LEASE AND SUBLEASE
DATED APRIL 21, 1998
EXECUTED BY
LTC-OHIO, INC., as Lessor and Sublessor
and
KARRINGTON OPERATING COMPANY, INC., AN OHIO CORPORATION,
as Lessee and Sublessee
TABLE OF CONTENTS
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 1 -
1.1 Leased Property. . . . . . . . . . . . . . . . . . . . . . . . . . . - 1 -
1.2 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 2 -
1.3 Contingencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . - 2 -
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 3 -
2. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 3 -
ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 8 -
3.1 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 8 -
3.1.1 Minimum Rent. . . . . . . . . . . . . . . . . . . . . . . . . - 8 -
3.1.2 Adjustment to Rent. . . . . . . . . . . . . . . . . . . . . . - 8 -
3.2 Additional Charges . . . . . . . . . . . . . . . . . . . . . . . . . - 9 -
3.3 Net Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 9 -
3.4 Late Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 10 -
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 10 -
4.1 Payment of Impositions . . . . . . . . . . . . . . . . . . . . . . . - 10 -
4.2 Notice of Impositions. . . . . . . . . . . . . . . . . . . . . . . . - 11 -
4.3 Utility Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . - 12 -
4.4 Insurance Premiums . . . . . . . . . . . . . . . . . . . . . . . . . - 12 -
4.5 Ground Lease Payments. . . . . . . . . . . . . . . . . . . . . . . . - 12 -
4.6 Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 12 -
ARTICLE V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 12 -
5.1 No Termination, Abatement, etc . . . . . . . . . . . . . . . . . . . - 12 -
5.2 Abatement Procedures . . . . . . . . . . . . . . . . . . . . . . . . - 13 -
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 13 -
6.1 Ownership of the Leased Property . . . . . . . . . . . . . . . . . . - 13 -
6.2 Lessee's Alterations . . . . . . . . . . . . . . . . . . . . . . . . - 13 -
6.3 Lessee's Personal Property . . . . . . . . . . . . . . . . . . . . . - 14 -
6.4 Consumable Inventory . . . . . . . . . . . . . . . . . . . . . . . . - 14 -
ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 14 -
7.1 Condition of Leased Property . . . . . . . . . . . . . . . . . . . . - 14 -
7.2 Use of the Leased Property . . . . . . . . . . . . . . . . . . . . . - 15 -
7.3 Preservation of Gross Revenues . . . . . . . . . . . . . . . . . . . - 16 -
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ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 17 -
8.1 Compliance with Legal and Insurance Requirements, Instruments,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 17 -
8.2 Legal Requirement Covenants. . . . . . . . . . . . . . . . . . . . - 17 -
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 18 -
9.1 Maintenance and Repair . . . . . . . . . . . . . . . . . . . . . . - 18 -
9.2 Expenditures to Comply with Law; Construction of Additional
Improvements Pursuant to Certificate of Need . . . . . . . . . . . - 19 -
9.3 Encroachments, Restrictions, etc . . . . . . . . . . . . . . . . . - 20 -
ARTICLE X. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 20 -
10.1 Lessee's Obligations for Hazardous Materials . . . . . . . . . . . - 20 -
10.2 Definition of Hazardous Materials. . . . . . . . . . . . . . . . . - 21 -
ARTICLE XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 22 -
11.1 No Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 22 -
11.2 Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . . . - 22 -
ARTICLE XII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 22 -
12. Permitted Contests . . . . . . . . . . . . . . . . . . . . . . . . - 22 -
ARTICLE XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 23 -
13.1 General Insurance Requirements . . . . . . . . . . . . . . . . . . - 23 -
13.2 Replacement Cost . . . . . . . . . . . . . . . . . . . . . . . . . - 24 -
13.3 Additional Insurance . . . . . . . . . . . . . . . . . . . . . . . - 25 -
13.4 Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . . . - 25 -
13.5 Form Satisfactory, etc . . . . . . . . . . . . . . . . . . . . . . - 25 -
13.6 Increase in Limits . . . . . . . . . . . . . . . . . . . . . . . . - 25 -
13.7 Blanket Policy . . . . . . . . . . . . . . . . . . . . . . . . . . - 26 -
13.8 No Separate Insurance. . . . . . . . . . . . . . . . . . . . . . . - 26 -
13.9 Continuous Coverage. . . . . . . . . . . . . . . . . . . . . . . . - 26 -
ARTICLE XIV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 26 -
14.1 Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . - 26 -
14.2 Reconstruction in the Event of Damage or Destruction Covered
by Insurance Proceeds. . . . . . . . . . . . . . . . . . . . . . . - 27 -
14.3 Reconstruction in the Event of Damage or Destruction Not
Covered by Insurance . . . . . . . . . . . . . . . . . . . . . . . - 27 -
14.4 Lessee's Property. . . . . . . . . . . . . . . . . . . . . . . . . - 27 -
14.5 Restoration of Lessee's Property . . . . . . . . . . . . . . . . . - 28 -
14.6 No Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . - 28 -
14.7 Damage Near End of Term. . . . . . . . . . . . . . . . . . . . . . - 28 -
14.8 Termination of Option to Extend. . . . . . . . . . . . . . . . . . - 28 -
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14.9 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 28 -
ARTICLE XV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 29 -
15. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . - 29 -
15.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . - 29 -
15.2 Parties' Rights and Obligations. . . . . . . . . . . . . . . . . . - 29 -
15.3 Total Condemnation . . . . . . . . . . . . . . . . . . . . . . . . - 29 -
15.4 Allocation of Portion of Award . . . . . . . . . . . . . . . . . . - 30 -
15.5 Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . - 31 -
15.6 Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . . . - 31 -
ARTICLE XVI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 32 -
16.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . - 32 -
16.2 Certain Remedies . . . . . . . . . . . . . . . . . . . . . . . . . - 34 -
16.3 Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 35 -
16.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 36 -
16.5 Application of Funds . . . . . . . . . . . . . . . . . . . . . . . - 36 -
ARTICLE XVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 36 -
17. Lessor's Right to Cure Lessee's Default. . . . . . . . . . . . . . - 36 -
ARTICLE XVIII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
18.1 Options to Extend. . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
18.2 Minimum Rent During Extended Terms . . . . . . . . . . . . . . . . - 37 -
ARTICLE XIX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
19. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
ARTICLE XX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
20. Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
ARTICLE XXI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
21. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
ARTICLE XXII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 39 -
22. Subletting and Assignment. . . . . . . . . . . . . . . . . . . . . - 39 -
22.1 Attornment . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 40 -
22.2 Sublease Limitation. . . . . . . . . . . . . . . . . . . . . . . . - 40 -
ARTICLE XXIII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 41 -
23. Officer's Certificates and Financial Statements; Lease
Covenants' . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 41 -
23.1 OFFICER'S CERTIFICATES AND FINANCIAL STATEMENTS.. . . . . . . - 41 -
23.2 Lease Covenants . . . . . . . . . . . . . . . . . . . . . . . - 41 -
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ARTICLE XXIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
24. Lessor's Right to Inspect. . . . . . . . . . . . . . . . . . . . . - 42 -
ARTICLE XXV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
25. No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
ARTICLE XXVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
26. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . - 42 -
ARTICLE XXVII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
27. Acceptance of Surrender. . . . . . . . . . . . . . . . . . . . . . - 43 -
ARTICLE XXVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
28. No Merger of Title . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
ARTICLE XXIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
29. Conveyance by Lessor . . . . . . . . . . . . . . . . . . . . . . . - 43 -
ARTICLE XXX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
30. Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
ARTICLE XXXI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
31. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
ARTICLE XXXII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 44 -
32.1 Lessor May Grant Liens . . . . . . . . . . . . . . . . . . . . . . - 44 -
32.2 Lessee's Right to Cure . . . . . . . . . . . . . . . . . . . . . . - 45 -
32.3 Default by Lessor. . . . . . . . . . . . . . . . . . . . . . . . . - 45 -
ARTICLE XXXIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 46 -
33. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . - 46 -
33.1 Survival of Obligations . . . . . . . . . . . . . . . . . . . - 46 -
33.2 Late Charges; Interest. . . . . . . . . . . . . . . . . . . . - 46 -
33.3 Limits of Lessor's Liability. . . . . . . . . . . . . . . . . - 46 -
33.4 Limits of Lessee's Liability. . . . . . . . . . . . . . . . . - 46 -
33.5 Transfer of Operations. . . . . . . . . . . . . . . . . . . . - 46 -
33.6 Addendum, Amendments and Exhibits . . . . . . . . . . . . . . - 47 -
33.7 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . - 47 -
33.8 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 47 -
33.9 Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 47 -
33.10 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 47 -
33.11 Applicable Law; Venue. . . . . . . . . . . . . . . . . . . . - 47 -
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33.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . - 47 -
33.13 Recordation. . . . . . . . . . . . . . . . . . . . . . . . . - 47 -
33.14 Prior and Future Agreements. . . . . . . . . . . . . . . . . - 47 -
33.15 Partial Invalidity . . . . . . . . . . . . . . . . . . . . . - 47 -
33.16 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . - 48 -
33.17 Authority of Lessor and Lessee . . . . . . . . . . . . . . . - 48 -
33.18 Relationship of the Parties. . . . . . . . . . . . . . . . . - 48 -
33.19 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . - 48 -
33.20 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . - 48 -
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LEASE
This LEASE and SUBLEASE (collectively this "Lease") is made as of
the 21st day of April, 1998, by and between LTC-OHIO, INC., a Delaware
corporation, herein called ALessor", and KARRINGTON OPERATING COMPANY, INC.,
an Ohio corporation, herein called "Lessee", subject to the terms, conditions
and contingencies set forth below.
ARTICLE I
1.1 LEASED PROPERTY. Upon and subject to the terms
and conditions hereinafter set forth, Lessor leases to Lessee, and Lessee
rents and hires from Lessor all of the following (the "Leased Property"):
(i) Each of the real properties situated in
the State of Ohio and more particularly described in Exhibits "▇-▇", "▇-▇",
"▇-▇" and "A-4" attached hereto, as the same may be supplemented or modified
from time to time (the "Land"). The parties acknowledge that the Lessor's
interests in the real properties described on Exhibits "A-2" and "A-3" is as
lessee under the Ground Leases defined below;
(ii) All buildings, structures, Fixtures (as
hereinafter defined) and other improvements of every kind including, but not
limited to, alleyways and connecting tunnels, sidewalks, utility pipes,
conduits and lines (on-site and off-site), parking areas and roadways
appurtenant to such buildings and structures presently situated upon the Land
(collectively, the "Leased Improvements");
(iii) All easements, rights and appurtenances
relating to the Land and the Leased Improvements;
(iv) All permanently affixed equipment,
machinery, fixtures, and other items of real and/or personal property,
including all components thereof, permanently affixed to or incorporated into
the Leased Improvements, including, without limitation, all furnaces,
boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution control,
waste disposal, air-cooling and air conditioning systems and apparatus,
sprinkler systems and fire and theft protection equipment, all of which to
the greatest extent permitted by the law, are hereby deemed by the parties
hereto to constitute real estate, together with all replacements,
modifications, alterations and additions thereto, to the extent acquired by
Lessor pursuant to the "Purchase Agreement" as defined in Article II hereof
(collectively the "Fixtures"); and
(v) All personal tangible and intangible
property comprising the "Personal Property" and/or the "Intangible Property"
acquired by Lessor pursuant to the Purchase
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Agreement.
The Leased Property includes those four (4) assisted living
facilities located in the following: the City of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇; the City of Worthington, County of Franklin, State
of Ohio; the City of Worthington, County of Franklin, State of Ohio; and the
City of Bexley, County of Franklin, State of Ohio, and commonly known as
Karrington on the Scioto, Karrington Place, Karrington at ▇▇▇▇▇▇ Creek and
Karrington of Bexley, respectively. Notwithstanding the foregoing, the
Leased Property shall not include any property not acquired by Lessor from
the Seller pursuant to the Purchase Agreement. The Leased Property is
demised subject to all covenants, conditions, restrictions, easements, and
other matters of record, and all other matters that affect title, zoning and
any other matters set forth in that certain Title Policy issued by Chicago
Title Company concurrently with Lessor's purchase of the Leased Property and
all matters disclosed in the ALTA survey obtained in connection with such
title insurance (collectively the "Permitted Title Matters").
1.2 TERM. The initial term of the Lease (the "Initial
Term") shall be the period commencing on the closing (the "Closing") whereby
Lessor acquires fee or leasehold title, as the case may be, to the Leased
Property under the Purchase Agreement (the "Commencement Date") and expiring
on April 30, 2018. Lessee has the right to extend the term of this Lease, at
Lessee's option, as provided in Article XVIII, below. (The Initial Term plus
all validly exercised options to extend, if any, shall be referred to herein
as the "Term"). Lessor and Lessee agree to execute a memorandum setting
forth the Commencement Date.
1.3 CONTINGENCIES.
1.3.1 ACQUISITION OF LEASED PROPERTY. Lessee
acknowledges and agrees that, at the time of executing this Lease, Lessor
does not own the Leased Property, but Lessor has a right to purchase the
Leased Property pursuant to the Purchase Agreement. This Lease, and all
obligations hereunder of either party, are contingent upon Lessor's
acquisition of the fee simple or leasehold interest (as the case may be) in
the Leased Property. Therefore, if the Leased Property has not been
transferred to Lessor on or before the Outside Closing Date (as that term is
defined in the Purchase Agreement), or by such later date as Lessor, in its
sole discretion may permit, this Lease shall be null and void and of no force
or effect whatsoever, and both Lessor and Lessee shall be relieved of all
responsibility under the Lease.
1.3.2 CROSS DEFAULT WITH OTHER LEASES. Lessor
and Lessee acknowledge and agree that this Lease is to be cross-defaulted
with every other lease now or hereafter entered into between Lessor (or any
of its Affiliates) and Lessee (or any of its Affiliates) with respect to any
assisted living facility (collectively, the "Other Leases"), each of which
shall (if Lessor so requests) be specifically amended to confirm that they
are cross-defaulted as additional security for Lessee's performance under
this Lease. However, the cross-default provisions of this Paragraph shall be
effective regardless of whether Lessor requests the aforesaid specific
amendments.
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ARTICLE II
2. DEFINITIONS. For all purposes of this Lease, except as
otherwise expressly provided, (i) the terms defined in this Article II have
the meanings assigned to them in this Article II and include the plural as
well as the singular; (ii) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally accepted
accounting principles at the time applicable; and (iii) the words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Lease as a whole and not to any particular Article, Paragraph or other
subdivision:
ADDITIONAL CHARGES. As defined in Article III.
AFFILIATE. When used with respect to any corporation, the
term "Affiliate" shall mean any person or entity (including any trust) which,
directly or indirectly, controls or is controlled by or is under common
control with such corporation. For the purposes of this definition,
"control" (including the correlative meanings of the terms "controlled by"
and "under common control with"), as used with respect to any person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such person, through the
ownership of voting securities, partnership interests or other equity
interests. For the purposes of this definition, "person" shall mean any
natural person, trust, partnership, corporation, joint venture or other legal
entity.
BUSINESS DAY. Each Monday, Tuesday, Wednesday, Thursday,
and Friday, which is not a day on which national banks in the State of Ohio
are authorized or obligated, by law or executive order, to close.
C.P.I. As defined in Paragraph 3.1.
CALENDAR YEAR. The period from January 1 through and
including December 31 in the same calendar year.
CODE. The Internal Revenue Code of 1986, as amended, and
all regulations issued thereunder.
CONSOLIDATED FINANCIALS. For any Fiscal Year or other
accounting period for Lessee and its consolidated subsidiaries, statements of
earnings and retained earnings and of changes in financial position for such
period and the related balance sheet as at the end of such period, together
with the notes thereto, all audited by a certified public accountant and in
reasonable detail and setting forth in comparative form the corresponding
figures for the corresponding period in the preceding Fiscal Year, and
prepared in accordance with generally accepted accounting principles.
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CONSOLIDATED NET WORTH. At any time, the sum of the
following for Lessee and its consolidated subsidiaries, on a consolidated
basis determined in accordance with generally accepted accounting principles:
(1) the amount of capital or stated capital
(after deducting the cost of any shares held in its treasury), plus
(2) the amount of capital surplus and retained
earnings (or, in the case of a capital or retained earnings deficit, minus
the amount of such deficit), minus
(3) the sum of the following (without duplication
of deductions in respect of items already deducted in arriving at surplus and
retained earnings): (a) unamortized debt discount and expense; and (b) any
write-up in the book value of assets resulting from a revaluation thereof
subsequent to the most recent Consolidated Financials prior to the date
thereof, except (i) any net write-up in value of foreign currency in
accordance with generally accepted accounting principles; and (ii) any
write-up resulting from a reversal of a reserve for bad debts or depreciation
and any write-up resulting from a change in methods of accounting for
inventory.
ENCUMBRANCE. As defined in Article XXXII.
EVENT OF DEFAULT. As defined in Article XVI.
EXTENDED TERM. As defined in Article XVIII.
FACILITY. Each and any assisted living facility which is
part of the Leased Property as defined in Article I, above, inclusive of the
Land, Leased Improvements, Fixtures, Personal Property and Intangible
Property pertaining to such Facility. The Facilities are collectively
referred to as the "Leased Property".
