EXHIBIT 10.54.2
AMENDED AND RESTATED PROPERTY LEASE AGREEMENT
BY AND BETWEEN
PSLT-ALS PROPERTIES II, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
AS LANDLORD,
AND
ALS PROPERTIES TENANT II, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
AS TENANT
DATED AS OF
DECEMBER 16, 2004
TABLE OF CONTENTS
1. Definitions............................................................................................. 1
2. Leased Property......................................................................................... 14
3. Condition of Leased Property............................................................................ 14
4. Term.................................................................................................... 15
(a) Initial Term................................................................................... 15
(b) Renewal Terms.................................................................................. 15
5. Rent.................................................................................................... 15
(a) Rent........................................................................................... 15
(b) Base Rent...................................................................................... 16
(c) Additional Rent................................................................................ 16
(d) Consent Expenses............................................................................... 16
(e) Late Charge; Interest.......................................................................... 16
(f) Payment without Abatement...................................................................... 16
6. Holding Over............................................................................................ 17
7. Use of Leased Property; Compliance With Legal Requirements.............................................. 17
(a) Intended Use................................................................................... 17
(b) Compliance with Legal Requirements, Insurance Requirements, Facility Mortgage
Requirements and Other Requirements............................................................ 17
(c) Compliance with Third Party Payor Program Requirements......................................... 17
(d) Landlord to Grant Easements, Etc............................................................... 18
(e) Landlord's Receipt Of Third Party Payor Program Reimbursements................................. 18
8. Tenant's Covenant to Repair............................................................................. 18
(a) Repair and Maintenance......................................................................... 18
(b) Related Personal Property...................................................................... 19
9. No Landlord Repair Obligations.......................................................................... 19
10. Surrender............................................................................................... 19
(a) Surrender of Leased Property................................................................... 19
(b) Transfer of Licenses and Permits............................................................... 19
(c) Apportionment of Impositions, Insurance Premiums and the Minimum Capital Additions Amount...... 20
11. Capital Additions....................................................................................... 20
(a) Construction of Capital Additions.............................................................. 20
(b) Non-Capital Additions.......................................................................... 21
(c) Capital Additions Financed by Landlord......................................................... 21
(d) Disbursement of Capital Addition Allowances.................................................... 22
(e) Capital Addition Allowances Added to Lease Basis............................................... 23
12. Utilities and Other Services............................................................................ 23
13. Performance by Landlord of Tenant's Obligations......................................................... 24
(a) Landlord's Self Help........................................................................... 24
(b) Landlord's Inspections......................................................................... 24
14. Entry................................................................................................... 25
15. Assignment, Subletting and Liens........................................................................ 25
(a) Transfers Prohibited Without Consent........................................................... 25
(b) Adequate Assurances............................................................................ 25
i
(c) Permitted Subleases............................................................................ 26
(d) Whole Facility Subleases....................................................................... 26
(e) Liens.......................................................................................... 27
16. Impositions............................................................................................. 27
17. Casualty................................................................................................ 27
(a) Restoration and Repair......................................................................... 27
(b) Unavailability of Proceeds..................................................................... 28
(c) Escrow of Insurance Proceeds................................................................... 29
(d) Uninsured Losses............................................................................... 29
(e) Deletion of Properties......................................................................... 29
18. Insurance............................................................................................... 30
(a) Insurance By Tenant............................................................................ 30
(b) Landlord as Additional Insured and/or Loss Payee............................................... 33
(c) Carriers and Features.......................................................................... 33
(d) Failure to Procure Insurance................................................................... 34
(e) Intentionally Omitted.......................................................................... 34
(f) Indemnification of Landlord.................................................................... 34
19. Environmental Matters................................................................................... 35
(a) Tenant's Covenant.............................................................................. 35
(b) Clean-Up....................................................................................... 35
(c) Indemnification................................................................................ 35
(d) Notice......................................................................................... 36
20. Costs and Attorneys' Fees............................................................................... 36
21. Default; Remedies....................................................................................... 36
(a) Default........................................................................................ 36
(b) Remedies....................................................................................... 38
22. Landlord's Default; Landlord's Right to Dispute......................................................... 40
(a) Landlord Default............................................................................... 40
(b) Landlord's Right to Dispute.................................................................... 41
(c) Tenant Right to Cure Facility Mortgage Default................................................. 41
23. Condemnation............................................................................................ 41
(a) Complete Taking................................................................................ 41
(b) Partial Taking................................................................................. 41
(c) Award.......................................................................................... 41
(d) Unavailability of Award........................................................................ 42
(e) Notices........................................................................................ 42
24. Reports and Statements.................................................................................. 43
25. Additional Covenants of Tenant.......................................................................... 44
(a) Indebtedness of Tenant......................................................................... 44
(b) Management of Leased Property; Joinder by Manager.............................................. 45
(c) Intentionally Omitted.......................................................................... 45
(d) Capital Additions.............................................................................. 45
(e) Capital Additions Reserve...................................................................... 46
(f) Operation of each of the Facilities............................................................ 46
26. Permitted Contests...................................................................................... 46
27. Notices of Commencement of Construction................................................................. 47
ii
28. Limitation on Liability of Landlord and Tenant.......................................................... 47
29. "Net" Lease/No Impairment............................................................................... 47
(a) "Net" Lease.................................................................................... 48
(b) No Affect or Impairment........................................................................ 48
30. Representations and Warranties.......................................................................... 48
(a) Representations of Tenant...................................................................... 48
(b) Representations of Landlord.................................................................... 49
31. Notices................................................................................................. 50
32. No Waiver............................................................................................... 51
33. Quiet Enjoyment......................................................................................... 51
34. Intentionally Omitted................................................................................... 51
35. Subordination, Non-Disturbance and Attornment........................................................... 51
36. Brokers................................................................................................. 52
37. Invalidity.............................................................................................. 52
38. Counterparts............................................................................................ 52
39. Memorandum of Lease..................................................................................... 52
40. Cumulative.............................................................................................. 52
41. Governing Law........................................................................................... 52
42. Successors and Assigns; Relationship.................................................................... 52
43. Entire Agreement........................................................................................ 52
44. Survival................................................................................................ 53
45. Estoppel Certificates................................................................................... 53
46. Time.................................................................................................... 53
47. Captions and Headings................................................................................... 53
48. Waiver of Jury Trial.................................................................................... 53
49. Signage................................................................................................. 53
50. Guaranty................................................................................................ 53
51. Intentionally Omitted................................................................................... 53
52. Public Offering Information; Delivery of Information.................................................... 54
53. Appraisal Procedure..................................................................................... 54
54. Facility Mortgages...................................................................................... 55
(a) Cooperation in Obtaining Facility Mortgages.................................................... 55
(b) Compliance With Facility Mortgages............................................................. 56
(c) Escrow Reserve Accounts Under Facility Mortgages............................................... 57
55. Escrows Held by Facility Mortgagee...................................................................... 57
56. Single Lease............................................................................................ 57
57. Erie County Industrial Development Agency Requirements.................................................. 57
SCHEDULES:
Schedule I Existing Leases and Subleases
EXHIBITS:
Exhibit A Legal Description
Exhibit B Memorandum of Lease
iii
Exhibit C Subordination Agreement
Exhibit D Guaranty
iv
AMENDED AND RESTATED PROPERTY LEASE AGREEMENT
THIS AMENDED AND RESTATED PROPERTY LEASE AGREEMENT (the "Lease") is made
as of this 16th day of December, 2004, by and between PSLT-ALS PROPERTIES II,
LLC, a Delaware limited liability company, as landlord ("Landlord") and ALS
PROPERTIES TENANT II, LLC, a Delaware limited liability company, as tenant
("Tenant"), and is joined into for certain limited purposes by ALTERRA
HEALTHCARE CORPORATION, a Delaware corporation ("Manager").
This Amended and Restated Property Lease Agreement amends and restates, in
their entirety, all of those certain leases and sub-leases listed on Schedule I
attached hereto and made a part hereof. The tenant interest in such leases and
sub-leases has been assigned by Manager to Tenant pursuant to that certain
Assignment of Leases dated as of December 16, 2004.
In consideration of the mutual promises and agreements herein contained,
the parties agree as follows:
1. DEFINITIONS. For all purposes of this Lease, except as otherwise expressly
provided or unless the context otherwise requires, (i) the terms defined in this
Paragraph shall have the meanings assigned to them in this Paragraph or
elsewhere in this Agreement and shall include the plural as well as the
singular, (ii) all accounting terms not otherwise defined herein shall have the
meanings assigned to them in accordance with GAAP, (iii) all references in this
Lease to designated "Paragraphs" or "Subparagraphs" and other subdivisions are
to the designated Paragraphs, Subparagraphs and other subdivisions of this
Lease, and (iv) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Lease as a whole and not to any particular
Paragraph or Subparagraph or other subdivision.
"Additional Rent" shall have the meaning given to such term in Paragraph
5(c).
"Affiliate" shall mean, with respect to any Person, (i) in the case of any
such Person which is a partnership, any general partner in such partnership or
any limited partner holding, directly or indirectly, fifty percent (50%) or more
of the partnership interests in such partnership; (ii) in the case of any such
Person which is a limited liability company, the managing member of such limited
liability company or any other member of such limited liability company holding,
directly or indirectly, fifty percent (50%) or more of the membership interests
in such company; (iii) any other Person which is a Parent, a Subsidiary, or a
Subsidiary of a Parent with respect to such Person or to one or more of the
Persons referred to in the preceding clauses (i) and (ii); (iv) any other Person
who is an officer, director or trustee of, or partner holding, directly or
indirectly, fifty percent (50%) or more of the partnership, membership or stock
interests in, such Person or any Person referred to in the preceding clauses
(i), (ii) and (iii); and (v) any other Person who is a member of the Immediate
Family of such Person or of any Person referred to in the preceding clauses (i)
through (iv).
"Aggregate Lease Basis" shall mean, for all of the Leased Properties
subject to this Lease as of the applicable Deletion Date, an amount equal to the
Lease Basis, as increased each year by three and one-half percent (3.5%),
compounded annually (pro rata for any partial Lease Year),
from the Commencement Date (or with respect to any increase or decrease in the
Lease Basis, from the date of such increase or decrease) to the Deletion Date.
"Agreement Regarding Leases" means that certain Agreement Regarding Leases
dated as of October 20, 2004 by and between PSLT-ALS Holdings and ALS Holdings.
"Allocated Lease Basis" shall mean, for each of the Leased Properties, the
amount set forth for such Leased Property on Schedule "A" annexed hereto.
"ALS Holdings" shall mean ALS Properties Holding Company, LLC, a Delaware
limited liability company.
"Annual Increase" shall mean:
(a) with respect to the First Comparison Year, an amount equal to
the lesser of (i) 1.025 and (ii) one (1) plus the product of four (4)
times the percentage increase in the Consumer Index (expressed as a
decimal) as of the first month of the First Comparison Year (or the next
preceding determination date) over the Base CPI Index; and
(b) with respect to each Lease Year thereafter during the Term
(including any Renewal Term), an amount equal to the lesser of (i) 1.025
and (ii) one (1) plus the product of four (4) times the percentage
increase in the Consumer Index (expressed as a decimal) as of the first
month of each such Lease Year (or the next preceding determination date)
over the Consumer Index applicable for the immediately preceding Lease
Year;
provided, however, that in no event shall the Annual Increase for
any Lease Year be less than 1.0.
"Award" shall mean all compensation, sums or other value awarded, paid or
received by virtue of a complete or partial Condemnation of one (1) or more of
the Leased Properties (after deduction of all reasonable legal fees and other
reasonable costs and expenses, including, without limitation, expert witness
fees, incurred in connection with obtaining any such award).
"Base CPI Index" shall mean the Consumer Index on the date hereof or the
determination date immediately prior to the date hereof.
"Base Rent" shall mean:
(a) During the first month of the initial Lease Year, an amount
equal to $311,396.88.
(b) During each subsequent month during the Term, including any
Renewal Term, an amount equal to one-twelfth (1/12th) of the product of
(x) the Lease Basis (as of the date of determination) multiplied by (y)
the Lease Rate (as of the date of determination).
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"Bond Documents" shall mean, with respect to the Existing Facility
Mortgages that are structured as bond financings, and any and all documents
evidencing, securing or otherwise entered into in connection with the
outstanding obligations to the Erie County Industrial Development Agency and the
Schenectady County Industrial Development Agency secured by the Facilities known
as Wynwood Commons of Kenmore located in Erie County, New York, and Wynwood
Commons of Niskayuna located in Schenectady County, New York, and with respect
to any future Facility Mortgage that is structured as a bond financing, any and
all documents evidencing, securing or otherwise entered into in connection with
such Facility Mortgage.
"Business Day" shall mean any day other than Saturday, Sunday, or any
other day on which the Federal Reserve system is authorized by law or executive
action to close.
"Capital Accretion Amounts" shall mean the sum of all of the following
amounts made by Landlord through the date of determination: (1) Capital Addition
Allowances and (2) Mandatory Capital Addition Allowances (as defined in the
Agreement Regarding Leases).
"Capital Addition" shall mean one or more new buildings, or one or more
additional structures annexed to any portion of the Leased Improvements with
respect to any one (1) or more of the Leased Properties, or the material
expansion of existing improvements, which are constructed on any parcel or
portion of the Land during the Term, including the construction of a new wing or
new story, the renovation of existing improvements on any one (1) or more of the
Leased Properties in order to provide a functionally new facility needed to
provide services not previously offered, or any expansion, construction,
renovation or conversion in order to increase the number of units of the
applicable Facility, to change the purpose for which such units are utilized or
to improve materially the quality of the applicable Facility, or any related
improvement whose cost would be treated as a capital expenditure under GAAP.
"Capital Addition Allowance" shall have the meaning set forth in Paragraph
11(d).
"Capital Additions Cost" shall mean the cost of any Capital Addition made
to one (1) or more of the Facilities in accordance with the terms of this Lease.
Such cost shall include, but not be limited to, the following: (i) the cost of
construction of the Capital Addition, including site preparation and
improvement, materials, labor, supervision, developer and administrative fees,
legal fees, and costs of related design, engineering and architectural services,
the cost of any fixtures, the cost of equipment and other personalty, the cost
of construction financing (including, but not limited to, capitalized interest)
and other miscellaneous costs approved by Landlord, which approval shall not be
unreasonably withheld or delayed; (ii) if agreed to by Landlord in writing, in
advance, the cost of any land (including all related acquisition costs incurred
by Tenant) contiguous to the applicable Facility to which such additional land
is to become a part for the purpose of placing thereon a Capital Addition or any
portion thereof or for providing means of access thereto, or parking facilities
therefor, including the cost of surveying the same; (iii) the cost of insurance,
real estate taxes, water and sewage charges and other carrying charges for such
Capital Addition during construction; (iv) title insurance charges; (v)
reasonable attorneys' fees and expenses; (vi) filing, registration and recording
taxes and fees; (vii) documentary stamp or transfer taxes, and (viii) all actual
and reasonable costs and expenses of Tenant incurred in connection with such
Capital Addition; provided, however, that in no event
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shall the direct or indirect costs of any employees of Tenant be deemed a
Capital Additions Cost (other than construction management agreements that are
arms-length and have market terms).
"Capital Additions Reserve" shall have the meaning given to such term in
Paragraph 25(d).
"Casualty" shall have the meaning given to such term in Paragraph 17(a).
"Change of Control" shall have the meaning given to such term in the
Agreement Regarding Leases.
"Claims" shall have the meaning given to such term in Paragraph 26.
"Code" shall mean the Internal Revenue Code of 1986 and, to the extent
applicable, the Treasury Regulations promulgated thereunder, each as from time
to time amended.
"Commencement Date" shall mean the date of this Lease.
"Condemnation" shall mean, with respect to any of the Leased Properties,
(i) the exercise of any governmental power with respect to the applicable Leased
Property, whether by legal proceedings or otherwise, by a Condemnor of its power
of condemnation; (ii) a voluntary sale or transfer of the applicable Leased
Property by Landlord to any Condemnor, either under threat of condemnation or
while legal proceedings for condemnation are pending; and (iii) a taking or
voluntary conveyance of all or part of the applicable Leased Property, or any
interest therein, or right accruing thereto or use thereof, as the result or in
settlement of any condemnation or other eminent domain proceeding affecting the
applicable Leased Property, whether or not the same shall have actually been
commenced.
"Condemnor" shall mean any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation.
"Consumer Index" shall mean the Consumer Price Index for all Urban
Consumers (CPI-U), U.S. City Average, All Items Less Food and Energy
(1982-1984=100) as published by the Bureau of Labor Statistics of the U.S.
Department of Labor, or if it ceases publication, a successor index measuring
the price of comparable market basket of consumer goods published by the United
States or any agency or department thereof.
"Date of Taking" shall mean the date the Condemnor has the right to
possession of the applicable Leased Property, or any portion thereof, in
connection with a Condemnation.
"Default" shall mean any event or condition that, with the giving of
notice and/or lapse of time, may ripen into an Event of Default.
"Deleted Properties" shall mean any Leased Property that is deleted from
the terms and scope of this Lease in accordance with a Limited Termination
Election in connection with a Casualty (in accordance with Paragraph 17) or a
Condemnation (in accordance with Paragraph 23).
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"Deleted Property Rent Adjustment" shall mean, with respect to any Deleted
Property, the product of (i) the quotient of (x) the amount of any insurance
proceeds or Awards actually received by Landlord or any Facility Mortgagee and
not made available to Tenant for the purposes of restoration divided by (y) the
Aggregate Lease Basis (as of the day immediately preceding the Deletion Date)
multiplied by (ii) the Base Rent that was payable immediately prior to the
applicable Deletion Date.
"Deletion Date" shall mean the date that a Deleted Property is removed
from the premises demised under this Lease pursuant to the terms and conditions
of Paragraph 17 or Paragraph 23.
"Entity" shall mean any general partnership, limited partnership, limited
liability company, limited liability partnership, corporation, joint venture,
trust, business trust, cooperative or association.
"Environment" shall mean soil, surface waters, ground waters, land,
stream, sediments, surface or subsurface strata, ambient air and the indoor
environment.
"Environmental Laws" shall mean all applicable laws, statutes,
regulations, rules, ordinances, codes, licenses, permits and orders of all
courts of competent jurisdiction and Government Agencies, and all applicable
judicial and administrative and regulatory decrees, judgments and orders,
including common law rulings and determinations, relating to injury to, or the
protection of, the Environment, including, without limitation, all valid and
lawful requirements of courts and other Government Agencies pertaining to
reporting, licensing, permitting, Remediation and removal of underground
improvements (including, without limitation, treatment or storage tanks, or
water, gas or oil xxxxx), or emissions, discharges, Releases or threatened
Releases, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances.
"Equity Transfer" shall have the meaning given to such term in Paragraph
6(c) of the Agreement Regarding Leases.
"Escrow Agent" shall have the meaning given to such term in Paragraph
17(b).
"Event of Default" shall have the meaning given to such term in Paragraph
21(a).
"Excluded Items" shall mean all cash, accounts receivable, credits against
account payable; trade names, trade marks, service names, service marks,
copyrights and other intellectual property relating to Tenant or Manager or the
Leased Properties; employees' cell phones and pagers; copier machines, fax
machines, time clocks and other equipment which is leased by Tenant or Manager
pursuant to equipment or financing leases and located at the Leased Properties;
employee manuals, training materials, policies, procedures and materials related
thereto with respect to the operation of the Facility; all brochures, pamphlets,
flyers, mailers and other promotional materials relating to the marketing and
advertising of the Facilities; computer software programs (other than for nurse
call or other life safety systems), discs and related materials connected to or
developed by or for Tenant's or Manager's systems or operations; all signs and
signage (other than signage monuments) referring to Tenant or Manager or to any
trade name, trademark, service name or service xxxx owned by Tenant or Manager
or the name of any
5
of the Facilities or any combination or portion thereof; and all automobiles,
vans, minivans and other vehicles used in connection with the operation of the
Facilities.
"Existing Facility Mortgages" means the Facility Mortgage(s), other than
any new Facility Mortgage(s) entered into by Landlord on the Commencement Date,
that are in effect on the Commencement Date.
"Expiration Date" shall have the meaning given to such term in Paragraph
4(a), as same may be extended pursuant to Paragraph 4(b).
"Extraordinary Capital Expenditures" shall mean expenditures incurred in
connection with Capital Additions to one (1) or more of the Facilities which are
not contemplated by the then current capital budget and other non-recurring
expenditures incurred by Tenant with respect to the Facility that are not
ordinary course repair and maintenance items.
"Facility" shall mean, as to any Leased Property, the senior housing
and/or independent living and/or assisted living facility being operated or
proposed to be operated on such Leased Property.
"Facility Mortgage" shall mean, with respect to any one (1) or more of the
Leased Properties, any encumbrance securing the repayment of indebtedness (and
including any obligations in connection with credit enhancement) now or
hereafter placed upon the fee simple interest or leasehold interest, as
applicable, in the applicable Leased Property, provided such Leased Property is
then subject to the terms of this Lease, together with all other documents and
instruments evidencing or securing the indebtedness secured thereby.
"Facility Mortgage Requirements" shall mean, subject to the requirements
of Paragraph 54(b), all covenants, agreements, restrictions and encumbrances
contained in any Existing Facility Mortgage or contained in any of the "Loan
Documents" referenced therein or any future modification or amendment to any
Existing Facility Mortgage or any future Facility Mortgage in effect from time
to time, other than any covenants and agreements with respect to the payment of
the Indebtedness secured thereby.
"Facility Mortgagee" shall mean the holder of a Facility Mortgage.
"Facility State" shall mean the State in which the applicable Facility is
located.
"Fair Market Value" shall mean, as determined by agreement between
Landlord and Tenant or, failing agreement and upon demand by either party, the
appraisal procedures set forth in Paragraph 53, as to any one (1) or more of the
Leased Properties, the amount that an uncompelled, willing buyer would pay, and
an uncompelled, willing seller would accept, at arm's length, for a fee simple
interest (or a ground leasehold interest for any property with a Ground Lease)
in the applicable Leased Property, including all Capital Additions thereto and
all Related Personal Property. In addition to such other market factors as may
be applicable in determining the Fair Market Value, the Fair Market Value shall
be determined on the basis, and on the assumptions, that (i) the applicable
Leased Property (or Leased Properties) is unencumbered by this Lease or the
Agreement Regarding Leases, (ii) the applicable Leased Property (or Leased
Properties) is in material compliance with any and all Legal Requirements
6
and Insurance Requirements, (iii) the applicable Leased Property (or Leased
Properties), for the benefit of the aforesaid buyer, have in full force and
effect any and all Permits and Licenses.
"First Comparison Year" shall mean the Lease Year commencing on January 1,
2006, and ending on December 31, 2006.
"GAAP" shall mean generally accepted accounting principles, consistently
applied, and being principally derived from promulgations of The Financial
Accounting Standards Board and The American Institute of Certified Public
Accountants, or their successors.
"Government Agency" shall mean any court, agency, authority, board
(including, without limitation, environmental protection, planning and zoning),
bureau, commission, department, office or instrumentality of any nature
whatsoever of any governmental or quasi-governmental unit of the United States
or the applicable Facility State or any county or any political subdivision of
any of the foregoing, whether now or hereafter in existence, having jurisdiction
over Landlord or Tenant or the applicable Leased Property or any portion thereof
or the Facility operated thereon.
"Ground Lease" shall mean, individually or collectively as applicable in
the context, the lease of the Facility known as Wynwood Commons of Kenmore dated
as of March 1, 1995, as assigned and amended as of March 1, 1999, with the Erie
County Industrial Development Agency as the landlord thereof, and PSLT-ALS
Properties II, LLC, f/k/a ALS Financing II, Inc., as the tenant thereunder, and
the Installment Sale Agreement dated as of June 1, 1995, and ultimately assigned
to PSLT-ALS Properties II, LLC, f/k/a ALS Financing II, Inc., as of March 1,
1999, for the Facility known as Wynwood Commons of Niskayuna with the
Schenectady County Industrial Development Agency, as seller, and the Landlord as
purchaser.
"Ground Rents" shall have the meaning given to such term in Paragraph
5(g).
"Guarantor" shall mean the Person that is the "guarantor" under the
Guaranty of Agreement Regarding Leases. The initial Guarantor is Alterra
Healthcare Corporation, a Delaware corporation.
"Guaranty" shall mean that certain Guaranty of Agreement Regarding Leases
made by Guarantor in favor of PSLT-ALS Holdings in the form of Exhibit D annexed
to the Agreement Regarding Leases.
