EXHIBIT 10.8
LEASE
for the
MARRIOTT BRIGHTON GARDENS FACILITY
between
HMC RETIREMENT PROPERTIES, INC.
("LANDLORD")
and
MARRIOTT SENIOR LIVING SERVICES, INC.
("TENANT")
at
SCOTTSDALE
MARICOPA COUNTY, ARIZONA
TABLE OF CONTENTS
FACILITIES LEASE AGREEMENT
PAGE
ARTICLE 1 LEASE OF PREMISES..............................................1
Section 1.01 "As-Is" Letting..................................1
Section 1.02 Tenant's Right of Possession.....................2
Section 1.03 Landlord's Corporation...........................2
ARTICLE 2 DEFINITION OF TERMS............................................3
Section 2.01 Definition of Terms..............................3
ARTICLE 3 TERM..........................................................10
Section 3.01 Term............................................10
Section 3.02 Extended Term...................................10
Section 3.03 Notice of Termination...........................11
Section 3.04 Obligations of Parties at Termination...........11
ARTICLE 4 ABSOLUTELY NET LEASE..........................................12
Section 4.01 Net Lease.......................................12
Section 4.02 Non-Terminability of Lease......................12
ARTICLE 5 RENTAL........................................................13
Section 5.01 Rental..........................................13
Section 5.02 Payment of Rental...............................14
Section 5.03 Records; Audit by Landlord......................15
Section 5.04 Subleases, Licenses and Concessions.............16
Section 5.05 Rental Upon Change of Use.......................17
Section 5.06 Rental Upon Certain Expansions..................17
Section 5.07 Special Rental Advance..........................18
ARTICLE 6 OPERATION AND MAINTENANCE OF PREMISES.........................18
Section 6.01 Operation and Maintenance of Premises...........18
Section 6.02 Taxes...........................................19
Section 6.03 Compliance with Requirements,
Covenants and Restrictions....................19
(i)
Section 6.04 Landlord's Right to Perform
Tenant Obligations............................20
Section 6.05 Compliance with Laws............................20
Section 6.06 Tenant's Right to Contest.......................20
Section 6.07 Liens...........................................21
ARTICLE 7 USE...........................................................22
Section 7.01 Use.............................................22
Section 7.02 Change of Use...................................22
ARTICLE 8 INDEMNIFICATION...............................................22
Section 8.01 General Indemnification by Tenant...............22
Section 8.02 Environmental Indemnification...................24
Section 8.03 Defense of Indemnified Parties..................24
Section 8.04 Payment by Tenant...............................25
Section 8.05 Survival........................................25
Section 8.06 Continuing Obligations..........................25
ARTICLE 9 ALTERATIONS AND EXPANSIONS....................................25
Section 9.01 Alterations and Expansions......................25
Section 9.02 Alterations and Expansions During,
Last Five Years of Term.......................26
Section 9.03 Recovery of Mandated Expenditures...............26
ARTICLE 10 FF&E, FIXED ASSET SUPPLIES AND INVENTORIES...................27
Section 10.01 FF&E Upon Commencement Date....................27
Section 10.02 FF&E Upon Termination..........................28
Section 10.03 Landlord's Security Interest in
Tenant's FF&E, Fixed Asset
Supplies and Inventories.....................28
ARTICLE 11 TRADEMARKS, TRADE NAMES AND SERVICE MARKS.....................29
Section 11.01 Trademarks, Trade Names and
Service Marks................................29
(ii)
ARTICLE 12 ENVIRONMENTAL HAZARDS.........................................30
Section 12.01 Compliance with Environmental Law..............30
Section 12.02 Environmental Assessments......................32
ARTICLE 13 INSURANCE.....................................................34
Section 13.01 Property & Business Interruption
Insurance.....................................34
Section 13.02 Application of Proceeds........................34
Section 13.03 Waiver of Rights of Subrogation................36
Section 13.04 Operational Insurance..........................36
Section 13.05 Blanket and Self-Insurance.....................36
Section 13.06 Costs of Insurance.............................37
Section 13.07 Defense of Claims after Termination............37
Section 13.08 Coverage and Certificates......................37
Section 13.09 Alternative Insurance Coverage.................38
ARTICLE 14 DAMAGE BY FIRE OR OTHER CASUALTY..............................38
Section 14.01 Damage by Fire or Other Casualty...............38
Section 14.02 Partial Damage by Fire or Other Casualty.......39
Section 14.03 Damage Occurring After the 10th
Anniversary of Commencement Date.............39
Section 14.04 No Abatement of Rent Due to Casualty...........39