FACILITY MORTGAGE. As defined in Article XIII.
FACILITY MORTGAGEE. As defined in Article XIII.
FISCAL YEAR. The twelve (12) month period from January 1
through the following December 31.
FIXTURES. As defined in Article I.
GROUND LEASES. Those two ground leases more fully
described as (a) that certain Ground Lease concerning the Karrington at
▇▇▇▇▇▇ Creek Facility between The United Methodist Children's Home West Ohio
Conference of the United Methodist Church, an Ohio nonprofit corporation, as
ground lessor ("Ground Lessor") and Developmed of Worthington Limited
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Partnership, an Ohio limited partnership, ("Developmed") as ground lessee
dated December 1, 1992 and thereafter amended pursuant to that certain First
Amendment to Ground Lease dated as of June 23, 1995. Developmed assigned its
interest in such Ground Lease to Karrington Operating Company, Inc., an Ohio
corporation pursuant to a Lease Assignment and Assumption Agreement dated as
of December 31, 1996, and Karrington Operating Company, Inc. subsequently
assigned its interest in such Ground Lease to Karrington Acquisition II, an
Ohio corporation pursuant to a Lease Assignment and Assumption Agreement
dated as of July 1, 1997; and (b) that certain Ground Lease concerning the
Karrington Place Facility between Ground Lessor and Developmed dated as of
June 29, 1995. Developmed assigned its interest in such Ground Lease to
Karrington Operating Company, Inc., pursuant to a Lease Assignment and
Assumption Agreement dated as of December 31, 1996, and Karrington Operating
Company, Inc. subsequently assigned its interest in such Ground Lease to
Karrington Acquisition II, Inc., an Ohio corporation pursuant to a Lease
Assignment and Assumption Agreement dated as of July 1, 1997. Either of the
Ground Leases may be referred to as a Ground Lease.
IMPOSITIONS. Collectively, all taxes (including, without
limitation, all ad valorem, sales and use, single business, gross receipts,
transaction, privilege, rent taxes, bed taxes or fees or any other taxes as
the same relate to or are imposed upon Lessee or Lessor or the business
conducted upon the Leased Property), assessments (including, without
limitation, all assessments for public improvements or benefits, whether or
not commenced or completed prior to the date hereof and whether or not to be
completed within the Term), ground rents, water, sewer or other rents and
charges, excises, tax levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees), and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of
the Leased Property, Lessor, or the business conducted thereon by Lessee
(including all interest and penalties thereon due to any failure in payment
by Lessee), and all increases in all the above from any cause whatsoever,
including reassessment, which at any time prior to, during or in respect of
the Term may be assessed or imposed on or in respect of or be a lien upon (a)
Lessor's interest in the Leased Property or any part thereof; (b) the Leased
Property or any part thereof, including without limitation any Personal
Property located thereon or used in connection therewith, or any rent
therefrom or any estate, right, title or interest therein; or (c) any
occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with the Leased Property or the leasing or use
of the Leased Property or any part thereof by Lessee. Without limiting the
foregoing, the term "Imposition" shall include any sales tax on rents paid
under this Lease or by residents of the Facility (including, but not limited
to, rental receipts taxes), bed taxes, depreciation recapture, any other
taxes (except for the specific exclusions stated below), fees or charges
imposed by the State of Ohio and any potential subdivision thereof relating
to any Facility or the Leased Property, this Lease, or rents received under
this Lease, whether relating to any period prior to or after the Commencement
Date. Provided, however, nothing contained in this Lease shall be construed
to require Lessee to pay (1) the following taxes and fees to the extent they
relate to Lessor's business generally (as opposed to relating specifically to
Lessor's ownership of any Facility, lease thereof to Lessee or income
therefrom): any federal, state or local income tax of Lessor, taxes based on
outstanding corporate shares of Lessor or Lessor's equity or capitalization,
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regardless of whether denominated as an income tax, franchise tax, capital
tax or otherwise; (2) any income or capital gain tax imposed with respect to
the sale, exchange or other disposition by Lessor of any Leased Property or
the proceeds thereof; or (3) estate, inheritance, gift taxes or documentary
transfer taxes.
INSURANCE REQUIREMENTS. All terms of any insurance policy
required by this Lease and all requirements of the issuer of any such policy.
LAND. As defined in Article I.
LEASE. As defined in the Preamble.
LEASE YEAR. Any twelve (12) month period from May 1 to
each following April 30 during the Term. In the case of the beginning of the
Initial Term, the provision "Lease Year" shall mean the period from the
Commencement Date (defined in Paragraph 1.2, above) to April 30, 1999; in the
case of the end of the Term, the provision "Lease Year" shall mean the period
from the last May 1 to occur during the Term to the date of expiration of the
Lease.
LEASED IMPROVEMENTS; LEASED PROPERTY. Each as defined in
Article I.
LEGAL REQUIREMENTS. All federal, state, county, municipal,
and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees, and injunctions affecting either the Leased
Property or the construction, use or alteration thereof whether now or
hereafter enacted and in force, including any which may (i) require repairs,
modifications or alterations in or to the Leased Property; or (ii) in any way
adversely affect the use and enjoyment thereof, and all permits, licenses and
authorizations and regulations thereto, and all covenants, agreements,
restrictions, and encumbrances contained in any instruments, either of record
or known to Lessee, at any time in force affecting the Leased Property.
LESSEE. Karrington Operating Company, Inc. an Ohio
corporation (and any assignee permitted subject to the terms and conditions
in this Lease).
LESSEE'S PERSONAL PROPERTY. All machinery, equipment,
furniture, furnishings, movable walls or partitions, computers, or trade
fixtures or other personal property, and consumable inventory and supplies,
owned by Lessee and used or useful in Lessee's business on the Leased
Property and located thereon, including without limitation, all items of
furniture, furnishings, equipment, supplies and inventory, except items (i)
included within the definition of Fixtures; and (ii) personal property
described in Paragraph 1.1(v), above.
LESSOR. LTC-Ohio, Inc., a Delaware corporation, and its
successors and assigns.
MINIMUM RENT. As defined in Article III.
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NOTICE. A notice given pursuant to Article XXXI hereof.
OFFICER'S CERTIFICATE. A certificate of Lessee signed by
(i) the Chief Executive Officer or the President or any authorized Vice
President; AND (ii) the secretary, or another officer authorized by
appropriate resolution to so sign by the Board of Directors. Any signature
required above may be substituted with a signature of another person whose
power and authority to act has been authorized by an appropriate corporate
resolution.
OTHER LEASES. As defined in Paragraph 1.3.2.
OVERDUE RATE. On any date, a rate equal to the Prime Rate
(defined below), plus two percent (2%); provided, however, that it is the
intent of Lessor and Lessee that the Overdue Rate (and all other interest
rates provided for hereunder) be in strict compliance with applicable usury
laws of the State of Ohio, and that in the event the Overdue Rate (or other
interest rate provided for hereunder) shall be deemed to exceed that
permitted to be charged by the laws of the State of Ohio, any and all excess
sums collected by Lessor shall be credited against the Rent payable under
this Lease or if there is no Rent due, promptly refunded to Lessee.
PAYMENT DATE. Any due date for the payment of the
installments of Minimum Rent or any other payments required under this Lease.
PRIMARY INTENDED USE. As defined in Paragraph 7.2.2.
PRIME RATE. On any date, a rate equal to the annual rate
on such date as may be published by The Wall Street Journal as the prime rate
in its listing of "Money Rates."
PURCHASE AGREEMENT. That certain Agreement of Purchase and
Sale and Joint Escrow Instructions, dated as of April 15, 1998, by and
between Lessee and Karrington Acquisition II, Inc. as the "Seller" and Lessor
as the "Buyer," providing for Lessor's acquisition of the Leased Property at
the purchase price and as more fully described therein.
PURCHASE PRICE. Lessor's Purchase Price for the Leased
Property pursuant to (and as defined in) the Purchase Agreement.
RELATED LEASES. Those certain leases between Lessor, as
"Lessor", and Lessee, as "Lessee," enumerated on Exhibit "B", attached hereto.
RENT. Any and all monetary obligations of Lessee owing
under this Lease.
SUBSIDIARIES. Corporations, of which either Lessee or
Lessor owns, directly or indirectly, more than 50% of the voting stock
(individually, a "Subsidiary").
TERM. Collectively, the Initial Term plus any Extended
Terms, as the context may
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require, unless earlier terminated pursuant to the provisions hereof.
UNSUITABLE FOR ITS PRIMARY INTENDED USE. A state of
condition of a Facility such that by reason of damage or destruction, or a
partial taking by Condemnation, in the good faith judgment of Lessor and
Lessee, reasonably exercised, such Facility cannot be operated on a
commercially practicable basis for its Primary Intended Use taking into
account, among other relevant factors, the number of usable units affected by
such damage or destruction or partial Condemnation.
UNAVOIDABLE DELAYS. Delays due to strikes, lock-outs,
inability to procure materials, power failure, acts of God, governmental
restrictions, enemy action, civil commotion, fire, unavoidable casualty or
other causes beyond the control of the party responsible for performing an
obligation hereunder; provided that lack of funds shall not be deemed a cause
beyond the control of either party hereto unless such lack of funds available
to Lessor results from Lessee's failure to perform any of its obligations
under this Lease.
The above does not include all the definitions to be used
in this Lease. Various definitions of other terms are included in the other
Articles of this Lease.
ARTICLE III
3.1 RENT.
3.1.1 MINIMUM RENT. Lessee will pay to Lessor
in lawful money of the United States of America which shall be legal tender
for the payment of public and private debts at Lessor's address set forth
hereinbelow or at such other place or to such other person, firms or
corporations as Lessor from time-to-time may designate in a Notice, a rent
(the "Minimum Rent"), during the Term, as follows:
(a) INITIAL TERM. The initial
annual Minimum Rent for the first Lease Year of the Initial Term shall be an
amount equal to Two Million Ninety-Two Thousand Five Hundred and 00/100
Dollars ($2,092,500). The Minimum Rent shall be subject to increase as and
when provided below in this Article III. The Minimum Rent, as the same may
be increased hereunder, shall be paid in advance in equal, consecutive
monthly installments on the first day of each calendar month of the Term
without demand, abatement, setoff or notice. Minimum Rent shall be prorated
for any partial month at the beginning or end of the Term; and
(b) EXTENDED TERMS. The Minimum
Rent during the Extended Terms shall be as stated in Article XVIII, below.
3.1.2 ADJUSTMENT TO RENT. Commencing on the
first (1st) day of the first calendar month following the one-year
anniversary of the Commencement Date (unless the Commencement Date falls on
the first (1st) day of a calendar month, in which case the Minimum
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Rent shall be increased (but never decreased) commencing on the one-year
anniversary of the Commencement Date) ("Rent Adjustment Date") and continuing
thereafter on each subsequent anniversary of the Rent Adjustment Date during
the Initial Term and each Extended Term, the Minimum Rent shall be increased
in an amount equal to the annual Minimum Rent payable under this Lease for
the immediately preceding twelve (12) month period increased by one hundred
fifty percent (150%) of the cumulative increase in the Consumer Price Index,
published as the "CPI-U" Index by the Bureau of Labor Statistics of the
Department of Labor, U.S. Cities Average, All Items (1982-84--100) in the
manner calculated on the date of this Lease ("C.P.I.") from the date two (2)
months prior to the immediately preceding Rent Adjustment Date (or, in the
case of the first adjustment to Minimum Rent, from the date two (2) months
prior to the Commencement Date) to the date two (2) months prior to then
current Rent Adjustment Date. Notwithstanding the foregoing, in no event
shall any INCREASE TO Minimum Rent in any Lease Year exceed two percent
(2.0%) of the Minimum Rent (as adjusted) payable for the immediately
preceding twelve (12) month period. In no event shall the Minimum Rent be
reduced by reason of the adjustment to Minimum Rent set forth in this
Paragraph 3.1.2. If the CPI Index is no longer published, or if the format
or components of the CPI Index are materially changed after the Commencement
Date, Lessor in its reasonable judgment shall substitute an index which is
published by the Bureau of Labor Statistics or similar agency and which is
most nearly equivalent to the Index in effect on the Commencement Date.
3.2 ADDITIONAL CHARGES. In addition to the Minimum
Rent, (1) Lessee will also pay and discharge as and when due and payable all
other amounts, liabilities, obligations (including but not limited to all
rents, charges, payments, impositions and amounts payable under the Ground
Leases) and Impositions which Lessee assumes, is obligated or agrees to pay
under this Lease, and (2) in the event of any failure on the part of Lessee
to pay any of those items referred to in clause (1) above, Lessee will also
promptly pay and discharge every fine, penalty, interest and cost which may
be added for non-payment or late payment of such items (the items referred to
in clauses (1) and (2) above being referred to herein collectively as the
"Additional Charges"), and Lessor shall have all legal, equitable and
contractual rights, powers and remedies provided either in this Lease or by
statute or otherwise in the case of non-payment of the Additional Charges.
If any elements of Additional Charges shall not be paid within five (5)
Business Days after its due date and Lessor pays any such amount (which
Lessor shall have the right, but not the obligation, to do), then, in
addition to Lessor's other rights and remedies, Lessee will pay Lessor on
demand, as Additional Charges, interest on such unpaid Additional Charges
computed at the Overdue Rate from the date that Lessor pays such amount to
the date that Lessor receives reimbursement from Lessee. To the extent that
Lessee pays any Additional Charges to Lessor pursuant to any requirement of
this Lease, Lessee shall be relieved of its obligation to pay such Additional
Charges to the entity to which they would otherwise be due.
3.3 NET LEASE. Subject to the provisions of Article
V, below, without limiting any provision of this Lease, the Rent shall be
paid absolutely net to Lessor, so that this Lease shall yield to Lessor the
full amount of the installments of Minimum Rent and Additional Charges
throughout the Term, all as more fully set forth in Articles III, IV, VIII,
IX and XIII, and other
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provisions of this Lease.
3.4 LATE CHARGE. LESSEE HEREBY ACKNOWLEDGES THAT LATE
PAYMENT BY LESSEE TO LESSOR OF RENT (INCLUDING MINIMUM RENT AND ADDITIONAL
CHARGES, BUT EXCLUDING LATE CHARGES) OR OTHER SUMS DUE HEREUNDER WILL CAUSE
LESSOR TO INCUR COSTS NOT CONTEMPLATED BY THIS LEASE, THE EXACT AMOUNT OF
WHICH WILL BE EXTREMELY DIFFICULT TO ASCERTAIN. SUCH COSTS INCLUDE, BUT ARE
NOT LIMITED TO, PROCESSING AND ACCOUNTING CHARGES. ACCORDINGLY, IF ANY
INSTALLMENT OF RENT (INCLUDING MINIMUM RENT AND ADDITIONAL CHARGES, BUT
EXCLUDING LATE CHARGES) OR ANY OTHER SUM DUE FROM LESSEE SHALL NOT BE
RECEIVED BY LESSOR WHEN THE SAME BECOMES DUE AND PAYABLE AND SUCH FAILURE IS
NOT CURED WITHIN FIVE (5) BUSINESS DAYS AFTER NOTICE THEREOF FROM LESSOR,
THEN LESSEE SHALL PAY TO LESSOR A LATE CHARGE EQUAL TO FIVE PERCENT (5%) OF
SUCH OVERDUE AMOUNT. THE PARTIES HEREBY AGREE THAT SUCH LATE CHARGE
REPRESENTS A FAIR AND REASONABLE ESTIMATE OF THE COSTS LESSOR WILL INCUR BY
REASON OF LATE PAYMENT BY LESSEE. ACCEPTANCE OF SUCH LATE CHARGE BY LESSOR
SHALL IN NO EVENT CONSTITUTE A WAIVER OF LESSEE'S DEFAULT OR BREACH WITH
RESPECT TO SUCH OVERDUE AMOUNT, NOR PREVENT LESSOR FROM EXERCISING ANY OF THE
OTHER RIGHTS AND REMEDIES GRANTED UNDER THIS LEASE.
ARTICLE IV
4.1 PAYMENT OF IMPOSITIONS. Subject to Article XII
relating to permitted contests, Lessee will pay, or cause to be paid, all
Impositions coming due prior to or during the Term, or which relate to any
period within the Term or prior to the Term, before any fine, penalty,
interest or cost may be added for non-payment (or earlier if required by any
taxing authority), such payments to be made directly to the taxing
authorities where feasible, and upon written request will promptly furnish to
Lessor copies of official receipts or other satisfactory proof evidencing
such payments. Lessee's obligation to pay Impositions shall be deemed
absolutely fixed upon the date such Impositions become a lien upon the Leased
Property or any part thereof. If any Imposition may, at the option of the
taxpayer, lawfully (without penalty) be paid in installments (whether or not
interest shall accrue on the unpaid balance of such Imposition), Lessee may
exercise the option to pay the same (and any accrued interest on the unpaid
balance of such Imposition) in installments and in such event, shall pay such
installments during the Term hereof (subject to Lessee's right of contest
pursuant to the provisions of Article XII) as the same respectively become
due and before any fine, penalty, premium, further interest or cost may be
added thereto. Lessee, at its expense, shall, to the extent required or
permitted by Legal Requirements, prepare and file all tax returns and reports
in respect of any Imposition as may be required by governmental authorities.