"Hazardous Materials Substances" shall mean any substance (whether solid,
liquid or gaseous in nature):
(a) the presence of which requires or may hereafter require
notification or Remediation under any federal, state or local statute,
regulation, rule, ordinance, order, action or policy; or
(b) which is or becomes defined as a "hazardous waste", "hazardous
material" or "hazardous substance" or "pollutant" or "contaminant" under
any present or future federal, state or local statute, regulation, rule or
ordinance or amendments thereto including, without limitation, the
Comprehensive Environmental Response,
7
Compensation and Liability Act (42 U.S.C. et seq.) and the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) and the
regulations promulgated thereunder; or
(c) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission,
board, agency or instrumentality of the United States, any state of the
United States, or any political subdivision thereof; or
(d) the presence of which on any Leased Property causes or
reasonably threatens to cause a violation of Environmental Laws upon the
applicable Leased Property or to adjacent properties or poses or
reasonably threatens to pose a hazard to the health or safety of persons
on or about such Leased Property; or
(e) without limitation, which contains gasoline, diesel fuel or
other petroleum hydrocarbons or volatile organic compounds; or
(f) without limitation, which contains polychlorinated biphenyls
(PCBs) or asbestos or urea formaldehyde foam insulation; or
(g) without limitation, which contains or emits radioactive
particles, waves or material; or
(h) without limitation, constitutes Regulated Medical Wastes.
"Immediate Family" shall mean, with respect to any individual, such
individual's spouse, parents, brothers, sisters, children (natural or adopted),
stepchildren, grandchildren, grandparents, parents-in-law, brothers-in-law,
sisters-in-law, nephews and nieces.
"Impositions" shall mean with respect to each of the Leased Properties,
all taxes (including, without limitation, all taxes imposed under the laws of
the applicable Facility State, as such laws may be amended from time to time,
and all ad valorem, sales and use, single business, gross receipts, transaction
privilege, rent or similar taxes as the same relate to or are imposed upon
Landlord, Tenant or the business conducted upon the applicable Leased Property
or additional federal and state taxes, interest or penalties, arising out of the
applicable Leased Property's non-compliance with Legal Requirements),
assessments (including, without limitation, all assessments for public
improvements or benefit, whether or not commenced or completed prior to the date
hereof and whether or not to be completed within the Term), water, sewer or
other rents and charges, excises, tax levies, fees (including, without
limitation, license, permit, inspection, authorization and similar fees), all
other governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
applicable Leased Property or the business conducted thereon by Tenant
(including all interest and penalties thereon due to any failure in payment by
Tenant), which at any time prior to, during or in respect of the Term hereof may
be assessed or imposed on or in respect of or be a lien upon (a) Landlord's
interest in the applicable Leased Property, (b) the applicable Leased Property
or any part thereof or any rent therefrom or any estate, right, title or
interest therein, or (c) any occupancy, operation, use or possession of, or
sales from, or activity conducted on, or in connection with the applicable
Leased Property or the leasing or use
8
of the applicable Leased Property or any part thereof by Tenant, and shall
include any tax being contested during the period that such taxes are being
contested, which tax, and any interest and penalties attributable thereto, shall
nevertheless be treated as a Claim within the meaning of Paragraph 25; provided,
however, that nothing contained herein shall be construed to require Tenant to
pay, and the term "Impositions" shall not include: (i) any tax based on the net
income of the Landlord, except for federal and state taxes arising out of
non-compliance with Legal Requirements, (ii) any net revenue tax of Landlord,
(iii) any transfer fee, stamp tax, mortgage recording tax, intangibles tax or
other similar tax imposed with respect to the sale, exchange, financing,
encumbering or other disposition by Landlord of any of the Leased Properties or
any portion thereof or the proceeds thereof, including without limitation as a
result of any Facility Mortgage (other than the Existing Facility Mortgages
relating to the transactions taking place on the date hereof), (iv) any single
business, gross receipts, transaction privilege, rent or similar taxes (other
than a commercial rent, sale, use or occupancy type tax or tax imposed with
respect to the rental or occupancy of one (1) or more of the Leased Properties)
as the same relate to or are imposed upon Landlord, (v) taxes attributable to a
period after the expiration or earlier termination of the Initial Lease Term or
any Renewal Term (if applicable), (vi) taxes, interest, penalties and additions
to tax imposed solely as a result of the failure of the Landlord to duly file
any tax return required to be filed by Landlord, (vii) taxes imposed solely as a
result of the Landlord's breach of any covenant or the inaccuracy of any
representation or warranty of the Landlord in any of the Operative Documents,
(viii) taxes imposed on Landlord to the extent that Landlord receives a credit
(or otherwise has a reduction in liability for such taxes) in respect of such
taxes, (ix) taxes resulting from the gross negligence or willful misconduct of
the Landlord, (x) taxes to the extent that such taxes would have been imposed on
the Landlord in the absence of any of the transactions contemplated by the
Operative Documents, (xi) taxes imposed on any transferee of Landlord pursuant
to the laws in effect at the time of the transfer to such transferee, to the
extent such tax exceeds the amount of such tax indemnified against hereunder
that would have been imposed on the transferor, (xii) taxes imposed by ERISA or
Section 4975 of the Internal Revenue Code to the extent resulting from any act
or omission of Landlord or its Affiliates, and (xiii) withholding taxes imposed
on payments to non-U.S. persons. Impositions shall include interest, penalties
and additions to taxes only to the extent that the taxes to which such items
relate are treated as Impositions hereunder. Any refund of taxes or other items
that are treated as Impositions hereunder shall be for the benefit of Tenant.
References to Landlord as contained in this definition of Impositions shall
include, as applicable, Affiliates of Landlord, and references to the "Operative
Documents" shall mean the Lease and the Agreement Regarding Leases and the other
documents and instruments executed and delivered in connection herewith or
pursuant hereto. Notwithstanding any other provision hereof to the contrary,
Impositions shall not include any taxes arising as a result of any failure of
Landlord (or any Affiliate) to qualify as a real estate investment trust for
federal income tax purposes, or under any corresponding state or local tax law.
"Improvements" shall have the meaning given such term in Paragraph 2.
"Initial Term" shall have the meaning given to such term in Paragraph
4(a).
"Inspection Report" shall have the meaning given to such term in Paragraph
13(b).
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"Insurance Requirements" shall mean all terms of any insurance policy
required by this Lease and all requirements of the issuer of any such policy.
"Intended Use" shall have the meaning given such term in Paragraph 7(a).
"Land" shall have the meaning given such term in Paragraph 2.
"Landlord" shall have the meaning given such term in the preamble to this
Lease.
"Landlord Capital Addition" shall have the meaning given to such term in
Paragraph 11(c).
"Lease" shall mean this Amended and Restated Property Lease Agreement
including the Exhibits attached hereto, as it and they may be amended from time
to time as herein provided.
"Lease Basis" shall mean $72,794,075.46 as of the date of this Lease, as
such amount shall be (a) increased from time to time in accordance with the
express terms of this Lease or the Agreement Regarding Leases by the amount of
any Capital Accretion Amounts or otherwise as expressly provided herein or
therein, and (b) decreased from time to time by (i) the amount of any Awards in
any Condemnation received by Landlord or received by any Facility Mortgagee and,
in either case, not made available to Tenant to rebuild or restore such
Facility, (ii) any insurance proceeds received by Landlord or any Facility
Mortgagee as a result of a Casualty, and, in either case, not made available to
Tenant to rebuild or restore the applicable Facility, and (iii) the amount of
any payment made (other than in connection with any third party claims) by
Alterra Healthcare Corporation under the indemnity provisions set forth in
Article 8 of that certain Amended and Restated Stock Purchase Agreement dated as
of October 19, 2004, between Alterra Healthcare Corporation and Provident Senior
Living Trust, to the extent such payment relates specifically to one (1) or more
of the Leased Properties demised pursuant to the terms of this Lease, or, if any
such payment under said indemnification provisions relates to more than one (1)
Leased Property or does not relate to any particular Leased Property (or Leased
Properties), then the amount of any such indemnity payment shall be divided
ratably across the Facilities (as defined in the Agreement Regarding Leases);
provided, however, that during each Renewal Term, the Lease Basis shall mean, as
determined in accordance with the provisions of Paragraph 3(b) of the Agreement
Regarding Leases, an amount equal to the greater of: (x) the Lease Basis for the
immediately preceding calendar month and (y) the sum of the Fair Market Values
of each of the Leased Properties, as such amounts in clause (x) and clause (y)
above shall be (A) increased from time to time in accordance with the terms of
this Lease and the Agreement Regarding Leases by the amount of any Capital
Accretion Amounts, and (B) decreased from time to time in connection with the
receipt by Landlord of the items delineated in clauses (b)(i) through (iii) of
this definition.
"Lease Guarantor" shall mean the Person that is the "guarantor" under the
Lease Guaranty. The initial Lease Guarantor is ALS Holdings.
"Lease Guaranty" shall mean that certain guaranty made by Lease Guarantor
in favor of Landlord in the form of Exhibit D annexed hereto.
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"Lease Rate" shall mean (a) initially, 9.625%, (b) commencing on the first
month of the First Comparison Year and for the remainder of the First Comparison
Year, the product of (i) 9.625% times (ii) the Annual Increase, and (c) on the
first month of each subsequent Lease Year, the product of (i) the Lease Rate in
effect during the last month of the immediately preceding Lease Year, times (ii)
the Annual Increase in effect for the Lease Year commencing on such date.
"Lease Year" shall mean each twelve month period commencing on January 1st
during the Term, provided that (i) the first Lease Year shall include the period
of time from the Commencement Date through December 31, 2005, and the last Lease
Year shall be the period of time from January 1st of such year through the
Expiration Date (as the same may be extended for the Renewal Terms in accordance
with the terms of the Agreement Regarding Leases).
"Leased Property" or "Leased Properties" shall have the meaning given to
such term in Paragraph 2.
"Legal Requirements" shall mean, as to any Leased Property, all federal,
state, county, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions affecting the
applicable Leased Property or the maintenance, construction, alteration or
operation thereof, whether now or hereafter enacted or in existence, including,
without limitation, all Permits and Licenses.
"Lien" shall mean any mortgage, security interest, pledge, collateral
assignment, or other encumbrance, lien or charge of any kind, or any transfer of
any property or assets for the purpose of subjecting the same to the payment of
indebtedness or performance of any other obligation in priority to payment of
its general creditors.
"Limited Termination Election" shall mean the termination of this Lease as
it relates to any one (1) or more of the Leased Properties in accordance with
the terms and conditions of Paragraph 17 or Paragraph 23.
"Management Agreement" shall mean one (1) or more management agreements,
management and leasing agreements (where required under applicable Legal
Requirements), or other similar agreements conformed to comply with applicable
Legal Requirements, each of even date herewith by and between Tenant and Manager
with respect to the management of each of the Facilities.
"Manager" shall mean the Person that is the "manager" under a Management
Agreement pursuant to Paragraph 25(b). The initial Manager is Alterra Healthcare
Corporation, a Delaware corporation.
"Mandatory Capital Addition" shall have the meaning given to such term in
the Agreement Regarding Leases.
"Non-Capital Additions" shall have the meaning given such term in
Paragraph 11(b).
"Notice" shall mean a notice given or received in accordance with
Paragraph 31.
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"Officer's Certificate" shall mean a certificate signed by a duly
authorized officer of the sole member of the Tenant.
"Other Requirements" shall mean all covenants, agreements, restrictions
and encumbrances contained in any Permitted Encumbrances affecting the
applicable Leased Property, other than any Facility Mortgage or Bond Documents.
"Overdue Rate" shall mean, on any date, a per annum rate of interest equal
to the lesser of (i) ten percent (10%) and (ii) the maximum rate then permitted
under applicable law, calculated from the date any payment obligation is due
(except with respect to payments which are indeterminable prior to Notice from
Landlord, in which event the Overdue Rate shall be calculated from the 10th day
following the date such Notice was received).
"Parent" shall mean, with respect to any Person, any Person which owns
directly, or indirectly through one or more Related Parties, fifty percent (50%)
or more of the voting or beneficial interest in such Person, or otherwise has
the right or power (whether by contract, through ownership of securities or
otherwise) to control such Person.
"Permits and Licenses" shall mean all permits, licenses, certificates of
need, provider agreements and other authorizations and approvals required under
applicable Legal Requirements in connection with the ownership of one (1) or
more of the Facilities for their respective Intended Uses.
"Permitted Encumbrances" shall mean all rights, restrictions, and
easements of record set forth on Schedule B to the owner's title insurance
policy and any other matters of record on the date of this Lease, and any other
covenants, restrictions, encumbrances or similar instruments as may after the
date hereof be granted or caused by Landlord or otherwise consented to in
writing by Landlord from time to time and which covenants, restrictions,
encumbrances or similar instruments arising after the date hereof (other than
Facility Mortgages) have been approved by Tenant, such approval not to be
unreasonably withheld, conditioned or delayed.
"Permitted Transfer" shall have the meaning given to such term in the
Agreement Regarding Leases.
"Person" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so requires.
"PSLT-ALS Holdings" shall mean PSLT-ALS Properties Holdings, LLC, a
Delaware limited liability company.
"Regulated Medical Wastes" shall mean all materials generated by Tenant,
subtenants, patients, occupants or operators of any one (1) or more of the
Leased Properties which are now or may hereafter be subject to regulation
pursuant to the Medical Waste Tracking Act of 1988, or any similar Environmental
Law promulgated by any Government Agencies.
"REIT" shall have the meaning given such term in Paragraph 15(a).
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"Related Party" shall mean, with respect to any Person, (i) in the case of
any such Person which is a partnership, any general partner in such partnership
or any limited partner holding, directly or indirectly, ten percent (10%) or
more of the partnership interests in such partnership; (ii) in the case of any
such Person which is a limited liability company, the managing member of such
limited liability company or any other member of such limited liability company
holding, directly or indirectly, ten percent (10%) or more of the membership
interests in such company; (iii) any other Person which is a Parent, a
Subsidiary, or a Subsidiary of a Parent with respect to such Person or to one or
more of the Persons referred to in the preceding clauses (i) and (ii); (iv) any
other Person who is an officer, director or trustee of, or partner holding,
directly or indirectly, ten percent (10%) or more of the partnership, membership
or stock interests in, such Person or any Person referred to in the preceding
clauses (i), (ii) and (iii); and (v) any other Person who is a member of the
Immediate Family of such Person or of any Person referred to in the preceding
clauses (i) through (iv).
"Related Personal Property" shall mean all consumable inventory and
supplies, furniture, furnishings, fixtures, movable walls and partitions,
equipment and machinery and all other tangible personal property owned by Tenant
and located at the Leased Properties or used in Tenant's business at one (1) or
more of the Leased Properties, whether located at the applicable Leased Property
on the date hereof or acquired after the date hereof, and all modifications,
replacements, alterations and additions to such personal property installed at
the expense of Tenant during the Term; provided, however, that the "Related
Personal Property" shall not include (i) the Residents' Personal Property or
(ii) the Excluded Items.
"Release" shall mean the presence, release, spill, emission, leaking,
emitting, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration of Hazardous Materials in or into the Environment, including, but
not limited to, the movement of Hazardous Materials through the air, soil,
surface water or groundwater.
"Remediation" or "Remediate" shall mean any action to (i) investigate,
study, monitor, clean up, remove, treat, respond to or in any other way address
Hazardous Materials in the Environment; or (ii) prevent the Release or minimize
the further Release of Hazardous Materials.
"Renewal Term" shall have the meaning given to such term in Paragraph
4(b).
"Rent" shall mean, collectively, the Base Rent and the Additional Rent.
"Residents' Personal Property" shall mean, with respect to each Leased
Property, such items of furniture, clothing and other personalty that is the
property of any of the residents of any of the units at the Leased Property.
"SEC" shall mean the Securities and Exchange Commission.
"Subordination Agreement" shall have the meaning given to such term in
Paragraph 35.
"Subsidiary" shall mean, with respect to any Person, any Entity (a) in
which such Person owns directly, or indirectly through one or more Subsidiaries,
fifty percent (50%) or more of the voting or beneficial interest, or (b) which
such Person otherwise has the right or power to control (whether by contract,
through ownership of securities or otherwise).
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"Tenant" shall have the meaning given such term in the preamble to this
Lease.
"Term" shall have the meaning given such term in Paragraph 4(b).
"Third Party Payor Programs" shall mean all third party payor programs in
which Tenant presently or in the future may elect to participate (but only
during the time that Tenant has so elected to participate therein), including,
without limitation, Medicare, Medicaid, CHAMPUS, Blue Cross and/or Blue Shield,
Managed Care Plans and other private insurance programs.
"Third Party Payors" shall mean Medicare, Medicaid, CHAMPUS, Blue Cross
and/or Blue Shield, private insurers and any other Person which presently or in
the future provides Third Party Payor Programs.
"Unsuitable for its Intended Use" shall mean a state or condition of any
Facility, taken as a whole, such that (i) following any damage or destruction
involving such Facility, the applicable Facility cannot reasonably be expected
to be restored to substantially the same condition as existed immediately before
such damage or destruction, within eighteen (18) months following such damage or
destruction or such other longer period of time as to which business
interruption insurance is available to fully cover Rent and other costs related
to the applicable Facility following such damage or destruction; or (ii) as the
result of a partial taking by Condemnation, the applicable Facility or
Improvements, as the case may be, cannot be operated, in the good faith judgment
of Landlord and Tenant, on a commercially practicable basis for its Intended
Use, taking into account, among other relevant factors, the number of usable
units, the amount of square footage or the revenues affected by such partial
taking.
2. LEASED PROPERTY. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, subject to the conditions hereinafter expressed: (a) those
certain nine (9) parcels of land and the easements, rights and appurtenances
related thereto, more particularly described on Exhibit A hereto (collectively,
the "Land"); (b) improvements on each parcel of the Land, including, without
limitation, the senior independent and/or assisted living facilities situated
thereon as of the date hereof, together with related paved parking and
appurtenant improvements and any replacements thereof (collectively, the
"Improvements"); and (c) the Related Personal Property. As used herein, the
Land, Improvements and the Related Personal Property at any time subject to the
terms of this Lease as they relate to a particular parcel of the Land are
referred to as the "Leased Property." The Leased Property does not include the
Resident's Personal Property or the Excluded Items.
3. CONDITION OF LEASED PROPERTY. Tenant acknowledges and agrees that each of the
Leased Properties is and shall be leased by Landlord to Tenant in its "as-is"
condition, as of the Commencement Date and at all times thereafter, subject to
all liens, encumbrances and restrictions affecting the Leased Properties.
Landlord makes absolutely no representations or warranties whatsoever with
respect to the Leased Properties or the condition thereof, either to their
respective fitness for use, condition, purpose or otherwise as to the quality or
material or workmanship therein, latent or patent, it being agreed that all such
risks are to be borne by Tenant. Tenant acknowledges that Landlord has not
investigated and does not warrant or represent to Tenant that any of the Leased
Properties is fit for the Intended Use or for any other purposes whatsoever.
Tenant acknowledges that Tenant shall be solely responsible for any and
14
all actions, repairs, permits, approvals and costs required for the
rehabilitation, renovation, use, occupancy and operation of the Leased
Properties in accordance with applicable Legal Requirements, Other Requirements,
Facility Mortgage Requirements and Insurance Requirements. By leasing each of
the Leased Properties, Tenant warrants and represents to Landlord that Tenant
has examined and approved all things concerning the Leased Properties which
Tenant deems material to Tenant's leasing and use of the Leased Properties.
Tenant further acknowledges and agrees that: (i) neither Landlord nor any agent
of Landlord has made any representation or warranty, express or implied,
concerning any of the Leased Properties or which have induced Tenant to execute
this Lease except as expressly contained in this Lease; and (ii) any other
representations and warranties are expressly disclaimed by Landlord.
4. TERM.
(a) Initial Term. This Lease shall be for an initial term (the "Initial
Term") commencing on the Commencement Date, and ending at midnight October 31,
2019, unless modified or earlier terminated pursuant to the terms hereof (as
such date may be extended pursuant to the terms of the Agreement Regarding
Leases, the "Expiration Date").
(b) Renewal Terms. Subject to the conditions set forth in Paragraph 3(b)
of the Agreement Regarding Leases, this Lease may be renewed by ALS Holdings
pursuant to Paragraph 3(b) of the Agreement Regarding Leases for two (2)
additional consecutive five (5) year periods (each, a "Renewal Term", and
collectively, the "Renewal Terms"), and upon such renewal, this Lease shall
automatically, and without any action by any Person, be deemed to have been
extended for the applicable Renewal Term for which ALS Holdings has exercised
such option. As used herein, the Initial Term and the Renewal Term(s), if
exercised, shall be referred to hereinafter collectively as the "Term."
5. RENT.
(a) Rent. Tenant shall pay Rent to Landlord (or to such Person as Landlord
may direct (in writing)) during the Term, in lawful money of the United States
of America which shall be legal tender for the payment of public and private
debts, without offset, abatement, demand or deduction, except as hereinafter
expressly provided. All payments of Rent to Landlord shall be made by wire
transfer of immediately available federal funds or by other means acceptable to
Landlord in its sole discretion. Base Rent for any partial month shall be
prorated on a per diem basis based on a 360 day year and the twelve (12) thirty
(30) day months. In addition, if directed to do so by Landlord in writing,
Tenant shall pay a portion of the Base Rent directly to any Facility Mortgagee
in an amount specified in such Notice to Tenant. Notwithstanding the foregoing,
if, in connection with the Existing Facility Mortgage, Landlord is unable to
obtain from the Facility Mortgagee an agreement not to disturb Tenant's right to
possession in the event of a foreclosure of such Existing Facility Mortgage,
then Tenant shall have the right, at Tenant's sole election, to pay directly to
the Facility Mortgagee all monthly payments due and payable or otherwise
required thereunder. If Tenant elects to make such payments directly to the
Facility Mortgagee, then (i) upon each monthly payment Tenant shall
simultaneously therewith deliver to Landlord evidence reasonably acceptable to
Landlord that such payment was made, and (ii) Tenant hereby agrees to indemnify,
defend and hold harmless Landlord from any claims, losses or damages that
Landlord suffers as a result of any failure,
15
default or defect in Tenant's making such payment on Landlord's behalf. Any
payments made directly by Tenant under this Paragraph may be off-set against
Base Rent payable by Tenant during such calendar month.
(b) Base Rent. Base Rent shall be paid in arrears on the first (1st) day
of each calendar month for the immediately preceding month, or if such day is
not a Business Day, the immediately preceding Business Day.
(c) Additional Rent. Tenant shall pay as additional rent hereunder
("Additional Rent"), all other charges and amounts payable in accordance with
the terms of this Lease. Except as otherwise provided herein, any costs or
expenses paid or incurred by Landlord on behalf of Tenant that constitute
Additional Rent shall be reimbursed by Tenant to Landlord within ten (10) days
after the delivery by Landlord to Tenant of invoices therefor.
(d) Consent Expenses. Tenant shall pay, as Additional Rent hereunder, on
behalf of Landlord, or reimburse Landlord for, any and all reasonable
out-of-pocket costs or expenses paid or incurred by Landlord relating to any
request made by Tenant of Landlord, including, without limitation, reasonable
attorneys' fees, in connection with any of the following activities undertaken
by or on behalf of Landlord under this Lease: (i) the review, execution,
negotiation or delivery of any consent, waiver, estoppel, subordination
agreement or approval requested of Landlord by Tenant hereunder, including,
without limitation, any request for consent to Capital Additions or any
so-called "landlord's waiver," excluding any such costs relating to any Facility
Mortgage; (ii) the review by Landlord or its representatives of any plans and
specifications in connection with any restoration of any of the Leased
Properties, any Capital Addition or otherwise; (iii) the review by Landlord or
its representatives of any request by Tenant for any other approval or consent
hereunder, or any waiver of any obligation of Tenant hereunder; (iv) any
assistance provided by Landlord in connection with a permitted contest pursuant
to Paragraph 26; (v) in connection with any Default by Tenant under this Lease;
or (vi) any other request by Tenant comparable to any of the foregoing.
(e) Late Charge; Interest. If Tenant fails to make any payment of Rent on
or before the date such payment is due and payable and such amount remains
unpaid for a period of five (5) days, such past due payment shall bear interest
at the Overdue Rate.
(f) Payment without Abatement. No abatement, diminution or reduction of
Rent shall be allowed to Tenant or any Person claiming under Tenant, under any
circumstances or for any reason whatsoever, except to the extent herein
provided.
(g) Ground Lease Payments. Tenant shall pay as Additional Rent hereunder
all rental and other amounts payable under any Ground Lease ("Ground Rents").
