this Lease,
which third party claims shall survive the term of this Lease. If any term or
provision of this Lease or any application thereof shall be invalid or
unenforceable for any reason whatsoever, the remainder of this Lease and any
other application of such term or provisions shall not be affected thereby. If
any late charge or any interest rate provided for in any provision of this Lease
based upon a rate in excess of the maximum rate permitted by applicable law,
such charges shall be fixed at the maximum permissible rate. Neither this Lease
nor any provision hereof may be changed, waived, discharged, modified or
terminated except by an instrument in writing and in recordable form, signed by
Landlord and Tenant. Subject to any limitations on assignment contained in this
Lease, all the terms and provisions of this Lease shall be binding upon
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and inure to the benefit of the parties hereto and their respective successors
and assigns. The headings in this Lease are for convenience of reference only
and shall not limit or otherwise affect the meaning, hereof. THIS LEASE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO,
BUT NOT INCLUDING ITS CONFLICTS OF LAWS RULES.
30.10 EXCULPATION OF LANDLORD'S OFFICERS AND AGENTS. This Lease is made
on behalf of Landlord by an officer thereof, not individually, but solely in his
capacity in such office as authorized by the directors of Landlord pursuant to
its by-laws. The obligations of this Lease are not binding upon, nor shall
resort be had to, the private property of any of the directors, shareholders,
officers, employees or agents of Landlord personally, but bind only Landlord's
property. The provision contained in the foregoing sentence is not intended to,
and shall not, limit any right that Tenant might otherwise have to obtain
injunctive relief against Landlord or Landlord's successors in interest, or any
action not involving the personal liability of the directors, Shareholders,
officers, employees or agents of Landlord. Except as otherwise expressly
provided herein, in no event shall Landlord ever be liable to Tenant for any
indirect or consequential damages suffered by Tenant from whatever cause.
30.11 TRANSFERS FOLLOWING TERMINATION. Upon the expiration or earlier
termination of the Term, Tenant shall use good faith efforts to transfer to
Landlord or Landlord's nominee, or to cooperate with Landlord or Landlord's
nominee in connection with the processing by Landlord or Landlord's nominee of
any applications for, all licenses, operating permits and other Governmental
authorizations and all contracts (including contracts with governmental or
quasi-governmental entities) which may be necessary for the operation of the
Facility; provided, however, that the costs and expenses of any such transfer or
the processing of any such application shall be paid by Landlord or Landlord's
nominee.
30.12 TENANT'S WAIVERS. Tenant waives all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor, and notices of acceptance and waives all notices of the existence,
creation, or incurring of new or additional obligations, except as expressly
granted herein.
30.13 MEMORANDUM OF LEASE. Landlord and Tenant shall, promptly upon the
request of either party, enter into a short form memorandum of this Lease and
all options contained herein, in form suitable for recording under the laws of
the State in which the Property is located. Tenant shall pay all costs and
expenses of recording such memorandum of this Lease.
30.14 ARBITRATION. Any controversy (a) involving $1,000,000 or less
(exclusive of interest and costs) arising out
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of, connected with or incidental to this Agreement (except disputes concerning
determinations of Fair Market Value which shall be resolved exclusively as
provided in Article XXV) and (b) involving clauses (vii) and (viii) in the
definition of Substitute Property shall be decided by arbitration under the
expedited procedures of the American Arbitration Association, provided that
claim is made within the applicable period of limitation. Depositions to obtain,
discovery may be taken upon good cause, upon leave to do so granted by the
arbitrator. If either party hereto alleges in a court action that such
controversy exceeds $1,000,000, such party shall be deemed to have waived the
right to interest and costs in any award obtained therein if such award does not
exceed $1,000,000.
30.15 MODIFICATIONS. No provision of this Lease may be amended,
supplemented or otherwise modified except by an agreement in writing signed by
the parties hereto or their respective successors in interest.
30.16 ATTORNEYS' FEES. If either party commences an action against the
other to interpret or enforce any of the terms of this Lease or because of the
breach by the other party of any of the terms hereof, the losing or defaulting
party shall pay to the prevailing party reasonable attorneys' fees, costs and
expenses incurred in connection with the prosecution or defense of such action,
whether or not the action is prosecuted to a final judgment.
30.17 BROKERS.
(a) Tenant. Tenant hereby warrants that no real estate broker
or finder who is not an employee of Tenant has represented or will represent it
in this transaction and that no finder's fees have been earned by a third party
who may claim through Tenant. Tenant shall indemnify and hold harmless the
Landlord against any claim for brokerage fees made by any employee of Tenant.
(b) Landlord. Landlord hereby warrants that no real estate
broker or finder who is not an employee of Landlord has represented or will
represent it in this transaction and that no finder's fees have been earned by a
third party who may claim through Landlord. Landlord shall indemnify and hold
harmless the Tenant against any claim for brokerage fees made by any employee of
Landlord.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date first above written.
CORNERSTONE CARE, INC.,
a Colorado corporation
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
Xxxxx X. Xxxxxxx,
President
AHP OF COLORADO, INC.,
a Colorado corporation
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx,
Vice President
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