If any refund shall be due from any taxing authority in respect of any
Imposition, the same shall be paid over to or retained by Lessee if no Event
of Default shall have occurred hereunder and be continuing, but if
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such Event of Default has occurred and is continuing (I.E., it has not been
cured), such refund shall be paid to Lessor and utilized to cure any such
continuing Event of Default. After fully curing such Event of Default, any
excess funds from such refund shall be paid by Lessor to Lessee. Any such
funds retained by Lessor, as provided above, shall be applied as provided in
Article XVI. Lessor and Lessee shall, upon request of the other, provide
such data as is maintained by the party to whom the request is made with
respect to the Leased Property as may be necessary to prepare any required
returns and reports. In the event governmental authorities classify any
property covered by this Lease as personal property, Lessee shall file all
personal property tax returns in such jurisdictions where it must legally so
file. Lessor, to the extent it possesses the same, and Lessee, to the extent
it possesses the same, will provide the other party, upon request, with cost
and depreciation records necessary for filing returns for any property so
classified as personal property. Where Lessor is legally required to file
personal property tax returns, Lessee will provide to Lessor copies of
assessment notices indicating a value in excess of the reported value in
sufficient time for Lessor to file a protest. Lessee may, upon notice to
Lessor, at Lessee's option and at Lessee's sole cost and expense, protest,
appeal or institute such proceedings as Lessee may deem appropriate to effect
a reduction of real estate or personal property assessments and Lessor, at
Lessee's sole cost and expense as aforesaid, shall fully cooperate with
Lessee in such protest, appeal, or other action, provided that Lessee may not
withhold payments pending such challenges except under the conditions set
forth in Article XII. ▇▇▇▇▇▇▇▇ for reimbursement by Lessee to Lessor of
personal property taxes shall be accompanied by copies of a ▇▇▇▇ therefor and
payments thereof which identify the personal property with respect to which
such payments are made. Lessor shall have the right, once any Event of
Default has occurred hereunder (and irrespective of whether such Event of
Default is continuing or has been cured), to require that Lessee pay to
Lessor 1/12th of the annual Impositions each month concurrently with the
payment of Minimum Rent; provided that, during any period when such payments
are being made, Lessor agrees (a) to pay, or cause to be paid, all such
Impositions prior to delinquency, and (b) upon written request from Lessee,
to account to Lessee for all payments then on deposit. Unless Lessee is
notified by Lessor otherwise, Lessee shall pay all "Impositions" directly to
the appropriate taxing or other authorities to which payments are due, and
upon written request Lessee shall provide Lessor written evidence and notice
that all such payments have been made. Without limiting any of the other
indemnities set forth in this Lease, Lessee hereby agrees to defend,
indemnify, protect and hold harmless Lessor in connection with any
"Impositions" that relate to any time prior to or during the Term, and Lessee
acknowledges and agrees that it will not make claims against, or otherwise
look to, Lessor to reimburse Lessee for payments made relating to any period
prior to the Commencement Date.
4.2 NOTICE OF IMPOSITIONS. Lessor shall give prompt
Notice to Lessee for all Impositions payable by Lessee hereunder of which
Lessor has knowledge, but Lessor's failure to give any such Notice shall in
no way diminish Lessee's obligations hereunder to pay such Impositions, but
such failure shall obviate any default hereunder for a reasonable time after
Lessee receives notice (from any source) of any Imposition which it is
obligated to pay. However, notwithstanding the foregoing, it shall be
Lessee's sole duty to inquire and determine all of the Impositions for which
it is liable as provided herein and shall promptly pay such Impositions when
due, and Lessor shall have no duty of inquiry concerning Impositions.
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4.3 UTILITY CHARGES. Lessee will pay or cause to be
paid all charges for electricity, power, gas, oil, water, sewer connection
and all other utilities used in or for the Leased Property during the Term.
4.4 INSURANCE PREMIUMS. Lessee will pay or cause to
be paid all premiums for the insurance coverage required to be maintained
pursuant to Article XIII during the Term.
4.5 GROUND LEASE PAYMENTS. Lessee will pay any and
all rents, charges, payments impositions and amounts payable by or on behalf
of the lessee under the Ground Leases during the Term. Lessee shall pay to
Lessor all such amounts payable under the Ground Leases so as to cause Lessor
to receive such payments not later than three (3) business days prior to the
date on which such sums are due to the ground lessor (or to such other party
as any of such sums may be payable) under the Grounds Leases.
4.6 PAYABLES. Lessee acknowledges and agrees that
prior to the Rent Commencement Date, certain liabilities and other
obligations were incurred arising from the development, construction and
operation of the Facilities for which Lessee is and shall remain entirely
responsible and liable, and Lessor shall have no responsibility, liability or
obligation whatsoever with respect to the same. Therefore, Lessee agrees as
part of this Lease to pay all liabilities and obligations concerning each
Facility, whether arising before or after the Rent Commencement Date.
ARTICLE V
5.1 NO TERMINATION, ABATEMENT, ETC. Except as
specifically provided under Article XV hereunder, Lessee shall not be
entitled to any abatement, deduction, deferment or reduction of Rent, or
set-off against the Rent, nor shall the respective obligations of Lessor and
Lessee be otherwise affected by reasons of (a) any damage to, or destruction
of, any Leased Property or any portion thereof; (b) the lawful or unlawful
prohibition of, or restriction upon, Lessee's use of the Leased Property, or
any portion thereof, the interference with such use by any person,
corporation, partnership or other entity, or by reason of eviction by
paramount title; (c) any claim which Lessee has or might have against Lessor
or by reason of any default or breach of any warranty by Lessor under this
Lease or any other agreement between Lessor and Lessee, or to which Lessor
and Lessee are parties; (d) any bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, winding-up or other
proceedings affecting Lessor or any assignee or transferee of Lessor; or (e)
for any other cause whether similar or dissimilar to any of the foregoing
other than a discharge of Lessee from any such obligations as a matter of
law. Lessee hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law
to (i) modify, surrender or terminate this Lease or quit or surrender the
Leased Property or any portion thereof; or (ii) entitle Lessee to any
abatement, reduction, suspension or deferment of the Rent payable under this
Lease except as specifically provided in Article XV hereunder. The
obligations of Lessor and Lessee hereunder shall be
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separate and independent covenants and agreements and the Rent due under this
Lease shall continue to be payable in all events, irrespective of Lessor's
performance or non-performance under this Lease, unless the obligations to
pay the same shall be terminated pursuant to the express provisions of this
Lease or by termination of this Lease other than by reason of an Event of
Default.
5.2 ABATEMENT PROCEDURES. In the event Lessee is
entitled to an abatement of Minimum Rent under Paragraph 15.3 (by reason of a
total Condemnation of a Facility), the Minimum Rent shall be abated as provided
in Paragraph 15.3. In the event Lessee is entitled to an abatement of Minimum
Rent under Paragraph 15.5 (by reason of any partial Condemnation of a Facility
as provided hereunder), the Lease shall not terminate but the Minimum Rent shall
be abated in proportion to the reduced capacity of the Leased Property for the
use made of the same by Lessee at the time of the Condemnation (I.E., the
reduction in the number of residents the Leased Property can accommodate under
standards existing immediately prior to the Condemnation). If Lessor and Lessee
are unable to agree upon the amount of such abatement within thirty (30) days
after any partial taking as provided under Article XV, the matter shall be
submitted by either party to a court of competent jurisdiction for resolution,
but Lessee during such resolution shall continue to perform its obligations
hereunder, including, but not limited to, payment of that portion of the Minimum
Rent which is not then in dispute.
ARTICLE VI
6.1 OWNERSHIP OF THE LEASED PROPERTY. Lessee
acknowledges and agrees that the Leased Property is the property of Lessor
(subject to the rights of the ground lessors under the Ground Leases) and that
Lessee has only the right to the exclusive possession and use of the Leased
Property upon the terms and conditions of this Lease.
6.2 LESSEE'S ALTERATIONS. Lessee shall not make any
modifications, alterations or improvements, whether by addition or deletion, to
the Leased Improvements or any portion thereof (collectively, "Alterations")
without Lessor's prior written consent; provided, however that Lessee may, at
its sole cost and expense, make non-structural Alterations to the interior of
the Leased Improvements so long as the total cost thereof is less than One
Hundred Fifty Thousand and 00/100 Dollars ($150,000) for any single Facility and
provided that the aggregate cost over any twelve (12) month period of such
Alterations for all of the Leased Property does not exceed Six Hundred Thousand
and 00/100 Dollars ($600,000) unless approved in advance in writing by Lessor.
Any Alterations by Lessee during the Term of this Lease shall be done in a good
and workmanlike manner, with good and sufficient materials, and in compliance
with law. Lessee will not make any Alteration or other improvement that may
materially impair the value or the usefulness of the Leased Property or any part
thereof for its Primary Intended Use. Subject to the provisions of Article XI,
all Alterations and other improvements shall be lien free (I.E., without
mechanics', materialmen's or other liens). Lessee shall promptly upon
completion thereof furnish Lessor with as-built plans and specifications
therefor. Lessee shall, at its sole cost and expense, repair and restore the
Leased Property as and when required under Paragraph 9.1.
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6.3 LESSEE'S PERSONAL PROPERTY. Lessee may (and shall as
provided hereinbelow), at its expense, install, assemble or place on any parcels
of the Land or in any of the Leased Improvements, any items of Lessee's Personal
Property, and Lessee may, subject to the conditions set forth below, remove the
same upon the expiration or any prior termination of the Term. Lessee shall
provide and maintain during the entire Term all such Lessee's Personal Property
as shall be necessary in order to operate each Facility in compliance with all
licensure and certification requirements, in compliance with all applicable
Legal Requirements and Insurance Requirements and otherwise in accordance with
customary practice in the industry for the Primary Intended Use. All of
Lessee's Personal Property not removed by Lessee within twenty (20) days
following the expiration or earlier termination of this Lease shall be
considered abandoned by Lessee and may be used, appropriated, sold, destroyed,
or otherwise disposed of by Lessor without first giving notice thereof to Lessee
and without any payment to Lessee and without any obligation to account
therefor. Lessee shall, within twenty (20) days following the expiration or
earlier termination of this Lease, at its sole cost and expense, repair any
damage to the Land or the Leased Improvements occasioned by the installation,
maintenance or removal of Lessee's Personal Property, and restore the Land or
Leased Improvements to its condition immediately prior to any such installation.
6.4 CONSUMABLE INVENTORY. Lessor and Lessee acknowledge
that certain inventory, including consumables, at each Facility, as of the
Commencement Date ("Consumable Inventory") will be completely consumed or
otherwise disposed of during the course of Lessee's operation of such Facility.
Lessee agrees that, at the end of the Term or earlier termination of the Lease,
it shall replace and restore the Consumable Inventory to the type and amount
(with the same value) as that existing as of the Commencement Date, and as may
otherwise be sufficient to fully equip each Facility for its operation and
maintenance as may be customary for properties comparable to the Leased Property
in the State of Ohio.
ARTICLE VII
7.1 CONDITION OF LEASED PROPERTY. Lessee acknowledges
receipt and delivery of possession of the Leased Property and further
acknowledges that Lessee has examined and otherwise has knowledge of the
condition of the Leased Property prior to the execution and delivery of this
Lease and has found the same to be in good order and repair and satisfactory for
it purposes hereunder. Lessee represents and warrants that the Personal
Property (as defined in Paragraph 1.1(v) hereof) includes all equipment and
property required under applicable federal and state law to operate each
Facility at full capacity. Lessee is leasing the Leased Property "AS-IS" in its
present condition. Lessee waives any claim or action against Lessor in respect
of the condition of the Leased Property. LESSOR MAKES NO WARRANTY OR
REPRESENTATIONS, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY
PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR THE
MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH
RISKS ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT THE LEASED PROPERTY
HAS BEEN INSPECTED BY
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LESSEE AND IS SATISFACTORY TO IT. WITHOUT LIMITING THE FOREGOING, IT SHALL
BE LESSEE'S RESPONSIBILITY TO DETERMINE THE AMOUNT OF REIMBURSEMENT AND OTHER
PAYMENTS THAT IT IS ENTITLED TO RECEIVE FROM THE FEDERAL, STATE OR LOCAL
GOVERNMENTS AND LESSEE'S OBLIGATIONS UNDER THIS LEASE SHALL NOT BE MODIFIED,
CHANGED OR OTHERWISE BE REDUCED IN THE EVENT THAT LESSEE HAS INCORRECTLY
ANALYZED THE AMOUNTS TO BE PAID TO LESSEE BY ANY GOVERNMENT OR AGENCY THEREOF.
7.2 USE OF THE LEASED PROPERTY.
7.2.1 Lessee covenants that it will obtain and
will at all times during the Term maintain all approvals needed to use and
operate the Leased Property and each Facility under applicable federal, state
and local law, including, but not limited to, licensure and Medicaid
certification, if and as applicable. Lessee shall provide to Lessor, at
Lessor's request a copy of any report or survey conducted by any federal, state
or local government entity regarding the quality of care at each Facility, and
any other such information or documents concerning the operation of each
Facility.
7.2.2 After the Commencement Date and during the
entire Term, Lessee shall use or cause to be used the Leased Property as
separate assisted living facilities licensed (if applicable) by the State of
Ohio and uses incidental to the foregoing, including without limitation home
health services provided in accordance with and as contemplated under Paragraph
22, below (the particular such use to which the Leased Property is put at any
particular time is herein referred to as the "Primary Intended Use"). Lessee
shall not use the Leased Property or any portion thereof for any other use
without the prior written consent of Lessor, which consent may be withheld in
Lessor's sole and absolute discretion. No use shall be made of the Leased
Property, and no acts shall be done, which will cause the cancellation of any
insurance policy to residents therein, or permit to be kept, used or sold in or
about the Leased Property any article which may be prohibited by law or by the
standard form of fire insurance policies, or any other insurance policies
required to be carried hereunder, or fire underwriter's regulations. Lessee
shall, at its sole cost, comply with all of the requirements pertaining to the
Leased Property or other improvements of any insurance board, association,
organization, or company necessary for the maintenance of insurance, as herein
provided, covering the Leased Property and Lessee's Personal Property.
7.2.3 Lessee covenants and agrees that subject to
damage, destruction and condemnation described in Articles XIV and XV, during
the Term it will operate continuously the entirety of the Leased Property in
accordance with its Primary Intended Use, provided that Lessee may cease
operations (at no more than one (1) Facility at a time) for more than ten (10)
days (i) if Lessee obtains Lessor's prior written approval, and (ii) so long as
such cessation of operations does not impair or threaten the status or
effectiveness of the operating license or other certification for operating such
Facility in accordance with its Primary Intended Use.
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7.2.4 Lessee shall not commit or suffer to be
committed any waste on the Leased Property, or in any Facility nor shall Lessee
cause or permit any nuisance thereon.
7.2.5 Lessee shall neither suffer nor permit the
Leased Property or any portion thereof, including Lessee's Personal Property, to
be used in such a manner as (i) might reasonably tend to impair Lessor's (or
Lessee's, as the case may be) title thereto or to any portion thereof; or (ii)
may reasonably make possible a claim or claims of adverse usage or adverse
possession by the public, as such, or of implied dedication of the Leased
Property or any portion thereof.
7.2.6 Lessee covenants and agrees that during the
Term it will maintain all licenses, approvals, permits and certifications for
reimbursement, licensure and as otherwise required for operating the Facility in
accordance with its Primary Intended Use.
7.3 PRESERVATION OF GROSS REVENUES. Lessee acknowledges
that a fair return to Lessor on its investment in the Leased Property is
dependent, in part, on the concentration on each Facility of the Leased Property
during the Term of the assisted living business of Lessee and its Affiliates in
the geographical area of each Facility of the Leased Property. Lessee further
acknowledges that diversion of residents and/or patients, as applicable, from
any Facility to other facilities or institutions owned, operated or managed,
whether directly or indirectly, by Lessee or its Affiliates will have a material
adverse impact on the value and utility of the Leased Property. Accordingly,
Lessor and Lessee agree as follows:
7.3.1 During the Term neither Lessee nor any of
its Affiliates, directly or indirectly, shall operate, own, manage or have any
interest in or otherwise participate in or receive revenues from any other
facility or institution providing services or similar goods to those provided in
connection with any Facility and the Primary Intended Use, within a four (4)
mile radius outward from the outside boundary of each Facility (other than any
other of the Facilities which may be located within such radius). All distances
shall be measured on a straight line rather than on a driving distance basis.
In the event that any portion of such other facility or institution is located
within such restricted area, the entire facility or institution shall be deemed
located within such restricted area.
7.3.2 During the Term, Lessee shall not recommend
or solicit the removal or transfer of any resident or patient from any Facility
to any other facility or institution; provided however that the provisions of
this Paragraph 7.3.2 shall not apply to removals or transfers required for
medically appropriate reasons, or required during the period of reconstruction
or restoration, if any, permitted after any casualty event pursuant to Article
XIV below or after any Condemnation pursuant to Article XV below.