Section 14.05 Early Termination..............................40
Section 14.06 Uninsurable Loss...............................40
ARTICLE 15 CONDEMNATION..................................................41
Section 15.01 Notice of Condemnation and Assignment
of Rights....................................41
Section 15.02 Tenant's Right to Pursue a Claim...............41
Section 15.03 Temporary Taking...............................41
Section 15.04 Total Taking...................................42
Section 15.05 Substantial Taking.............................43
Section 15.06 Partial Taking.................................43
(iii)
ARTICLE 16 ASSIGNMENT, SALE AND SUBLETTING...............................46
Section 16.01 Sale or Assignment by Landlord..................46
Section 16.02 Assignment by Tenant............................46
Section 16.03 Tenant's Right to Sublease......................47
ARTICLE 17 HOLDING OVER..................................................47
Section 17.01 Holdover.......................................47
ARTICLE 18 ESTOPPEL CERTIFICATES.........................................47
Section 18.01 Estoppel Certificates..........................47
ARTICLE 19 LANDLORD FINANCING ...........................................48
Section 19.01 Right to Finance...............................48
Section 19.02 Priority.......................................48
Section 19.03 Mortgage Amendments.............................49
ARTICLE 20 DEFAULT BY TENANT.............................................49
Section 20.01 Events of Default..............................49
Section 20.02 Landlord's Rights Upon an Event of Default.....50
Section 20.03 Implied Waiver.................................52
Section 20.04 Injunctive Relief..............................52
ARTICLE 21 PROVISIONS APPLICABLE TO PURCHASE
BY TENANT OF THE PREMISES...................................53
Section 21.01 Procedures Upon Purchase.......................53
ARTICLE 22 NOTICES.......................................................55
Section 22.01 Notices........................................55
ARTICLE 23 MEMORANDUM OF LEASE...........................................57
Section 23.01 Memorandum of Lease............................57
(iv)
ARTICLE 24 MISCELLANEOUS.................................................57
Section 24.01 Partial Invalidity.............................57
Section 24.02 Headings.......................................57
Section 24.03 Binding Effect.................................58
Section 24.04 Representations................................58
Section 24.05 Amendments.....................................58
Section 24.06 Brokers........................................58
Section 24.07 Authority to Execute...........................58
Section 24.08 Applicable Law.................................58
Section 24.09 Construction...................................58
Section 24.10 Impossibility of Performance...................59
Section 24.11 Time of Essence................................59
Section 24.12 Attorney's Fees................................59
Section 24.13 No Merger......................................59
Section 24.14 Landlord's Right to Enter......................59
Section 24.15 Corporate Reorganization of Tenant.............59
Section 24.16 No Waiver......................................60
Section 24.17 Confidentiality................................60
Section 24.18 Gender and Number..............................60
Section 24.19 Survival.......................................61
Section 24.20 Acceptance of Surrender........................61
Section 24.21 Non-Recourse as to Landlord....................61
Section 24.22 Entire Agreement; Integration..................61
Section 24.23 Waiver of Trial by Jury........................62
Section 24.24 Tenant's Remedies..............................62
Section 24.25 Landlord and Tenant Relationship...............62
ARTICLE 25 SPECIAL PROVISIONS............................................63
Section 25.01 Supremacy of Article 25........................63
Section 25.02 Completion of Construction.....................63
EXHIBITS
A Description of Land and Premises with Site Plan
B [This Exhibit Intentionally Not Used]
C Schedules of Landlord's FF&E, Fixed Asset Supplies and Inventories
D Landlord's Trademarks, Etc.
E Related Landlord Leases
(v)
FACILITIES LEASE AGREEMENT
THIS LEASE is made as of the 8th day of October, 1993 ("Commencement
Date"), by and between HMC RETIREMENT PROPERTIES, INC. ("Landlord"), a Delaware
corporation with a mailing address at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, and MARRIOTT SENIOR LIVING SERVICES, INC. ("Tenant"), a Delaware
corporation, with a mailing address at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
R E C I T A L S:
A. The Premises were developed by a corporation which was an Affiliate
of Tenant. Both such corporations were subsidiaries of Landlord and engaged in
the business of owning and/or operating senior living retirement and health care
facilities under the Marriott trade name.