Tenant shall pay all Ground Rents to Landlord not later than ten (10) days prior
to the due date thereof. Notwithstanding the foregoing, if Landlord is unable to
obtain from the landlord under the Ground Lease an agreement (in form reasonably
satisfactory) to Tenant not to disturb Tenant's right to possession in the event
of a termination of the Ground Lease, Tenant shall have the right, at Tenant's
sole election, to pay directly to the landlord under the Ground Lease all rent
and other monthly payments due and payable thereunder. If Tenant elects to make
such payments directly to the landlord under the Ground Lease, then (i) upon
each monthly payment Tenant
16
shall simultaneously therewith deliver to Landlord evidence reasonably
acceptable to Landlord that such payment was made, and (ii) Tenant hereby agrees
to indemnify, defend and hold harmless Landlord from any claims, losses or
damages that Landlord suffers as a result of any failure, default or defect in
Tenant's making such payment on Landlord's behalf. Any payments made directly by
Tenant under this Paragraph may be off-set against Base Rent payable by Tenant
during such calendar month.
6. HOLDING OVER. If Tenant or any other Person shall remain in possession of one
(1) or more of the Leased Properties or any part thereof following the
expiration of the Term or earlier termination of this Lease without an agreement
in writing between Landlord and Tenant with respect thereto, the Person
remaining in possession shall be deemed to be a tenant at sufferance, and during
any such holdover, the Rent payable under this Lease by such tenant at
sufferance shall be one hundred fifty percent (150%) of the Rent in effect
immediately prior to the expiration of the Term or earlier termination of this
Lease. In no event, however, shall such holding over be deemed or construed to
be or constitute a renewal or extension of this Lease.
7. USE OF LEASED PROPERTY; COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) Intended Use. Tenant shall use the Leased Properties as a senior
housing facility, including, without limitation, as a senior housing and/or
independent living and/or an assisted living facility and for such other uses as
may be related, incidental or necessary thereto (the "Intended Use") and for no
other purpose; provided, that in no event shall any of the Leased Properties be
used as a skilled nursing facility. Tenant shall not perform any act or follow
any practice relating to any of the Leased Properties which shall constitute a
nuisance. Subject to the terms and provisions of this Lease, Tenant shall have
the right to control the business being conducted at each of the Leased
Properties.
(b) Compliance with Legal Requirements, Insurance Requirements, Facility
Mortgage Requirements and Other Requirements. Tenant, at its sole expense, and
subject to the right of diligent contest as provided in Paragraph 26, shall (i)
comply with all Legal Requirements, Insurance Requirements and Facility Mortgage
Requirements (provided that the terms of such Facility Mortgage comply with the
requirements of Paragraph 54(b)) in respect of the use, operation, maintenance,
repair, alteration and restoration of each of the Leased Properties, including,
without limitation, all zoning classifications of any lawful Government Agencies
or other public or private regulatory authority (including insurance
underwriters or ratings bureaus) having jurisdiction over any of the Leased
Properties, (ii) comply in all material respects with all Other Requirements and
(iii) procure, maintain and comply in all material respects with all Permits and
Licenses, and for the proper operation and maintenance of each of the Leased
Properties or any part thereof, including, without limitation, any Capital
Additions, except, in the case of (i), (ii) or (iii) above, where failure to
comply will not have a material adverse effect on Tenant or Tenant's ability to
operate the Leased Properties for their Intended Use. Upon Tenant's written
request, Landlord shall cooperate with Tenant's reasonable requests and at
Tenant's sole cost and expense, to the extent Landlord's involvement is required
for Tenant to comply with this Paragraph 7(b).
(c) Compliance with Third Party Payor Program Requirements. Tenant shall,
at its sole cost and expense, make (i) whatever improvements (capital or
ordinary) as are required to
17
conform each of the Leased Properties in all material respects to such
standards, if any, as may, from time to time, be required by any applicable
Third Party Payor Programs to the extent Tenant elects to be and remains a
participant in such Third Party Payor Programs (it being acknowledged that the
initial election to participate and to continue to participate in such Third
Party Payor Programs is at the sole and absolute discretion of Tenant), or (ii)
capital improvements required by any other Government Agency having jurisdiction
over the applicable Leased Property as a condition of the continued operation of
such Leased Property for its Intended Use, except, in the case of (i) or (ii)
above, where the failure to comply will not have a material adverse effect on
Tenant or Tenant's ability to operate the Leased Properties for their Intended
Use.
(d) Landlord to Grant Easements, Etc. Landlord shall from time to time, at
the request of Tenant and at Tenant's sole cost and expense, with respect to
each applicable Leased Property (i) grant easements and other rights in the
nature of easements with respect to the applicable Leased Property to third
parties; (ii) release existing easements or other rights in the nature of
easements which are for the benefit of the applicable Leased Property; (iii)
dedicate or transfer unimproved portions of the applicable Leased Property for
road, highway or other public purposes; (iv) execute petitions to have the
applicable Leased Property annexed to any municipal corporation or utility
district; (v) execute amendments to any covenants and restrictions affecting the
applicable Leased Property; and (vi) execute and deliver to any Person any
instrument appropriate to confirm or effect such grants, release, dedications,
transfer, petitions and amendments (to the extent of its interests in the
applicable Leased Property); provided, however, that Landlord shall have first
reasonably determined in good faith that such grant, release, dedication,
transfer, petition or amendment is not detrimental in any material respect to
the operation of the applicable Leased Property for its Intended Use, does not
materially reduce the value of the applicable Leased Property and, to the extent
required by the Facility Mortgage, if any, is acceptable to the Facility
Mortgagee.
(e) Landlord's Receipt Of Third Party Payor Program Reimbursements. If
Landlord is required by applicable law to receive any payments from Third Party
Payors as the owner of any Facility which would be deemed payment for services
provided by or on behalf of Tenant to residents of such Facility, the parties
hereto agree that, so long as there is no existing and continuing Event of
Default hereunder, Landlord shall pay such monies to Tenant as promptly as
practicable.
8. TENANT'S COVENANT TO REPAIR.
(a) Repair and Maintenance. Except to the extent expressly permitted to
the contrary in Paragraph 17 or Paragraph 23, Tenant shall, at all times during
the Term and at its sole cost and expense, (i) put, keep, replace and maintain
each of the Leased Properties (including, without limitation, the Improvements
and the Related Personal Property) in good repair and in good and safe order and
condition, ordinary wear and tear excepted (subject to Tenant's obligations
under clauses (ii) and (iii) below), (ii) make all repairs and replacements
thereto, both inside and outside, structural and non-structural, ordinary and
extraordinary, howsoever the necessity for repairs and replacements may occur,
and whether or not necessitated by wear, tear, obsolescence or defects, latent
or otherwise to satisfy Tenant's obligation under clause (i) above, (iii) use
all reasonable precautions to prevent waste, damage or injury, and (iv) install,
maintain
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and replace all landscaping, signs, sidewalks, roadways, driveways and parking
areas within each of the Leased Properties in good repair and in good and safe
order and condition, ordinary wear and tear excepted (subject to Tenant's
obligations under clauses (ii) and (iii) above). Tenant's obligations under this
Paragraph 8 shall constitute an expense of Tenant, shall not constitute Rent and
shall not offset or reduce any Rent otherwise required to be paid hereunder.
(b) Related Personal Property. Tenant may (and shall as provided herein
below), at its expense, affix or assemble or place on any parcels of the Land or
in any of the Improvements, any Related Personal Property, and Tenant may,
subject to the conditions set forth below, remove the same at any time, provided
it is replaced with substantially equivalent personal property sufficient to
comply with the terms of this Paragraph 8(b). Tenant shall provide and maintain
throughout the Term all such Related Personal Property as shall be necessary in
order to operate each of the Facilities for its Intended Use and in material
compliance with all applicable Legal Requirements and Insurance Requirements.
All of the Related Personal Property shall, upon the expiration or earlier
termination of this Lease, at Landlord's option, exercised by written notice to
Tenant, be either removed by Tenant, at Tenant's sole cost and expense, or left
at the applicable Facility.
9. NO LANDLORD REPAIR OBLIGATIONS. Landlord shall not be required to make any
structural or non-structural alterations, reconstructions, replacements,
changes, additions, improvements or repairs of any kind or nature whatsoever to
any of the Leased Properties or any portion thereof (including, without
limitation, any portion of the Improvements or any Related Personal Property) at
any time during the Term.
10. SURRENDER.
(a) Surrender of Leased Property. Tenant shall on the last day of the
Term, or upon the sooner termination of this Lease, peaceably and quietly
surrender each of the Leased Properties to Landlord, in good repair and in good
and safe order and condition and, further, in at least as good condition as when
each of the Leased Properties was received, ordinary wear and tear and damage by
fire, Casualty or Condemnation excepted (but subject to Tenant's obligation to
restore the Leased Properties as provided in Paragraph 17 and Paragraph 23).
(b) Transfer of Licenses and Permits. In addition, upon the expiration or
earlier termination of this Lease, Tenant shall, at Landlord's sole cost and
expense, with respect to each Leased Property, (i) use commercially reasonable
efforts to cooperate with Landlord or Landlord's nominee in connection with the
processing of Landlord's or such nominee's applications for Permits and Licenses
and (ii) to the extent the same are assignable or otherwise transferable by law
and pursuant to the terms thereof, transfer to Landlord or Landlord's nominee
the Permits and Licenses and all contracts, including contracts with
governmental or quasi-governmental entities which may be necessary for the
operation of the applicable Facility for its Intended Use. If requested by
Landlord, Tenant will continue to manage one (1) or more of the applicable
Facilities after the expiration of the Term and for up to six (6) additional
months, if necessary for Landlord or Landlord's nominee to obtain all necessary
Permits and Licenses on commercially reasonable terms, including, without
limitation, (i) an agreement to pay Tenant a market rate management fee (which
shall in no event be less that $10,000 per month per Facility net to Tenant
(which $10,000 per month shall be increased by the same
19
percentage as the Consumer Index has increased from the Base CPI Index to the
Consumer Index published most closely in time to the effective date of such
management agreement), (ii) an agreement for Landlord to pay all costs and
expenses of operating the applicable Facility, either directly or by
reimbursement to Tenant, and (iii) an agreement for Landlord to reimburse Tenant
for Tenant's reasonable out-of-pocket costs and expenses, and reasonable
administrative costs), and (iv) such other terms and conditions as Landlord and
Tenant shall mutually agree. To that end, pending completion of the transfer of
the operational control of the applicable Facility to Landlord or its nominee:
(i) Tenant will provide all information reasonably requested by
Landlord or its nominee for Landlord's or such nominee's use in the
preparation and filing of any and all necessary applications or
notifications of any federal or state governmental authority having
jurisdiction over a change in the operational control of the applicable
Facility, and any other information reasonably required to effect an
orderly transfer of the applicable Facility; and
(ii) Tenant shall use commercially reasonable efforts to keep the
business and organization of the applicable Facility intact and to
preserve for Landlord or its nominee the goodwill of the suppliers,
distributors, residents and others having business relations with Tenant
with respect to the applicable Facility (it being acknowledged that
residency rates typically decline and employee turnover rates typically
increase when a change in management becomes known).
(c) Apportionment of Impositions, Insurance Premiums and the Minimum
Capital Additions Amount. Upon the expiration of the Term, Landlord and Tenant
shall apportion and prorate Impositions, Insurance Premiums and the Minimum
Capital Additions Amount through the Expiration Date, with Tenant being
responsible for all Impositions, Insurance Premiums and the Minimum Capital
Additions Amount relating to the period prior to the Expiration Date and
Landlord being responsible for all Impositions, Insurance Premiums and the
Minimum Capital Additions Amount relating to the period on and after the
Expiration Date.
11. CAPITAL ADDITIONS.
(a) Construction of Capital Additions. Tenant shall not construct or
install any Capital Addition on any of the Leased Properties without obtaining
Landlord's prior written consent, which consent shall not be unreasonably
withheld, delayed or conditioned, provided that no consent shall be required for
any Capital Addition as long as (i) the Capital Additions Costs for such Capital
Addition are less than Two Hundred Fifty Thousand Dollars ($250,000.00) per
Capital Addition (including all related work), with respect to any particular
Leased Property and (ii) such construction or installation will not violate any
Facility Mortgage Requirements, or materially and adversely affect such Leased
Property or violate any Legal Requirement or Insurance Requirement applicable to
such Leased Property. Prior to commencing construction of any Capital Addition
requiring consent pursuant to the preceding sentence, 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. Landlord shall
have ten (10) Business Days to review all materials submitted
20
to Landlord in connection with any such proposal. Failure of Landlord to respond
to Tenant's proposal within ten (10) Business Days after receipt of all
information and materials requested by Landlord in connection with the proposed
Capital Addition shall be deemed to constitute approval of such proposed Capital
Addition, subject in all events, however, to Tenant's compliance with the other
requirements of this Paragraph 11. Without limiting the generality of the
foregoing, such proposal shall indicate the approximate projected cost of
constructing such Capital Addition and the use or uses to which it will be put.
No Capital Addition shall be made which would tie in or connect any Improvement
on the applicable Leased Property with any other improvements on property
adjacent to such Leased Property (and not part of the Land), including, without
limitation, tie-ins of buildings or other structures or utilities (other than a
utility facility belonging to the provider of such utility service), without
Landlord's consent, which shall be given or withheld in Landlord's discretion.
Any Capital Additions shall, upon the expiration or sooner termination of the
Term, pass to and become the property of Landlord, free and clear of all
encumbrances other than Permitted Encumbrances.
(b) Non-Capital Additions. Tenant shall have the right, at Tenant's sole
cost and expense, without Landlord consent, to make additions, modifications or
improvements which are not Capital Additions ("Non-Capital Additions") to any of
the Leased Properties from time to time as Tenant, in its sole discretion, may
deem desirable for the applicable Intended Use provided that any such
Non-Capital Addition will not materially alter the character or purpose or
materially detract from the value of the applicable Leased Property.
(c) Capital Additions Financed by Landlord. Upon the request of Tenant,
Landlord may elect to finance a Capital Addition, if Landlord, Tenant and ALS
Holdings mutually agree to Tenant's performing such work (each, a "Landlord
Capital Addition"). If Landlord agrees to finance a Landlord Capital Addition,
Tenant shall provide such information as Landlord may from time to time request,
including, without limitation, the following:
(i) Reasonable evidence that such Landlord Capital Addition will be,
and upon completion, has been, completed in compliance with all applicable
Legal Requirements, all Other Requirements and all Facility Mortgage
Requirements;
(ii) Copies of any required building, zoning and land use permits
and approvals and, upon completion of such Landlord Capital Addition, a
copy of the certificate of occupancy for such Landlord Capital Addition,
if required;
(iii) Such information, certificates, licenses, permits or other
documents necessary to confirm that Tenant will be able to use the
Landlord Capital Addition upon completion thereof in accordance with the
applicable Facility's Intended Use, including all Legal Requirements and
all Other Requirements;
(iv) An Officer's Certificate and a certificate from Tenant's
architect, if available, setting forth, in reasonable detail, the
projected (or actual, if available) Capital Additions Cost and invoices
and lien waivers from Tenant's contractors for such work;
(v) A deed conveying to Landlord title to any land acquired for the
purpose of constructing the Landlord Capital Addition free and clear of
any liens or encumbrances,
21
except those approved by Landlord, and, upon completion of the Landlord
Capital Addition, a final as-built survey thereof reasonably satisfactory
to Landlord;
(vi) Endorsements to any outstanding owner's policy of title
insurance, for Capital Additions Costs in excess of $500,000, covering the
applicable Facility or commitments therefor, reasonably satisfactory in
form and substance to Landlord, (A) adding any land acquired for purposes
of constructing the Landlord Capital Addition, (B) updating the same
without any additional exceptions except as reasonably approved by
Landlord, and (C) increasing the coverage thereof by an amount equal to
the Capital Additions Cost relating to such Landlord Capital Addition; and
(vii) Copies of plans and specifications relating to such Landlord
Capital Addition and other instruments reasonably required by Landlord.
(d) Disbursement of Capital Addition Allowances. Provided that no Default
or Event of Default hereunder or under the Agreement Regarding Leases has
occurred and is continuing, and subject to Tenant's satisfaction of the
conditions set forth in this Paragraph 11(d) and, with respect only to any
Mandatory Capital Addition to one (1) or more of the Leased Properties, the
conditions set forth in Paragraph 5(a) of the Agreement Regarding Leases, Tenant
shall have the right upon ten (10) days' prior written notice to Landlord to
request from Landlord a disbursement of funds in connection with a Landlord
Capital Addition or a Mandatory Capital Addition (each, a "Capital Addition
Allowance"). Requests for disbursements under this Paragraph 11(d) shall not be
made more often than once during any calendar month and shall be made in
increments of not less than Twenty Five Thousand and No/100 Dollars ($25,000.00)
and in an aggregate amount not to exceed the approved Capital Additions Cost for
such Landlord Capital Addition.
(i) Landlord shall, upon written request from Tenant and
satisfaction of the requirements set forth in this Paragraph 11(d),
disburse a Capital Addition Allowance to Tenant necessary to pay for the
actual approved costs of Landlord Capital Additions (or, upon partial
completion of such Landlord Capital Additions pursuant to Paragraph
11(d)(vi)).
(ii) Each request for a Capital Addition Allowance shall be in a
form reasonably specified or approved by Landlord and shall set forth (a)
the applicable Leased Property and the specific Landlord Capital Addition
for which the Capital Addition Allowance is requested, (b) if the Landlord
Capital Addition includes the purchase or replacement of specific items,
the quantity and price of each item purchased, (c) the price of all
materials (grouped by type or category) used in connection with the
Landlord Capital Addition to be paid for with the Capital Addition
Allowance, other than the purchase or replacement of specific items, and
(d) the cost of all contracted labor or other services applicable to each
Landlord Capital Addition for which such request for disbursement is made.
(iii) With each request, Tenant shall certify that all Landlord
Capital Additions to be paid for with the Capital Addition Allowance will
be made in a good and
22
workmanlike manner and in accordance with all applicable Legal
Requirements of any Government Agency having jurisdiction over the
applicable Facility.
(iv) To the extent required by Landlord, each request for a Capital
Addition Allowance shall include copies of invoices for all items or
materials purchased and all contracted labor or services provided or to be
provided as a condition to any requested disbursement, and shall include a
waiver of lien (or conditional waiver of lien conditioned only upon
payment of all or a portion of the requested Capital Addition Allowance)
from each Person receiving payment prior to Landlord's disbursement, and
from each contractor, supplier, materialman, mechanic or subcontractor or
other Person who receives payment in an amount equal to or greater than
$25,000.00 for completion of its work or delivery of its materials.
(v) Any lien waiver delivered hereunder shall conform to Legal
Requirements and shall cover all work performed and materials supplied
(including equipment and fixtures) for the applicable Facility by that
contractor, supplier, subcontractor, mechanic or materialman or other
Person up to the date covered by the current disbursement request.
(vi) Each request for a Capital Addition Allowance shall be made
only after completion of the portion of the work with respect to the
Landlord Capital Addition for which the Capital Addition Allowance is
requested. Tenant shall provide Landlord with such evidence of completion
of the portion of the Landlord Capital Addition with respect to which the
Capital Addition Allowance is requested, which shall be satisfactory to
Landlord in its reasonable judgment.
(vii) Upon receipt of the requested Capital Addition Allowance,
Tenant shall pay all invoices in connection with the Landlord Capital
Addition relating to the applicable Capital Addition Allowance.
(e) Capital Addition Allowances Added to Lease Basis. All Capital Addition
Allowances made by Landlord shall be added to the Lease Basis on a
dollar-for-dollar basis and the Base Rent shall be adjusted accordingly.
12. UTILITIES AND OTHER SERVICES. Tenant shall be liable for and shall pay
directly all charges, fees and amounts (together with any applicable penalties,
late charges, taxes or assessments thereon) when due for water, gas,
electricity, air conditioning, heat, septic, sewer, refuse collection, telephone
and any other utility charges or similar items in connection with the use or
occupancy of each of the Leased Properties. Landlord shall not be responsible or
liable in any way whatsoever for the quality, quantity, impairment,
interruption, stoppage, or other interference with any utility service,
including, without limitation, water, air conditioning, heat, gas, electric
current for light and power, telephone, or any other utility service provided to
or serving any of the Leased Properties or any damage or injury caused thereby.
No such interruption, termination or cessation of utility services shall relieve
Tenant of its duties and obligations pursuant to this Lease, including, without
limitation, its obligation to pay all Rent as and when the same shall be due
hereunder.
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13. PERFORMANCE BY LANDLORD OF TENANT'S OBLIGATIONS.
(a) Landlord's Self Help. If an Event of Default shall have occurred and
is continuing, Landlord may (but shall be under no obligation to), after Notice
to Tenant (or without Notice or time to perform if, in Landlord's reasonable
opinion, an emergency exists or action is necessary to cure any default under
any applicable Facility Mortgage prior to the expiration of the applicable cure
period therefor), perform the same for the account and at the expense of Tenant.
If, at any time and by reason of such Event of Default, Landlord is compelled to
pay, or reasonably elects to pay, any sum of money or do any reasonable act
which will require the payment of any sum of money, or is compelled to incur any
expense in the enforcement of its rights hereunder or otherwise, such sum or
sums, together with interest thereon at the Overdue Rate, shall be deemed
Additional Rent hereunder and shall be paid to Landlord by Tenant promptly when
billed therefor, and Landlord shall have all the same rights and remedies in
respect thereof as Landlord has in respect of the Rent herein reserved.
(b) Landlord's Inspections. Landlord, its agents or representatives,
including any applicable Facility Mortgagee, shall have the right, but not the
obligation, upon reasonable advance Notice to enter from time to time upon any
or all of the Leased Properties to perform inspections (including, but not
limited to, sampling) of such Leased Property or Leased Properties to confirm
that Tenant is performing all of Tenant's obligations under this Lease, that
Tenant has not violated any of its covenants under this Lease and that the
Leased Property is in compliance with the applicable Facility Mortgage. Landlord
shall use reasonable efforts to minimize any disturbance to Tenant or any
resident or occupant of the applicable Leased Property (or Leased Properties) as
a result of any such entry by Landlord, its agents or representatives. Upon
completion of such inspection, Landlord may deliver to Tenant a written report
("Inspection Report") outlining certain defaults, if any, in Tenant's
obligations under Paragraph 7(b), Paragraph 7(c) or Paragraph 8(a). Within ten
(10) Business Days after Tenant's receipt of such Inspection Report, Tenant
shall either (i) object to Landlord in writing as to any portion of the
Inspection Report, specifically describing such objection; or (ii) commence any
and all required work outlined in the Inspection Report which Tenant has not
objected to, and diligently complete such work. If Tenant objects to any item in
the Inspection Report, then within ten (10) Business Days of Landlord's receipt
of Tenant's objection notice, both Landlord and Tenant shall select a third
party licensed engineer mutually satisfactory to Landlord and Tenant or if a
single engineer cannot be agreed upon, then Landlord and Tenant shall each, at
their own cost, select a licensed engineer and the two chosen engineers shall
select a third licensed engineer, the cost of the third engineer being paid
equally by Landlord and Tenant. The engineer(s) shall determine, by majority
vote, whether the work outlined in the Inspection Report is necessary to put the
applicable Leased Property in good condition and repair, ordinary wear and tear
excepted (but subject to Tenant's covenants under clauses (ii) and (iii) of
Paragraph 8(a) and otherwise in compliance with this Lease). Such determination
shall be final and binding on Landlord and Tenant. Notwithstanding anything to
the contrary contained in this Paragraph 13(b), all inspections shall occur at
reasonable times during normal business hours and shall be conducted in a manner
aimed to minimize the disturbance or interference with (x) Tenant's and
Manager's use and operation of the applicable Facility and (y) the residents'
and occupants' use of the applicable Facility, and the scope of such inspections
shall be limited by (A) any security, health, safety or confidentiality
requirements of any Governmental Agency or imposed by applicable law or
regulations and (B) Tenant's ordinary business practices and standard
24
residency agreements, if any, requiring Tenant to maintain the confidential
nature of certain personal information relating to individual residents living
in the applicable Facility.
14. ENTRY. Landlord, any related Facility Mortgagee and their agents or
representatives may enter any of the Leased Properties at reasonable times
during normal business hours upon twenty-four (24) hours prior written Notice
(except during emergencies, in which case Landlord shall give reasonable notice
under the circumstances) for the purpose of performing any work which Landlord
elects pursuant to Paragraph 13(a) to undertake by reason of an Event of
Default. Landlord shall use reasonable efforts not to disturb Tenant or any
resident or occupant of the applicable Leased Property (or Leased Properties)
and not to interfere unreasonably with the use and operations of the applicable
Facility (or Facilities) as a result of any such entry by Landlord, its agents
or representatives. Landlord's right to entry with respect to the applicable
Leased Property shall be limited by (A) any security, health, safety or
confidentiality requirements of any Governmental Agency or imposed by applicable
law or regulations and (B) Tenant's ordinary contractual business practices, if
any, requiring Tenant to maintain the confidential nature of certain personal
information relating to individual residents living in the applicable Facility.