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ARTICLE VIII
8.1 COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS,
INSTRUMENTS, ETC. Subject to Article XII relating to permitted contests,
Lessee, at its sole cost and expense, will promptly (a) comply with all
applicable Legal Requirements and Insurance Requirements in respect of the use,
operation, maintenance, repair, and restoration of the Leased Property, whether
or not compliance therewith shall require structural changes in any of the
Leased Improvements or interfere with the use and enjoyment of the Leased
Property; and (b) procure, maintain and comply with all licenses, certificates
of need, provider agreements and other authorizations, if any, required for any
use of the Leased Property and Lessee's Personal Property then being made, and
for the proper erection, installation, operation, and maintenance of the Leased
Property or any part thereof.
8.2 LEGAL REQUIREMENT COVENANTS. Lessee covenants and
agrees that the Leased Property and Lessee's Personal Property shall not be used
for any unlawful purpose. Lessee further warrants and represents that Lessee
has obtained all necessary governmental approvals and has given all necessary
notices to allow Lessee to operate each Facility and all of the Leased Property
for its Primary Intended Use. Lessee shall acquire and maintain all licenses,
certificates, permits, provider agreements and other authorizations and
approvals needed to operate each Facility and the Leased Property in its
customary manner for the Primary Intended Use, and any other use conducted on
the Leased Property as may be permitted by Lessor from time-to-time hereunder.
Lessee further covenants and agrees that Lessee's use of the Leased Property and
maintenance, alteration and operation of the same, and all parts thereof, shall
at all times conform to all applicable federal, state and local laws,
ordinances, rules, and regulations unless the same are held by a court of
competent jurisdiction to be unlawful. Lessee, may, however, upon prior written
notice to Lessor, contest the legality or applicability of any such law,
ordinance, rule, or regulation, or any licensure or certification decision if
Lessee maintains such action in good faith, with due diligence, without
prejudice to Lessor's rights hereunder, and at Lessee's own expense. If by the
terms of any such law, ordinance, rule or regulation, compliance therewith
pending the prosecution of any such proceeding may legally be delayed without
the incurrence of any fine, charge or liability of any kind against the Leased
Property, including any Facility, or Lessee's leasehold interest therein and
without subjecting Lessor to any liability, civil or criminal, for failure so to
comply therewith, Lessee may delay compliance therewith until the final
determination of such proceeding. If any lien, charge or civil or criminal
liability would be incurred by reason of any such delay, Lessee, on the prior
written consent of Lessor, may nonetheless contest as aforesaid and delay as
aforesaid provided that such delay would not subject Lessor to criminal
liability and Lessee both (a) furnishes to Lessor security reasonably
satisfactory to Lessor against any loss or injury by reason of such contest or
delay; and (b) prosecutes the contest continuously, with due diligence and in
good faith.
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ARTICLE IX
9.1 MAINTENANCE AND REPAIR.
9.1.1 Lessee, at its sole cost and expense, will
keep the Leased Property and all portions thereof and Lessee's Personal Property
and all private roadways, sidewalks and curbs appurtenant thereto and which are
under Lessee's control in good order and repair (whether or not the need for
such repairs occurs as a result of Lessee's use, any prior use, the elements or
the age of the Leased Property, or any portion thereof), and, except as
otherwise provided in Article XIV, with reasonable promptness, make all
necessary and appropriate repairs thereto of every kind and nature, whether
interior or exterior, structural or non-structural, ordinary or extraordinary,
foreseen or unforeseen or arising by reason of a condition existing prior to the
Commencement Date (concealed or otherwise). All repairs shall, to the extent
reasonably achievable, be at least equivalent in quality to the original work.
Lessee will not take or omit to take any action the taking or omission of which
may materially impair the value or the usefulness of the Leased Property or any
part thereof for its Primary Intended Use. Any repair work performed by Lessee
shall be paid for so that no lien (I.E., mechanics', materialmen's or other
liens) shall attach to the Leased Property, subject to Article XII.
9.1.2 Lessor shall not under any circumstances be
required to build or rebuild any improvements on the Leased Property, or to make
any repairs, replacements, alterations, restorations, or renewals of any nature
or description to the Leased Property, whether ordinary or extraordinary,
structural or non-structural, foreseen or unforeseen, or to make any expenditure
whatsoever with respect thereto, in connection with this Lease, or to maintain
the Leased Property in any way. Lessee hereby waives, to the extent permitted
by law, the right to make repairs at the expense of Lessor pursuant to any law
in effect at the time of the execution of this Lease or hereafter enacted.
Lessor shall have the right to give, record and post, as appropriate, notices of
non-responsibility (or similar notices) under any mechanics' or materialmen's
lien laws now or hereafter existing.
9.1.3 Nothing contained in this Lease and no
action or inaction by Lessor shall be construed as (i) constituting the consent
or request of Lessor, express or implied, to any contractor, sub-contractor,
laborer, materialman, or vendor to or for the performance of any labor or
services or the furnishing of any materials or other property for the
construction, alteration, addition, repair, or demolition of, or to the Leased
Property or any part thereof; or (ii) giving Lessee any right, power or
permission to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against Lessor in respect thereof or to make any
agreement that may create, or in any way be the basis for any right, title,
interest, lien, claim, or other encumbrance upon the estate of Lessor in the
Leased Property, or any portion thereof. Lessor shall have the right to give,
record and post, as appropriate, notices of non-responsibility (or similar
notices) under any mechanics' or materialsmen's lien laws now or hereafter
existing.
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9.1.4 Unless Lessor shall convey any of the Leased
Property to Lessee pursuant to the provisions of this Lease, and subject to the
provisions of Paragraph 6.3 regarding Lessee's Personal Property, upon the
expiration or prior termination of the Term, all the Leased Property, including
all Fixtures and Personal Property located thereon, and any Alterations,
repairs, restorations, additions or improvements otherwise made by or for
Lessee, shall be Lessor's property and shall be vacated and surrendered to
Lessor in the condition in which the Leased Property was originally received
from Lessor, and in the same type and amount (with the same depreciated value)
as that existing as of the Commencement Date, except as repaired, rebuilt,
restored, altered or added to as permitted or required under this Lease, and as
otherwise sufficient to fully equip the Facilities for their operation and
maintenance as may be customary for properties comparable to the Leased Property
in the County of Franklin, Ohio, and except for ordinary wear and tear (subject
to the obligation of Lessee to maintain the Leased Property) in good order and
repair without compensation to Lessee; provided however that, at the election of
Lessor, exercisable by notice to Lessee, Lessee shall, at Lessee's sole cost and
expense, prior to the expiration or prior termination of the Term, remove from
the Leased Property any Fixtures, Personal Property, Alterations or other
improvements to the Leased Property or any portion thereof that were not
consented to in advance in writing by Lessor, irrespective of whether Lessor's
consent was required hereunder, and Lessee shall repair any damage to the Leased
Property occasioned by the installation, maintenance or removal of the same, and
restore the Leased Property to its condition immediately prior to such
installation. Notwithstanding the foregoing, if this Lease is terminated
pursuant to Paragraph 14.7 due to damage or destruction during the last 24
months of the Term (as described in Paragraph 14.7), then, unless the dmage or
destruction was due to Lessee's negligent acts or omissions or willful
misconduct, at the end of the Term (shortened due to the damage and destruction)
Lessee shall not be obligated to repair any items that were damaged; provided
that nothing contained herein shall affect Lessee's obligation to maintain the
Leased Property in good order and repair during the entire Term. Additionally,
Lessor shall own and may remove, at the end of the Term (or at the earlier
termination of this Lease), all patient records and other records in connection
with the Facilities, and in connection with the transfer of such records, Lessee
shall take all necessary action to insure full compliance with any and all
patient confidentiality, patient-physician privileges or any duly enacted
APatient's ▇▇▇▇ of Rights" or similar applicable laws or regulations.
9.2 EXPENDITURES TO COMPLY WITH LAW; CONSTRUCTION OF
ADDITIONAL IMPROVEMENTS PURSUANT TO CERTIFICATE OF NEED. Without limiting
Lessee's other obligations, during the Term of this Lease, Lessee will, at its
expense, make whatever expenditures (including, but not limited to capital and
non-capital expenditures) that are required to conform the Leased Property to
such standards as may from time-to-time be required by Federal Medicaid (Title
19) assisted living programs, as and if applicable, or any other applicable
programs or legislation, or capital improvements required by any other
governmental agency having jurisdiction over the Leased Property as a condition
of the continued operation of the Leased Property during the Term (as extended)
as an assisted living residence or other health-care related facility, approved
for Medicaid and similar programs as and if applicable, pursuant to present or
future laws of governmental regulation.
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9.3 ENCROACHMENTS, RESTRICTIONS, ETC. If any of the
Leased Improvements shall, at any time, encroach upon any property, street or
right-of-way adjacent to the Leased Property, or shall violate the agreements or
conditions contained in any lawful restrictive covenant or other agreement
affecting the Leased Property, or any part thereof, or shall impair the rights
of others under any easement or right-of-way to which the Leased Property is
subject, then promptly upon the request of Lessor at the behest of any person
affected by any such encroachment, violation or impairment, Lessee shall, at its
sole cost and expense, (and after Lessor's prior approval) subject to Lessee's
right to ▇▇▇ ▇▇▇▇▇▇'▇ predecessors in title with respect thereto or to contest
the existence of any such encroachment, violation or impairment and, in such
case, in the event of an adverse final determination, either (i) obtain valid
and effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation or impairment, whether the same
shall affect Lessor or the Leased Property; or (ii) make such changes in the
Leased Improvements, and take such other actions, as Lessee in the good faith
exercise of its judgment deems reasonably practicable, to remove such
encroachment, and to end such violation or impairment, including, if necessary,
the alteration of any of the Leased Improvements, and in any event take all such
actions as may be necessary in order to be able to continue the operation of the
Leased Improvements for the Primary Intended Use substantially in the manner and
to the extent the Leased Improvements were operated prior to the assertion of
such violation, impairment or encroachment. Any such alteration shall be made
in conformity with the applicable requirements of Paragraph 6.2 (provided that
Lessor shall not unreasonably withhold its consent) and this Article IX.
Lessee's obligations under this Paragraph 9.3 shall be in addition to and shall
in no way discharge or diminish any obligation of any insurer under any policy
of title or other insurance.
ARTICLE X
10.1 LESSEE'S OBLIGATIONS FOR HAZARDOUS MATERIALS. Lessee
shall, at its sole cost and expense, take all actions as required to cause the
Leased Property including, but not limited to, the Land and all Leased
Improvements, to be free and clear of the presence of all Hazardous Materials
during the Term; provided, however, that Lessee shall be entitled to use and
maintain Hazardous Materials on the Leased Property of types and in the
quantities commonly used in assisted living facilities in the State of Ohio and
which have been used, stored and disposed of in compliance with all applicable
laws. In this connection, Lessee shall, upon its discovery, belief or suspicion
of the presence of Hazardous Materials on, in or under any part of the Leased
Property, including, but not limited to, the Land and all Leased Improvements in
violation of the preceding sentence, immediately notify Lessor and, at no
expense to Lessor, cause any such Hazardous Materials to be removed immediately,
in compliance with all applicable laws and in a manner causing the least
disruption of or interference with the operation of Lessee's business. Lessee
hereby agrees to fully indemnify, protect, defend and hold harmless Lessor from
any costs, damages, claims, liability or loss of any kind or nature arising out
of or in any way in connection with the presence, suspected presence, removal or
remediation of Hazardous Materials in, on, or about the Leased Property, or any
part thereof. Lessee acknowledges that it has received and reviewed a Phase I
Environmental Report prepared by C-K Associates, Inc. of approximately equal
date herewith for each Facility (collectively the "Environmental Report").
Without limiting
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Lessee's other obligations under this Lease, Lessee agrees, at Lessee's sole
cost, to fully comply with all recommendations set forth in the Environmental
Report or any other environmental report. Lessee's obligations hereunder
shall apply to all Hazardous Materials, irrespective of when they arose or
were discovered and therefore will include any Hazardous Materials that
existed prior to, at, or after the Commencement Date and during the Term.
10.2 DEFINITION OF HAZARDOUS MATERIALS. For purposes
of this Lease, "Hazardous Materials" shall mean (1) any flammables, explosive
or radioactive materials, hazardous wastes, toxic substances or related
materials including, without limitation, substances defined as "hazardous
substances," "hazardous materials", "toxic substances" or "solid waste" in
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Sec. 9601, ET SEQ.; the hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, ET SEQ.; the Toxic Substances
Control Act, 15 U.S.C., Section 2601 ET SEQ.; the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 ET SEQ.; Occupational Safety and
Health Act, 29 U.S.C. Section 651, ET SEQ.; and in comparable State of Ohio
and local laws and ordinances, and the regulations now or hereafter adopted,
published and/or promulgated pursuant thereto; (2) those substances listed in
the United States Department of Transportation Table (49 C.F.R. 172.101 and
amendments thereto) or by the Environmental Protection Agency (or any
successor agency) as hazardous substances (40 C.F.R. Part 302 and amendments
thereto); (3) those substances defined as "hazardous wastes," "hazardous
substances" or "toxic substances" in any similar federal, state or local laws
or in the regulations adopted and publications promulgated pursuant to any of
the foregoing laws or which otherwise are regulated by any governmental
authority, agency, department, commission, board or instrumentality of the
United States of America, the State of Ohio or any political subdivision
thereof, (4) any pollutant or contaminant or hazardous, dangerous or toxic
chemicals, materials, or substances within the meaning of any other
applicable federal, state, or local law, regulation, ordinance, or
requirement (including consent decrees and administrative orders) relating to
or imposing liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or material, all as amended; (5) petroleum or
any by-products thereof; (6) any radioactive material, including any source,
special nuclear or by-product material as defined at 42 U.S.C. Sections 2011
ET SEQ., as amended, and in the regulations adopted and publications
promulgated pursuant to said law; (7) asbestos in any form or condition; and
(8) polychlorinated biphenyls. "Environmental Laws" means and includes any
law, ordinance, statute, rule, code, order, approval, regulation or
requirement now or hereinafter in effect relating to land use, air, soil,
surface water, groundwater (including the protection, cleanup, removal,
remediation or damage thereof), human health and safety or any other
environmental matter, including, without limitation, the following laws as
the same may be amended from time to time: Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C.
Section 9601, ET SEQ.; Federal Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, ET SEQ.; Clean Water Act, 33 U.S.C. Section 1251, ET
SEQ.; Toxic Substances Control Act, 15 U.S.C. Section 2601, ET SEQ.; Refuse
Act, 33 U.S.C. Section 407; Occupational Safety and Health Act, 29 U.S.C.
Section 651, ET SEQ.; Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; and
comparable Ohio laws; and any and all similar state and local laws and
ordinances and the regulations now or hereafter adopted, published and/or
promulgated pursuant thereto.
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ARTICLE XI
11.1 NO LIENS. Subject to the provisions of Article XII
relating to permitted contests, Lessee will not directly or indirectly,
voluntarily or by operation of law, create or allow to remain and will promptly
discharge at its expense any lien, mortgage, encumbrance, attachment, title
retention agreement, or claim upon the Leased Property or any portion thereof,
or Lessee's interest under this Lease or any attachment, levy, claim, or
encumbrance in respect of the Rent, not including however, (a) this Lease; (b)
restrictions, liens and other encumbrances created or allowed pursuant to the
provisions of Paragraph 11.2 below; (c) liens for those taxes of Lessor which
Lessee is not required to pay hereunder; (d) subleases permitted by Article
XXIII; (e) liens for Impositions or for sums resulting from non-compliance with
Legal Requirements so long as (1) the same are not yet payable or are payable
without the addition of any fine or penalty, or (2) such liens are in the
process of being contested as permitted by Article XII; (f) liens of mechanics,
laborers, materialmen, suppliers or vendors for sums either disputed or not yet
due, provided that in the case of disputed sums any such liens are in the
process of being contested as permitted by Article XII; (g) any liens which are
the responsibility of Lessor pursuant to the provisions of Article XXXIII of
this Lease; (h) the Permitted Title Matters (defined in Paragraph 1.1 above);
and (i) any other matters that have been consented to in advance in writing by
Lessor.
11.2 PERMITTED LIENS. Lessee may borrow funds to finance
all or any part of the cost of any Alterations or other improvements permitted
or required under this Lease to the extent and upon such terms and conditions as
may be approved in advance in writing by Lessor in Lessor's sole discretion,
subject to Lessor's right of first refusal to finance such Alterations or other
improvements upon commercially reasonable terms and conditions; provided,
however, that Lessor's approval shall not be required for any borrowing of funds
that does not result in a lien, mortgage, encumbrance or other claim affecting
the Leased Property or Lessee's interest under this Lease. Notwithstanding the
foregoing, Lessee may grant security interests encumbering specific items of
Lessee's Personal Property (but not fixtures attached to the Land) in favor of
the lessors of or purchase-money lenders for said items of Lessee's Personal
Property, so long as such personal property is permitted on the Land or in the
Leased Improvements under Paragraph 6.3 hereunder and is not owned by or subject
to any claim or right of Lessor.