B. The lease transaction described herein is a portion of a larger
transaction involving multiple properties. As a material inducement to the other
party, each party hereto has agreed to also enter into the Related Landlord
Lease(s).
ARTICLE 1
LEASE OF PREMISES
Section 1.01 "As-Is" Letting
A. In consideration of the Rentals, covenants and agreements to be
paid, kept and performed hereunder, Landlord, for the term and upon the
conditions hereinafter set forth, leases to Tenant and Tenant leases and takes
from Landlord, the Premises, together with all privileges, easements and
appurtenances beneficial thereto.
B. The Premises are leased to Tenant "as is" and Landlord makes no
representation or warranty, express or implied, with respect to the condition of
the Premises, or as to the compliance of the Premises with any Legal
Requirements. Tenant has examined the Premises and title to the Premises and has
found all of the same satisfactory for its purposes. Tenant accepts the Premises
subject to the existing state of title. During the term of this Lease, Tenant
shall have the nonexclusive right to use, enforce and obtain the benefits of all
guaranties and warranties relating to the construction, improvement, alteration
and repair of the Premises and all architectural and engineering plans, drawings
and specifications related thereto, and during the term of this Lease Landlord
shall execute such assignments or other transfer instruments as are necessary to
transfer the benefits of all such guaranties, warranties and rights to Tenant,
and shall not waive, surrender or modify any of Landlord's rights with respect
thereto without obtaining Tenant's prior written consent.
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Section 1.02 Tenant's Right of Possession
During the term of this Lease, Tenant shall have exclusive possession
(subject to the rights of existing residents therein) and control of the
Premises.
Section 1.03 Landlord's Cooperation
A. Landlord agrees upon request by Tenant to provide all information
relevant to Landlord, its officers and directors, and to execute, and to cause
its officers and directors to sign, promptly, and without charge, all
applications (including all documents related thereto) for licenses, permits,
instruments or other general approvals required to be submitted to any
governmental authority that are necessary for the proper and successful conduct
of Tenant's lawful business operations at the Premises if and to the extent such
execution and/or information by or from Landlord and/or any of its officers and
directors is required by law, regulation or governmental practice in order for
Tenant to obtain any such license, permit, instrument or other governmental
approval; provided, however, that all costs and expenses associated therewith
shall be the sole obligation of Tenant, and Tenant shall promptly pay and
discharge the same, and provided further, that the proper execution of any such
application shall not expose Landlord to any personal liability. In all cases,
Landlord shall have a reasonable amount of time to comply with Tenant's requests
pursuant to this Section 1.03A, Landlord and Tenant shall, in good faith,
cooperate with each other in determining and complying with relevant
governmental requirements, and Tenant shall afford Landlord every reasonable
opportunity to question and challenge by appropriate administrative and/or
judicial process any relevant governmental requirement so long as such challenge
does not materially and adversely affect any material license, permit or
governmental approval of Tenant. Tenant hereby agrees that it will fully
indemnify, defend and save Landlord harmless from and against any and all costs,
losses and expenses, including, without limitation, any and all legal fees and
court costs incurred or suffered by Landlord as a result of its compliance with
the obligations imposed upon Landlord under this Section 1.03 except in the case
of Landlord's fraud or willful misconduct.
B. If Landlord should fail to comply with the requirements of Section
1.03A above, and such failure should continue for more than thirty (30) days
after Notice from Tenant specifying the required cooperation and informing
Landlord that Tenant intends to act pursuant to this Section 1.03B if such
cooperation is not provided within said thirty (30) day period and such failure
results, or with reasonable certainty will result, in the denial, non-renewal or
withdrawal of a material license, permit or governmental approval that will
materially and adversely affect Tenant's business at the Premises, then, in
addition and not as a substitution for any remedies available to Tenant under
Section 24.24 of this Lease, if such failure is not cured within such thirty
(30) day period, Tenant shall have the right to terminate this Lease by so
notifying Landlord not later than the date which is sixty (60) days after the
date of the aforesaid Notice. If Tenant elects to exercise the night described
in the preceding sentence, it shall, simultaneously with its delivery of its
Notice of termination, deliver to Landlord its irrevocable offer to purchase the
Premises for an amount equal to the Leasehold Purchase Price.