15. ASSIGNMENT, SUBLETTING AND LIENS.
(a) Transfers Prohibited Without Consent. Except as provided below, Tenant
shall not, without the prior written consent of Landlord, which consent may be
withheld in Landlord's sole and absolute discretion, in each instance, sell,
assign or otherwise transfer Tenant's interest under this Lease, or Tenant's
interest in one (1) or more of the Leased Properties, in whole or in part, or
any rights or interest which Tenant may have under this Lease, or sublet one (1)
or more of the Leased Properties, or any part thereof. If given, the consent of
Landlord to an assignment, transfer or subletting shall in no event be construed
to relieve Tenant or such assignee or subtenant from the obligation of obtaining
the express consent in writing of Landlord to any further assignment, transfer
or subletting. For purposes of this Paragraph 15(a), a Change of Control which
is not expressly permitted in accordance with the terms of Paragraph 6 of the
Agreement Regarding Leases shall be deemed to constitute a prohibited assignment
of this Lease. Any assignment, transfer or sublease in violation of this
Paragraph 15 shall be voidable at Landlord's option. For purposes of this
Paragraph, Landlord's consent shall conclusively be deemed reasonably withheld
(i) if the proposed transfer would, in Landlord's judgment, violate any Facility
Mortgage Requirements or Ground Lease and Tenant has not obtained the written
consent (in form satisfactory to Landlord) of the applicable Facility Mortgagee
or lessor of the Ground Lease, as applicable, or (ii) if the effect of any such
transfer would adversely affect the status or the treatment of Landlord or its
direct or indirect Parent as a real estate investment trust ("REIT") under
applicable REIT regulations. Notwithstanding the foregoing, except as expressly
provided in Paragraph 6 of the Agreement Regarding Leases, Landlord's consent
shall not be required in connection with (y) any Permitted Transfer, or (z) any
Equity Transfer.
(b) Adequate Assurances. Without limiting any of the foregoing provisions
of this Paragraph 15, if, pursuant to the U.S. Bankruptcy Code, as the same may
be amended from time to time, Tenant is permitted to assign or otherwise
transfer its rights and obligations under this Lease in disregard of the
restrictions contained in this Paragraph 15, the assignee agrees to provide
adequate assurance to Landlord (i) of the continued use of the applicable Leased
25
Property solely in accordance with the Intended Use thereof and in compliance
with all other terms of this Lease; and (ii) of such other matters as Landlord
may reasonably require at the time of such assumption or assignment. Such
assignee shall expressly assume this Lease by an agreement in recordable form.
(c) Permitted Subleases. Notwithstanding the foregoing, Tenant may enter
into (i) third party residency agreements with respect to the individual
residency units located at each of the Facilities, (ii) subleases for space at
each of the Leased Properties for use as a bank, beauty salon, xxxxxx shop,
laundry, commissary or healthcare purposes or other concessions and services in
the ordinary course of business consistent with and ancillary to the Intended
Use; provided, however, that any such proposed subleases with terms longer than
six (6) months shall be subject to Landlord's prior written approval, which
shall not be unreasonably withheld, conditioned or delayed, (iii) any sublease
shall be for a term that will expire prior to the Expiration Date, and (iv)
subject to Landlord's prior written approval as to the form of sublease
agreement, the identity of the proposed tenant and the substance of such
proposed sublease transaction (which will not be unreasonably withheld),
subleases with Manager in so-called "possessory interest" Facility State where
use of a sublease is required by applicable Legal Requirements. Any sublease
permitted hereunder shall not reduce the number of units at the applicable
Facility and will not violate or affect any Legal Requirement or Insurance
Requirement, and Tenant shall maintain (or cause any sublessee to maintain) such
additional insurance coverage with respect to the activities to be conducted in
such subleased space as Landlord may reasonably require so long as such
additional insurance coverage is customarily maintained for comparable
activities and uses at comparable properties. Any sublease permitted hereunder
with respect to the Facility known as Wynwood Commons of Kenmore shall,
notwithstanding the provisions of this Paragraph 15(c), remain subject to the
requirements set forth in Paragraph 57.
(d) Whole Facility Subleases. Notwithstanding anything to the contrary set
forth herein, upon Tenant's satisfaction of the conditions set forth below in
this clause (d), Tenant shall be permitted to sublease up to six (6) of the
Facilities to third party owner/operators of independent living facilities or
senior living facilities. Any subleases under this Paragraph 15(d) shall be
subject to the satisfaction of the following conditions: (i) Tenant shall have
received Landlord's prior written consent both with respect to the identity of
the proposed sublessee and with respect to the form and content of the proposed
sublease, which consent under this clause (i) shall not be unreasonably
withheld, (ii) if required under the terms of any applicable Facility
Mortgage(s) or Ground Lease(s) affecting the Leased Properties proposed to be
subleased, Tenant shall have received the applicable Facility Mortgagee's or
Ground Lease lessor's prior written consent to such sublease, (iii) Tenant shall
promptly after demand by Landlord reimburse Landlord and any applicable Facility
Mortgagee for any out-of-pocket costs (including reasonable attorneys' fees and
disbursements) incurred by Landlord or any such Facility Mortgagee in reviewing
the proposed sublease documents or any preparing any consent agreements, (iv)
the sublease by its terms shall be expressly subject and subordinate to the
interests of Landlord under this Lease, and any such sublease shall provide that
upon the termination of this Lease, at Landlord's option, such sublease will
either (x) terminate and be of no further force and effect, whereupon the
subtenant shall immediately quit and vacate the Leased Property, or (y) continue
in effect as a direct lease between Landlord , as the landlord thereunder, and
the subtenant, as the tenant thereunder, (v) the terms of the subleasing
26
transaction shall otherwise comply with Paragraph 15(c), and (vi) Landlord shall
have determined, in Landlord's discretion reasonably exercised, that Tenant's
entering into the proposed sublease would not adversely affect the status or the
treatment of Landlord or its direct or indirect Parent as a REIT under
applicable REIT regulations. If Tenant enters into one (1) or more subleases
contemplated under this Paragraph 15(d), Tenant shall remain fully liable for
all of Tenant's obligations under this Lease, and no such sublease shall release
or relieve Tenant of any of Tenant's duties or obligations under this Lease,
including, without limitation, the obligation to pay Rent applicable to any
sublet Leased Property.
(e) Liens. Subject to the provisions of Paragraph 26, Tenant shall not,
directly or indirectly, create or allow to remain and shall promptly discharge
or bond over in a manner reasonably satisfactory to Landlord, at its expense,
any Lien encumbering one (1) or more of the Leased Properties or Tenant's
leasehold interest therein or any attachment, levy, claim or encumbrance in
respect of the Rent, other than (i) Permitted Encumbrances; (ii) restrictions,
liens and other encumbrances which are consented to in writing by Landlord or
otherwise permitted under this Lease; (iii) Liens for those taxes of Landlord
which Tenant is not required to pay hereunder; (iv) Liens for Impositions or for
sums resulting from purported noncompliance with Legal Requirements so long as
(A) the same are not yet payable, or (B) are being contested in accordance with
Paragraph 26; (v) liens of mechanics, laborers, materialmen, suppliers or
vendors incurred in the ordinary course of business that are not yet due and
payable or are for sums that are being contested in accordance with Paragraph
26; and (vi) any Facility Mortgage or other liens which are the responsibility
of Landlord pursuant to the provisions of Paragraph 35.
16. IMPOSITIONS. Throughout the Term, Tenant shall bear, pay and discharge all
Impositions which become due and payable during, arise during, accrue during or
otherwise relate to the period comprising (a) the Term or (b) any period prior
to the commencement of the Term. Upon request of Landlord, Tenant shall promptly
furnish to Landlord satisfactory evidence of the payment of any Imposition
required to be paid by Tenant pursuant to the foregoing. If, pursuant to the
terms of any Facility Mortgage, Landlord is required to establish and fund
payments of Impositions to an escrow reserve account established under the loan
documents relating to such Facility Mortgage, then Tenant shall fund all such
payments for the reserve account, and such payments shall constitute Additional
Rent hereunder. Upon the expiration of the Term, Landlord and Tenant shall
apportion and prorate Impositions to the Expiration Date, with Tenant being
responsible for all Impositions relating to the period prior to the Expiration
Date and Landlord being responsible for all Impositions relating to the period
on and after the Expiration Date, as more particularly described in Paragraph
10.
17. CASUALTY.
(a) Restoration and Repair. If the Improvements and/or the Related
Personal Property at any Leased Property shall be destroyed or damaged in whole
or in part by fire or any cause whatsoever ("Casualty"), Tenant shall give
Landlord prompt written notice thereof. If such Casualty does not render the
individual Leased Property Unsuitable for its Intended Use, and if the
applicable Facility Mortgagee applies all or any portion of the applicable
insurance proceeds to repay the applicable Facility Mortgage and therefore any
portion of the proceeds is not available for restoration, or the Facility
Mortgagee otherwise refuses in writing to make any
27
portion of such proceeds available to be used for restoration within a
commercially reasonable period of time in light of the nature of the Casualty
event, then Landlord, in Landlord's sole and absolute discretion, may elect to
make available to Tenant funds in an amount equal to the amount of the proceeds
so applied or withheld, as the case may be, by such Facility Mortgagee. If
Landlord elects not to make such funds available for restoration, Tenant may, by
written Notice to Landlord terminate this Lease as to the applicable Facility by
electing a Limited Termination Election with respect thereto, in which case the
provisions of Paragraph 17(b) shall apply. If the applicable insurance company
or Landlord elects to fund the proceeds for restoration (as more particularly
described in Paragraph 17(b)), then upon Tenant's receipt of proceeds or funds
from the insurance carrier or Landlord as described above, Tenant shall repair,
reconstruct or replace the Improvements and/or the Related Personal Property, or
the portion thereof so destroyed or damaged (whichever is reasonably required),
at least to the extent practicable to a condition substantially equivalent in
value and character as existed immediately prior to such Casualty, and in
accordance with all Legal Requirements, all Insurance Requirements, all Facility
Mortgage Requirements and all Other Requirements. All such work shall be started
as soon as practicable and completed at Tenant's sole cost and expense if the
amount of insurance proceeds are insufficient to complete the project (provided
Tenant actually receives all such proceeds either from the insurance company or,
if any portion of such proceeds is held by the Facility Mortgagee, then from
Landlord), and Tenant shall immediately take such action as is necessary to
secure the applicable Leased Property (or any portion thereof) such that the
same does not constitute a nuisance or otherwise present a health or safety
hazard. Notwithstanding the occurrence of any such Casualty, Tenant shall
continue to pay all Rent without abatement.
(b) Unavailability of Proceeds. Upon the occurrence of a Casualty in which
any individual Leased Property is rendered Unsuitable for its Intended Use, and
if the applicable Facility Mortgagee (i) applies all or any portion of the
applicable insurance proceeds to repay the applicable Facility Mortgage and
therefore any portion of the proceeds are not available for restoration or (ii)
otherwise refuses in writing to make any portion of such proceeds available to
be used for restoration within a commercially reasonable period of time in light
of the nature of the Casualty event, then, unless Landlord, in Landlord's sole
and absolute discretion, agrees to make available to Tenant funds in an amount
equal to the amount of proceeds so applied or withheld as aforesaid by such
Facility Mortgagee, Tenant may elect by written notice to Landlord ("Limited
Termination Election") to terminate this Lease as it relates to the applicable
Leased Property. Upon Landlord's receipt of a Limited Termination Election under
this Paragraph 17(b) or under Xxxxxxxxx 00(x), Xxxxxxxx shall notify Tenant in
writing as to whether Landlord intends to make such funds available and shall
deliver such notice to Tenant not later than ten (10) Business Days after
receiving written notice from the applicable Facility Mortgagee that such
Facility Mortgagee has applied or intends to apply (or has made a final
determination not to disburse) the insurance proceeds (it being acknowledged and
agreed by the parties hereto that if Landlord advances any funds under this
Paragraph 17(b), the Lease Basis will not be increased in connection with any
such funding). Such Limited Termination Election shall be exercised, if at all,
by written termination notice given during the fifteen (15) Business Day period
after Tenant's receipt of such notice from Landlord (time being of the essence
with respect to the giving of such termination notice by Tenant within such time
period), and shall be effective on the day on which the applicable insurance
company (or insurance companies) fund the proceeds of the applicable insurance
policies and the proceeds thereof are actually applied by
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the applicable Facility Mortgagee in reduction of the principal amount of the
applicable Facility Mortgage. Upon the effective date of the transactions
contemplated by the Limited Termination Election (i) Tenant shall immediately
(x) assign Tenant's rights in and to all insurance proceeds for such damage or
destruction to Landlord and any applicable Facility Mortgagee, and (y) pay to
Landlord an amount equal to the deductible or self-insured retention amount
under each insurance policy under which a claim was paid, and (ii) from and
after such effective date until the Expiration Date, the Rent payable monthly
under this Lease shall be reduced in an amount equal to the Deleted Property
Rent Adjustment, and the applicable Deleted Property shall no longer be
considered a Leased Property for the purposes of this Lease other than Paragraph
18(f) and Paragraph 19(c).
(c) Escrow of Insurance Proceeds. Subject to the requirements of any
Facility Mortgagee, in the event of a Casualty resulting in an insurance loss
payment for any Improvements and/or Related Personal Property in an amount
greater than Two Hundred Fifty Thousand Dollars ($250,000.00), unless this Lease
is terminated as provided in Paragraph 17(a) or Paragraph 17(b), the proceeds of
all insurance policies maintained by Tenant plus the amount of any deductible
(to be deposited by Tenant) shall, subject to all Legal Requirements and to the
terms of any Facility Mortgage, be deposited in the name of Landlord, Tenant and
any applicable Facility Mortgagee in an escrow account at an approved financial
institution designated by Landlord or the Facility Mortgagee (which depositary
may be the Facility Mortgagee) (the "Escrow Agent"), and shall be used by Tenant
for the repair, reconstruction or restoration of the Improvements and/or Related
Personal Property. Such proceeds shall be disbursed periodically by the Escrow
Agent upon certification of the general contractor, architect or engineer having
supervision of the work that such amounts are the amounts paid or payable for
the repair, reconstruction or restoration. Tenant shall, at the time of
establishment of such escrow account and from time to time thereafter until said
work shall have been completed and paid for, furnish Landlord with adequate
evidence that at all times the undisbursed portion of the escrowed funds,
together with any funds made available by Tenant, is sufficient to pay for the
repair, reconstruction or restoration in its entirety. Subject to the
requirements of a Facility Mortgage, if a Casualty results in a loss payment for
the Improvements and/or Related Personal Property in an amount equal to or less
than Two Hundred Fifty Thousand Dollars ($250,000.00), unless this Lease is
terminated as provided in Paragraph 17(b), then the proceeds shall be paid to
Tenant, and shall be applied by Tenant toward the repair, reconstruction and
restoration of the Leased Property. Tenant shall obtain, and make available to
Landlord, receipted bills and, upon completion of the work, full and final
waivers of lien.
(d) Uninsured Losses. Nothing contained herein shall relieve Tenant of its
obligations under this Paragraph 17 even if the Casualty is not covered, either
in whole or in part, by insurance.
(e) Deletion of Properties. If this Lease is terminated as to one (1) or
more Leased Properties (but not all of the Leased Properties) in connection with
a Casualty (in accordance with this Paragraph 17) or a Condemnation (in
accordance with Paragraph 23), the provisions of this Paragraph 17(f) shall be
applicable. Without necessity of any further action of the parties, this Lease
shall terminate as to the Deleted Property(ies), and the Deleted Property(ies)
shall be separated and removed herefrom, on the effective date of such removal
(each such date, a "Property Removal Date") as set forth under the express terms
of Paragraph 17 or Paragraph 23.
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As of the applicable Property Removal Date, this Lease shall be automatically
and ipso facto amended to: (i) delete and eliminate the Deleted Property(ies)
herefrom; and (ii) exclude the applicable Deleted Property(ies) from the
definition of Leased Property (except with respect to Tenant's obligations under
Paragraph 18(f) or Paragraph 19(c)). The terms of items (i) and (ii) above shall
not limit the liability of Tenant in case of any termination of this Lease as it
relates to an applicable Deleted Property in connection with a Casualty (in
accordance with Paragraph 17) or a Condemnation pursuant to Paragraph 23 for any
other amounts then owed by Tenant to Landlord with respect to the related Leased
Property, and the deletion of one (1) or more of the Leased Properties from this
Lease shall not reduce the Lease Basis or otherwise affect or reduce the
obligations of Tenant hereunder, except for reducing the Rent by the Deleted
Property Rent Adjustment. Tenant and Landlord shall execute and enter into an
amendment to this Lease reflecting the elimination of any Deleted Property(ies)
herefrom at the effective date of the Limited Termination Election for such
Deleted Property.
18. INSURANCE.
(a) Insurance By Tenant. Subject to the requirements of Paragraph 54(b),
Tenant shall, throughout the Term, and at its sole cost and expense, maintain in
full force and effect the types and amounts of insurance required under each of
the Facility Mortgages and each Ground Lease; provided, however, that if there
is no Facility Mortgage affecting the applicable Leased Property or if the
applicable Facility Mortgagee does not require the maintenance of insurance, the
following types and amounts of insurance coverage with respect to each of the
Leased Properties; provided such insurance coverage is commercially available at
commercially reasonable rates:
(i) Hazard Insurance. Tenant shall keep the Improvements and the
Related Personal Property at each of the Leased Properties, including all
permitted alterations, changes, additions and replacements thereof and
thereto, insured against loss or damage caused by: (A) fire, and other
hazards and perils generally included under extended coverage; (B)
sprinkler leakage; (C) vandalism and malicious mischief; (D) boiler and
machinery; and (E) other perils commonly covered by "All Risk" insurance,
all in an amount which reasonably assures there will be sufficient
proceeds to replace such Improvements and the Related Personal Property in
the event of a loss against which such insurance is issued but in no event
less than 100% of the full replacement value thereof (exclusive of
foundations). Such insurance shall contain (x) "Ordinance or Law Coverage"
(if any of the related Improvements at such Leased Property or the use of
the applicable Leased Property shall at any time constitute legal
non-conforming structures or uses which non-conformance shall be presumed
unless and until Tenant proves to Landlord's reasonable satisfaction, that
such uses are conforming), "Operation of Building Laws," or "Enforcement"
endorsement, (y) "demolition" insurance (in an amount of at least
$5,000,000) and (z) "increased cost of construction" endorsement (equal to
at least $5,000,000). All insurance required hereunder, and all other
insurance maintained by Tenant on the Improvements and the Related
Personal Property in excess of or in addition to that required hereunder,
shall be carried in favor of Landlord, any related Facility Mortgagee and
Tenant, as their respective interests may appear.
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(ii) Liability Insurance. Tenant shall provide and keep in full
force and effect a policy of general public liability and property damage
insurance providing coverage against liability for personal injury, death
and property damage having limits of not less than Five Million Dollars
($5,000,000) in the aggregate. Such insurance shall (A) continue at not
less than the aforesaid limits until required to be changed by Landlord by
reason of changed economic conditions making such protection inadequate,
and (B) cover at least the following: (1) premises and operations; (2)
products and completed operations on an "if any" basis; (3) independent
contractors; (4) blanket contractual liability for all insured contracts;
(5) contractual liability covering indemnities, if any, given by Tenant
contained any applicable Facility Mortgage, to the extent the same is
available; (6) broad form property damage; (7) personal injury (including
death resulting therefrom); (8) healthcare professional liability and (9)
a liquor liability endorsement if alcoholic beverages are sold at the
applicable Leased Property.
(iii) Business Interruption. Tenant shall provide and keep in effect
a policy of business interruption insurance in an amount to cover costs,
damages, lost income, expenses, Base Rent, and all other sums payable
under this Lease for a period of not less than eighteen (18) months from
the date of casualty or loss. Such insurance shall (A) cover all risks
required to be covered by the insurance provided for in clause (i) above
and clause (vii) below; (B) be in an amount sufficient to avoid any
co-insurance penalty; and (C) contain an extended period of indemnity
endorsement that provides that after the physical loss to the applicable
Leased Property has been repaired, the continued loss of income will be
insured until such income returns to the same level it was prior to the
loss, or the expiration twelve (12) months from the date of the repair,
whichever first occurs, and notwithstanding that the policy may expire
prior to the end of such period.
(iv) Worker's Compensation and Employer's Liability Insurance.
Tenant shall provide and keep in full force and effect workers'
compensation insurance, in a form prescribed by the laws of the applicable
Facility State for each of the Leased Properties, and employers' liability
insurance with limits of not less than One Million Dollars ($1,000,000).
(v) Builder's Risk Insurance. Tenant shall, prior to the
commencement of and during the construction of any restoration, renovation
or alteration to any of the Leased Property, provide and keep in full
force and effect builder's risk insurance equal to the total cost of the
project.
(vi) Flood Insurance. If any Improvements relating to any of the
Leased Properties are or become located in an area which is considered a
flood risk by the U.S. Department of Housing and Urban Development, Tenant
shall provide and keep in effect a policy of flood insurance with the
maximum limit of coverage available for the Improvements under the
National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994.
(vii) Boiler and Machinery Insurance. Tenant shall provide and keep
in effect a policy of broad form boiler and machinery insurance (without
exclusion for explosion) covering all boilers or other pressure vessels,
machinery, and equipment located in, on or
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about any of the Leased Properties (including "system breakdown coverage")
in an amount equal to or greater than the repair and full replacement cost
of such equipment and insurance against loss of occupancy or use arising
from any breakdown of such equipment on a so-called "accident basis" and
in such amounts as are generally required by institutional lenders for
properties comparable to the applicable Leased Property.
(viii) Motor Vehicle Insurance. Tenant shall provide and keep in
effect motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles, used in connection with
the operation of the Leased Property, containing minimum limits per
occurrence of One Million and No/100 Dollars ($1,000,000.00).
(ix) "Dram-Shop" Insurance. If alcoholic beverages are sold at any
of the Leased Properties, Tenant shall provide and keep in effect a policy
of so-called "dramshop" insurance or other liability insurance required in
connection with the sale of alcoholic beverages containing minimum limits
per occurrence of One Million and No/100 Dollars ($1,000,000.00).
(x) Fidelity Insurance. Tenant shall provide and keep in effect a
policy of insurance against employee dishonesty in an amount not less than
One Million and No/100 Dollars ($1,000,000) and with a deductible not
greater than Twenty-five Thousand and No/100 Dollars ($25,000.00).
(xi) Healthcare Professional Liability Insurance. Tenant shall
provide and keep in effect a policy of insurance covering claims arising
out of healthcare professional liability in an amount as stated in clause
(ii) of this Paragraph 18(a), and, if written on a "claims-made" basis,
Tenant shall also provide continuous liability coverage for claims arising
during the Term either by obtaining an endorsement providing for an
extended reporting period reasonably acceptable to Landlord if such policy
is cancelled or not renewed for any reason whatsoever, or by obtaining
"tail" insurance coverage providing coverage for a period of at least
twelve (12) months beyond the expiration of the Term.
(xii) Earthquake Insurance. If any of the Leased Properties is in a
high probability earthquake area (i.e., Zone 1 and 2), and a probable
maximum loss ("PML") study reveals that the PML is greater than 10% of the
replacement cost (as determined by Landlord), then earthquake insurance
must be maintained in an amount equal to the PML percentage of the
replacement cost with a deductible not to exceed 5% of the values at risk.
The insurance pursuant to this clause (xii) shall be on terms consistent
with the comprehensive all risk insurance policy required under clause (i)
above.
(xiii) Terrorism Insurance. If the insurance required under
Paragraph 18(a)(i) above excludes coverage for acts of terrorism, Tenant
shall provide terrorism insurance coverage in an amount equal to the full
replacement cost of the applicable Leased Property or Leased Properties,
unless such terrorism insurance coverage is (i) waived by Landlord, (ii)
unable to be procured from any carrier of such insurance, or (iii) not
available at commercially reasonable rates and not being carried by owners
or operators of similarly situated properties.
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(xiv) Other Insurance. In addition, Tenant shall, at Landlord's
request, provide and keep in full force and effect such other insurance
for such risks and in such amounts as may from time to time be required
pursuant to any Facility Mortgage or by any Legal Requirements or as
Landlord may, from time to time, reasonably request against such other
insurable hazards or casualties that at the time are commonly insured
against in the case of business operations similar to those contemplated
by this Lease or for properties similar to the Leased Properties located
in or around the region in which each of the Leased Properties is located
including, without limitation, wind, sinkhole, mine subsidence and
environmental insurance, due regard being given to the height and type of
each of the applicable Leased Properties, construction, location, use and
occupancy. In addition, with respect to the insurance policies required
under clauses (iv), (viii), (ix), (x) and (xi) of this Xxxxxxxxx 00,
Xxxxxxxx shall have the right on Notice to Tenant to change the limits of
said policies by reason of changed economic conditions making such
protection inadequate in Landlord's discretion, but only to the extent
that such revised increased limits are customarily carried and maintained
by companies engaged in businesses similar to Tenant's and operating
properties similar to the Leased Properties.