ARTICLE XII
12. PERMITTED CONTESTS. Lessee shall have the right to contest
the amount or validity of any Imposition or any Legal Requirement or Insurance
Requirement or any lien, attachment, levy, encumbrance, charge or claim
("Claims") not otherwise permitted by Article XI, by appropriate legal
proceedings in good faith and with due diligence, and to delay payment if
legally permitted. Any such legal proceeding (and delay in payment) shall
operate to extend the time for performance of Lessee's covenants to pay such
charges hereunder only so long as such Claims are in the process of being
diligently contested as permitted in this Article XII and such legal proceedings
(and delay in payment) do not cause the sale of the Leased Property, or any part
thereof, to satisfy the same or
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cause Lessor or Lessee to be in default under any mortgage or deed of trust
encumbering the Leased Property or any interest therein; provided that such
legal proceedings (and delay in payment) shall not otherwise be deemed or
construed as relieving, modifying or extending Lessee's covenants to pay or
its covenants to cause to be paid any such charges at the time and in the
manner provided for under this Lease. Upon the reasonable request of Lessor,
Lessee shall provide to Lessor reasonable security satisfactory to Lessor, in
Lessor's reasonable discretion, to assure the payment of all Claims which may
be assessed against the Leased Property or any portion thereof together with
interest and penalties, if any, thereon. Lessor agrees to join in any such
proceedings if the same be required to legally prosecute such contest of the
validity of such Claims; provided, however, that Lessor shall not thereby be
subjected to any liability for the payment of any costs or expenses in
connection with any proceedings brought by Lessee; and Lessee covenants to
indemnify and save harmless Lessor from any such costs or expenses. In the
event that Lessee fails to pay any Claims when due or, upon Lessor's request,
to provide the security therefor as provided in this Article XII and to
diligently prosecute any contest of the same, Lessor may, upon thirty (30)
days advance written Notice to Lessee, pay such charges together with any
interest and penalties and the same shall be repayable by Lessee to Lessor at
the next Payment Date provided for in this Lease. Provided, however, that
should Lessor reasonably determine that the giving of such Notice would risk
loss to the Leased Property or cause damage to Lessor, then Lessor shall give
such written Notice as is practical under the circumstances. Lessee shall be
entitled to any refund of any Claims and such charges and penalties or
interest thereon which have been paid by Lessee or paid by Lessor and for
which Lessor has been fully reimbursed.
ARTICLE XIII
13.1 GENERAL INSURANCE REQUIREMENTS. Subject to the
provisions of Paragraph 13.8, during the Term, Lessee shall at all times keep
the Leased Property, and all portions thereof and all property located in or on
the Leased Property, including Lessee's Personal Property, insured with the
kinds and amounts of insurance described below. This insurance shall be written
by companies authorized to do insurance business in the state in which the
Leased Property is located. The policies must name Lessor as a loss payee and
additional insured. Losses shall be payable to Lessor or Lessee as provided in
Article XIV. In addition, upon Lessor's written request, the policies shall
name as mortgagee, loss payee and additional insured the holder ("Facility
Mortgagee") of any mortgage, deed of trust or other security agreement and any
other Encumbrance placed on the Leased Property or any portion thereof in
accordance with the provisions of Article XXXII ("Facility Mortgage") by way of
a standard form of mortgagee's loss payable endorsement. Any loss adjustment
shall require the written consent of Lessor, Lessee, and each Facility
Mortgagee. Evidence of insurance shall be deposited with Lessor and, if
requested, with any Facility Mortgagee(s). If any provision of any Facility
Mortgage requires deposits of premiums for insurance to be made with such
Facility Mortgagee, or, pursuant to written direction by Lessor upon the
occurrence of any Event of Default hereunder (and irrespective of whether such
Event of Default is continuing or has been cured), Lessee shall make such
deposits directly with such Facility Mortgagee or with Lessor, as required,
provided that during any period when such deposits are being made, the Facility
Mortgagee or Lessor (depending on which party collects such
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deposits) agrees (a) to pay the premiums on a timely basis, and (b) upon
written request from Lessee, to account to Lessee for all funds then on
deposit. The policies on the Leased Property, including the Leased
Improvements, Fixtures and Lessee's Personal Property, shall insure against
the following risks:
13.1.1 Loss or damage by fire, vandalism and
malicious mischief, extended coverage perils commonly known as "All Risk," and
all physical loss perils normally included in such All Risk insurance,
including, but not limited to, sprinkler leakage, in an amount not less than one
hundred percent (100%) of the then full replacement cost thereof (as defined
below in Paragraph 13.2);
13.1.2 Loss or damage by explosion of steam
boilers, pressure vessels or similar apparatus, now or hereafter installed in
any Facility, if any, in such amounts with respect to any one accident as may be
reasonably requested by Lessor from time-to-time;
13.1.3 Business interruption insurance policy
covering risk of loss during the first twelve (12) months of reconstruction
necessitated by the occurrence of any of the hazards described in Paragraph
13.1.1 or 13.1.2 in an amount sufficient to prevent Lessor from becoming a
co-insurer.
13.1.4 Claims for personal injury or property
damage under a policy of comprehensive general public liability insurance with
amounts not less than One Million Dollars ($1,000,000) per occurrence, and with
an annual aggregate of Three Million Dollars ($3,000,000);
13.1.5 Claims arising out of malpractice or other
professional actions or omissions under a policy of professional liability
insurance with amounts not less than One Million Dollars ($1,000,000) per
occurrence, and with an annual aggregate of Three Million Dollars ($3,000,000);
13.1.6 Flood (if any of the Leased Improvements are
located in whole or in part within a flood plain area, as designated by any
governmental or other responsible agency and if such insurance is available
pursuant to applicable law) and such other hazards and in such amounts as may be
customary for comparable properties in the area; and
13.2 REPLACEMENT COST. The term "full replacement cost"
as used herein, shall mean the actual replacement cost of the Leased Property
requiring replacement from time-to-time including an increased cost of
construction endorsement, less exclusions provided in the standard form of fire
insurance policy in the state where the Leased Property is located. Lessor and
Lessee agree that as of the Commencement Date the full replacement cost shall be
deemed to be the "Purchase Price" less the value of the Land. In the event
either party believes that full replacement cost (the then replacement cost less
such exclusions) has increased or decreased at any time during the Term, it
shall have the right to have such full replacement cost redetermined.
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13.3 ADDITIONAL INSURANCE. In addition to the insurance
described above, Lessee shall maintain such additional insurance as may be
reasonably required from time-to-time by Lessor or any Facility Mortgagee (to
the extent available in the state where the Leased Property is located) and
shall further at all times maintain adequate worker's compensation insurance
coverage for all persons employed by Lessee on the Leased Property or any
portion thereof. Such worker's compensation insurance shall be in accordance
with the requirements of applicable federal, state and local law.
13.4 WAIVER OF SUBROGATION. All insurance policies
carried by either party covering the Leased Property, the Fixtures, the
Facilities, or Lessee's Personal Property including without limitations,
contents, fire and casualty insurance, shall expressly waive any right of
subrogation on the part of the insurer against the other party. The parties
hereto agree that their policies will include such waiver clause or endorsement
so long as the same are obtainable without extra cost, and in the event of such
an extra charge the other party, at its election, may pay the same, but shall
not be obligated to do so. Upon written request, each party shall provide the
other party with a copy of each insurance policy with the waiver clause or
endorsement attached.
13.5 FORM SATISFACTORY, ETC. All of the policies of
insurance referred to in this Article XIII shall be written in a form reasonably
satisfactory to Lessor and by insurance companies reasonably satisfactory to
Lessor. Subject to the foregoing, Lessor agrees that it will not unreasonably
withhold its approval as to the form of the policies of insurance or as to the
insurance companies selected by Lessee. Lessee shall pay all of the premiums
therefor, and deliver such policies or certificates thereof to Lessor prior to
their effective date (and, with respect to any renewal policy, prior to the
expiration of the existing policy), and in the event of the failure of Lessee
either to effect such insurance as herein called for or to pay the premiums
therefor, or to deliver such policies or certificates thereof to Lessor at the
times required, Lessor shall be entitled, but shall have no obligation, to
effect such insurance and pay the premiums therefor, which premiums shall be
repayable by Lessee to Lessor upon written demand therefor, and failure to repay
the same shall constitute an Event of Default within the meaning of Paragraph
16.1(c). Each insurer mentioned in this Article XIII shall agree, by
endorsement on the policy or policies issued by it, or by independent instrument
furnished to Lessor, that will give to Lessor (and to any Facility Mortgagee, if
required by the same) thirty (30) days written notice before the policy or
policies in questions shall be altered, allowed to expire or cancel.
13.6 INCREASE IN LIMITS. In the event that Lessor or a
Facility Mortgagee shall at any time reasonably deem the limits of the personal
injury or property damage public liability insurance then carried to be
insufficient, Lessee shall thereafter carry the insurance with increased limits
until further change pursuant to the provisions of this Paragraph; provided that
if Lessor desires to increase the limits of insurance, and such is not pursuant
to the request of a Facility Mortgagee, then Lessor may not demand an increase
in limits above the limits generally consistent with the requirements of owners
of assisted living facilities in the State of Ohio.
13.7 BLANKET POLICY. Notwithstanding anything to the
contrary contained in this
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Article XIII, Lessee's obligations to carry the insurance provided for herein
may be brought within the coverage of a so-called blanket policy or policies
of insurance carried and maintained by Lessee; provided, however, that the
coverage afforded Lessor will not be reduced or diminished or otherwise be
different from that which would exist under a separate policy meeting all
other requirements of this Lease by reason of the use of such blanket policy
of insurance, and provided further that the requirements of this Article XIII
are otherwise satisfied.
13.8 NO SEPARATE INSURANCE. Lessee shall not on Lessee's
own initiative or pursuant to the request or requirement of any third party take
out separate insurance concurrent in form or contributing in the event of loss
with that required in this Article, to be furnished or which may reasonably be
required to be furnished, by Lessee or increase the amount of any then existing
insurance by securing any additional policy or additional policies, unless all
parties having an insurable interest in the subject matter of the insurance,
including in all cases Lessor and all Facility Mortgagees, are included therein
as additional insureds, and the loss is payable under said insurance in the same
manner as losses are payable under the Lease. Lessee shall immediately notify
Lessor of the taking out of any such separate insurance or of the increasing of
any of the amount of the then existing insurance.
13.9 CONTINUOUS COVERAGE. Lessee shall assure that there
is no gap in the insurance coverage provided in connection with the Facilities
at or after the Commencement Date and, therefore, the insurance provided by
Lessee shall be continuous, with the types and amounts of coverage, described
herein to be applicable on the Commencement Date. To the extent there is not
full, complete and continuous coverage for all issues, no matter when arising,
claimed or occurring, Lessee shall, at its sole cost, obtain such insurance.
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ARTICLE XIV
14.1 INSURANCE PROCEEDS. All proceeds payable by reason of any
loss of or damage to the Leased Property, or any portion thereof, which is
insured under any policy of insurance required by Article XIII of the Lease,
where the total proceeds paid by the insurer are less than $125,000.00 for
any single Facility, shall be paid to Lessee and applied to the
reconstruction or repair, as the case may be, of any damage to or destruction
of the Leased Property, or any portion thereof. All proceeds payable by
reason of any loss of or damage to the Leased Property, or any portion
thereof, which is insured under any policy of insurance required by Article
XIII of this Lease where the total proceeds paid by the insurer are equal to
or in excess of $125,000.00 for any single Facility shall be paid to Lessor
and held by Lessor in trust (subject to the provisions of Paragraph 14.7) and
shall be made available for reconstruction or repair, as the case may be, of
any damage to or destruction of the Leased Property, or any portion thereof,
and shall be paid out by Lessor from time-to-time for the reasonable costs of
such reconstruction or repair. Any excess proceeds of insurance remaining
after the completion of the restoration or reconstruction of the Leased
Property shall go to Lessee, provided the Lease is in force and there exists
no uncured Event of Default; otherwise such excess shall be paid to Lessor
for application as set forth in Article XVI hereof. In the event neither
Lessor nor Lessee is required or elects to repair and restore, and the Lease
is terminated as described in Paragraph 14.7, all such insurance proceeds
shall be retained by Lessor. All salvage resulting from any risk covered by
insurance shall belong to Lessor except that any salvage relating to Lessee's
Personal Property shall belong to Lessee.
14.2 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION COVERED
BY INSURANCE PROCEEDS.
14.2.1 Except as provided in Paragraph 14.7, if
during the Term, any Facility or any portion of the Leased Property is totally
or partially destroyed by a risk covered by the insurance described in Article
XIII and whether or not any Facility is rendered Unsuitable for Its Primary
Intended Use, Lessee shall restore the Leased Property to substantially the same
condition as existed immediately before the damage or destruction. Lessee shall
be entitled to the insurance proceeds for the purpose of such repair and
restoration.
14.2.2 If the cost of the repair or restoration
exceeds the amount of proceeds received by Lessee or Lessor from the insurance
required under Article XIII as provided in Paragraph 14.1, above, Lessee shall
be obligated to restore the Leased Property and pay the extra cost therefor,
provided that, prior to commencing the repair and restoration, Lessee shall
either (i) contribute any excess amount needed to restore the Leased Property,
or (ii) provide Lessor with satisfactory evidence that such funds are, and
throughout the entire period of reconstruction will be, available. If Lessee
contributes such excess in cash, such excess shall be paid by Lessee to Lessor
to be held in trust, together with any insurance proceeds, for application to
the cost of repair and restoration.
14.3 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION
NOT COVERED BY
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INSURANCE. Except as provided in Paragraph 14.7 below, if during the Term
any Facility or any portion of the Leased Property is damaged or destroyed
irrespective of the extent of the damage from a risk not covered by the
insurance described in Article XIII, whether or not such damage or renders
the Facility Unsuitable for Its Primary Intended Use, Lessee shall restore
the Leased Property to substantially the same condition it was in immediately
before such damage or destruction and such damage or destruction shall not
terminate this Lease.
14.4 LESSEE'S PROPERTY. All insurance proceeds payable by
reason of any loss of or damage to any of Lessee's Personal Property shall be
paid to Lessee, and Lessee shall hold such insurance proceeds in trust to pay
the cost of repairing or replacing damaged Lessee's Personal Property. Any
proceeds in excess of the cost of repairing or replacing any such Lessee's
Personal Property shall belong to Lessee.
14.5 RESTORATION OF LESSEE'S PROPERTY. Without limiting
Lessee's obligation to restore the Leased Property as provided in Paragraphs
14.2 and 14.3, Lessee shall also pay the cost to restore all Alterations and
other improvements made by Lessee which Lessee elects to restore, including
Lessee's Personal Property to the extent that Lessee's Personal Property is
necessary to the operation of the Leased Property for its Primary Intended Use
in accordance with applicable Legal Requirements.
14.6 NO ABATEMENT OF RENT. This Lease shall remain in
full force and effect and Lessee's obligation to make rental payments and to pay
all other charges required by this Lease shall remain unabated during any period
required for repair and restoration.
14.7 DAMAGE NEAR END OF TERM. Notwithstanding any
provisions of Paragraph 14.2 or 14.3 appearing to be contrary, if damage to or
destruction of any of the Facilities occurs during the last six (6) months of
the Term (in calculating such 6 months, any Extended Terms as to which Lessee
exercised its option prior to or after the occurrence of such damage or
destruction shall be included), and if such damage or destruction cannot be
fully repaired and restored within six (6) months immediately following the date
of damage or destruction, then Lessor and Lessee shall each have the right to
terminate this Lease as to the damaged or destroyed Facility only (and this
Lease shall continue in full force and effect as to the remainder of the Leased
Property) by giving written notice to the other within thirty (30) days after
the date of damage or destruction. If the Lease as to any Facility so
terminates as provided in this Paragraph 14.7, and unless the damage or
destruction was due to Lessee's negligent acts or omissions or willful
misconduct, Lessee shall have no responsibility to repair or restore the damaged
or destroyed Facility. Upon the termination of this Lease as to any Facility
the Minimum Rent payable by Lessee hereunder with regard to such Facility shall
be apportioned as of the date this Lease is terminated as to such Facility and
the Minimum Rent as to the remaining Facilities shall be adjusted as provided in
Paragraph 15.3 below.
14.8 TERMINATION OF OPTION TO EXTEND. Any termination of
this Lease pursuant to this Article XIV shall cause any unexercised options to
extend the Lease under Article XVIII to
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be terminated and without further force or effect.
14.9 WAIVER. Lessee hereby waives any statutory rights of
termination which may arise by reason of any damage to or destruction of the
Leased Property or any portion thereof which Lessor is obligated to restore or
may restore under any of the provisions of this Lease.
ARTICLE XV
15. CONDEMNATION.
15.1 DEFINITIONS.
15.1.1 "Condemnation" means (a) the exercise of any
governmental power, whether by legal proceedings or otherwise, by a Condemnor;
(b) a voluntary sale or transfer by Lessor to any Condemnor, either under threat
of Condemnation or while legal proceedings for Condemnation are pending.
15.1.2 "Date of Taking" means the date the
Condemnor has the right to possession of the property being condemned.
15.1.3 "Award" means all compensation, sums or
anything of value awarded, paid or received on a total or partial Condemnation.
15.1.4 "Condemnor" means any public or quasi-public
authority, or private corporation or individual, having the power of
Condemnation.
15.2 PARTIES' RIGHTS AND OBLIGATIONS. If during the Term
there is any taking of all or any part of any Facility, the Leased Property or
any interest in this Lease by Condemnation, the rights and obligations of the
parties shall be determined by this Article XV.