C. Landlord may accept or reject Tenant's irrevocable offer to purchase
the Premises by sending Tenant a Notice of rejection or acceptance within thirty
(30) days from the date upon which Landlord received Tenant's Notice of
termination. If Landlord fails to send Tenant a
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Notice of rejection or acceptance within thirty (30) days of its receipt of
Tenant's irrevocable offer to purchase the Premises, Landlord shall be deemed to
have accepted such offer. If Landlord accepts or is deemed to have accepted
Tenant's offer to purchase, the Lease shall terminate and closing of such
purchase shall occur in accordance with the provisions of Article 21. Upon such
termination, Tenant shall pay to Landlord all Rental due through such date of
termination landlord shall convey the Premises to Tenant in accordance with the
provisions of Section 21.01.
D. If Landlord rejects Tenant's irrevocable offer to purchase pursuant
to Section 1.03B, this Lease shall terminate on a Minimum Rental payment date
specified by Tenant in its Notice of termination which occurs not earlier than
ninety (90) days nor later than one hundred twenty (120) days after delivery to
Landlord of Tenant's irrevocable offer to purchase, provided that this Lease
shall not terminate unless and until Tenant shall have paid all sums due
hereunder (including, without limitation, all taxes and insurance premiums) as
of the actual date of termination. Upon such termination, Tenant shall vacate
the Premises in accordance with the provisions of Section 3.04.
E. Landlord shall have the right at all times prior to either a closing
date for any purchase under Section 1.03C or the termination date under Section
1.03D, to cancel the right of Tenant to so purchase or terminate pursuant to
said sections, by complying with the requirements of Section 1.03A in sufficient
time and manner so that the subject license, permit or approval is obtained or
reinstated by a date that is prior to the aforesaid closing date or termination
date as the case may be.
END OF ARTICLE 1
ARTICLE 2
DEFINITION OF TERMS
Section 2.01 Definition of Terms
The following terms when used in this Lease shall have the meanings
indicated:
"Accounting Period" shall mean the four (4) week accounting periods
having the same beginning and ending dates as Tenant's four (4) week accounting
periods, except that an Accounting Period may occasionally contain five (5)
weeks when necessary to conform Tenant's accounting system to the calendar.
"Additional Rental" shall mean any obligation of Tenant to pay money to
Landlord under this Lease, other than Minimum Rental or Percentage Rental.
"Affiliate" shall mean any individual or entity directly or indirectly
through one or more intermediaries, controlling, controlled by or under common
control with a party. The term "control," as used in the immediately preceding
sentence, means, with respect to a corporation, the right to the exercise,
directly or indirectly, of more than fifty percent (50%) of the voting
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rights attributable to the shares of the controlled corporation, and, with
respect to an entity that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled entity.
"Alternative Rental" shall have the meaning set forth in Section 5.05.
"Business Day(s)" means Monday through Friday (except holidays);
"normal business hours" means 8:00 a.m. to 6:00 p.m. on Business Days; and
"holidays" mean New Year's Day, President's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.
"Change of Use" shall have the meaning set forth in Section 7.02.
"Commencement Date" shall have the meaning set forth in the Preamble.
"Effective Extended Term" means any Extended Term that has become
effective by reason of the occurrence of the first day of such Extended Term or
because Tenant has irrevocably exercised its option to extend the Term through
such Extended Term.
"Environmental Laws" shall mean: (a) the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., as now
or hereafter amended and the Resource Conservation and Recovery Act of 1976, as
now or hereafter amended; (b) the regulations promulgated thereunder, from time
to time; (c) all federal, state and local laws, rules and regulations (now or
hereafter in effect) dealing with the use, generation, treatment, management,
storage, disposal or abatement of Hazardous Materials or protection of human
health or the environment.
"Environmental Violation" shall mean any violation of any Environmental
Law at or relating to the Premises.
"Event of Default" shall have the meaning set forth in Section 20.01.
"Expansion" shall have the meaning set forth in Section 9.01.
"Expansion Rental" shall have the meaning set forth in Section 5.06B.
"Extended Term(s)" shall have the meaning set forth in Section 3.02.
"FF&E" shall mean all of the furniture, furnishings, and equipment
(including trade fixtures and equipment) owned by Landlord and/or Tenant,
situated at or on the Premises and used in connection with Tenant's use and
occupancy of the Premises.