(b) Landlord as Additional Insured and/or Loss Payee. Any and all
insurance maintained by Tenant as required by this Lease, or in excess of or in
addition to that required hereunder, shall name Landlord, any Facility Mortgagee
and any Ground Lease lessor as additional insureds, as their interests may
appear, and shall contain waiver of subrogation endorsements from its insurance
carrier. Landlord and any Facility Mortgagee shall be named as the loss payee on
all property policies.
(c) Carriers and Features. All insurance policies (except those required
under clause (a)(ii) and clause (a)(xi) of Paragraph 18(a) required to be
carried by Tenant as provided in this Paragraph 18 shall be issued by insurance
companies authorized and/or licensed to do business in the Facility State with a
Best's Insurance Rating of not less than "A-" or a Best's Financial Category of
not less than "VIII", with reasonable deductibles per occurrence. All such
policies shall be for periods of not less than one year. At least fifteen (15)
days prior to the expiration of any such policy, Tenant shall provide evidence,
reasonably satisfactory to Landlord, of Tenant's policy renewal options and
evidence that such policy renewal will be in place prior to the expiration
thereof. All such policies shall require not less than thirty (30) days written
notice to Landlord prior to any cancellation thereof or any change reducing
coverage thereunder. Notwithstanding the foregoing, Tenant may elect to obtain
blanket insurance for each of the foregoing required types of insurance.
Tenant shall pay the premiums for all insurance policies which Tenant is
obligated to carry under this Paragraph 18 and, prior to the expiration of any
such policy, deliver to Landlord a copy of the renewal policy or policies, or,
if Landlord or any related Facility Mortgagee requests, a certificate or
certificates thereof, along with evidence that the premiums therefor have been
paid for through, at least, the next ensuing monthly period or longer as may be
required by the premium installment plan offered by the insurer(s) or premium
finance company(ies). If, pursuant to the terms of any Facility Mortgage,
Landlord is required to establish and fund payments for insurance premiums to
any escrow reserve account established under the loan documents relating to such
Facility Mortgage, then Tenant shall fund all such payments for the reserve
account, and such payments shall constitute Additional Rent hereunder. Any such
funds,
33
paid to an escrow reserve account in connection with insurance premiums shall,
subject to the terms of the applicable Facility Mortgage, be used to pay for
insurance policies required under the Facility Mortgage. Upon the expiration of
the Term, Landlord and Tenant shall apportion and prorate funds on deposit in
any such reserve account, with Tenant being responsible for all insurance
premiums relating to the period prior to the Expiration Date and Landlord being
responsible for all insurance premiums relating to the period on and after the
Expiration Date.
(d) Failure to Procure Insurance. If Tenant fails to procure insurance
required under this Paragraph or fails to maintain the same in full force and
effect continuously during the Term, Landlord shall be entitled to procure the
same and Tenant shall immediately reimburse Landlord for such premium expense as
Additional Rent.
(e) Intentionally Omitted.
(f) Indemnification of Landlord. Notwithstanding the existence of any
insurance provided for herein and without regard to the policy limits of any
such insurance, Tenant shall protect, indemnify and hold harmless Landlord for,
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and reasonable expenses (including, without limitation,
reasonable attorneys' fees), to the maximum extent permitted by law, imposed
upon or incurred by or asserted against Landlord (except to the extent that any
of the following result from Landlord's gross negligence or willful misconduct
after the Commencement Date) by reason of: (i) any accident, injury to or death
of persons or loss of or damage to property occurring on or about any of the
Leased Properties or adjoining sidewalks or right of way, including, without
limitation, any claims of malpractice; (ii) any past, present or future use,
misuse, non-use, non-compliance, condition, management, maintenance or repair by
Tenant or anyone claiming under Tenant of any of the Leased Properties or the
Related Personal Property or any litigation, proceeding or claim by Government
Agencies or other third parties (other than Condemnation proceedings) to which
Landlord is made a party or participant relating to any of the Leased Properties
or the Related Personal Property or such use, misuse, non-use, non-compliance,
condition, management, maintenance, or repair thereof; (iii) any Impositions
(which are the obligation of Tenant to pay pursuant to the applicable provisions
of this Lease), and (iv) any failure or inability of Tenant to obtain the
insurance coverage required hereunder. If at any time Landlord shall have
received written notice of the assertion of a claim, Landlord shall give
reasonably prompt written notice of such claim to Tenant, provided that (x)
Landlord shall have no liability for the failure to give notice of any claim of
which Tenant has otherwise been notified or has actual knowledge, and (y) the
failure of Landlord to give such a notice to Tenant shall not limit the rights
of Landlord or the obligations of Tenant with respect to such claim, except to
the extent that Tenant suffers actual monetary loss as a result of such failure.
Tenant shall pay all amounts payable under this Paragraph 18(f) within fifteen
(15) Business Days after demand therefor, and if not timely paid, such amounts
shall bear interest at the Overdue Rate from the date payment thereof is
required hereunder to the date of payment. Tenant shall have the right to
control the defense and settlement of any such claim (but Tenant, without
Landlord's prior written consent, which Landlord may withhold in Landlord's sole
and absolute discretion, shall not be permitted to settle any claim if such
settlement would admit criminal liability of Landlord), and Tenant, at its
expense, shall contest, resist and defend any such claim, action or proceeding
asserted or instituted against Landlord or may compromise or otherwise dispose
of the same, with Landlord's prior written consent (which consent may not be
unreasonably
34
withheld, delayed or conditioned), provided no such consent shall be required if
the compromise or settlement shall result in a complete release of Landlord from
the claim so compromised or settled). Landlord shall have the right (but not the
obligation), at Landlord's election and sole cost and expense, to participate in
the defense of any such claim, and Tenant shall have no obligation to reimburse
Landlord for any attorneys' fees incurred by Landlord in connection with same.
The obligations of Tenant under this Paragraph 18(f) are in addition to the
obligations set forth in Paragraph 19(c) and shall survive the termination of
this Lease for two (2) years.
19. ENVIRONMENTAL MATTERS.
(a) Tenant's Covenant. Throughout the Term, Tenant covenants that it shall
not cause, permit or allow any Hazardous Materials to be placed, stored, dumped,
dispensed, deposited, used, transported, located, generated or subject to a
Release on any of the Leased Properties in violation of any Environmental Law.
Tenant shall not install or permit the installation of any underground storage
tanks, above ground storage tanks, surface impoundments or asbestos-containing
materials on any of the Leased Properties, unless Landlord consents in writing
prior to the installation. With respect to any asbestos or any
asbestos-containing materials located on or within any of the Leased Properties,
Tenant will perform all necessary actions, including, but not limited to,
operation and maintenance that are necessary to avoid exposing any Person to
asbestos or asbestos-containing materials.
(b) Clean-Up. During the Term, to the extent required by any applicable
Environmental Laws, Tenant shall (i) Remediate the applicable Leased Property to
comply with any and all Environmental Laws regarding Hazardous Materials and
Remediation thereof, and (ii) pay for all Remediation costs at no cost to
Landlord; provided, in each case, such Hazardous Materials were placed, used,
transported, generated or subject to a Release prior to the end of the Term and
do not result from any act or omission after the date hereof of Landlord (other
than a failure to perform Remediation) or any other indemnity hereunder.
(c) Indemnification. Tenant shall indemnify, release and hold harmless
Landlord, its successors, assigns, members, managers, officers, directors,
shareholders and employees, from and against all Liabilities (as defined below),
suffered by, incurred by or assessed against such parties, their agents or other
representatives, whether incurred as a result of legal action taken by any
Government Agency, taken by any private claimant, or taken by Landlord, before
or after the expiration of the Term as a result of the Release or Remediation of
any Hazardous Materials upon or under, on or off site, associated with,
generated on or flowing or originating from any of the Leased Properties prior
to the end of the Term, provided such Liabilities do not arise as a result of
any act or omission after the Commencement Date by Landlord (other than a
failure to perform Remediation) or any other indemnitee hereunder. The term
"Liabilities" as used in this Paragraph 19 is hereby defined as any and all
liabilities, expenses, demands, damages, punitive or exemplary damages,
consequential damages, costs, Remediation costs, losses, causes of action,
claims for relief, reasonable attorneys' fees, other professional fees,
penalties, fines, assessments and charges. Tenant shall have the right to
control the defense or settlement of any such claim (except that Tenant shall
not be authorized to settle criminal charges against Landlord without obtaining
Landlord's, prior written consent, which may be withheld in Landlord's sole and
absolute discretion), and Tenant, at its expense, shall contest, resist and
defend any such claim, action or proceeding asserted or instituted against
Landlord or may compromise or
35
otherwise dispose of the same, with Landlord's prior written consent (which
consent may not be unreasonably withheld, delayed or conditioned, provided no
such consent shall be required if the compromise or settlement shall result in
the complete release of Landlord from the claim so compromised or settled).
Landlord shall have the right (but not the obligation), at its election and sole
cost and expense, to participate in the defense of any such claim, and Tenant
shall have no obligation to reimburse Landlord for any attorneys' fees incurred
by Landlord in connection with same. The provisions of this Paragraph 19 shall
survive the expiration or sooner termination of this Lease for two (2) years.
(d) Notice. Tenant shall promptly notify Landlord of any pending or
threatened claim concerning Environmental Laws and/or Hazardous Material and one
(1) or more of the Leased Properties, for which Tenant has received written
notice. All such notices shall describe in reasonable detail the nature of such
fact, circumstance, condition, occurrence or environmental claim and, where
applicable, Tenant's response thereto. Tenant shall provide additional
information relating to any of the foregoing in such detail as may be reasonably
requested by Landlord.
20. COSTS AND ATTORNEYS' FEES. If either party shall bring an action to recover
any sum due hereunder, or for any breach hereunder, and shall obtain a judgment
or decree in its favor, the court may award to the prevailing party in such
action its reasonable costs and reasonable attorneys' fees, specifically
including reasonable attorneys' fees incurred in connection with any appeals
(whether or not taxable or assessable as such by law). Landlord shall also be
entitled to recover Landlord's reasonable attorneys' fees and costs incurred in
any bankruptcy action filed by or against Tenant, including, without limitation,
those incurred in seeking relief from the automatic stay, in dealing with the
assumption or rejection of this Lease, in any adversary proceeding, and in the
preparation and filing of any proof of claim.
21. DEFAULT; REMEDIES.
(a) Default. Upon the occurrence and during the continuance of any one or
more of the following events (each, an "Event of Default"), Landlord shall have
the right to exercise any rights or remedies available in this Lease, at law or
in equity. Events of Default shall consist of:
(i) Tenant's failure to pay when due any regularly scheduled payment
of Rent, and such failure is not cured within five (5) days (or such
earlier period as set forth in this Paragraph 21(a)); provided, however,
that no Event of Default shall be deemed to have occurred under this
Paragraph 21(a)(i), if Tenant or ALS Holdings cures such failure to pay,
pursuant to the terms of the Agreement Regarding Leases or otherwise,
within such five (5) day period;
(ii) Tenant's failure to pay when due any other payment of Rent, or
any other sum of money payable hereunder (whether as Additional Rent or
otherwise) and such failure is not cured within five (5) days after
receipt of Notice thereof from Landlord; provided, however, that no Event
of Default shall be deemed to have occurred under this Paragraph
21(a)(ii), if Tenant or ALS Holdings cures such failure to pay, pursuant
to the terms of the Agreement Regarding Leases or otherwise, within such
five (5) day period;
36
(iii) Tenant's failure to perform any other of the terms, covenants
or conditions contained in this Lease if not remedied within thirty (30)
days after receipt of Notice thereof, or, if such default cannot
reasonably be remedied within such period, Tenant does not within thirty
(30) days after Notice thereof commence such act or acts as shall be
necessary to remedy the default and shall not thereafter diligently
complete such act or acts within a reasonable time, provided, however, in
no event shall such cure period extend beyond one hundred eighty (180)
days after Notice thereof;
(iv) if Tenant, Lease Guarantor or Guarantor becomes bankrupt or
insolvent, or files any debtor proceedings, or files pursuant to any
statute a petition in bankruptcy or insolvency or for reorganization, or
files a petition for the appointment of a receiver or trustee for all or
substantially all of its assets, or (x) any of the foregoing are filed
against Tenant, Lease Guarantor or Guarantor, and such petition or
appointment shall not have been set aside within ninety (90) days after
the date of such petition or appointment, or (y) Tenant, Lease Guarantor
or Guarantor makes an assignment for the benefit of creditors or shall
admit in writing its inability to pay its debts generally as they become
due, or if Tenant's interest in this Lease is attached, levied upon,
seized or made subject to any other judicial seizure and such seizure or
attachment is not discharged within ninety (90) days;
(v) if Tenant fails to provide insurance coverage (or allows such
coverage to be canceled or lapse) pursuant to its obligation hereunder;
(vi) if any of Tenant, Lease Guarantor or Guarantor is liquidated or
dissolved, or begins proceedings toward such liquidation or dissolution,
or, in any manner, permits the sale or divestiture of substantially all of
its assets;
(vii) if a default occurs under Paragraph 15;
(viii) if (x) there has been a final, unappealable revocation of any
license, permit, certification or approval required for the lawful
operation of any of the Facilities in accordance with its Intended Use, or
(y) any license, permit, certification or approval required for the lawful
operation of any of the Facilities is materially limited and, as a result
of such limitation, Tenant experiences a material adverse effect on the
operation of the Leased Properties, taken as a whole, for their respective
Intended Use;
(ix) if Tenant voluntarily ceases operation of any of the Leased
Properties for its Intended Use, except as a result of Casualty or partial
or complete Condemnation;
(x) if Tenant fails to pay for money borrowed or for the deferred
purchase price of any material property or services (excluding trade
accounts payable in the ordinary course of business on customary trade
terms) or any guaranty relating thereto which, in the aggregate, exceeds
Two Hundred Fifty Thousand Dollars ($250,000), and the same be declared to
be or become due and payable prior to the stated maturity thereof and all
applicable notices with respect thereto have been given and all applicable
grace or cure periods with respect thereto shall have lapsed;
(xi) Intentionally Omitted;
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(xii) Intentionally Omitted;
(xiii) any material representation or warranty made by Tenant in
this Lease is determined to have been false when made;
(xiv) the issuance or entry against Tenant of any final,
unappealable award or judgment (or any appeal periods have expired) in an
amount of Two Hundred Fifty Thousand Dollars ($250,000.00) or more, and
such award or judgment shall continue unsatisfied and in effect for a
period of ten (10) consecutive days without demonstrating that any
insurance policy exists that would cover such award or judgment;
(xv) the issuance or entry against Lease Guarantor or Guarantor of
any final, unappealable award or judgment (after any appeal period have
expired) in an amount of One Million Six Hundred Thousand Dollars
($1,600,000.00) or more, and such award or judgment shall continue
unsatisfied and in effect for a period of ten (10) consecutive days
without Tenant's demonstrating, to Landlord's reasonable satisfaction,
that any insurance policy exists that would cover such award or judgment;
(xvi) Intentionally Omitted; or
(xvii) if an Event of Default (as defined in the Agreement Regarding
Leases) occurs under the Agreement Regarding Leases; provided, however,
that if and to the extent that a default under this clause (xvii) occurs
and such default arises solely as a result of a default under one (1) or
more of the other Property Leases (as defined in the Agreement Regarding
Leases), then, provided that no other independent Event of Default then
exists under this Lease, such default shall not constitute an Event of
Default, unless each Facility Mortgagee (if any) holding a Facility
Mortgage encumbering the Leased Property consents in writing, in its sole
discretion, to such default's constituting an Event of Default.
Notwithstanding the foregoing, if any applicable Facility Mortgage
provides for a shorter cure or grace period, or does not require notice to be
given to trigger an event of default thereunder for the same obligation as
described above and provided such obligation is a concurrent obligation of
Tenant hereunder, then the provisions for notice (or lack thereof) and cure
under such Facility Mortgage shall supersede the notice and cure provisions set
forth above, it being acknowledged and agreed that all such payments and
obligations of Tenant hereunder shall be made and performed within such time
periods so as to comply with the terms of the Facility Mortgage.
(b) Remedies. If any of the Events of Default hereinabove specified shall
occur and be continuing, Landlord shall have and may exercise any one or more of
the following rights and remedies:
(i) Landlord may, by written Notice thereof to Tenant, terminate
this Lease as to all but not less than all of the Leased Properties, and,
peaceably or pursuant to appropriate legal proceedings, re-enter, retake
and resume possession of all of the Leased Properties for Landlord's own
account and recover immediately from Tenant any and all Rent and other
sums and damages due or in existence at the time of such termination,
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including, without limitation: (A) all Rent and other sums, charges,
payments, costs and expenses agreed and/or required to be paid by Tenant
to Landlord hereunder; (B) all reasonable costs and expenses of Landlord
in connection with the recovery of possession of the Leased Properties,
including reasonable attorneys' fees and court costs; and (C) all costs
and expenses of Landlord in connection with any reletting or attempted
reletting of the Leased Properties or any part or parts thereof,
including, without limitation, brokerage fees, reasonable attorneys' fees
and the cost of any alterations or repairs which may be reasonably
required to so relet the Leased Properties or any part or parts thereof;
(ii) If an Event of Default continues uncured for a period of six
(6) months, Landlord may, by written Notice thereof to Tenant, terminate
Tenant's option to renew the term this Lease for one (1) or both of the
Renewal Terms;
(iii) Landlord may, pursuant to any prior notice required by law,
and without terminating this Lease, peaceably or pursuant to appropriate
legal proceedings, re-enter, retake and resume possession of the Leased
Properties for the account of Tenant, make such alterations of and repairs
to the Leased Properties as may be reasonably necessary in order to relet
the same or any part or parts thereof and relet or attempt to relet the
Leased Properties or any part or parts thereof for such term or terms
(which may be for a term or terms extending beyond the Term), at such rent
and upon such other terms and provisions as Landlord, in its reasonable
discretion, may deem advisable. If Landlord retakes and resumes possession
of the Leased Properties, it shall use commercially reasonable efforts to
mitigate any damages it suffered by virtue of such Event of Default.
Subject to the requirements of any Facility Mortgage, upon any such
reletting, all rents received by Landlord from such reletting shall be
applied: (A) first, to the payment of all costs and expenses of recovering
possession of the Leased Properties; (B) second, to the payment of any
costs and expenses of such reletting, including brokerage fees, reasonable
attorneys' fees and the cost of any alterations and repairs reasonably
required for such reletting; (C) third, to the payment of any
indebtedness, other than Rent, due hereunder from Tenant to Landlord, and
to satisfy any Liens encumbering Tenant's leasehold interest; (D) fourth,
to the payment of all Rent and other sums due and unpaid hereunder with
respect to the Leased Properties; and (E) fifth, the residue, if any,
shall be held by Landlord and applied in payment of future Rent as the
same may become due and payable hereunder. If the rents received from such
reletting during any period shall be less than that required to be paid
during that period by Tenant hereunder, then Tenant shall promptly pay any
such deficiency to Landlord and failing the prompt payment thereof by
Tenant to Landlord, Landlord shall immediately be entitled to institute
legal proceedings for the recovery and collection of the same. Landlord
shall, in addition, be immediately entitled to xxx for and otherwise
recover from Tenant any other damages occasioned by or resulting from any
abandonment of any of the Leased Properties or other Event of Default
under this Lease other than a monetary Event of Default. No such re-entry,
retaking or resumption of possession of any of the Leased Properties by
Landlord for the account of Tenant shall be construed as an election on
the part of Landlord to terminate this Lease, unless a Notice of such
intention shall be given to Tenant or unless the termination of this Lease
be decreed by a court of competent jurisdiction. Notwithstanding any such
re-entry and reletting or attempted reletting of any Leased Property or
any part or parts thereof for the account of Tenant without
39
termination of this Lease as provided above, Landlord may at any time
thereafter, upon Notice to Tenant, elect to terminate this Lease as
provided above or pursue any other remedy available to Landlord for
Tenant's previous and continuing Event of Default under this Lease; or
(iv) Landlord may, without re-entering, retaking or resuming
possession of the Leased Property, xxx for all Rent and all other sums,
charges, payments, costs and expenses due from Tenant to Landlord
hereunder either: (A) as they become due under this Lease, taking into
account that Tenant's right and option to pay the Rent hereunder with
respect to the Leased Properties on a monthly basis in any particular
Lease Year is conditioned upon the absence of an Event of Default under
this Lease; or (B) at Landlord's option, accelerate the maturity and due
date of the whole or any part of the Rent for the entire then-remaining
unexpired balance of the Initial Term or the applicable Renewal Term, as
the case may be (reduced to its present value, applying an interest rate
of eight percent (8%)) less the present value of the fair market rent for
the same period, plus all other sums, charges, payments, costs and
expenses required to be paid by Tenant to Landlord hereunder, including,
without limitation, damages for breach or default of Tenant's obligations
hereunder in existence at the time of such acceleration, such that all
sums due and payable under this Lease shall, following such acceleration,
be treated as being, and in fact shall be, due and payable in advance as
of the date of such acceleration. Landlord may then proceed to recover and
collect all such unpaid Rent and other sums so sued for from Tenant by
distress, levy, execution or otherwise.
In addition to the remedies hereinabove specified and enumerated, Landlord
shall have and may exercise the right to invoke any other remedies allowed at
law or in equity as if the remedies of re-entry, unlawful detainer proceedings
and other remedies were not herein provided. Accordingly, the mention in this
Lease of any particular remedy shall not preclude Landlord from having or
exercising any other remedy at law or in equity. Nothing herein contained shall
be construed as precluding Landlord from having or exercising such lawful
remedies as may be and become necessary in order to preserve Landlord's right or
the interest of Landlord in the Leased Properties and in this Lease, even before
the expiration of any notice periods provided for in this Lease, if under the
particular circumstances then existing the allowance of such notice periods will
result in the termination of the rights and estate of Landlord in this Lease and
in any of the Leased Properties.
22. LANDLORD'S DEFAULT; LANDLORD'S RIGHT TO DISPUTE.
(a) Landlord Default. If Landlord shall default in the performance or
observance of any of its covenants or obligations set forth in this Lease and
such default shall continue for a period of thirty (30) days after Notice
thereof from Tenant to Landlord, or such additional period as may be reasonably
required to correct the same provided Landlord has commenced and is diligently
prosecuting a cure thereof, Tenant may declare the occurrence of a "Landlord
Default" by a second Notice to Landlord. Thereafter, Tenant may, but shall have
no obligation, to cure the same (including, without limitation, by making
payments past due under any Facility Mortgage(s) directly to the applicable
Facility Mortgagee(s)), and, subject to the provisions of Paragraph 22(b),
invoice Landlord for costs and expenses (including reasonable attorneys' fees
and court costs) incurred by Tenant in curing the same, together with interest
thereon from five
40
(5) days following the date Landlord receives Tenant's invoice, at the Overdue
Rate. Tenant shall have no right to terminate this Lease for any default by
Landlord hereunder and no right, for any such default, to offset or counterclaim
against any Rent or other charges due hereunder.
(b) Landlord's Right to Dispute. If Landlord shall in good faith dispute
the occurrence of any Landlord Default, and Landlord, before the expiration of
the thirty (30) day cure period, shall give Notice thereof to Tenant, setting
forth, in reasonable detail, the basis therefor, Landlord shall have no
obligation with respect to such occurrence or event until a final adverse
determination thereof by a court of competent jurisdiction. Tenant and Landlord
shall in good faith attempt to resolve such dispute and if they fail to do so
within ten (10) days after Landlord's Notice, either may submit the matter for
resolution to a court of competent jurisdiction.
(c) Tenant Right to Cure Facility Mortgage Default. Notwithstanding
anything to the contrary contained herein (including, without limitation in
Paragraph 22(b)), if in connection with any Existing Facility Mortgage, Landlord
is unable to obtain from the Facility Mortgagee a Subordination Agreement as
contemplated in Paragraph 35, then Tenant shall have the right, at its sole
election, but upon not less than two (2) Business Days prior written notice to
Landlord, to cure on behalf of Landlord any default by Landlord under the
Facility Mortgage, provided such default was not caused by Tenant and, provided,
further, that such default can be cured by the payment of money. If Tenant
elects to cure any such monetary default under a Facility Mortgage on behalf of
Landlord, then Tenant may off-set any payments made by Tenant under this
Paragraph against Rent payable by Tenant hereunder.