15.3 TOTAL CONDEMNATION. If title to the fee (or in the
case of the portion of the Leased Property which is subject to a Ground Lease,
Lessor's leasehold interest) of the whole of any Facility shall be taken or
condemned by any Condemnor, this Lease shall cease and terminate with regard to
such Facility only as of the Date of Condemnation by said Condemnor and shall
continue in full force and effect as to the remainder of the Leased Property.
If title to the fee (or Lessor's ground leasehold interest as the case may be)
of less than the whole of any Facility shall be so taken or condemned, which
nevertheless renders such Facility Unsuitable for Its Primary Intended Use, as
reasonably determined by Lessor and Lessee, Lessee and Lessor shall each have
the option by written Notice to the other, at any time at or prior to the taking
of possession by, or the date of vesting of title in, such Condemnor, whichever
first occurs, to terminate this Lease as to such Facility only as of the date of
the occurrence of such first event. If such Notice has timely been given, this
Lease shall thereupon cease and terminate as to such Facility. Upon the
termination of this Lease as to any single Facility in accordance with this
Paragraph 15.3, the
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Minimum Rent payable by Lessee hereunder with regard to such Facility shall
be apportioned as of the date the Lease terminated as to such Facility.
Notwithstanding the termination of this Lease as to any Facility in
accordance with provisions of this Section 15.3, this Lease shall continue in
full force and effect without modification with regard to the remainder of
the Leased Property. If and so often as this Lease shall terminate as to any
particular Facility (a "Terminated Facility"), then, from and after the date
of such termination, the then current Minimum Rent payable under this Lease
(as the same may have been previously reduced following termination of this
Lease as to another Facility or increased as provided herein) shall be
reduced by a fraction, the numerator of which fraction shall be the "Facility
Percentage" as set forth in the table below opposite the name of the
Terminated Facility, and the denominator of which fraction shall be the sum
of all the "Facility Percentages" as set forth in the table below for all
Facilities (including the Terminated Facility) which are subject to this
Lease immediately prior to the event of termination.
Facility Facility Percentage
-------- -------------------
Scioto 28.50%
Bexley 28.50%
Karrington Place 14.00%
▇▇▇▇▇▇ Creek 29.00%
By way of example only of the foregoing, assume that the Lease terminates as
to the Scioto Facility, and that the time of such termination all other
Facilities remain subject to this Lease. From and after the date of
termination of this Lease as to the Scioto Facility, the Minimum Rent shall
be reduced by a fraction equal to the Facility Percentage allocable to the
Scioto Facility (28.50%) divided by the sum of the Facility Percentages
allocable to all the Facilities then subject to this Lease (Scioto [28.50%] +
Bexley [28.5%] + Karrington Place [14.00%] + ▇▇▇▇▇▇ Creek [29%] = 100%), for
a reduction of 28.50/100, or 28.50%. Assume further that following the
termination of the Lease as to the Scioto Facility, the Lease also terminates
as to the Bexley Facility. From and after the date of termination of this
Lease as to the Bexley Facility, the Minimum Rent (as previously adjusted
following the termination of the Lease as to the Scioto Facility) shall be
further reduced by a fraction equal to the Facility Percentage allocable to
the Bexley Facility (28.50%) divided by the sum of the Facility Percentages
allocable to all the Facilities then subject to this Lease (Bexley [28.5%] +
Karrington Place [14.00%] + ▇▇▇▇▇▇ Creek [29%] = 71.50%), for a reduction of
28.50/71.5, or 39.86%.
15.4 ALLOCATION OF PORTION OF AWARD. The total Award made
with respect to all or any portion of the Leased Property or for loss of rent,
or for loss of business, whether or not beyond the Term of this Lease, or for
the loss of value of the leasehold (including the bonus value of the Lease)
shall be solely the property of and payable to Lessor and Lessee hereby assigns
to Lessor any and all rights in such Award; provided, however, that Lessee shall
be entitled to make a separate claim for the taking of Lessee's Personal
Property and relocation expense as long as any such claim will not in any way
diminish Lessor's Award, or for any other loss that can be awarded to Lessee
separately from Lessor's claim and which will not in any respect whatsoever
diminish or
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threaten to diminish the total amounts to be awarded to Lessor, as set forth
above or otherwise. To the extent Lessee's claim may thereafter reduce
Lessor's claim, Lessee shall, and hereby does, assign its claim to Lessor.
In any Condemnation proceedings, each of the Lessor and Lessee shall seek its
own claim in conformity herewith, at its own expense.
15.5 PARTIAL TAKING. If title to the fee (or in the case
of the Ground Leases, Lessor's ground lease interest) of less than the whole of
any Facility shall be so taken or condemned, and the Facility is still suitable
for its Primary Intended Use, as reasonably determined by Lessor and Lessee, or
if Lessee or Lessor shall be so entitled, but shall not elect to terminate this
Lease as provided in Paragraph 15.3 hereof, Lessee, at its own cost and expense
(subject to Lessor's contribution described below), shall with all reasonable
dispatch restore the untaken portion of any Leased Improvements on the Leased
Property for such Facility so that such Leased Improvements shall constitute a
complete architectural unit of the same general character and condition (as
nearly as may be possible under the circumstances) as the Leased Improvements
existed immediately prior to such Condemnation. Lessor shall contribute to the
cost of restoration that part of its Award as is reasonably necessary to
accomplish such restoration, provided, however, the amount of such contribution
shall not exceed the cost of restoration. The Minimum Rent shall be reduced as
set forth in Paragraph 5.2.
15.6 TEMPORARY TAKING. Lessee agrees that if, at any time
after the date hereof, the whole or any part of the Leased Property or of
Lessee's interest under this Lease, shall be Condemned by any Condemnor for its
temporary use or occupancy, this Lease shall not terminate by reason thereof,
and Lessee shall continue to pay, in the manner and at the times herein
specified, the full amounts of Minimum Rent and Additional Charges. Except
only to the extent that Lessee may be prevented from doing so pursuant to the
terms of the order of the Condemnor, Lessee shall also continue to perform and
observe all of the other terms, covenants, conditions and obligations hereof, on
the part of the Lessee to be performed and observed, as though such Condemnation
had not occurred. In the event of any such Condemnation as in this Paragraph
15.6 described, the entire amount of any such Award made for such temporary use,
whether paid by way of damages, rent or otherwise, shall be paid to Lessee to
the extent attributable to any period within the Term (as extended by any
already exercised options to extend or options thereafter timely exercised if
applicable). Lessee covenants that upon the termination of any such period of
temporary use or occupancy as set forth in this Paragraph 15.6, it will, at its
sole cost and expense, restore the Leased Property as nearly as may be
reasonably possible, to the condition in which the same was immediately prior to
the Condemnation, unless such period of temporary use or occupancy shall extend
beyond the expiration of the Term, in which case Lessee shall not be required to
make such restoration, and in such case, Lessee shall contribute to the cost of
such restoration that portion of its entire Award which is specifically
allocated to such restoration in the judgment or order of the court, if any.
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ARTICLE XVI
16.1 EVENTS OF DEFAULT. Any one or more of the following
events shall be an "Event of Default":
(a) if Lessee fails to make payment of the Rent
payable by Lessee under this Lease when the same becomes due and payable and
such failure is not cured by Lessee within a period of five (5) business days
after Notice thereof from Lessor; or
(b) if Lessee fails to observe or perform any
other term, covenant or condition of this Lease with regard to any portion of
the Leased Property and such failure is not cured by Lessee within a period of
thirty (30) days after Notice thereof from Lessor, unless such failure cannot
with due diligence be cured within a period of thirty (30) days, in which case
such failure shall not be deemed an Event of Default if Lessee proceeds promptly
and with due diligence to cure the failure and diligently completes the curing
thereof. No Event of Default (other than a failure to make payment of money)
shall be deemed to exist under this clause (b) during any time the curing
thereof is prevented by an Unavoidable Delay, provided that upon the cessation
of such Unavoidable Delay, Lessee shall remedy such default without further
delay; or
(c) if Lessee (or any of its Affiliates) commits
an "Event of Default" under any of the Other Leases. Without limiting the
foregoing, if Lessee commits an "Event of Default" under this Lease, Lessee (and
its Affiliates) shall thereby be in default (and shall therefore have committed
an "Event of Default") under all of and the Other Leases; or
(d) if Lessee does any of the following:
(i) admit in writing its inability to
pay its debts generally as
they become due;
(ii) file a petition in bankruptcy or a
petition to take advantage
of any insolvency law;
(iii) make a general assignment for the
benefit of its creditors;
(iv) consent to the appointment of a
receiver of itself or of the whole
or any substantial part of its
property; or
(v) file a petition or answer seeking
reorganization or arrangement under
the Federal bankruptcy laws or any
other applicable law or statute of
the United States of America or any
state thereof; or
(e) if Lessee, on a petition in bankruptcy filed
against it, is adjudicated a
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bankrupt or an order for relief thereunder is entered against it or a court
of competent jurisdiction shall enter an order or decree appointing, without
the consent of Lessee, a receiver for Lessee or of the whole or substantially
all of its property or the Facility, or approving a petition filed against
Lessee seeking reorganization or arrangement of Lessee under the Federal
bankruptcy laws or other applicable law or statute of the United States of
America or any state thereof, and such judgment, order or decree shall not be
vacated or set aside within ninety (90) days from the date of the entry
thereof; or
(f) if Lessee shall be liquidated or dissolved,
or shall begin proceedings toward such liquidation or dissolution, or shall, in
any manner, permit the sale or divestiture of substantially all of its assets
other than in connection with a merger or consolidation of Lessee into, or a
sale of substantially all of Lessee's assets to, another corporation, provided
any such actions shall also constitute an Event of Default unless: (i) the
survivor of such merger or the purchaser of such assets shall assume all of
Lessee's obligations under this Lease by a written instrument, in form and
substance reasonably satisfactory to Lessor, stating that such instrument of
assumption is valid, binding and enforceable against the parties thereto in
accordance with its terms (subject to usual bankruptcy and other creditor's
rights exceptions); and (ii) immediately after giving effect to any such merger,
consolidation or sale, Lessee or the other corporation (if not Lessee) surviving
the same shall have a Consolidated Net Worth of not less than Twenty Six Million
Five Hundred Thousand Dollars ($26,500,000) and a debt to equity ratio of not
more than four to one (4.0:1.0), all as to be set forth in an Officer's
Certificate and delivered to Lessor within a reasonable period of time after
such merger, consolidation or sale; or
(g) if the estate or interest of Lessee in the
Leased Property or any part thereof be levied upon or attached in a proceeding
and the same shall not be vacated or discharged within the later of ninety (90)
days after commencement thereof or thirty (30) days after Notice thereof from
Lessor (unless Lessee shall be contesting such lien or attachment in good faith
in accordance with Article XII hereof), or a mechanic's or similar lien is filed
with respect to the Leased Property or any part thereof and is not released or
bonded around for a period exceeding sixty (60) days after Lessee first has
knowledge of the lien having been filed; or
(h) if, except as a result of damage,
destruction or a partial or total Condemnation, or Unavoidable Delay, Lessee
voluntarily ceases operations at any Facility or other portion of the Leased
Property for a period in excess of ten (10) days; provided that Lessee may cease
operations for more than ten (10) days (i) if Lessee obtains Lessor's prior
written approval, and (ii) so long as such cessation of operations does not
impair or threaten the status or effectiveness of the operating license or other
certification for operating a Facility in accordance with its Primary Intended
Use; or
(i) if any of Lessee's representations,
covenants or warranties expressly set forth in this Lease (or financial
statements provided to Lessor) proves to be untrue when made in any material
respect which materially and adversely affects Lessor; or
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(j) if Lessee attempts to assign or sublease, in
violation of the provisions of this Lease;
(k) if Lessee fails to maintain in effect an
operator's license required to operate any Facility, or if Lessee otherwise
ceases to maintain in effect any license, permit, certificate or approval
necessary or otherwise required to operate any Facility in accordance with its
Primary Intended Use; or
(l) if Lessee and/or Karrington violates any of
the Lease Covenants described in Paragraph 23.2 hereof.
Upon the occurrence of an Event of Default, in addition to all
of Lessor's other remedies, Lessor may terminate this Lease by giving Lessee not
less than ten (10) business days Notice of such termination and upon the
expiration of the time fixed in such Notice, the Term shall terminate and all
rights of Lessee under this Lease shall cease.
In the event litigation is commenced with respect to any
alleged default under this Lease, the prevailing party in such litigation shall
receive, in addition to its damages incurred, such sum as the court shall
determine as its reasonable attorneys' fees, and all costs and expenses incurred
in connection therewith, including reasonable attorneys' fees and costs incurred
on appeal.
16.2 CERTAIN REMEDIES. Lessor shall have remedies and rights
provided in law and equity as a result of an Event of Default, including, to the
extent permitted by applicable Ohio law, the right to appoint a receiver as a
matter of strict right without regard to the solvency of Lessee, for the purpose
of preserving the Leased Property and any portion thereof, preventing waste,
protecting and otherwise enforcing any and all of Lessor's rights under this
Lease and for any and all other purposes for which a receiver is allowed under
the laws of the State of Ohio. Lessee hereby waives the right to notice of any
hearing with respect to the appointment of a receiver and waives the requirement
for the posting of a bond by any receiver. Without limiting the foregoing, if
an Event of Default occurs (and the event giving rise to such Event of Default
has not been cured within the curative period, if any, relating thereto as set
forth in this Lease) whether or not this Lease has been terminated pursuant to
Paragraph 16.1, Lessee shall, to the extent permitted by law, and if required by
Lessor to so do, immediately surrender to Lessor the entirety of the Leased
Property pursuant to the provisions of Paragraph 16.1 and quit the same and
Lessor may enter upon and repossess any portion of or the entirety of the Leased
Property, in person, by agent or by a court-appointed receiver, by reasonable
force, summary proceedings, ejectment or otherwise, and may remove Lessee and
all other persons and any and all personal property from the Leased Property
subject to rights of any residents (and their property) and to any requirements
of law. Without limiting all other rights and remedies of Lessor under this
Lease and under law, Lessor shall have the right to accelerate all Rent and
therefore, upon Lessee's default, at Lessor's option, all such Rent shall become
immediately due and payable in accordance with Paragraph 16.3, below. Further,
without limiting all other rights and remedies of Lessor under this Lease and
under law, Lessor shall be entitled to recover from Lessee, and Lessee shall
therefore be liable for, all costs of
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recovering possession (including without limitation all costs associated with
any receiver) and renovating the Leased Property or any portion thereof for a
new lessee and all other costs of any reletting or attempted reletting,
including, but not limited to, brokerage fees and reasonable attorneys fees,
except as limited by Paragraph 16.3 below.
16.3 DAMAGES. Neither (i) the termination of this Lease
pursuant to Section 16.1, (ii) the repossession of the Leased Property; (iii)
the failure of Lessor, notwithstanding reasonable good faith efforts, to relet
the Leased Property; nor (iv) the reletting of all or any portion thereof, shall
relieve Lessee of its liability and obligations hereunder, all of which shall
survive any such termination, repossession or reletting (except for proceeds
received on subletting). In the event of any such termination, Lessee shall
forthwith pay to Lessor all Rent due and payable with respect to the Leased
Property to and including the date of such termination.
(a) Lessor shall not be deemed to have
terminated this Lease unless Lessor delivers written Notice to Lessee of such
election. If Lessor voluntarily elects to terminate this Lease upon an Event of
Default, then in addition to all remedies available to Lessor, Lessor may
recover the sum of:
(i) the worth at the time of award of
the unpaid Rent which had been earned at the time of termination;
(ii) the worth at the time of award of
the amount by which the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Lessee proves could have been reasonably avoided;
(iii) the worth at the time of award of
the amount by which the unpaid Rent for the balance of the Term after the time
of award exceeds the amount of such rental loss that Lessee proves could be
reasonably avoided; and
(iv) any other amount necessary to
compensate Lessor for all the detriment proximately caused by Lessee's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom.
The "worth at the time of award" of the
amounts referred to in subparagraphs (i) and (ii) above is computed by allowing
interest at the Overdue Rate. The worth at the time of award of the amount
referred to in subparagraph (iii) is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%).
(b) Without limiting Lessor's other remedies
provided herein and provided by law, Lessor may continue the Lease in effect
after Lessee's breach and abandonment and recover Rent as it becomes due,
provided that, in such event, Lessee has the right to sublet or assign subject
only to reasonable conditions imposed by Lessor. Accordingly, without
termination
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of Lessee's right to possession of the Leased Property, Lessor may demand and
recover each installment of Rent and other sums payable by Lessee to Lessor
under the Lease as the same becomes due and payable, which Rent and other
sums shall bear interest at the maximum interest rate permitted in accordance
with the laws of the State of Ohio (or the Overdue Rate, whichever is lower),
from the date when due until paid, and Lessor may enforce, by action or
otherwise, any other term or covenant of this Lease. If Lessor elects to
recover each installment of Rent as it becomes due, then Lessor may file any
number of lawsuits for the recovery of the amounts due hereunder.
16.4 WAIVER. If this Lease is terminated pursuant to
Paragraph 16.1, Lessee waives, to the extent permitted by applicable law, the
benefit of any laws now or hereafter in force exempting property from liability
for rent or for debt.