"Fiscal Quarter" shall mean the period of time which (i) commences on
the first day of a Fiscal Year and ends on the last day of the third (3rd)
Accounting Period of such Fiscal Year; (ii) commences on the first day of the
fourth (4th) Accounting Period of a Fiscal Year and ends on the last day of the
sixth (6th) Accounting Period of such Fiscal Year; (iii) commences on the first
day of the seventh (7th) Accounting Period of a Fiscal Year and ends on the last
day of the
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ninth (9th) Accounting Period of such Fiscal Year; and (iv) commences on the
first day of the tenth (10th) Accounting Period of a Fiscal Year and ends on the
last day of such Fiscal Year.
"Fiscal Year" shall mean Tenant's Fiscal Year which now ends at
midnight on the Friday closest to December 31 in each calendar year; the new
Fiscal Year begins on the Saturday immediately following said Friday. If
Tenant's Fiscal Year is changed in the future, appropriate adjustment to this
Lease's reporting and accounting procedures shall be made; provided, however,
that no such change or adjustment shall alter the Term of this Lease or in any
way reduce the payment of Percentage Rental or other payments due Landlord
hereunder.
"Fixed Asset Supplies" shall mean supply items included within
"Property and Equipment" under the Uniform System of Accounts including linen,
china, glassware, silver, uniforms, and similar items.
"GDP Deflator" shall mean the "Gross Domestic Product Implicit Price
Deflator" issued from time to time by the United States Bureau of Economic
Analysis of the Department of Commerce, or if the aforesaid GDP Deflator is not
at such time so prepared and published, any comparable index selected by
Landlord and reasonably satisfactory to Tenant (a "Substitute Index") then
prepared and published by an agency of the Government of the United States,
appropriately adjusted for changes in the manner in which such index is prepared
and/or year upon which such index is based. Except as otherwise expressly stated
herein, whenever a number or amount is required to be "adjusted by the GDP
Deflator", or similar terminology, such adjustment shall be equal to the
percentage increase in the GDP Deflator which is issued for the month in which
such adjustment is to be made (or, if the GDP Deflator for such month is not yet
publicly available, the GDP Deflator for the most recent month for which the GDP
Deflator is publicly available) as compared to the GDP Deflator which was issued
for the month in which the Commencement Date occurred, it being agreed that for
purposes of this Lease, no GDP Deflator adjustment shall operate to decrease any
sum or number specified in this lease.
"Guaranty" means that certain Agreement of Guaranty between Landlord
and Guarantor of even date herewith.
"Guarantor" shall mean Marriott International, Inc., a Delaware
corporation, whose mailing address is ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
"Hazardous Materials" shall mean and include any substance or material
containing one or more of any of the following: "hazardous material", "hazardous
waste", hazardous substance", "regulated substance", "petroleum", "petroleum
products", "pollutant", "contaminant", "polychlorinated biphenyls",
"pesticides", "asbestos", or "asbestos containing materials" as such terms are
defined in any applicable Environmental Law.
"Improvements" shall mean the buildings, parking lots, structures, and
all other improvements and fixtures (other than trade fixtures owned by Tenant)
now or hereafter located on the Land together with the electrical, mechanical,
plumbing and HVAC systems installed therein.
"Indemnified Parties" shall have the meaning set forth in Section 8.01.
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"Initial Term" shall have the meaning set forth in Section 3.01.
"Insubstantial Taking" shall mean a condemnation of a portion of the
Premises that is less than all or substantially all of the Premises if (i) the
Improvements can be restored to substantially the same physical condition which
prevailed therein and thereon prior to such condemnation at a cost not exceeding
the condemnation award payable with respect thereto, (ii) the condemnation does
not cause a material reduction in the size or useability of any building on the
Premises or any material disruption to Tenant's use and occupancy of the
Premises, and (iii) such condemnation will not materially reduce the operating
profitability of its business on the Premises after any restoration when
compared to such profitability before the condemnation.
"Insurance Requirements" shall mean the requirements of any and all
insurance policies procured in accordance with the terms hereof.
"Insurance Trustee" shall mean a bank, insurance company, pension fund,
real estate investment trust or commercial lending institution, with financial
statements audited by an independent public accounting firm and a net worth of
at least One Hundred Million Dollars ($100,000,000). The Senior Mortgagee shall
be the Insurance Trustee if the Senior Mortgagee fulfills the requirements of
the first sentence of this paragraph. If there is no Senior Mortgagee that
fulfills the requirements of the first sentence of this paragraph, the Insurance
Trustee shall be such qualifying institution as is selected by Tenant and
approved by Landlord, such approval not to be unreasonably withheld,
conditioned, or delayed.