23. CONDEMNATION.
(a) Complete Taking. If (i) the whole of any of the Leased Properties
shall be taken by Condemnation or (ii) a Condemnation of less than the whole of
any of the Leased Properties renders the affected Leased Property Unsuitable for
its Intended Use, then this Lease shall automatically terminate as to the
affected Leased Property only as of the Date of Taking, subject to the
obligations of Tenant to deliver to Landlord all Awards to which Landlord is
entitled pursuant to the terms of this Lease and to pay such other amounts as
required by Paragraph 23(c) hereof, which obligations shall survive the
termination of this Lease as to such affected Leased Property. Tenant and
Landlord shall seek the Award for their interests in the affected Leased
Property as provided in Paragraph 23(c).
(b) Partial Taking. If any part of any of the Leased Properties shall be
taken by Condemnation, such that the remaining portion of the affected Leased
Property may continue to be used for its Intended Use, this Lease shall not
terminate or be terminated, and subject to Paragraph 23(d), Tenant shall restore
the remaining portion of the affected Leased Property to the extent necessary to
render it reasonably suitable for its Intended Use and make all repairs to any
related Improvements or Related Personal Property damaged by such taking to the
extent necessary to constitute such Improvements a complete architectural unit
and otherwise in accordance with Legal Requirements.
(c) Award. All Awards in any Condemnation, either permanent or temporary,
of all or any part of any of the Leased Properties or any easement or any
appurtenance thereto,
41
including severance and consequential damages and change in grade of any street,
shall, after any required repayment of any applicable Facility Mortgage pursuant
to the terms thereof, be the property of and paid to Landlord, provided that the
Award in connection with any partial taking shall be made available by Landlord
to pay or reimburse Tenant for the cost of restoration or rebuilding. Landlord
shall make available to Tenant all or any portion of the Award to be used to pay
for costs of restoration or rebuilding in connection with any such partial
taking. Any such funds shall be held and disbursed by Escrow Agent in the manner
and under the conditions provided in Paragraph 17. Any surplus which may remain
out of any Award after any required repayment of any applicable Facility
Mortgage and any payment or reimbursement to Tenant of the cost of restoration
or rebuilding shall be retained by Landlord, and the Lease Basis shall be
reduced on a dollar-for-dollar basis by the amount so retained. Notwithstanding
the foregoing, any Award made for the Tenant's leasehold interest in the Leased
Property, the loss of Tenant's business for the remainder of the Term and
relocation expenses of Tenant shall be paid to and be the property of Tenant.
(d) Unavailability of Award. If, in connection with a partial
Condemnation, a Facility Mortgagee refuses to make available (within a
commercially reasonable time in light of the circumstances) for the
reconstruction, repair and restoration of the applicable Facility any portion of
the Award, then, unless Landlord, in Landlord's sole and absolute discretion,
agrees to make available to Tenant funds in an amount equal to the amount of
proceeds so applied by such Facility Mortgagee, Tenant may give a Notice
electing to terminate this Lease as it relates to the applicable Leased
Property. Landlord shall notify Tenant in writing as to whether Landlord intends
to make such funds available and shall deliver such notice to Tenant not later
than ten (10) Business Days after receiving written notice from the applicable
Facility Mortgagee that such Facility Mortgagee has applied or intends to apply
(or has made a final determination not to disburse) the Award (it being
acknowledged and agreed by the parties hereto that if Landlord advances any
funds under this Paragraph 23(d), the Lease Basis will not be increased in
connection with any such funding). Such termination option shall be exercised,
if at all, by termination Notice given during the fifteen (15) Business Day
period after Tenant's receipt of such notice from Landlord (time being of the
essence with respect to the giving of such termination notice by Tenant within
such time period). If Tenant elects under this Paragraph 23(d) to terminate this
Lease as it relates to the applicable Leased Property, such partial termination
shall be effective on the day on which the applicable condemning authority pays
the Award and such funds are actually applied by the applicable Facility
Mortgagee in reduction of the principal amount of the applicable Facility
Mortgage. Upon the effective date of the transactions contemplated by the
termination notice, (i) Tenant shall immediately assign Tenant's rights in and
to any Award relating to such condemnation, and (ii) from and after such
effective date until the Expiration Date, the Rent payable monthly under this
Lease shall be reduced in an amount equal to the Deleted Property Rent
Adjustment, and the applicable Deleted Property shall no longer be considered a
Leased Property for the purposes of this Lease (other than Paragraph 18(f) and
Paragraph 19(c)).
(e) Notices. Each of Landlord and Tenant further covenants and agrees to
give the other immediate Notice of the actual or threatened commencement of any
Condemnation proceedings and to deliver to the other copies of any and all
papers served in connection with any such proceedings.
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24. REPORTS AND STATEMENTS. Tenant shall furnish the following reports and
statements to Landlord during the Term; provided, however, that with respect to
the items listed in clauses (i) through (v) below, Tenant shall be required to
furnish same only if and to the extent such reports are required to be delivered
to any Facility Mortgagee pursuant to the loan documents relating to the
applicable Facility Mortgage, whereupon Tenant shall furnish such reports listed
in clauses (i) through (v) below simultaneously with the delivery of the same to
such Facility Mortgagee (except to the extent that (x) Tenant is legally
prohibited from delivering such information based on the facility-resident
relationship and/or the physician-resident privilege under applicable laws or
under any security, health, safety or confidentiality requirements imposed by
applicable law or regulations or (y) Tenant's ordinary business practices and
standard resident agreements, if any, require Tenant to maintain the
confidential nature of certain personal information relating to individual
residents living in the applicable Facility, in which case, such protected
information shall be redacted from the material otherwise required to be
delivered hereunder):
(i) copies of all licenses authorizing Tenant to operate each of the
Facilities for its Intended Use (together with any renewals or extensions
thereof), accompanied by an Officer's Certificate certifying that copies
of such licenses are accurate and complete in all material respects;
(ii) true and complete copies of a report regarding the compliance
of each of the Leased Properties with all licenses, permits and
authorizations necessary for the use thereof in accordance with its
Intended Use;
(iii) all Medicare and Medicaid certifications, together with
provider agreements and all material correspondence relating thereto with
respect to each of the Facilities, if any (excluding, however,
correspondence which may be subject to any attorney-client privilege);
(iv) all reports or surveys, statements of deficiencies, plans of
correction, and all material correspondence relating thereto, including,
without limitation, all reports and material correspondence concerning
compliance with or enforcement of licensure, Medicare/ Medicaid (if
applicable), all accreditation requirements including physical environment
and Life Safety Code survey reports (excluding, however, correspondence
which may be subject to any attorney-client privilege);
(v) such other confirmation as to the licensure and, if applicable,
Medicare and Medicaid participation of Tenant as Landlord may reasonably
request from time to time;
(vi) as soon as available, and in any event within thirty (30) days
after the end of each calendar year and within thirty (30) days after the
end of each calendar quarter with respect to the first three (3) quarters
of each calendar year, unaudited operating statements prepared for such
calendar year or calendar quarter, as the case may be, with respect to
Tenant, and a quarterly operating statement for each Facility, each
accompanied by an Officer's Certificate certifying that the information
contained therein is true and correct in all material respects;
43
(vii) within thirty (30) days after the end of each calendar month,
an income statement for the Tenant, occupancy reports and a rent roll (if
reasonably requested by Landlord) for each of the Facilities (including
the amounts paid by residents at each of the Facilities); and
(viii) with reasonable promptness following request from Landlord,
information regarding licensure, regulatory compliance and, if applicable,
Medicare and Medicaid participation, and any other statements, reports and
other information with respect to Tenant or the operation of the Leased
Property required pursuant to any Facility Mortgage or otherwise
reasonably requested by Landlord.
25. ADDITIONAL COVENANTS OF TENANT.
(a) Indebtedness of Tenant. Tenant shall not create, incur, assume or
guarantee, or permit to exist, or become or remain liable directly or indirectly
upon, any indebtedness except the following:
(i) indebtedness of Tenant to Landlord or to Manager under the
Management Agreement;
(ii) indebtedness of Tenant for current taxes, assessments,
governmental charges of levies, to the extent that payment thereof shall
not at the time be required to be made in accordance with the provisions
of Paragraph 26;
(iii) indebtedness of Tenant in respect of judgments or awards (A)
either (x) which have been in force for less than the applicable appeal
period and in respect of which execution thereof shall have been stayed
pending such appeal or review, or (y) which are fully covered by insurance
payable to Tenant, or (z) which are for an amount not in excess of
$250,000.00, in the aggregate, at any one time outstanding, and (B) either
(x) which have been in force for not longer than the applicable appeal
period, so long as execution is not levied thereunder, or (y) in respect
of which an appeal or proceedings for review shall at the time be
prosecuted in good faith in accordance with the provisions of Paragraph
26, and in respect of which execution thereof shall have been stayed
pending such appeal or review;
(iv) unsecured borrowings from any Related Party (other than
Landlord or its Affiliates) which are by their terms expressly subordinate
to the payment and performance of Tenant's obligations under this Lease;
(v) indebtedness for purchase money financing of goods and services
in an amount not to exceed Fifty Thousand Dollars ($50,000.00), per
Facility, incurred in the ordinary course of business, provided that any
such indebtedness in excess of $50,000.00 incurred in the ordinary course
of business shall be subject to Landlord's consent, which shall not be
unreasonably withheld, conditioned or delayed; or
(vi) unsecured trade payables incurred in the ordinary course of
business.
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(b) Management of Leased Property; Joinder by Manager. Subject to the
rights of any Facility Mortgagee, Tenant shall not enter into or permit to exist
any management agreement with respect to any of the Leased Properties, or make
any material modification of an approved management agreement, unless the terms
thereof have been previously approved in writing by Landlord, which approval may
be withheld in Landlord's reasonable discretion; provided, however, that
Landlord hereby approves the terms of the Management Agreement. Subject to the
rights of any Facility Mortgagee, all management fees, payments in connection
with any extension of credit and fees for services provided in connection with
the operation of each of the Leased Properties payable by Tenant to Manager
under the Management Agreement are hereby subordinated to all of the obligations
of Tenant due under this Lease, and Manager's consent to such subordination is
evidenced by its joining into this Lease solely to acknowledge and agree to the
subordination and the other terms and conditions set forth in this Paragraph
25(b). Upon replacement of the Manager in accordance with the terms of this
Lease, Tenant shall, and shall cause the new Manager of the applicable Leased
Property or Leased Properties to, execute (x) a Manager's Consent and
Subordination of Property Management Agreement, in form and substance reasonably
acceptable to Landlord and the new Manager, which shall provide that any fee
relating to the management or operation of the applicable Leased Property (or
Leased Properties) is and shall at all times remain subordinate to the payments
of Rent hereunder and that such replacement manager shall be subject to the
termination provisions of Paragraph 28 of the Agreement Regarding Leases, and
(y) a Manager's Consent and Subordination of Property Management Agreement, in
form and substance reasonably acceptable to any applicable Facility Mortgagee
and the new Manager, which shall provide that any fee relating to the management
or operation of the applicable Leased Property (or Leased Properties) is and
shall at all times remain subordinate to the payments under any related Facility
Mortgage.
(c) [Intentionally Omitted].
(d) Capital Additions. Subject to the provisions of Paragraph 10(c) of the
Agreement Regarding Leases, during each Lease Year of the Term, Tenant shall
expend on Capital Additions made to the Facilities, in the aggregate, an amount
at least equal to the Minimum Capital Additions Amount. As used herein, the term
"Minimum Capital Additions Amount" shall mean, with respect to the Facilities,
the product of (i) the number of units contained in the Facilities (in the
aggregate) multiplied by (ii) Four Hundred Dollars ($400) during the first (1st)
year of the Term, as such amount shall be increased on the first day of each
succeeding Lease Year of the Term after the first Lease Year of the Term in
proportion to increases in the Consumer Index, provided that in no event shall
the Minimum Capital Additions Amount be less than the Minimum Capital Additions
Amount for the prior Lease Year. If in any Lease Year Tenant fails to expend the
entire Minimum Capital Additions Amount, as required pursuant to this Paragraph
25(d), prior to the end of such Lease Year, Tenant shall pay any such shortfall
amount to Landlord, which funds shall be deposited into the Capital Additions
Reserve (as defined in the Agreement Regarding Leases) (or a similar account
required in connection with any Facility Mortgage(s)), for expenditure by Tenant
as required herein. If Tenant funds any such shortfall amount to the Capital
Additions Reserve prior to the end of the applicable Lease Year, no default
shall be deemed to have occurred hereunder. Provided no Event of Default exists
hereunder any such escrowed funds shall be disbursed by Landlord from time to
time during the Term, in accordance with the terms and conditions set forth in
Paragraph 10(d) of the Agreement Regarding Leases, to be used in connection with
Capital Additions requiring funds in
45
the applicable Lease Year in excess of the Minimum Capital Additions Amount, as
more particularly described in Paragraph 10(c) and Paragraph 10(d) of the
Agreement Regarding Leases. Subject to the provisions of Paragraph 12(a) of the
Agreement Regarding Leases, the Minimum Capital Additions Amount may be adjusted
from time to time based on the requirements of any Facility Mortgagee, provided
any such provisions regarding the funding of capital replacement reserves under
any future Facility Mortgage shall be in compliance with the requirements of
Paragraph 54(b). In addition, Landlord and Tenant agree to review the Minimum
Capital Additions Amount periodically (but in no event less than annually), to
provide for the proper operation and maintenance of each of the Facilities.
(e) Capital Additions Reserve. Upon Landlord's written request, or if
Tenant deposits any funds in accordance with Paragraph 25(d), or if otherwise
required by any Facility Mortgagee, Tenant shall establish a reserve fund for
the Minimum Capital Additions Amount (the "Capital Additions Reserve"), which
reserve fund shall be held in Landlord's name or in the name of the Facility
Mortgagee, if applicable, in an escrow account with a financial institution
designated by Landlord or by the Facility Mortgagee, if applicable. If the
Capital Additions Reserve is established, Tenant shall deposit therein
one-twelfth (1/12th) of the Minimum Capital Additions Amount each month. All
moneys deposited into the Capital Additions Reserve shall be maintained for the
payment of, or reimbursement to Tenant for, Capital Additions Costs (other than
with respect to Landlord Capital Additions). Tenant shall convey, pledge and
grant to Landlord or the Facility Mortgagee, as applicable, a security interest
in the Capital Additions Reserve in order to secure Tenant's obligations to pay
Rent and other charges under this Lease. Tenant shall cooperate with Landlord
and the Facility Mortgagee, if applicable, in connection with perfecting any
such security interest.
(f) Operation of each of the Facilities. Tenant shall operate each of the
Facilities in at least as high a standard of operation as the Facilities are
currently operated as of the date of this Lease.
26. PERMITTED CONTESTS. Tenant shall have the right to contest the amount or
validity of any Legal Requirement, Insurance Requirement, Lien, Imposition,
charge or other claim (collectively, "Claims") as to any of the Leased
Properties, by appropriate legal proceedings, conducted in good faith and with
due diligence, provided that (i) the foregoing shall in no way be construed as
relieving, modifying or extending Tenant's obligation to pay any Claims as
finally determined; (ii) such contest shall not cause Landlord to be in default
under any Facility Mortgage; (iii) no part of the applicable Leased Property nor
any Rent therefrom shall be in any immediate danger of sale, forfeiture,
attachment or loss; and (iv) Tenant shall indemnify and hold harmless Landlord
from and against any cost, claim, damage, penalty or reasonable expense,
including reasonable attorneys' fees, incurred by Landlord in connection
therewith or as a result thereof. Upon Landlord's request, Tenant shall either
(i) provide a bond, title indemnity, endorsement or other assurance reasonably
satisfactory to Landlord that all Claims which may be assessed against the
applicable Leased Property, together with all interest and penalties thereon,
will be paid, or (ii) deposit within the time otherwise required for payment
with the Escrow Agent or another financial institution reasonably acceptable to
Landlord, as security for the payment of such Claims, an amount sufficient to
pay the same, together with interest and penalties in connection therewith and
all Claims which may be assessed against or become a Claim on or with respect to
the applicable Leased Property, or any part thereof, in connection
46
with any such contest. Tenant shall furnish Landlord with reasonable evidence of
such deposit, title indemnity, endorsement or other assurance within five (5)
Business Days after request therefor. Landlord agrees to join in such
proceedings if required legally to prosecute such contest (and shall cooperate
with Tenant's reasonable requests in connection therewith, at Tenant's sole cost
and expense), provided that Landlord shall not thereby be subjected to any
liability therefor (including, without limitation, for the payment of any costs
or expenses in connection therewith). Tenant shall be entitled to any refund of
any Claims and such charges and penalties or interest thereon which have been
paid by Tenant or paid by Landlord and for which Landlord has been fully
reimbursed by Tenant. If Tenant shall fail (A) to pay any Claims promptly after
such Claim is finally determined (provided no appeal has been commenced and
under applicable law no payment is required to be made during the pendency of
any appeal), (B) to provide security therefor as provided in this Paragraph 26,
or (C) to prosecute any such contest diligently and in good faith, Landlord may,
upon reasonable Notice to Tenant, pay such charges, together with interest and
penalties due with respect thereto, and Tenant shall reimburse Landlord
therefor, upon demand.
27. NOTICES OF COMMENCEMENT OF CONSTRUCTION. If required by the laws of the
Facility State with respect to the related Leased Property or in the event
permitted by the laws of the Facility State with respect to the related Leased
Property and Landlord so requests, upon Tenant giving Notice to Landlord of its
intended construction, and if Tenant reasonably contemplates that construction
of any work on the applicable Leased Property will cost, in the aggregate, Two
Hundred Fifty Thousand Dollars ($250,000.00) or more for such project, prior to
commencement by Tenant of any work on the applicable Leased Property which shall
have been previously permitted by Landlord as provided in this Lease, Tenant
shall record or file a notice of the commencement of such work (the "Notice of
Commencement") in the land records of the county in which such Leased Property
is located, identifying Tenant as the party for whom such work is being
performed, stating such other matters as may be required by applicable law and
requiring the service of copies of all notices, liens or claims of lien upon
Landlord. Any such Notice of Commencement shall clearly reflect that the
interest of Tenant in the applicable Leased Property is that of a leasehold
estate and shall also clearly reflect that the interest of Landlord, as the fee
simple owner of the applicable Leased Property (or the holder of a ground
leasehold interest for each property with a Ground Lease), shall not be subject
to mechanics or materialmen's liens on account of the work which is the subject
of such Notice of Commencement. A copy of any such Notice of Commencement shall
be furnished to and approved by Landlord (in Landlord's reasonable discretion)
and its attorneys prior to the recording or filing thereof, as aforesaid.
28. LIMITATION ON LIABILITY OF LANDLORD AND TENANT. If Tenant is awarded a money
judgment against Landlord, then Tenant's sole recourse for satisfaction of such
judgment shall be limited to execution against the applicable Leased Property.
In no event shall any trustee, stockholder, shareholder, member, manager,
partner, employee, officer or beneficiary of Landlord be personally liable for
the obligations of Landlord hereunder. Except to the extent expressly provided
in the Guaranty and the Lease Guaranty or in the Agreement Regarding Leases, in
no event shall any trustee, shareholder, member, guarantor, partner, employee,
officer or beneficiary of Tenant or any Affiliate of Tenant be personally liable
for any of the obligations of Tenant hereunder.
29. "NET" LEASE/NO IMPAIRMENT.
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(a) "Net" Lease. Landlord and Tenant acknowledge and agree that this Lease
shall be and constitute what is generally referred to as a "triple net" or
"absolute net" lease, such that Tenant shall be obligated hereunder to pay all
costs and expenses howsoever incurred with respect to, and associated with, each
of the Leased Properties and each of the Facilities, including, without
limitation, all Impositions, utility charges, insurance costs, maintenance
costs, replacement costs and repair and restoration expenses (all as more
particularly herein provided).
(b) No Affect or Impairment. The obligations of Tenant hereunder shall not
be affected or impaired by reason of (a) any damage to, or destruction of, any
of the Leased Properties or any portion thereof, from whatever cause, or any
Condemnation of any of the Leased Properties or any portion thereof (except as
otherwise expressly and specifically provided in Xxxxxxxxx 00 xx Xxxxxxxxx 00),
(x) the interruption or discontinuation of any service or utility servicing any
of the Leased Properties, (c) the lawful or unlawful prohibition of, or
restriction upon, Tenant's use of the Leased Property, or any portion thereof,
due to the interference with such use by any Person or eviction by paramount
title, except as provided in Xxxxxxxxx 00, (x) except as provided in Paragraph
22, any claim that Tenant has or might have against Landlord on account of any
breach of warranty or default by Landlord under this Lease or any other
agreement by which Landlord is bound, (e) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding up
or other proceedings affecting Landlord or any assignee or transferee of
Landlord, (f) the revocation, suspension or non-renewal of any license, permit,
approval or other authorization necessary for the use of any of the Facilities
for its Intended Use, or (g) for 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 may now or hereafter be conferred
upon it by law (i) to modify, surrender or terminate this Lease or quit or
surrender any of the Leased Properties or any portion thereof, or (ii) that
would entitle Tenant to any abatement, reduction, suspension or deferment of the
Rent or other sums payable by Tenant hereunder. The obligations of Landlord and
Tenant hereunder shall be separate and independent covenants and agreements and
the Rent and all other sums payable by Tenant hereunder shall continue to be
payable in all events unless otherwise expressly provided herein.
30. REPRESENTATIONS AND WARRANTIES
(a) Representations of Tenant. To induce Landlord to enter into this
Lease, Tenant represents and warrants to Landlord as follows:
(i) Status and Authority of Tenant. Tenant is a limited liability
company duly organized, validly existing and in corporate good standing
under the laws of the State of Delaware. Tenant has all requisite power
and authority to enter into and perform its obligations under this Lease
and to consummate the transactions contemplated hereby, including such
licensing as may be required for Tenant to lease and Manager to operate
each of the Leased Properties for its respective Intended Use as a senior
independent and assisted living facility. Tenant has duly qualified to
transact business in each jurisdiction in which the nature of the business
conducted by it requires such qualification.
(ii) Action of Tenant. Tenant has taken all necessary action to
authorize the execution, delivery and performance of this Lease, and this
Lease constitutes the valid
48
and binding obligation and agreement of Tenant, enforceable against Tenant
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of creditors.
(iii) No Violations of Agreements. To the best of Tenant's
knowledge, except as permitted or contemplated by this Lease, the Facility
Mortgages or the Bond Documents, neither the execution, delivery or
performance of this Lease by Tenant, nor compliance with the terms and
provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result
in any breach of the terms, conditions or provisions of, or conflict with
or constitute a default under, or result in the creation of any lien,
charge or encumbrance upon any of the Leased Properties pursuant to the
terms of any indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other material agreement or instrument by which Tenant
is bound.
(iv) Litigation. Tenant has received no written notice, and, to
Tenant's knowledge, no action or proceeding is pending or threatened,
which questions the validity of this Lease.
(b) Representations of Landlord. To induce Tenant to enter into this
Lease, Landlord represents and warrants to Tenant as follows:
(i) Status and Authority of Landlord. Landlord is a duly organized,
validly existing limited liability company and in good standing under the
laws of the State of Delaware, and has all requisite power and authority
under the laws of such state to enter into and perform its obligations
under this Lease and, to consummate the transactions contemplated hereby.
Landlord has duly qualified and is in good standing in each jurisdiction
in which the nature of the business conducted by it required such
qualification.
(ii) Action of Landlord. Landlord has taken all necessary action to
authorize the execution, delivery and performance of this Lease, and, upon
the execution and delivery of this Lease by Landlord, this Lease shall
constitute the valid and binding obligation and agreement of Landlord,
enforceable against Landlord in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting the rights and
remedies of creditors.
(iii) No Violations of Agreements. Neither the execution, delivery
or performance of this Lease by Landlord, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions
or provisions of, or conflict with or constitute a default under, or
result in any creation of any lien, charge or encumbrance upon any of the
property or assets of Landlord pursuant to the terms of any indenture,
mortgage, deed of trust, note, evidence of indebtedness or any other
material agreement or instrument by which Landlord is bound.
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(iv) Litigation. No investigation, action or proceeding is pending
and, to Landlord's knowledge, no action or proceeding is threatened which
questions the validity of this Lease or any action taken or to be taken
pursuant hereto.
31. NOTICES. All notices, approvals, requests, consents and other communications
("Notices") given pursuant to this Lease shall be in writing and shall be deemed
to have been duly given (i) when actually received if either (A) hand delivered
or (B) sent by facsimile transmission, with evidence of receipt; (ii) two (2)
days after the same was deposited in a regularly maintained receptacle for the
deposit of United States mail, sent by registered or certified mail, postage and
charges prepaid; or (iii) on the next Business Day if sent via a national
overnight delivery service, addressed, in each case, as follows or at such other
address as either party may specify from time to time by Notice to the other
party at least five (5) days prior Notice to the other party of the changed
address:
If to Tenant: ALS Properties Tenant II, LLC
c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Guarantor: ALS Properties Holding Company, LLC
c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Landlord: PSLT-ALS Properties II, LLC
c/o Provident Senior Living Trust
000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
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Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Sidley Xxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
32. NO WAIVER. No course of dealing between Landlord and Tenant, or any delay or
omission of Landlord or Tenant to insist upon a strict performance of any term
or condition of this Lease shall be deemed a waiver of any right or remedy that
such party may have, and shall not be deemed a waiver of any subsequent breach
of such term or condition.
33. QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying the Rent and
observing and keeping the covenants, agreements and stipulations of this Lease
on its part to be kept, shall lawfully, peaceably and quietly hold, occupy and
enjoy each of the Leased Properties during the Term without hindrance, ejection
or molestation. Landlord covenants and warrants that it is lawfully seized of
each of the Leased Properties and has good, right and lawful authority to enter
into this Lease for the full term aforesaid, that each of the Leased Properties
is free and clear of all encumbrances that would prevent Landlord from having
such right and authority and that Landlord will put Tenant in actual possession
of each of the Leased Properties on the Commencement Date.
34. INTENTIONALLY OMITTED.
35. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT. If Landlord places a Facility
Mortgage (other than an Existing Facility Mortgage) on any of the Leased
Properties, Landlord agrees to cause the Facility Mortgagee to execute and
deliver to Tenant, and Tenant agrees to enter into, execute and deliver promptly
to the Facility Mortgagee, a subordination, non-disturbance and attornment
agreement substantially similar to the form attached hereto as Exhibit C (the
"Subordination Agreement") with any such Facility Mortgagee, which shall
provide, among other things, that if the Facility Mortgagee or any other Person
acquires title to the applicable Leased Property, so long as no Event of Default
has occurred and is continuing hereunder, Tenant's leasehold estate, possession
and occupancy of such Leased Property shall not be disturbed, and which
Subordination Agreement shall acknowledge that (subject to the foregoing) this
Lease, Tenant's interest hereunder and Tenant's leasehold interest in and to
each of the Leased Properties is junior, inferior, subordinate and subject in
right, title, interest, lien, encumbrance, priority and all other respects to
the lien of the applicable Facility Mortgage. If, within fifteen (15) days
following Tenant's receipt of a written request by Landlord or the holder or
proposed holder of any such Facility Mortgage, Tenant shall fail or refuse or
shall have not executed any such Subordination Agreement, Tenant shall be in
breach and default of its obligation to do so and of this Lease and Landlord
shall be entitled thereupon to exercise any and all remedies available to
Landlord pursuant to this Lease or otherwise provided by law.
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36. BROKERS. Each of Landlord and Tenant represent and warrant to the other that
neither of them has engaged or contracted with any person, firm or entity to
serve or act as a broker, agent or finder for the purpose of leasing any of the
Leased Properties, and that no broker's or real estate or other similar
commissions or fees are or shall be due in respect of the transaction
contemplated by this Lease. Each of Landlord and Tenant shall indemnify, defend
and save harmless the other from and against any cost and expense, including
reasonable attorney's fees, incurred by the other as a result of the untruth of
any of the foregoing representations made by it. The terms of this Paragraph 36
shall survive the termination or expiration of this Lease.
37. INVALIDITY. If any provision of this Lease shall be declared invalid or
unenforceable, the remainder of this Lease shall continue in full force and
effect.
38. COUNTERPARTS. This Lease may be executed in two (2) or more counterparts,
which taken together shall be deemed one (1) original.
39. MEMORANDUM OF LEASE. The parties hereto agree not to record this Lease. The
parties agree to execute and to record in the appropriate local registry where
each of the Facilities is located, at Tenant's sole cost and expense, one (1) or
more Memoranda of Lease substantially in the form attached hereto as Exhibit B.
40. CUMULATIVE. All rights and remedies of Landlord and Tenant herein shall be
cumulative and none shall be exclusive of any other or of any rights and
remedies allowed by law.
41. GOVERNING LAW. Except as to matters regarding the internal affairs of
Landlord and issues of or limitations on any personal liability of the members
or managers of Landlord for obligations of Landlord, as to which the laws of the
State of Delaware shall govern, this Lease shall be interpreted, construed,
applied and enforced with respect to each applicable Leased Property in
accordance with the laws of the Facility State in which such Leased Property is
located.
42. SUCCESSORS AND ASSIGNS; RELATIONSHIP. The covenants, terms, conditions,
provisions, and undertakings in this Lease shall extend to and be binding upon
the permitted successors, and assigns of the respective parties hereto, which
shall include, but is not limited to, a Facility Mortgagee pursuant to a
subordination, non-disturbance and attornment agreement executed by the
Landlord, Tenant and such Facility Mortgagee, and shall be construed as
covenants running with the land. This Lease creates and evidences a lease
between Landlord and Tenant, and not a partnership, joint venture, or other type
of ownership, inconsistent with a lease, and neither Landlord nor Tenant shall
make any representation to the contrary.
43. ENTIRE AGREEMENT. Except for the terms and conditions of the Agreement
Regarding Leases, this Lease and any exhibits attached hereto, contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof. There are no oral understandings, terms, or conditions,
and neither party has relied upon any representation, express or implied, with
respect to the subject matter hereof not contained in this Lease or the
Agreement Regarding Leases. All prior understandings, terms, or conditions with
respect to the subject matter hereof are deemed merged in this Lease. This Lease
cannot be changed or supplemented orally, but may be modified or amended only by
a written instrument executed by
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the parties. Any disputes regarding the interpretation of any portion of this
Lease shall not be presumptively construed against the drafting party.
44. SURVIVAL. Tenant's indemnity obligations herein, including, without
limitation, those set forth in Paragraphs 18(f) and Paragraph 19(c) shall
survive termination of this Lease for two (2) years.
45. ESTOPPEL CERTIFICATES. Each of Landlord and Tenant shall from time to time,
within fifteen (15) Business Days after request by the other and without charge,
give to any person, firm or corporation specified by the requesting party an
estoppel certificate containing such matters with respect to this Lease as may
be reasonably requested. If the estoppel certificate is not returned within such
fifteen (15) Business Day period, such party shall be deemed to have consented
to the information contained therein as if it had executed such Estoppel
Certificate and returned it to the requesting party.
46. TIME. Time is of the essence in every particular of this Lease, including,
without limitation, obligations for the payment of money.
47. CAPTIONS AND HEADINGS. The captions and headings in this Lease have been
inserted herein only as a matter of convenience and for reference and in no way
define, limit or describe the scope or intent of, or otherwise affect, the
provisions of this Lease.
48. WAIVER OF JURY TRIAL. TO THE EXTENT ALLOWED BY APPLICABLE LAW, TENANT AND
LANDLORD HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER
OF THEM OR THEIR HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS LEASE OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO LANDLORD'S ACCEPTING THIS LEASE.
49. SIGNAGE. Tenant shall have the right to install signs containing Tenant's
trade name and such other identification signs on each of the Leased Properties
as are permitted by applicable Legal Requirements. Tenant shall obtain all
governmental permits, licenses and approvals necessary to erect such signs, and
shall maintain such signs in good condition and repair, ordinary wear and tear
excepted (subject to Tenant's obligations under clauses (ii) and (iii) of
Paragraph 8(a)). Tenant shall not remove any identification signs without first
obtaining Landlord's written consent, which shall not be unreasonably withheld
or delayed.
50. GUARANTY. At the time of Tenant's execution of this Lease, Tenant shall
obtain the execution of the guaranty agreement in the form of Exhibit D attached
hereto ("Guaranty") by Guarantor.
51. INTENTIONALLY OMITTED.
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52. PUBLIC OFFERING INFORMATION; DELIVERY OF INFORMATION. Tenant specifically
agrees that Landlord (or Landlord's direct or indirect Parent) may include
financial information and information concerning Tenant, Lease Guarantor,
Guarantor and the operation of each of the Leased Properties that does not
violate the confidentiality of the facility-resident relationship and the
physician-resident privilege under applicable laws, in offering memoranda or
prospectuses, or similar publications in connection with syndications, private
placements or public offerings of Landlord's (or Landlord's direct or indirect
Parent's) securities or interests, and any other reporting requirements under
applicable federal and state laws, including those of any successor to Landlord
(or Landlord's direct or indirect Parent). Tenant agrees to provide such other
reasonable information necessary with respect to Tenant, the Facilities, and
each of the Leased Properties to facilitate a private placement or a public
offering or to satisfy the SEC or regulatory disclosure requirements. Tenant
agrees to cause, at Landlord's sole cost and expense, Tenant's independent
accountants to consent to the inclusion of their audit report issued with
respect to such financial statements in any registration statement or other
filing under federal and state laws and to provide the underwriters
participating in any offering of securities or interests of Landlord (or
Landlord's direct or indirect Parent) with a standard accountant's "comfort"
letter with regard to the financial information of Tenant or the Leased
Properties included or incorporated by reference into any prospectus or other
offering document. Tenant also agrees to make available to any underwriter
participating in an offering of Landlord's (or Landlord's direct or indirect
Parent's) securities or interests, and any attorney, accountant or other agent
or representative retained by an underwriter (an "Inspector"), all financial and
other records and pertinent corporate documents of Tenant as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and
cause Tenant's directors, officers and employees to supply all information
requested by any such Inspector in connection with such offering. Prior to any
submission or circulation of any such offering memoranda, prospectuses or
similar publications, Landlord shall provide to Tenant such documents for the
purpose of reviewing same. Upon request of Landlord, Tenant shall notify
Landlord of any necessary corrections to information Landlord proposes to
publish within a reasonable period of time (not to exceed three (3) Business
Days) after being informed thereof by Landlord.
53. APPRAISAL PROCEDURE. If it becomes necessary to determine the Fair Market
Value of one (1) or more the Facilities for any purpose of this Lease and the
parties cannot agree thereon, such Fair Market Value shall be determined upon
the written demand of either party in accordance with the following procedure:
(i) The party requesting an appraisal, by Notice given within thirty
(30) days after the date of the event that requires or permits such
procedure, shall propose and unilaterally approve an appraiser licensed to
perform MAI appraisals and experienced in the valuation of assisted
living, independent living or skilled nursing facilities (a "Qualified
Appraiser"). The other party, by Notice given within fifteen (15) days
after receipt of such Notice appointing the first Qualified Appraiser, may
appoint a second Qualified Appraiser. If the other party fails to appoint
the second Qualified Appraiser within such fifteen (15) day period, such
party shall have waived its right to appoint a Qualified Appraiser, and
the first Qualified Appraiser shall make the sole determination of the
Fair Market Value.
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(ii) The selected Qualified Appraiser or Appraisers shall thereupon
determine the Fair Market Value of the applicable Leased Property or
Leased Properties. Each such Qualified Appraiser shall, within thirty (30)
days following its appointment, submit its appraisal of such fair market
value to each of Landlord and Tenant in writing, and if the amounts set
forth in such appraisals vary by five percent (5%) or less of the greater
value, the Fair Market Value of the applicable Leased Property or Leased
Properties shall be determined by calculating the average of the two
determinations by the two appraisers.
(iii) If the fair market values set forth in the two appraisals vary
by more than five percent (5%) of the greater of the two values, the two
Qualified Appraisers shall select a third Qualified Appraiser within an
additional fifteen (15) days following the submittal of the last
appraisal. If the two appraisers are unable to agree upon the appointment
of a third appraiser within such fifteen (15) day period, either party
may, upon written notice to the other, request that such appointment be
made by the then President (or equivalent officer) of the Chapter of the
American Institute of Real Estate Appraisers in the Facility State for
each of the applicable Leased Properties, or his or her designee or, if
there is no such organization or if such individual declines to make such
appointment, by any state or Federal court of competent jurisdiction for
the Facility State for each of the applicable Leased Properties.
(iv) Within twenty (20) days following its selection, the third
appraiser shall review the two (2) appraisals and select the appraisal
that it determines most clearly reflects the fair market value. The
selected fair market value shall then be the Fair Market Value of the
applicable Leased Property or Leased Properties.
(v) In connection with the appraisal process, Tenant shall provide
the appraisers full access during normal business hours to examine the
applicable Facility or Facilities, the books, records and files of Tenant
and all agreements, leases and other operating agreements relating to the
applicable Facility or Facilities. The costs of each party's appraisal
shall be borne by the selecting party and the cost of the third appraisal
shall be shared equally. Upon determining such value, the appraisers shall
promptly notify Landlord and Tenant in writing of such determination. The
determination of the Qualified Appraisers made in accordance with the
foregoing provisions shall be final and binding upon the parties, such
determination may be entered as an award in arbitration in a court of
competent jurisdiction, and judgment thereon may be entered.
54. FACILITY MORTGAGES.
(a) Cooperation in Obtaining Facility Mortgages. Tenant agrees, at
Landlord's cost and expense, to cooperate with Landlord's reasonable requests to
assist Landlord in obtaining one (1) or more Facility Mortgage(s) with respect
to Landlord's fee interest (or ground leasehold interest for each property with
a Ground Lease) in one (1) or more of the Leased Properties. Subject to the
execution of a reasonably satisfactory confidentiality agreement, and provided
there is no violation of (i) any security, health, safety, or confidentiality
requirements of any Governmental Agency or imposed by applicable law or
regulations and/or (ii) Tenant's ordinary business practices and standard
resident agreements, if any requiring Tenant to maintain the confidential nature
of certain personal information relating to individual residents living in the
55
applicable Facility, Tenant agrees to provide such information as is reasonably
requested by Landlord or any proposed Facility Mortgagee with respect to Tenant,
Guarantor or the operation of the applicable Leased Property or Leased
Properties to facilitate in obtaining such Facility Mortgage.
(b) Compliance With Facility Mortgages.
(i) Except as otherwise provided in Paragraph 54(b)(v), Tenant
agrees to operate each of the Facilities and to maintain each of the
Facilities and all of the Leased Properties in a manner that complies in
all material respects with the terms of any Facility Mortgage.
(ii) Except as otherwise provided in Paragraph 54(b)(v), Tenant
shall make all deliveries of information with respect to the applicable
Leased Property available to Tenant and required under the applicable
Facility Mortgage, and shall otherwise comply with the operational
requirements in all Facility Mortgages, including, without limitation,
complying in all material respects with the insurance requirements thereof
and the financial reporting requirements thereof.
(iii) In the event of a conflict between the provisions of this
Lease and the terms of any Facility Mortgage, Tenant's compliance with the
terms of such Facility Mortgage shall not be deemed to be a Default under
this Lease.
(iv) To the extent that Tenant is obligated pursuant to this Lease
to comply with covenants or requirements of an Existing Facility Mortgage,
Landlord shall not amend or modify such covenants or requirements without
the prior written consent of Tenant.
(v) Tenant shall not have any right to approve the terms of any
Facility Mortgage, or any revision in the insurance requirements of any
Existing Facility Mortgage, and Landlord may enter into any Facility
Mortgage, or agree to be bound by any revision in the insurance
requirements of any Existing Facility Mortgage, as Landlord may determine
in Landlord's sole and absolute discretion; provided, however, that
Landlord agrees that the business terms, provisions and conditions
contained in any proposed Facility Mortgage and any revision of the
insurance requirements under any Existing Facility Mortgage (whether
pursuant to amendment or expiration of a waiver of such requirements)
shall be commercially reasonable in the then current market at the time
that such Facility Mortgage is obtained or such Existing Facility Mortgage
insurance requirements are revised and shall be reasonably consistent with
the then current standards for similar-type financing transactions
affecting similar types of properties as reflected, generally, in
mortgages, deeds of trust and security deeds encumbering other assisted
living and independent living facilities which are similar to those owned
and/or managed by Guarantor or its direct or indirect subsidiaries
(provided, however, that with respect to assessing whether the insurance
requirements under the proposed Facility Mortgage or the revised insurance
requirements of the Existing Facility Mortgage satisfy the foregoing
criteria, the standards set forth in Paragraph 18(a)(xiv) shall govern);
provided, further, that in no event shall the terms of any Facility
Mortgage increase the
56
Base Rent payable hereunder or alter the payment schedule for Base Rent.
Landlord shall deliver to Tenant drafts of all proposed new Facility
Mortgage loan documents and any proposed revision of the insurance
requirements of an Existing Facility Mortgage at least fifteen (15)
Business Days prior to entering into or agreeing to be bound by the same.
(c) Escrow Reserve Accounts Under Facility Mortgages. For purposes of this
Lease, any funds on deposit in any escrow reserve account required under any
Facility Mortgage (other than any principal reserve funds) that were funded by
Tenant in accordance with Tenant's obligations under this Lease shall be deemed
to be the property of Tenant. If during the term, any Facility Mortgage is
refinanced and the terms of the replacement Facility Mortgage do not require
Landlord to establish escrows at the inception thereof, then any amounts then
held in escrow reserve accounts (other than principal reserve accounts) shall be
disbursed to Tenant, and any amounts then held in principal reserve accounts
shall be disbursed to Landlord. Subject to Section 16, at the expiration of the
Term, any funds on deposit in any escrow reserve account (other than any
principal reserve account) that were funded by Tenant in accordance with
Tenant's obligations under this Lease shall be promptly returned to Tenant.
55. ESCROWS HELD BY FACILITY MORTGAGEE. Tenant shall be responsible for funding
to Landlord, the real estate tax, capital improvement reserve account, deferred
maintenance reserve account and other property-related reserve accounts under
any Facility Mortgage to the extent that such reserves are used to fund any of
Tenant's obligations under this Lease; provided, however, that Tenant shall not
in any event be required to fund deposits for any principal repayment reserve
account. Subject to the terms of the existing Facility Mortgage, and provided no
Event of Default has occurred and is continuing, Landlord shall cooperate with
Tenant to make available to Tenant for use in accordance with the terms of the
Facility Mortgage amounts held in escrow by the Facility Mortgagee pursuant to
the Existing Facility Mortgage (or any replacement Facility Mortgagee therefor
or any Facility Mortgage on any of the other Leased Properties), excluding
amounts on deposit in debt service reserve funds and amounts held as tenant
security deposits, for the uses established therefor in accordance with the
terms of the applicable Facility Mortgage (i.e., payment of taxes or insurance
premiums; capital expenditures) and which are required to be performed by Tenant
under this Lease. Tenant shall cooperate with Landlord in requesting the
disbursement of such amounts from the applicable Facility Mortgagee in
accordance with the provisions of the Facility Mortgage, and shall promptly
furnish to Landlord such documents and other evidence requested by the
applicable Facility Mortgagee in connection therewith.
56. SINGLE LEASE. Tenant hereby acknowledges that the agreement between Landlord
and Tenant to treat this Lease as single lease in all respects was and is of
primary importance to Landlord, and Landlord would not have entered into this
Lease without there being such an agreement and such treatment of this Lease.
All rights and obligations under this Lease relating to the Leased Properties
shall apply to each Leased Property and any default under this Lease pertaining
to a single Leased Property or to all of the Leased Properties or any portion
thereof shall be an Event of Default pertaining to each of the Leased
Properties. Without limiting the generality of the foregoing, the parties hereto
acknowledge that, notwithstanding any references herein to any individual Leased
Property and notwithstanding the possibility that certain individual Leased
Properties may be deleted herefrom pursuant to the express provisions of this
57
Lease under certain limited circumstances, the parties hereto expressly intend
and agree that this Lease is not divisible and shall be treated as a single
lease for all purposes whatsoever (including, without limitation, in the context
of Tenant's attempted rejection, assumption and/or assignment of this Lease in
any bankruptcy or other insolvency proceeding affecting any Tenant, in which
case the parties hereto intend for such rejection to terminate this Lease with
respect to all of the Leased Properties or such assumption to apply with respect
to all of the Leased Properties, i.e., all but not less than all of the Leased
Properties). This Lease does not constitute, and may not be enforced or treated
as, a separate lease for any individual Leased Property.
57. ERIE COUNTY INDUSTRIAL DEVELOPMENT AGENCY REQUIREMENTS. In addition to the
foregoing provisions of this Lease, with respect to the Facility known as
Wynwood Commons of Kenmore, the following additional covenants shall apply:
(a) Title to the Facility is held by the Erie County Industrial
Development Agency ("ECIDA") and the Facility is leased by the ECIDA to Landlord
pursuant to a lease agreement dated as of March 1, 1999, as amended (the "Agency
Lease Agreement"). This Lease is subject to and is expressly subordinated to the
Agency Lease Agreement and all extensions, modifications, amendments and
renewals of the Agency Lease Agreement.
(b) The Tenant shall operate the Facility as a qualified "project" in
accordance with and as defined in the New York State Industrial Development
Agency Act (Title 1 of Article 18-A of the General Municipal Law), as amended,
and Chapter 293 of the 1970 Laws of New York, as amended.
(c) The Tenant shall furnish to the Erie County Industrial Development
Authority , upon request, such information as the ECIDA shall reasonably request
regarding the Facility and employment by the Tenant (past, present and future)
at the Facility.
(d) Landlord and Tenant will permit the ECIDA, or its duly authorized
agents, to enter upon the Facility, and to examine and inspect the same, in the
same manner and to the same extent permitted for a Facility Mortgagee under
Paragraph 14 hereof.
(e) Neither this Lease, nor any interest therein, shall be assigned,
modified, amended, rescinded, terminated or canceled without the prior written
consent of the ECIDA, as set forth in the Ground Lease for the Facility.
(f) Except as is otherwise provided by collective bargaining contracts or
agreements, new employment opportunities created by the Tenant at the Facility
shall be listed by the Tenant with the New York State Department of Labor
Community Services Division, and with the administrative entity of the service
delivery area created by the Federal Job Training Partnership Act (P.L. No.
97-300) (or any successor legislation) in which the Facility is located. Except
as is otherwise provided by collective bargaining contracts or agreements, the
Tenant agrees, where practicable, to first consider persons eligible to
participate in the Federal Job Training Partnership (P.L. No. 97-300) programs
(or any programs established under successor legislation) who shall be referred
by administrative entities of service delivery areas created pursuant to such
act or by the Community Services Division of the New York State Department of
Labor for such new employment opportunities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
58
IN WITNESS WHEREOF, the parties have hereunto executed this Lease the day
and year first above written.
LANDLORD:
PSLT-ALS PROPERTIES II, LLC,
a Delaware limited liability company
By: PSLT-ALS Properties Holdings, LLC,
a Delaware limited liability company,
its sole member
By: PSLT OP, L.P.,
a Delaware limited partnership,
its sole member
By: PSLT GP, LLC,
a Delaware limited liability company,
its sole general partner
By: Provident Senior Living Trust,
a Maryland real estate investment trust,
its sole member
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President
TENANT:
ALS PROPERTIES TENANT II, LLC,
a Delaware limited liability company
By: ALS Properties Holding Company, LLC,
a Delaware limited liability company,
its sole member
By: /s/ Xxxxxxx X. Xxxxx
_______________________________
Name: Xxxxxxx X. Xxxxx
Title: VP
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
Manager hereby joins into this Amended and Restated Property Lease Agreement for
the limited purposes set forth in Paragraph 25(b):
MANAGER:
ALTERRA HEALTHCARE CORPORATION,
a Delaware Corporation
By: /s/ Xxxxxxx Xxxxx
_______________________________
Name: Xxxxxxx Xxxxx
Title: VP
and for those three Facilities known as:
Clare Bridge of Xxxx
Xxxxx Bridge of Niskayuna
Clare Bridge of Williamsville
ALTERNATIVE LIVING SERVICES - NEW YORK, INC.,
a New York corporation
By: /s/ Xxxxxxx Xxxxx
_______________________________
Name: Xxxxxxx Xxxxx
Title: VP
SCHEDULE I
LEASES AND SUBLEASES
1. Lease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Clare Bridge of Cary" located at 0000 Xxxxxx
Xxxx Xxxx, Xxxx, Xxxx Xxxxxx, Xxxxx Xxxxxxxx 00000-0000.
2. Sublease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Wynwood Commons of Kenmore" located at 0000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxxxx, Xxx Xxxx 00000-0000.
3. Lease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Clare Bridge of Niskayuna" located at 0000
Xxxx-Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx Xxxxxx, Xxx Xxxx 00000-0000.
4. Lease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Wynwood Commons of Niskayuna" located at 0000
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx Xxxxxx, Xxx Xxxx 00000-0000.
5. Lease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Wynwood of Northville" located at 00000 Xxx
Xxxx Xxxx, Xxxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxxx 00000-0000.
6. Lease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Clare Bridge of Perinton" located at 000
Xxxxx'x Xxxxx, Xxxxxxxxx, Xxxxxx Xxxxxx, Xxx Xxxx 00000-0000.
7. Lease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Wynwood of Utica" located at 00000 Xxxxx
Xxxxxx Xxxxxxxxx, Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx 00000-0000.