16.5 APPLICATION OF FUNDS. Any payments received by
Lessor under any of the provisions of this Lease during the existence or
continuance of any Event of Default shall be applied to Lessee's obligations in
the order which Lessor may determine or as may be prescribed by the laws of the
State of Ohio.
ARTICLE XVII
17. LESSOR'S RIGHT TO CURE LESSEE'S DEFAULT. If Lessee fails to
make any payment or to perform any act required to be made or performed under
this Lease, and to cure the same within the relevant time periods, if any,
provided under this Lease, Lessor, after thirty (30) days Notice to and demand
upon Lessee, and without waiving or releasing any obligation of Lessee or
default, may (but shall be under no obligation to) at any time thereafter make
such payment or perform such act for the account and at the expense of Lessee,
and may, to the extent permitted by law, enter upon the Leased Property for such
purpose and take all such action thereon as, in Lessor's opinion, may be
necessary or appropriate therefor. Provided, however, that should Lessor
reasonably determine that the giving of such Notice would risk loss to the
Leased Property or any portion thereof or cause damage to Lessor, then Lessor
shall give such written Notice as is practical under the circumstances. No such
entry shall be deemed an eviction of Lessee. In exercising any remedy under
this Article XVII, Lessor shall use its good faith efforts not to violate any
rights of residents of the Facility. All sums so paid by Lessor and all costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses, in each case) so incurred, together with a late charge thereon (to the
extent permitted by law) at the Overdue Rate from the date on which sums or
expenses are paid or incurred by Lessor, shall be paid by Lessee to Lessor on
demand. The obligations of Lessee and rights of Lessor contained in this
Article shall survive the expiration or earlier termination of this Lease.
ARTICLE XVIII
18.1 OPTIONS TO EXTEND. Provided there exists no uncured
Event of Default
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under any of this Lease, the Related Leases and the Other Leases at the time
Lessee exercises any option to extend (in accordance with this Article
XVIII), Lessee will have the right to extend this Lease for two (2) periods
of ten (10) years each (each such additional term shall be referred to herein
as an "Extended Term"), commencing immediately following the end of the
Initial Term or the immediately preceding Extended Term, as the case may be;
provided, however, that notwithstanding anything stated in this Paragraph
18.1 or elsewhere in this Lease, Lessee shall not be entitled to exercise its
option to extend this Lease for any Extended Term (and any such option to
extend shall automatically expire and terminate) unless Lessee concurrently
exercises its option to extend all the Related Leases for the same period, as
provided in Article XVIII of the Related Leases. The Lease during any
Extended Term shall be on the same terms and conditions as during the Initial
Term, except that the Minimum Rent shall be determined as set forth in
Paragraph 18.2 below. In the event Lessee desires to exercise any option to
extend granted in this Article XVIII, Lessee shall give Landlord written
notice ("Notice to Extend") not less than one hundred eighty (180) days prior
to the expiration of the Initial Term or the immediately preceding Extended
Term, as the case may be. If Lessee fails to give Lessor any such notice,
then Lessor shall give Lessee written notice that Lessor has not received
Lessee's Notice to Extend. If Lessee fails to deliver to Lessor the Notice
to Extend within ten (10) days thereafter, Lessee shall be deemed to have
elected not to extend this Lease and the Related Leases, such option to
extend and all future options to extend granted in this Article XVIII or in
the Related Leases shall be null and void and of no further force or effect.
18.2 MINIMUM RENT DURING EXTENDED TERMS. The Minimum Rent
at the commencement of each Extended Term shall be Minimum Rent, as determined
below.
(a) The Minimum Rent for the first year of the
first Extended Term shall be $3,109,345 and shall be increased annually
thereafter in accordance with the method described in Paragraph 3.1.2, above.
(b) The Minimum Rent for the first year of the
second Extended Term shall be $3,790,274 and shall be increased annually
thereafter in accordance with the method described in Paragraph 3.2.1, above.
ARTICLE XIX
19. HOLDING OVER. If Lessee shall for any reason
remain in possession of the Leased Property after the expiration of the Term
or earlier termination of the Term hereof, such possession shall be as a
month-to-month tenant during which time Lessee shall pay as rental each
month, one and one-quarter times the aggregate of (i) one-twelfth of the
aggregate Minimum Rent payable with respect to the last Lease Year of the
Term; (ii) all Additional Charges accruing during the month; and (iii) all
other sums payable by Lessee pursuant to the provisions of this Lease.
During such period of month-to-month tenancy, Lessee shall be obligated to
perform and observe all of the terms, covenants and conditions of this Lease,
but shall have no rights hereunder other than the right, to the extent given
by law to month-to-month tenancies, to continue its occupancy
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and use of the Leased Property. Nothing contained herein shall constitute
the consent, express or implied, of Lessor to the holding over of Lessee
after the expiration or earlier termination of this Lease.
ARTICLE XX
20. RISK OF LOSS. During the Term of this Lease, the risk of loss
or of decrease in the enjoyment and beneficial use of the Leased Property in
consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures,
attachments, levies or executions (other than those caused by or through Lessor)
is assumed by Lessee, and Lessor shall in no event be answerable or accountable
therefor, nor shall any of the events mentioned in this Paragraph entitle Lessee
to any abatement of Rent except as specifically provided in this Lease, or any
right to terminate this Lease, except as provided in Paragraph 14.7, above.
Without limiting the foregoing, Lessor shall not be liable for injury or damage
to the person or goods, wares, merchandise or other property of Lessee, Lessee's
employees, contractors, invitees, customers, or any other person in or about the
Leased Premises, whether such damage or injury is caused by or results from
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, air conditioning, or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Leased Premises or upon other portions of the Land, or any part thereof, or from
other sources or places, and regardless of whether the cause of such damage or
injury or the means of repairing the same is accessible or not. Lessor shall
not be liable for any damages arising from any act or neglect of Lessee, or any
other party named above. Lessor shall, however, remain liable for any damages
arising from Lessor's own gross negligence or willful misconduct.
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ARTICLE XXI
21. INDEMNIFICATION. Notwithstanding the existence of any
insurance provided for in Article XIII, and without regard to the policy limits
of any such insurance, Lessee will protect, indemnify, hold harmless and defend
Lessor from and against all liabilities, obligations, claims, demands damages,
penalties, causes of action, costs, and expenses (including, without limitation,
actual reasonable attorneys' fees and expenses), to the extent permitted by law,
imposed upon or incurred by or asserted against Lessor by reason of any of the
following (except to the extent solely attributable to Lessor's gross negligence
or willful misconduct): (a) any accident, injury to or death of persons or loss
of or damage to property occurring on or about the Leased Property or adjoining
sidewalks, including without limitation any claims of malpractice, whether
arising in connection with events occurring prior to or after the Commencement
Date hereunder (except to the extent such events occur after the expiration of
this Lease); (b) any occupancy, use, misuse, non-use, condition, maintenance, or
repair by Lessee of the Leased Property; (c) any Impositions (which are the
obligations of Lessee to pay pursuant to the applicable provisions of this
Lease, which include any Impositions arising prior to the Commencement Date);
(d) any failure on the part of Lessee to perform or comply with any of the terms
of this Lease, (e) the non-performance of any of the terms and provisions of any
and all existing and future subleases of the Leased Property to be performed by
the landlord (Lessee) thereunder; (f) any Hazardous Materials, as defined in
Paragraph 10.2, above that now or hereafter during the Term may be located in,
on or around, or affecting, any part of the Land or Leased Improvements; (g) any
and all other matters pertaining to the Leased Property or the operation of the
Facility after the date of this Lease during the Term, including without
limitation compliance with or failure to comply with the provisions of Section 8
of the United States Housing Act of 1937, and the provisions of the Fair Housing
Amendments Act of 1988, each as amended from time to time; (h) any liability
relating to the construction or development of the Facility, including patent or
latent defects in the Facilities, whether arising in connection with events
occurring prior to or after the Commencement Date hereunder, including without
limitation compliance with or failure to comply with the provisions of the
federal Americans with Disabilities Act, as amended from time to time; and (i)
third party claims of any kind relating to the Leased Property, the Facilities,
the operations at the Facilities or otherwise, and any and all other matters
whatsoever relating to the Leased Property, the assisted living facilities
located thereon and the operation thereof. Any amounts which became payable by
Lessee under this Paragraph shall be paid within ten (10) days of the date the
same becomes due and if not timely paid, shall bear a late charge (to the extent
permitted by law) at the Overdue Rate from the date of such determination to the
date of payment. Lessee, at its expense, shall contest, resist and defend any
such claim, action or proceeding asserted or instituted against Lessor or may
compromise or otherwise dispose of the same as Lessee sees fit, at Lessee's sole
cost, but after consultation with and approval by Lessor, which approval shall
not be unreasonably withheld or delayed. Nothing herein shall be construed as
indemnifying Lessor against its own gross negligence or willful misconduct.
Lessee's liability for a breach of the provisions of this article arising during
the Term hereof shall survive any termination of this Lease.
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ARTICLE XXII
22. SUBLETTING AND ASSIGNMENT. Except as provided hereinbelow to
the contrary, Lessee may not assign, sublease or sublet, encumber, appropriate,
pledge or otherwise transfer, the Lease or the leasehold or other interest in
the Leased Property without Lessor's prior written consent, which consent may be
withheld or granted in Lessor's sole and absolute discretion; provided, however,
that Lessee may from time to time during the Term of this Lease enter into
rental agreements with residents of each Facility, and execute any documents
necessary in connection therewith, without obtaining Lessor's prior consent.
Notwithstanding the foregoing provisions of this Paragraph 22, (a) Lessee and
its permitted assigns shall be entitled, at any time without first obtaining the
consent of Lessor, to sublease up to the greater of (i) 2,000 square feet, or
(ii) ten percent (10%) of the total square footage of any single Facility, to
any person or entity providing any services related or ancillary to the
operation of such Facility or in connection with the provision of home health
services both within and outside such Facility; (b) so long as Lessee is lessee
under this Lease, Lessee shall be entitled, at any time without first obtaining
the consent of Lessor to sell, assign and convey to Karrington Health, Inc., an
Ohio corporation ("Karrington"), either (i) all (but not less than all) of
Lessee's leasehold or subleasehold interest in all of the Leased Property or
(ii) all of the issued and outstanding stock of Lessee; and (c) in the event
that there occurs a change in control in respect to the ownership of Karrington,
whether by merger, sale, or transfer of substantially all of Karrington's assets
(other than in the ordinary course of Karrington's business) or otherwise,
including without limitation the acquisition by any one person or entity of
thirty-five percent (35%) or more of the issued and outstanding stock of
Karrington (any of the foregoing, a "Change of Control"), and so long as the
surviving entity at the conclusion of such Change of Control has a net worth of
Twenty Six Million Five Hundred Thousand Dollars ($26,500,000) or more and a
debt to equity ratio of not more than four to one (4.0:1.0) (which net worth and
debt to equity ratio are greater than or substantially similar to Karrington's
as of the date hereof), Karrington or Lessee, as the case may be, shall be
entitled, without first obtaining the consent of Lessor, to assign all of its
right, title and interest in and to this Lease to said surviving entity, so long
as, under any of the scenarios described in this Paragraph 22, Lessor is
notified of such assignment or conveyance in writing within five (5) business
days thereafter. Upon Lessor's consent, (w) in the case of a subletting, the
sublessee shall comply with the provisions of Paragraph 22.2, (x) in the case of
an assignment, the assignee shall assume in writing and agree to keep and
perform all of the terms of this Lease on the part of Lessee to be kept and
performed and shall be, and become, jointly and severally liable with Lessee for
the performance thereof, (y) an original counterpart of each sublease and
assignment and assumption, duly executed by Lessee and such sublessee or
assignee, as the case may be, in form and substance satisfactory to Lessor,
shall be delivered promptly to Lessor, and (z) in case of either an assignment
or subletting, Lessee shall remain primarily liable, as principal rather than as
surety, for the prompt payment of the Rent and for the performance and
observance of all of the covenants and conditions to be performed by Lessee
hereunder.
22.1 ATTORNMENT. Lessee shall insert in each sublease
permitted under Paragraph 22 provisions to that effect that (i) such sublease is
subject and subordinate to all of the terms and provisions of this Lease and to
the rights of Lessor hereunder; (ii) in the event this Lease shall
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terminate before the expiration of such sublease, the sublessee thereunder
will, at Lessor's option, attorn to Lessor and waive any right the sublessee
may have to terminate the sublease or to surrender possession thereunder, as
a result of the termination of this Lease; and (iii) in the event the
sublessee receives a written Notice from Lessor or Lessor's assignees, if
any, stating that Lessee is in default under this Lease, the sublessee shall
thereafter be obligated to pay all rentals accruing under said sublease
directly to the party giving such Notice, or as such party may direct. All
rents received from the sublessee by Lessor or Lessor's assignees, if any, as
the case may be, shall be credited against amounts owing by Lessee under this
Lease.
22.2 SUBLEASE LIMITATION. Anything contained in this
Lease to the contrary notwithstanding, Lessee shall not sublet the Leased
Property on any basis such that the rental to be paid by the sublessee
thereunder would be based, in whole or in part, on either (i) the income or
profits derived by the business activities of the sublessee; or (ii) any other
formula such that any portion of the sublease rental received by Lessor would
fail to qualify as Arents from real property" within the meaning of Paragraph
856(d) of the Code, or any similar or successor provision thereto.
ARTICLE XXIII
23. OFFICER'S CERTIFICATES AND FINANCIAL STATEMENTS; LEASE
COVENANTS.
23.1 OFFICER'S CERTIFICATES AND FINANCIAL STATEMENTS.
(a) At any time from time-to-time upon not less
than twenty (20) days Notice by Lessor, Lessee will furnish to Lessor an
Officer's Certificate certifying that this Lease is unmodified and in full force
and effect (or that this Lease is in full force and effect as modified and
setting forth the modifications), the date to which the Rent has been paid and
such other information concerning this Lease as may be reasonably requested by
Lessor. Any such certificate furnished pursuant to this Paragraph may be relied
upon by Lessor and any prospective purchaser or lender of the Leased Property.
(b) In addition to all other obligations to
provide financial information contained in the Lease, Lessee will furnish the
following statements to Lessor:
(i) within one hundred twenty (120) days
after the end of each Lease Year, an Officer's Certificate stating that to the
best of the signer's knowledge and belief after making reasonable inquiry,
Lessee is not in default in the performance or observance of any of the terms of
this Lease, or if Lessee shall be in default to its knowledge, specifying all
such defaults, the nature thereof, and the steps being taken to remedy the same,
and
(ii) with reasonable promptness, such other
information respecting the financial condition and affairs of Lessee as Lessor
may reasonably request from time-to-time.
(c) Within one hundred twenty (120) days after
the end of each Fiscal Year, Lessee agrees to provide to Lessor Consolidated
Financials of Lessee for such Fiscal Year.
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23.2 LEASE COVENANTS. Lessee warrants, covenants and represents
to Lessor that prior to December 31, 1999, Karrington shall not undertake or
accomplish any of the following: (a) buy back any of the stock of Karrington;
(b) declare a dividend to Karrington stockholders; or (c) repay any loan or
other indebtedness to any current or former directors, officers, shareholders
or affiliates of Karrington; provided, however, that Karrington shall be
allowed to do any of the foregoing only up to a total combined amount equal
to or less than fifty percent (50%) of a total amount of equity funding
actually received by Karrington from the Commencement Date through December
31, 1999. Notwithstanding the foregoing, Karrington shall be entitled, prior
to December 31, 1999, to do any of the following: (d) repay to JMAC the Four
Million Dollar ($4,000,000) bridge loan entered into on or about April 1,
1998, so long as the entire outstanding balance of such bridge loan has been
used substantially in accordance with the use of proceeds attached to this
Lease as Exhibit "D", (e) grant to JMAC the right to convert to equity in
Karrington all or any portion of its existing debt to Karrington, in the
approximate amount of Seven Million Five Hundred Thousand Dollars
($7,500,000); and (f) upon a Change of Control of Karrington, so long as the
surviving entity at the conclusion of such Change of Control has a net worth
of Twenty-Six Million Five Hundred Thousand Dollars ($26,500,000) or more and
a debt to equity ratio of not more than four to one (4.0:1.0), Karrington
shall be entitled to pay off any and all debts which it may have to JMAC.
Lessee acknowledges and agrees that Lessor has entered into this Lease in
material reliance on the foregoing warranties, covenants and representations
(the "Lease Covenants"). Lessee further acknowledges that certain of the
Lease Covenants concern the activities of Karrington rather than Lessee and
that any violation or breach of any of the Lease Covenants, whether by Lessee
or Karrington shall be an Event of Default hereunder.
ARTICLE XXIV
24. LESSOR'S RIGHT TO INSPECT. Lessee shall permit Lessor and its
authorized representatives to inspect the Leased Property or any portion thereof
on at least one Business Day's prior notice during usual business hours subject
to any security, health, safety, or confidentiality requirements of Lessee or
any governmental agency or insurance requirement relating to the Leased
Property, or imposed by law or applicable regulations. Lessor shall take
reasonable steps to avoid interference with the residents.