"Inventories" shall mean "Inventories" as defined in the Uniform System
of Accounts, such as provisions in storerooms, refrigerators, pantries and
kitchens; beverages in wine cellars and bars; other merchandise intended for
sale; fuel; mechanical supplies; stationery; and other expensed supplies and
similar items.
"Land" shall mean the real property described in Exhibit A hereto, or
such lesser area that from time to time may be leased by Tenant hereunder as set
forth in this Lease.
"Landlord" shall have the meaning set forth in the Preamble and its
successors and assigns.
"Landlord's Audit" shall have the meaning set forth in Section 5.03.
"Landlord's Temporary Taking Award" shall have the meaning set forth in
Section 15.03.
"Lease" shall mean this Facilities Lease Agreement between Landlord and
Tenant dated as of the Commencement Date.
"Lease Interest Rate" shall mean the Prime Rate as set from time to
time by. Bankers Trust Company, New York, New York plus two (2) percentage
points per annum, but in no event shall the Lease Interest Rate be less than ten
percent (10%) per annum; provided, however, that the Lease Interest Rate shall
not exceed the maximum rate of interest from time to
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time permitted to be charged under applicable law with respect to the
indebtedness and party for which and against whom such interest is charged under
this Lease.
"Lease Memorandum" shall have the meaning set forth in Section 23.01.
"Leasehold Purchase Price" shall be at any particular time during the
Term, the dollar amount equal to the present value as of the date of such
purchase of the payments of Minimum Rental, Alternative Rental if any, and
Expansion Rental if any, that would have been payable during the period
commencing on the date of such purchase and ending on the date of expiration of
the current term of this Lease (including any Effective Extended Term)
discounted to the date of purchase at an interest rate equal to the effective
interest rate on United States Treasury, obligations as of the month preceding
the date of such purchase and having a maturity most nearly equal to the number
of months remaining in the current term of this Lease (including any Effective
Extended Term) as of the date of such purchase.
'Legal Requirement(s)" shall have the meaning set forth in Section
6.05.
"Major Casualty" shall mean any damage to or destruction of all or any
portion of the Premises when such casualty is likely to result in a significant
reduction in the operating profitability of Tenant's business on the Premises
for a period exceeding twelve (12) months based upon the assumption that the
casualty will be repaired with reasonable diligence.
"Mandated Expenditure(s)" shall mean all costs in excess of Twenty Five
Thousand Dollars ($25,000) adjusted by the GDP Deflator, in the aggregate in any
Fiscal Year that are: (i) incurred by Tenant to (x) repair, renovate, or improve
the Premises or (y) remedy or mitigate any condition therein, thereon or
thereunder if such actions referred to in clause (x) or clause (y) (1) are
required to be made by reason of any Legal Requirement not in effect on the
Commencement Date, (2) are made to enable Tenant to continue its then current
operations in the Premises and (3) would be capitalized under generally accepted
accounting principles; (ii) incurred by Tenant pursuant to Section 8.02, Section
12.01 or Section 12.02 that are attributable to (A) remediating or correcting a
condition on the Premises that existed on the Commencement Date (whether or not
such condition was a violation of any Environmental Laws in effect on the
Commencement Date), or (B) the migration of any Hazardous Materials to the
Premises from real property other than the Premises, or (C) the adoption or
amendment of any Environmental Law that results in any act or omission occurring
after the Commencement Date constituting a violation of any Environmental Law if
and to the extent that such act or omission was not a violation of any
Environmental Law when it occurred; or (iii) costs that constitute Mandated
Expenditures pursuant to Section 14.06B.
"Minimum Rental" shall have the meaning set forth in Section 5.01.
"Mortgage" shall mean any security instrument which encumbers the
Premises, including, without limitation, mortgages, deeds of trust, security
deeds and similar instruments.
"Mortgagee" shall mean the holder of, or beneficiary under, any
Mortgage on Landlord's interest in the Premises.
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"Notice" shall have the meaning set forth in Section 22.01.