8. Lease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Clare Bridge of
Westhampton" located at 000 Xxxx Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000.
9. Lease Agreement dated as of March 23, 1999 by and between ALS Financing
II, Inc., as landlord, and Alterra Healthcare Corporation, f/k/a
Alternative Living Services, Inc., as tenant relating to that certain
facility commonly known as "Clare Bridge of Williamsville" located at 0000
Xxxx Xxxxxx, Xxxxxxx, Xxxx Xxxxxx, Xxx Xxxx 00000-0000
EXHIBIT A
LEGAL DESCRIPTION
Exhibit A-1
EXHIBIT B
FORM OF MEMORANDUM OF MASTER LEASE
This instrument prepared by and
upon recordation return to:
____________________________
____________________________
____________________________
____________________________
MEMORANDUM OF MASTER LEASE
THIS MEMORANDUM OF MASTER LEASE (this "Memorandum") is made and entered
into this ___ day of December, 2004 by and between PSLT-ALS PROPERTIES II, LLC,
a Delaware limited liability company, with an address at c/o Provident Senior
Living Trust, 000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxxxxxxxx, Xxx Xxxxxx 00000
("Landlord"), and ALS PROPERTIES TENANT II, LLC, a Delaware limited liability
company, with an address at c/o Alterra Healthcare Corporation, 0000 Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000 ("Tenant").
WITNESSETH THAT:
1. Landlord and Tenant entered into an Amended and Restated Property Lease
Agreement (the "Lease") effective as of the date hereof, for premises located at
the locations listed on Schedule 1 annexed hereto and made a part hereof,
including the real property commonly known as ___________________ and more
particularly described in Exhibit A attached hereto (collectively, the
"Premises").
2. The term of the Lease continues as of the date hereof, the date
referred to therein as the Commencement Date, and shall terminate on December
31, 2019. The Lease contains two (2) five (5) year renewal terms. The Lease may
be terminated earlier pursuant to the terms of the Lease.
3. This Memorandum shall apply with respect to Landlord, Tenant and each
of their respective successors and permitted assigns. This Memorandum is not
intended to modify the terms of the Lease and in the event of any ambiguity, the
Lease shall control.
4. Any notices required hereunder shall be directed to the parties shown
on Exhibit B attached hereto and made a part hereof for all purposes.
Exhibit B-1
EXECUTED by the undersigned under seal with the intent that this
instrument be an instrument under seal as of the day, month and year first above
written.
LANDLORD:
PSLT-ALS PROPERTIES II, LLC, A DELAWARE LIMITED
LIABILITY COMPANY
By: PSLT-ALS Properties Holdings, LLC, a Delaware
limited liability company, its sole member
By: PSLT OP, L.P.,
a Delaware limited partnership,
its sole member
By: PSLT GP, LLC,
a Delaware limited liability company,
its sole general partner
By: Provident Senior Living Trust,
a Maryland real estate investment trust,
its sole member
By:
--------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President
TENANT:
ALS PROPERTIES TENANT II, LLC
By: ALS Properties Holding Company, LLC,
its sole member
By:
--------------------------------
Name: Xxxxxxx X. Xxxxx,
Title: Vice President
Exhibit B-2
[ADD ACKNOWLEDGEMENT]
Exhibit B-3
SCHEDULE 1
LIST OF ALL PROPERTIES DEMISED UNDER THE LEASE
PROPERTY NAME STATE CITY COUNTY
------------- ----- ---- ------
1. Wynwood of Northville Michigan Northville Xxxxx
2. Wynwood of Utica Michigan Utica Macomb
3. Clare Bridge of Westampton New Jersey Westampton Burlington
4. Clare Bridge of Williamsville New York Amherst Erie
5. Wynwood Commons of Kenmore New York Kenwood Erie
6. Clare Bridge of Niskayuna New York Niskayuna Schenectady
7. Wynwood Commons of Niskayuna New York Niskayuna Schenectady
8. Clare Bridge of Perinton New York Pittsford Monroe
9. Clare Bridge of Cary North Carolina Cary Wake
Exhibit B-4
EXHIBIT A
TO MEMORANDUM OF LEASE
Legal Description of the Premises
Exhibit B-5
EXHIBIT B
to Memorandum of Lease
Notices
If to Tenant: ALS Properties Tenant II, LLC
c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx & Hardin LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Guarantor: ALS Properties Holdings Company, LLC
c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx & Hardin LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Landlord: PSLT-ALS Properties II, LLC
c/o Provident Senior Living Trust
000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Sidley Xxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Exhibit B-6
EXHIBIT C
FORM OF SUBORDINATION AGREEMENT
Loan Number: __________________
Drafted by and when recorded return to:
____________________________
____________________________
____________________________
____________________________
____________________________
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
For use with Commercial Leases
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT ("Agreement")
is made to be effective as of the ___ day of _________________________, 200_,
between _______________________________ ("Lender") and ___________________, a
Delaware limited liability company ("Tenant").
BACKGROUND:
Tenant has entered into a lease agreement with _________________, a Delaware
limited liability company ("Landlord") dated ___________________, 200_, (the
"Lease") relating to the property described in Exhibit A attached to this
Agreement and by this reference made a part of this Agreement (the "Property").
Lender has made or has committed to make or has purchased a loan to Landlord in
the original principal amount of $_______________ (the "Loan") secured by a
[DEED OF TRUST/MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT] filed on
______________, 200_, in the office of the __________________ Clerk/Register of
Deeds in Liber _______, Page ____ (the "Mortgage") covering the Property. Tenant
has agreed that the Lease will be subject and subordinate to the Mortgage held
by Lender, provided Tenant is assured of continued use of the Property under the
terms of the Lease.
AGREEMENT:
For and in consideration of the mutual covenants contained in this Agreement,
the sum of Ten Dollars ($10.00) and other good and valuable considerations, the
receipt and sufficiency of which are acknowledged, and notwithstanding anything
in the Lease to the contrary, the parties agree as follows:
1. SUBORDINATION. The Lease with all rights, options, liens and charges
created by the Lease is expressly made and will continue to be subject to
and subordinate in all respects to the terms,
Exhibit C-1
conditions, lien, operation and effect of the Mortgage and to any
renewals, modifications, consolidations, replacements and extensions of
the Mortgage.
2. NONDISTURBANCE. If Lender or any other party takes possession of the
Property or becomes the owner of the Property by foreclosure, conveyance
in lieu of foreclosure or otherwise ("Successor Landlord"), so long as
Tenant complies with and performs its obligations under the Lease and no
event of default has occurred and is continuing under the Lease, then
Lender, on its own behalf and on behalf of Successor Landlord agrees as
follows:
(a) Successor Landlord will not terminate, impair or disturb the
possession of Tenant.
(b) The Lease will continue in full force and effect as a direct
Lease between Successor Landlord and Tenant, upon and subject to all of the
terms, covenants and conditions of the Lease, for the balance of the term of the
Lease.
3. MORTGAGE Remedies. Nothing contained in this Agreement will prevent Lender
from naming Tenant in any foreclosure or other action or proceeding
initiated by Lender pursuant to the Mortgage to the extent necessary under
applicable law in order for Lender to avail itself of and complete the
foreclosure or other remedy.
4. ATTORNMENT. If Successor Landlord becomes the owner of the Property by
foreclosure, conveyance in lieu of foreclosure or otherwise, then Tenant
agrees as follows:
(a) Tenant will perform and observe its obligations under the Lease.
(b) Tenant will attorn to and recognize Successor Landlord as the
Landlord under the Lease for the remainder of the term of the Lease, such
attornment to be automatic and self-operative.
(c) Tenant will execute and deliver upon request of Successor
Landlord an appropriate agreement of attornment to Successor Landlord.
5. PROTECTION OF SUCCESSOR LANDLORD. Tenant agrees that Successor Landlord
will not be liable for, subject to or bound by any of the following:
(a) claims, offsets or defenses which Tenant might have against
Landlord;
(b) acts or omissions of Landlord;
(c) rent or additional rent which Tenant might have paid for more
than current month;
(d) any security deposit or other prepaid charge paid to Landlord
which Successor Landlord has not received;
(e) construction or completion of any improvements for Tenant's use
and occupancy;
(f) warranties of any nature whatsoever, including any warranties
respecting use, compliance with zoning, hazardous wastes or environmental laws,
Landlord's title, Landlord's authority, habitability, fitness for purpose or
possession; or
(g) amendments or modifications of the Lease made without its
written consent.
Exhibit C-2
6. SUCCESSOR LANDLORD EXCULPATION. Tenant will look solely to Successor
Landlord's interest in the Property for the payment and discharge of any
obligation or liability imposed upon Successor Landlord under the Lease.
7. ESTOPPEL. To the best of Tenant's knowledge, there does not exist any
default, claim, controversy or dispute under the Lease. Tenant has not
commenced any action nor sent or received any notice to terminate the
Lease.
8. NOTICE TO LENDER. Tenant agrees that it will deliver to Lender a copy of
all notices of default or termination received by it under the terms of
the Lease.
9. ASSIGNMENT TO LENDER. Tenant acknowledges that the Landlord may execute
and deliver to Lender an assignment of the Lease as security for the Loan
and Lender may assign the Loan to _____________________. Tenant expressly
consents to such assignments.
10. INVALIDITY. If any portion of this Agreement is held invalid or
inoperative, then all of the remaining portions will remain in full force
and effect, and, so far as is reasonable and possible, effect will be
given to the intent manifested by the portion or portions held to be
invalid or inoperative.
11. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State where the Property is located.
12. NOTICES.
(i) All notices, demands and other communications ("Notices") under
or concerning this Agreement must be in writing. Each Notice shall be
addressed to the intended recipient at its address set forth in this
Agreement, and will be deemed given on the earliest to occur of (1) the
date when the Notice is received by the addressee; (2) the first Business
Day after the Notice is delivered to a recognized overnight courier
service, with arrangements made for payment of charges for next Business
Day delivery; or (3) the third Business Day after the Notice is deposited
in the United States mail with postage prepaid, certified mail, return
receipt requested. The term "Business Day" means any day other than a
Saturday, a Sunday or any other day on which Lender is not open for
business.
(ii) Any party to this Agreement may change the address to which
Notices intended for it are to be directed by means of Notice given to the
other party in accordance with this Section. Each party agrees that it
will not refuse or reject delivery of any Notice given in accordance with
this Section, that it will acknowledge, in writing, the receipt of any
Notice upon request by the other party and that any Notice rejected or
refused by it will be deemed for purposes of this Section to have been
received by the rejecting party on the date so refused or rejected, as
conclusively established by the records of the U.S. Postal Service or the
courier service.
Exhibit C-3
Any Notice, if given to Lender, must be addressed as follows:
______________________________
______________________________
______________________________
______________________________
Any Notice, if given to Tenant, must be addressed as follows:
______________________________
______________________________
______________________________
______________________________
13. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure to
the benefit of the PARTIES to this Agreement and their respective heirs,
legal representatives, successors, successors-in-title and assigns.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which when taken together will constitute one and the
same instrument.
[SIGNATURE PAGE FOLLOWS]
Exhibit C-4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement [UNDER SEAL]
as of the date first above written.
LENDER:
_______________________________
By: _______________
Name: _____________
Title: ______________
[ADD ACKNOWLEDGEMENT]
Exhibit C-5
TENANT:
_____________,
a Delaware limited liability company
By: _______________
Name: _____________
Its:________________
[ADD ACKNOWLEDGEMENT]
Exhibit C-6
EXHIBIT A
(Legal Description of Land)
Exhibit C-7
EXHIBIT D
FORM OF LEASE GUARANTY
THIS LEASE GUARANTY (this "Guaranty") is made and entered into to be
effective as of December 16, 2004 (the "Effective Date"), by ALS PROPERTIES
HOLDING COMPANY, LLC, a Delaware limited liability company ("Guarantor"), in
favor of PSLT-ALS PROPERTIES II, LLC, a Delaware limited liability company
("Landlord").
RECITALS
WHEREAS, as of the Effective Date, Landlord and ALS Properties Tenant II,
LLC, a Delaware limited liability company, as tenant ("Tenant"), have executed
and entered into that certain Amended and Restated Lease Agreement (as the same
may be renewed, extended, amended or modified from time to time, the "Lease"),
pertaining to those certain Leased Properties (as defined in the Lease
Agreement);
WHEREAS, Guarantor is a direct or indirect owner of 100% of the beneficial
ownership interest in Tenant, and Guarantor will derive substantial direct and
indirect benefit from the transactions contemplated by the Lease; and
WHEREAS, it is a condition to the entering into of the Lease by Landlord
that Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged by Guarantor, and in order to induce Landlord to enter into the
Lease, Guarantor hereby agrees as follows:
1. GUARANTY. Guarantor hereby unconditionally and irrevocably guarantees (i)
the full and prompt payment of all rent and other sums required to be paid by
Tenant under the Lease, (ii) the full and timely performance of all other terms,
conditions, covenants and obligations of Tenant under the Lease (as same may be
amended, renewed, extended or modified), and (iii) any and all expenses
(including reasonable attorneys' fees and expenses) incurred by Landlord in
enforcing any rights under the Lease or this Guaranty (such obligations,
collectively, are referred to as the "Guaranteed Obligations"). Guarantor agrees
that this Guaranty is a guarantee of payment and performance, not collection,
and that Guarantor is primarily liable and responsible for the payment and
performance of the Guaranteed Obligations. It is not necessary for Landlord, in
order to enforce payment and performance by Guarantor under this Guaranty, first
or contemporaneously to institute suit or exhaust remedies against Tenant or
others liable for any of the Guaranteed Obligations or to enforce rights against
any collateral securing any of it. With the exception of the defense of prior
payment, performance, or compliance by Tenant or Guarantor of the Guaranteed
Obligations which Guarantor is called upon to pay, or the defense that
Landlord's claim against Guarantor hereunder is barred by the applicable statute
of limitations, all defenses of the law of guaranty or suretyship, including,
without limitation, substantive defenses and procedural defenses, are waived and
released by Guarantor to the extent permitted by law. Except as provided in the
preceding sentence, under no circumstances will the liability of
Guarantor under this Guaranty be terminated either with respect to any period of
time when the liability of Tenant under the Lease continues, or with respect to
any circumstances as to which the Guaranteed Obligations have not been fully
discharged by payment, performance or compliance.
2. GUARANTY ABSOLUTE. Guarantor guarantees that the Guaranteed Obligations
will be paid and performed strictly in accordance with the terms of the Lease.
The liability and responsibilities of Guarantor under this Guaranty shall be
absolute and unconditional, shall not be subject to any counterclaim, setoff, or
deduction and shall not be released, discharged, affected or impaired by (i) any
change in the time, manner, or place of payment or performance of any of the
Guaranteed Obligations, or any other amendment or waiver of, or any consent to
or departure from, or termination of, the Lease, (ii) any release or discharge
of Tenant in any bankruptcy, receivership or other similar proceedings, (iii)
the impairment, limitation or modification of the liability of Tenant or the
estate of Tenant in bankruptcy or of any remedy for the enforcement of Tenant's
liability under the Lease, resulting from the operation of any present or future
provisions of any bankruptcy code or other statute or from the decision in any
court, the rejection or disaffirmance of the Lease in any such proceedings, or
the assignment or transfer of the Lease by Tenant, (iv) any failure, omission or
delay on the part of Landlord, to enforce, assert or exercise any right, power
or remedy conferred on or available to Landlord in or by the Lease or this
Guaranty, or any action on the part of Landlord granting indulgence or extension
in any form whatsoever or any invalidity, irregularity or unenforceability as to
Tenant of all or any part of the Guaranteed Obligations or any security
therefor, (v) the waiver by Landlord of the performance or observance by Tenant
or Guarantor of any of the agreements, covenants, terms or conditions contained
in the Lease or this Guaranty, (vi) any merger, consolidation, reorganization or
similar transaction involving Tenant even if Tenant ceases to exist as a result
of (and is not the surviving party in) such transaction, (vii) the inability of
Landlord or Tenant to enforce any provision of the Lease for any reason, (viii)
any change in the corporate relationship between Tenant and Guarantor or any
termination of such relationship, (ix) any change in the ownership of all or any
part of the membership interests in Tenant, (x) the inability of Tenant to
perform, or the release of Tenant or Guarantor from the performance of, any
obligation, agreement, covenant, term or condition under the Lease or this
Guaranty by reason of any law, regulation or decree, now or hereafter in effect,
(xi) any merger of the leasehold estate of Tenant with the fee estate or any
other estate in any of the Leased Properties, or (xii) any disability or other
defense of Tenant. Landlord and Tenant, without notice to or consent by
Guarantor, may at any time or times enter into such modifications, extensions,
amendments, or other covenants with respect to the Lease as they may deem
appropriate and Guarantor shall not be released thereby, but shall continue to
be fully liable for the payment and performance of all liabilities, obligations
and duties of Tenant under the Lease as so modified, extended or amended.
3. REINSTATEMENT. Guarantor further agrees that, if at any time all or any
part of any payment applied to any of the Guaranteed Obligations is or must be
rescinded or returned for any reason whatsoever (including, without limitation,
the insolvency, bankruptcy or reorganization of Guarantor), such Guaranteed
Obligations shall, for the purposes of this Guaranty, to the extent that such
payment is or must be rescinded or returned, be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall continue to
be effective or be
Exhibit C-9
reinstated, as the case may be, as to such Guaranteed Obligations, all as though
such application had not been made.
4. CERTAIN ACTIONS. Landlord may, from time to time at its discretion and
without notice to Guarantor, take any or all of the following actions: (a)
retain or obtain the primary or secondary obligation of any obligor or obligors,
in addition to Guarantor, with respect to any of the Guaranteed Obligations; (b)
extend or renew for one or more periods (regardless of whether longer than the
original period), or release or compromise any obligation of Guarantor hereunder
or any obligation of any nature of any other obligor (including, without
limitation, Tenant) with respect to any of the Guaranteed Obligations; or (c)
release or fail to perfect any lien upon or security interest in, or impair,
surrender, release or permit any substitution or exchange for, all or any part
of any property securing any of the Guaranteed Obligations or any obligation
hereunder, or extend or renew for one or more periods (regardless of whether
longer than the original period) or release or compromise any obligations of any
nature of any obligor with respect to any such property.
5. WAIVER. To the extent permitted by applicable law, Guarantor hereby
expressly waives: (i) notice of the acceptance of this Guaranty, (ii) except as
otherwise provided in the Lease or this Guaranty, notice of the existence or
creation or non-payment of all or any of the Guaranteed Obligations, (iii)
presentment, demand, notice of dishonor, protest and all other notices
whatsoever except as otherwise provided in the Lease or this Guaranty, and (iv)
all diligence in collection or protection of or realization upon the Guaranteed
Obligations or any part thereof, any obligation hereunder, or any security for
or guaranty of any of the foregoing.
6. WAIVER OF SUBROGATION. Guarantor hereby waives all rights of subrogation
which it may at any time otherwise have as a result of this Guaranty to the
claims of Landlord against Tenant and all contractual, statutory or common law
rights of reimbursement, contribution or indemnity from Tenant which it may at
any time otherwise have as a result of this Guaranty prior to final payment and
satisfaction of the Guaranteed Obligations.
7. MISCELLANEOUS.
(a) Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Guarantor therefrom shall be effective
unless the same shall be in writing and signed by Landlord.
(b) Addresses for Notices. All notices hereunder shall be in writing,
personally delivered, delivered by overnight courier service, sent by facsimile
transmission (with confirmation of receipt), or sent by certified mail, return
receipt requested, addressed as follows, or to such other address as shall be
designated by Guarantor or Landlord in written notice to the other party:
If to Tenant: ALS Properties Tenant II, LLC
c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxxx
Exhibit C-10
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to: Xxxxxx & Hardin LLP
000 Xxxxxxxxx Xxxxxx
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Guarantor: ALS Properties Holding Company, LLC
c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Alterra Healthcare Corporation
c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to: Xxxxxx & Hardin LLP
000 Xxxxxxxxx Xxxxxx
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Landlord: PSLT-ALS Properties II, LLC
c/o Provident Senior Living Trust
000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Exhibit C-11
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Sidley Xxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) No Waiver; Remedies. No failure on the part of Landlord to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
other remedies available at law or equity.
(d) Continuing Guaranty; Transfer of Interest. This Guaranty shall create
a continuing guaranty and will (i) remain in full force and effect until payment
and performance in full and satisfaction of the Guaranteed Obligations, (ii) be
binding upon Guarantor and its successors and assigns, and (iii) inure, together
with the rights and remedies of Landlord hereunder, to the benefit of Landlord
and its successors, as permitted under the Lease. Without limiting the
generality of the foregoing clause, if and when Landlord assigns or otherwise
transfers any interest held by it under the Lease to any other person, that
other person shall thereupon become vested with all the benefits held by
Landlord under this Guaranty.
8. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
9. INDUCEMENT TO LANDLORD. Guarantor acknowledges and agrees that the
execution and delivery of this Guaranty by Guarantor to Landlord has served as a
material inducement to Landlord to execute and deliver the Lease, and Guarantor
further acknowledges and agrees that but for the execution and delivery of this
Guaranty by Guarantor, Landlord would not have executed and delivered the Lease.
10. INTENTIONALLY DELETED.
11. INTENTIONALLY DELETED.
12. SUBMISSION TO JURISDICTION. Guarantor hereby irrevocably submits to the
non-exclusive jurisdiction of any State or Federal court located in New York
County, New York State over any action, suit or proceeding to enforce or defend
any right under this Guaranty or otherwise arising from or relating to this
Guaranty, and Guarantor irrevocably agrees that all claims in respect of any
such action, suit or proceeding may be heard and determined in such court.
Guarantor hereby irrevocably waives, to the fullest extent that it may
effectively do so, the defense of an inconvenient forum or venue to the
maintenance of any such action, suit or proceeding. Guarantor hereby agrees that
a final, non-appealable judgment in any such action,
Exhibit C-12
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
13. WAIVER OF JURY TRIAL. Guarantor hereby waives, to the fullest extent
permitted by applicable law, any right to a trial by jury in any action, suit or
proceeding to enforce or defend any rights under this Guaranty or any other
transaction document or any amendment, instrument, document or agreement
delivered or which may in the future be delivered in connection herewith or
arising from or relating to any relationship existing in connection with this
guaranty, and agrees, to the fullest extent permitted by applicable law, that
any such action, suit or proceeding shall be tried before a court and not before
a jury.
14. COOPERATION, FURTHER ASSURANCES. Guarantor covenants, and agrees to sign,
execute and deliver or cause to be signed, executed and delivered and to do or
make, or to cause to be done or make, upon the written request of Landlord, any
and all agreements, instruments, papers, deeds, acts or things, supplemental,
confirming or otherwise, as may be reasonably required by Landlord for the
purpose of, or in connection with, the transaction contemplated hereby. Upon
full and final payment and performance of the Guaranteed Obligations, Landlord
agrees to execute a release for the benefit of Guarantor, in form and content
reasonably satisfactory to Landlord. Notwithstanding anything to the contrary
contained herein, this Guaranty shall survive for a period of twenty four (24)
months after the expiration or earlier termination of the Lease, and Guarantor
shall be liable to Landlord hereunder for any Guaranteed Obligations which arise
during such period and relate to matters which (i) occurred during the term of
the Lease or (ii) Tenant is otherwise required to indemnify Landlord against
pursuant to the terms of the Lease. Except to the extent expressly provided
otherwise in any guaranty or indemnity from Guarantor or its direct or indirect
Parent to Landlord or its Affiliates (each such term as defined in the Lease),
in no event shall any trustee, shareholder, member, guarantor, partner,
employee, officer or beneficiary of Guarantor be personally liable for any of
the obligations of Guarantor hereunder.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
Exhibit C-13
Guarantor has caused this Guaranty to be effective as of the Effective
Date.
GUARANTOR:
ALS PROPERTIES HOLDING
COMPANY, LLC,
a Delaware limited liability company
By:_________________________________
Name:
Title:
Exhibit C-14
ACKNOWLEDGMENT
STATE OF _____________ )
) SS
COUNTY OF ___________ )
On this ___ day of December, 2004, before me, the undersigned
officer, personally appeared ____________________________, personally known to
me, or proved to me on the basis of satisfactory evidence, and who acknowledged
that he/she is the _________________ of ALS PROPERTIES HOLDING COMPANY, LLC, a
Delaware limited liability company, and that as such officer, being duly
authorized to do so pursuant to the company's bylaws or a resolution of its
board of directors, executed, subscribed and acknowledged the foregoing
instrument for the purposes therein contained, by signing the name of the
company by himself in his authorized capacity as such officer, as his free and
voluntary act and deed and the free and voluntary act and deed of the company.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
________________________
[NOTARIAL SEAL] Notary Public
My Commission Expires:
________________________
Exhibit C-15