ARTICLE XXV
25. NO WAIVER. The waiver by Lessor or Lessee of any term,
covenant or condition in this Lease shall not be deemed to be a waiver of any
other term, covenant or condition or any subsequent waiver of the same or any
other term, covenant or condition contained in this Lease. The subsequent
acceptance of rent hereunder by Lessor or any payment by Lessee shall not be
deemed to be a waiver of any preceding default of any term, covenant or
condition of this Lease, other than the failure to pay the particular amount so
received and accepted, regardless of the knowledge of any preceding default at
the time of the receipt or acceptance.
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ARTICLE XXVI
26. REMEDIES CUMULATIVE. To the extent permitted by law, each
legal, equitable or contractual right, power and remedy of Lessor now or
hereafter provided either in this Lease or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power
and remedy and the exercise or beginning of the exercise by Lessor of any one or
more of such rights, powers and remedies shall not preclude the simultaneous or
subsequent exercise by Lessor of any or all of such other rights, powers and
remedies.
ARTICLE XXVII
27. ACCEPTANCE OF SURRENDER. No surrender to Lessor of this Lease
or of the Leased Property or any part thereof, or of any interest therein, shall
be valid or effective unless agreed to and accepted in writing by Lessor and no
act by Lessor or any representative or agent of Lessor, other than such a
written acceptance by Lessor, shall constitute an acceptance of any such
surrender.
ARTICLE XXVIII
28. NO MERGER OF TITLE. There shall be no merger of this Lease or
of the leasehold estate created hereby by reason of the fact that the same
person, firm, corporation, or other entity may acquire, own or hold, directly or
indirectly, (a) this Lease or the leasehold estate created hereby or any
interest in this Lease or such leasehold estate; and (b) the fee estate in the
Leased Property.
ARTICLE XXIX
29. CONVEYANCE BY LESSOR. If Lessor or any successor owner of the
Leased Property shall transfer or assign Lessor's title or interest in the
Leased Property or any portion thereof or this Lease other than as security for
a debt, and provided the new owner has agreed in writing for the benefit of
Lessee to recognize this Lease and be bound by all of the terms and conditions
hereof, Lessor shall thereupon be released from all future liabilities and
obligations of Lessor under this Lease arising or accruing from and after the
date of such transfer or assignment and all such future liabilities and
obligations shall thereupon be binding upon the new owner.
ARTICLE XXX
30. QUIET ENJOYMENT. So long as Lessee shall pay all Rent as the
same becomes due and shall comply with all of the terms of this Lease and
perform its obligations hereunder, and except for any claims, actions, liens or
encumbrances arising from the acts or omissions of Lessee or otherwise from
events occurring prior to the Commencement Date hereunder, Lessee shall
peaceably and quietly have, hold and enjoy the Leased Property for the Term
hereof, free of any claim or other action by Lessor or anyone claiming by,
through or under Lessor, but subject to all liens and encumbrances of record as
of the date hereof or hereafter
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consented to by Lessee. Except as otherwise provided in this Lease, no
failure by Lessor to comply with the foregoing covenant or any covenant of
this Lease shall give Lessee any right to ▇▇▇▇▇, reduce or made a deduction
from or offset against the Rent or any other sum payable under this Lease, or
to fail to perform any other obligation of Lessee hereunder.
ARTICLE XXXI
31. NOTICES. All notices, demands, requests, consents, approvals,
and other communications ("Notice" or "Notices") hereunder shall be in writing
and personally served upon an Executive Officer of the party being served or
mailed (by registered or certified mail, return receipt requested and postage
prepaid), overnight delivery service addressed to the respective parties, as
follows:
(a) If to Lessee: Karrington Operating Company, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chief Financial Officer
with a copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(b) If to Lessor: LTC-Ohio, Inc.
c/o LTC Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
with a copy to: LTC Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
and: ▇▇▇▇▇▇▇▇▇, Wolff, Aronson, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address as either party may hereafter designate by a Notice
pursuant to this Paragraph. Personally delivered Notice (including Notices sent
by overnight delivery service) shall be effective upon receipt, and Notice given
by mail shall be completed five (5) days after the time of deposit in the U.S.
Mail system. For the purposes hereof, the term "Executive Officer" shall
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mean the Chairman of the Board of Directors, the President, any Vice
President, or the Secretary of the corporation upon which service is to be
made.
ARTICLE XXXII
32.1 LESSOR MAY GRANT LIENS. Lessor may, subject to
the terms and conditions set forth below in this Paragraph 32.1, from
time-to-time, directly or indirectly, create or otherwise cause to exist any
lien or encumbrance or any other change of title (AEncumbrance") upon the
Leased Property, or any portion thereof or interest therein, whether to
secure any borrowing or other means of financing or refinancing. Any such
Encumbrance shall contain the right to prepay (whether or not subject to a
prepayment penalty) and shall provide that it is subject to the rights of
Lessee under this Lease, provided that any holder of an Encumbrance shall (a)
give Lessee the same notice, if any, given to Lessor of any default or
acceleration of any obligation underlying any such mortgage or any sale in
foreclosure under such mortgage; (b) permit Lessee to cure any such default
on Lessor's behalf within any applicable cure period, and Lessee shall be
reimbursed by Lessor or shall be entitled to offset against Minimum Rent
payments next accruing or coming due for any and all costs incurred in
effecting such cure, including, without limitation, out-of-pocket costs
incurred to effect any such cure (including reasonable attorneys' fees); (c)
permit Lessee to appear and to bid at any sale in foreclosure made with
respect to any such mortgage, and (d) provide that in the event of
foreclosure or other possession of the Leased Property by the Mortgagee, that
the Mortgagee shall be bound by the terms and provisions of this lease. Upon
the reasonable request of Lessor, Lessee shall execute an agreement to the
effect that this Lease shall be subject and subordinate to the lien of a new
mortgage on the Leased Property and that in the event of any default or
foreclosure under such mortgage, Lessee shall attorn to the new mortgagee,
and as otherwise requested by Lessor; provided that the proposed mortgagee
execute a non-disturbance agreement recognizing this Lease and agreeing, for
itself and its successor and assigns, to comply with the provisions of this
Article XXXII.
32.2 LESSEE'S RIGHT TO CURE. Subject to the provisions
of Paragraph 32.3, if Lessor breaches any covenant to be performed by it
under this Lease, Lessee, after Notice to and demand upon Lessor, without
waiving or releasing any obligation hereunder, and in addition to any other
remedies available to Lessee, may (but shall be under no obligation at any
time thereafter to) make such payment or perform such act for the account and
at the expense of Lessor. All sums so paid by Lessee and all costs and
expenses (including, without limitation, reasonable attorneys' fees) so
incurred, together with interest thereon (at the Overdue Rate) from the date
on which such sums or expenses are paid or incurred by Lessee, shall be paid
by Lessor to Lessee on demand, but may not be offset by Lessee against
Minimum Rent payments. The rights of Lessee hereunder to cure and to secure
payment from Lessor in accordance with this Paragraph 32.2 shall survive the
termination of this Lease.
32.3 DEFAULT BY LESSOR. It shall be a default of this
Lease if Lessor fails to observe or perform any term, covenant or condition
of this Lease on its part to be performed, and such failure shall continue
for a period of ten (10) days after Notice thereof from Lessee in the case of
a monetary default or thirty (30) days after Notice thereof from Lessee (or
such shorter time as
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may be required in order to protect the health or welfare of any patients or
other residents of the Leased Property) in the case of a non-monetary
default, unless in the case of a non-monetary default such failure cannot
with due diligence be cured within a period of thirty (30) days, in which
case such failure shall not be deemed to continue if Lessor, within said
thirty (30) day period, proceeds promptly, continuously and with due
diligence to cure the failure and diligently completes the curing thereof.
The time within which Lessor shall be obligated to cure any such failure
shall also be subject to extension of time due to the occurrence of any
Unavoidable Delay.
ARTICLE XXXIII
33. MISCELLANEOUS.
33.1 SURVIVAL OF OBLIGATIONS. Anything contained in this
Lease to the contrary notwithstanding, all claims against, and liabilities of,
Lessee or Lessor arising prior to, or in connection with any event occurring
prior to, the date of any expiration or termination of this Lease or the date of
Lessee's surrender of possession of the Leased Property, whichever is later,
shall survive such termination or surrender of possession.
33.2 LATE CHARGES; INTEREST. If any interest rate
provided for in any provision of this Lease is based upon a rate in excess of
the maximum rate permitted by applicable law, the parties agree that such
charges shall be fixed at the maximum permissible rate.
33.3 LIMITS OF LESSOR'S LIABILITY. Lessee specifically
agrees to look solely to the assets of Lessor for recovery of any judgment
against Lessor, it being specifically agreed that no constituent shareholder,
officer or director of Lessor shall ever be personally liable for any such
judgment or the payment of any monetary obligation to Lessee. The provision
contained in the foregoing sentence is not intended to, and shall not, limit any
right that Lessee might otherwise have to obtain injunctive relief against
Lessor or Lessor's successors in interest, or any action not involving the
personal liability of Lessor (original or successor). Additionally, Lessor
shall be exonerated from any further liability under this Lease upon Lessor's
transfer or other divestiture of its ownership of the Leased Property, provided
that the assignee or grantee shall expressly assume in writing the obligations
of Lessor hereunder. Furthermore, in no event shall Lessor (original or
successor) ever be liable to Lessee for any indirect or consequential damages
suffered by Lessee from whatever cause.
33.4 LIMITS OF LESSEE'S LIABILITY. Lessor specifically
agrees to look solely to the assets of Lessee for recovery of any judgment
against Lessee, it being specifically agreed that no constituent shareholder,
officer or director of Lessee shall ever be personally liable for any such
judgment or the payment of any monetary obligation to Lessor. The provision
contained in the foregoing sentence is not intended to, and shall not, limit any
right that Lessor might otherwise have to obtain injunctive relief against
Lessee or Lessee's successors in interest, or any action not involving the
personal liability of Lessee (original or successor). Furthermore, in no event
shall Lessee (original or successor) ever be liable to Lessor for any indirect
or consequential damages suffered by Lessor from whatever cause.
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33.5 TRANSFER OF OPERATIONS. At Lessor's request, upon
the expiration or earlier termination of the Term, Lessee shall use its best
efforts to transfer to Lessor or Lessor's nominee (or to cooperate with Lessor
or Lessor's nominee in connection with the processing by Lessor or Lessor's
nominee of any applications for) all licenses, operating permits and other
governmental authorizations and all contracts, including contracts with
governmental or quasi-governmental entities which may be necessary for the
operation of each Facility; provided that the costs and expenses of any such
transfer or the processing of any such application shall be paid by Lessor or
Lessor's nominee.
33.6 ADDENDUM, AMENDMENTS AND EXHIBITS. Any addendum,
amendments and exhibits attached to this Lease are hereby incorporated in this
Lease and made a part of this Lease.
33.7 HEADINGS. The headings and paragraph titles in this
Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part of this Lease.
33.8 TIME. Time is of the essence of this Lease and each
and all of its provisions.
33.9 DAYS. Unless otherwise expressly indicated herein,
any reference to "days" in this Lease shall be deemed to refer to calendar days.
33.10 RENT. Each and every monetary obligation under this
Lease shall be deemed to be "Rent" under this Lease and for all other purposes
under law.
33.11 APPLICABLE LAW; VENUE. This Lease shall be governed
by and construed in accordance with the laws of the State of Ohio, but not
including its conflicts of laws rules; thus the law that will apply is the law
applicable to a transaction solely within the State of Ohio. Notwithstanding
the application of the laws of the State of Ohio, each party hereto hereby
irrevocably submits itself to the jurisdiction of the state courts of the State
of California and to the jurisdiction of the United States District Court for
the Central District of California, for the purpose of any suit, action or other
proceeding arising out of or based upon this Lease or the subject matter hereof
brought by either party hereto and such suit, action or other proceedings shall
be conducted in the State or Federal courts located in Los Angeles, California.
33.12 SUCCESSORS AND ASSIGNS. The covenants and conditions
contained in this Lease shall, subject to the provisions regarding assignment
(Article XXII), apply to and bind the heirs, successors, executors,
administrators, and assigns of Lessor and Lessee.
33.13 RECORDATION. Lessor and Lessee shall execute with
appropriate acknowledgments and record in the Official Records of the county in
which the Leased Property is located, that certain Memorandum of Lease in the
form and content of Exhibit "C" attached hereto. Lessor and Lessee shall
equally share the cost of recording the Memorandum of Lease. In no
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event shall this Lease otherwise be recorded.
33.14 PRIOR AND FUTURE AGREEMENTS. This Lease contains all
of the agreements of Lessor and Lessee with respect to any matter covered or
mentioned in this Lease, and no prior agreements or understanding pertaining to
any such matters shall be effective for any purpose. No provision of this Lease
may be amended or supplemented except by an agreement in writing signed by both
Lessor and Lessee or their respective successors in interest. This Lease shall
not be effective or binding on any party until fully executed by both Lessor and
Lessee.
33.15 PARTIAL INVALIDITY. Any provision of this Lease
which shall be held by a court of competent jurisdiction to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provision or term
of this Lease, and such other provision or terms shall remain in full force and
effect.
33.16 ATTORNEYS' FEES. In the event of any action or
proceeding brought by one party against the other under this Lease, the
prevailing party shall be entitled to recover its reasonable attorneys' fees in
such action or proceeding from the other party, including all attorneys' fees
incurred in connection with any appeals, and any post-judgment attorneys' fees
incurred in efforts to collect on any judgment.
33.17 AUTHORITY OF LESSOR AND LESSEE. Lessor and Lessee
each hereby represent and warrant that the individuals signing on its behalf are
duly authorized to execute and deliver this Lease on behalf of the corporation,
in accordance with the bylaws of the corporation, and that this Lease is binding
upon the corporation.
33.18 RELATIONSHIP OF THE PARTIES. Nothing contained in
this Lease shall be deemed or construed by Lessor or Lessee, nor by any third
party, as creating the relationship of principal and agent or a partnership, or
a joint venture by Lessor or Lessee, it being understood and agreed that no
provision contained in this Lease nor any acts of Lessor and Lessee shall be
deemed to create any relationship other than the relationship of landlord and
tenant.
33.19 COUNTERPARTS. This Lease may be executed in one or
more separate counterparts, each of which, once they are executed, shall be
deemed to be an original. Such counterparts shall be and constitute one and the
same instrument.
33.20 BROKERS. Lessor and Lessee each warrants that it has
had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease and it knows of no real estate broker or agent who is
entitled to a commission in connection with this Lease. Lessor and Lessee
hereby agree to indemnify the other and to hold the other harmless from and
against any and all costs, expenses, claims, damages, suits, including
attorneys' fees, in any way resulting from claims or demands for commissions or
other compensation from any real estate brokers claiming through such party with
respect to this Lease.
WHEREFORE, each of the parties has accepted and agreed by affixing
their
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respective authorized signatures below as of the date first above written.
[SIGNATURE CONTINUED ON NEXT PAGE]
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[SIGNATURE CONTINUED FROM PREVIOUS PAGE]
"LESSEE"
SIGNED AND ACKNOWLEDGED KARRINGTON OPERATING COMPANY, INC.,
IN PRESENCE OF: AN OHIO CORPORATION
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------- --------------------------
Printed: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Its: President
-------------------- ---------------------------
SIGNED AND ACKNOWLEDGED
IN PRESENCE OF:
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Printed: ▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
[SIGNATURE CONTINUED ON NEXT PAGE]
[SIGNATURE CONTINUED FROM PREVIOUS PAGE]
"LESSOR"
SIGNED AND ACKNOWLEDGED LTC-OHIO, INC.,
IN THE PRESENCE OF: A DELAWARE CORPORATION
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------------
Printed Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Its: President and Chief Financial Officer
--------------- ----------------------------------------
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Printed Name: ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
ACKNOWLEDGEMENT
STATE OF OHIO )
-------- ) SS.
COUNTY OF FRANKLIN )
---------------
The foregoing instrument was acknowledged before me on this 20th day of
April, 1998, by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President of Karrington Operating Company,
Inc., an Ohio corporation, on behalf of the corporation.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇ Notary Public
My Commission Expires:
---------------------------
[STAMP]
ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
) SS.
COUNTY OF VENTURA )
On the 9th day of April, 1998, before me, ▇▇▇ ▇. ▇▇▇▇▇▇, a notary
public in and for the State of California, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument he, or the entity on behalf of which he
acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
[STAMP] ▇▇▇ ▇. ▇▇▇▇▇▇
NOTARY PUBLIC
State of California
My Commission Expires July 31, 1998
This Instrument Prepared by:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇, Wolff, Aronson, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
INDEX OF EXHIBITS
-----------------
Exhibit "A-1" - "A-4" - Legal Description
Exhibit "B" - Related Leases
Exhibit "C" - Memorandum of Lease
Exhibit "D" - Approved Use of Proceeds
EXHIBIT A-1
-----------
Legal Description
Scioto Property
EXHIBIT A-2
-----------
Legal Description
Karrington Property
EXHIBIT ▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
Legal Description
▇▇▇▇▇▇ Creek Property
EXHIBIT A-3
EXHIBIT A-4
-----------
Legal Description
Bexley Property
EXHIBIT A-4
EXHIBIT "B"
RELATED LEASES*
*The Related Leases referenced above will be modified in writing in the future
if Lessor and Lessee enter into a lease (or leases) of property in substitution
of any of the aforementioned Related Leases.
EXHIBIT "C"