"Operating Revenues" shall mean the aggregate of all monies received by
Tenant from or with respect to the Premises, including without limitation,
moneys received for (i) the sale of goods, wares and merchandise, and (ii) the
provision of accommodations and food services and (iii) the provision of
nursing, health care and retirement community services, and (iv) the provision
of any other services or the sale of any other goods, for cash or credit on or
from the Premises during the Term hereof including, but not limited to income
arising from: rental of rooms, stores, offices and meeting and sales spaces of
every kind; license, lease and concession fees and rentals paid to Tenant (but
not including gross receipts of licensees, lessees and concessionaires); food
and beverage sales and services; sales of merchandise; service charges, to the
extent not distributed to Tenant's employees as gratuities; net receipts from
ancillary health care related services provided by third party contractors,
vending machines, stamp machines, telephones, and the like (but not including
gross receipts of same collected by or paid to others except to the extent
hereafter provided); provided, however, that Operating Revenues shall not
include the following:
(a) returns or refunds, or credits received in settlement of
claims for loss or damage to goods, wares, merchandise, or deficient services;
(b) all sales taxes, excise taxes, occupational taxes, gross
receipt taxes and similar taxes paid, whether imposed under any existing or
future rules, regulations, laws or ordinances, provided, however, that any
income, excess profits, franchise, or other taxes based upon, or measured by,
Tenant's income shall not be excluded from Operating Revenues;
(c) any receipts from the transfer of goods, wares or
merchandise from the Premises to any other facility operated by Tenant or its
Affiliates;
(d) all receipts from sales to employees made at a discount;
provided, however, if the Premises are convened to a store which is closed to
the general public, but offers merchandise for sale to its employees, then such
sales are to be included in the definition of Operating Revenues;
(e) gratuities to Tenant's employees;
(f) insurance proceeds;
(g) condemnation award(s) (other than any condemnation
award for a temporary taking as described in Section 15.03 hereof); and
(h) proceeds from the sale of Tenant's FF&E or all or a
substantial part of its stock-in-trade and merchandise at a sale other than in
the ordinary course of business.
"Partial Condemnation Reduction Percentage" shall mean that percentage
applicable in the event of a condemnation equal to the fraction whose numerator
is the fair market value of the Premises immediately prior to the effective date
of such condemnation less the fair market value of the Premises remaining
immediately after such condemnation has become effective and excluding the
portion of the Premises taken by the condemning authority and whose denominator
is the fair market value of the Premises immediately prior to the effective date
of such condemnation. Thus, for example, if the fair market value of the
Premises immediately prior to such condemnation was $20 million and the fair
market value of the premises remaining immediately after such condemnation was
$15 million, the Partial Condemnation Reduction Percentage would be 25%.
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"Partial Fiscal Year" shall mean (i) the period between the
Commencement Date and the commencement of the first full Fiscal Year of this
Lease, and (ii) the period between the end of the last full Fiscal Year of this
Lease and the termination of this Lease, and (iii) the period between the first
day of the Fiscal Year in which Alternative Rental or Expansion Rental becomes
payable in lieu of Percentage Rental and the date upon which Percentage Rental
ceases.
"Percentage Rental" shall have the meaning set forth in Section 5.01.
"Premises" shall mean all of the Land and the Improvements or such
lesser area or portion that from time to time may be leased by Tenant hereunder
as set forth in this Lease.
"Prospectus" shall have the meaning set forth in Section 24.17.
"Related Landlord Lease" as of any date shall mean each of those leases
described in Exhibit E hereto with respect to which as of such date Landlord
hereunder or any Affiliate of Landlord hereunder is also the landlord under such
lease or leases as of such date.
"Rental(s)" shall mean Minimum Rental, Percentage Rental, Alternative
Rental, Additional Rental, and Expansion Rental either collectively or any one
or more of same as the context may indicate.
"Sale of the Premises" shall mean any sale, assignment, transfer or
other disposition, for value or otherwise, voluntary or involuntary, of the fee
simple title to the Land and/or the Premises. For purposes of this Lease, a Sale
of the Premises shall also include a lease (subject to this Lease) of all or
substantially all of the Premises or Land and any sale, assignment, transfer or
other disposition, for value or otherwise, voluntary or involuntary , in a
single transaction or a series of related transactions, of the controlling
interest in Landlord. If Landlord is a corporation, the phrase "controlling
interest" shall mean the right to exercise, directly or indirectly, more than
fifty percent (50%) of the voting rights attributable to the shares of Landlord
(through ownership of such shares or by contract). If Landlord is not a
corporation, the phrase "controlling interest" shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of Landlord.
"Senior Mortgagee" shall mean the holder, of, or beneficiary under,
from time to time the most senior Mortgage against Landlord's interest in the
Premises.
"Site Assessment" shall have the meaning ascribed to it in Section
12.02.
"Site Reviewer" shall have the meaning ascribed to it in Section 12.02.
"Special Rental Advance" shall have the meaning ascribed to it in
Section 5.07.
"Substantial Taking" shall mean a condemnation of a portion of the
Premises that is less than all or substantially all of the Premises and that is
not an Insubstantial Taking.
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"Surviving Obligations" shall mean any obligations of Tenant under this
Lease, actual or contingent, which arise on or prior to the expiration or prior
termination of this Lease and which survive such expiration or termination by
their own terms.
"Tenant" shall have the meaning set forth in the Preamble and its
successors and assigns. "Term" shall have the meaning set forth in Section 3.01.
"Uniform System of Accounts" shall mean the Uniform System of Accounts
for Hotels, Eighth Revised Edition, 1986, as published by the Hotel Association
of New York City, Inc.
"Use Award" shall have the meaning set forth in Section 15.03.
"Year" shall mean a calendar year commencing on January 1 and ending on
December 31. A Partial Year shall mean that portion of a Year that occurs during
the Term in the case of the Year in which the Commencement Date occurs and the
Year in which the expiration or termination of this Lease occurs.
END OF ARTICLE 2
ARTICLE 3
TERM
Section 3.01 Term
The "Term" shall consist of the Initial Term, the Extended Term(s), if
any, and any extensions of the Term of this Lease pursuant to Section 9.03A. The
Initial Term of this Lease shall commence on the Commencement Date, and, unless
sooner terminated as otherwise provided herein, shall expire on December 31,
2013.
Section 3.02 Extended Term
If Tenant has not given Notice of its intention to terminate this Lease
pursuant to Section 3.03 and the Initial Term has not been sooner term, the Term
of this Lease shall automatically be extended on the same terms and conditions
as set forth herein for an Extended Term of five (5) years (the "First Extended
Term"). If Tenant has not given Notice of its intention to terminate pursuant to
Section 3.03 and the Initial Term and the First Extended Term has not been
sooner terminated, the Term of the Lease shall automatically be extended on the
same terms and conditions as set forth herein for one (1) additional Extended
Term of five (5) full Years (the "Second Extended Term"). If Tenant has not
given Notice of its intention to terminate pursuant to Section 3.03 and the
Initial Term, the First Extended Term or the Second Extended Term have not been
sooner terminated, the Term of the Lease shall automatically be extended on the
same terms and conditions as set forth herein for one (1) additional Extended
Term of five (5) full years (the "Third Extended Term"). If Tenant has not given
Notice of its intention to terminate pursuant to Section 3.03 and the Initial
Term, the First Extended Term, the Second Extended Term and the Third Extended
Term have not been sooner terminated, the
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Term of the Lease shall automatically be extended on the same terms and
conditions as set forth herein for one (1) additional Extended Term of five (5)
Years (the "Fourth Extended Term"). Notwithstanding the foregoing, Tenant may
elect at any time throughout the Term to exercise, by Notice to Landlord, its
option to extend the Term through any or all Extended Terms. If and to the
extent Tenant elects by written notice to Landlord to exercise its option to
extend the Term through any Extended Term, Tenant's option to terminate this
Lease pursuant to Section 3.03 with respect to such Extended Term for which
Tenant has exercised its extension option shall no longer be applicable, but
such option to terminate pursuant to Section 3.03 shall continue to apply to any
Extended Term with respect to which such option to extend was not exercised
pursuant to this Section 3.02. All elections to extend the Term shall be
irrevocable after exercised.
Section 3.03 Notice of Termination
Tenant may terminate the Lease at the end of the Initial Term or at the
end of any Extended Term upon Notice to Landlord not less than twenty-four (24)
calendar months prior to the expiration of the Initial Term or the then current
Extended Term, as the case may be. In addition, Tenant may terminate this Lease
if Tenant gives a Notice of termination to Landlord after the date which is
twenty-four (24) months prior to the expiration of the Initial Term or the then
current Extended Term, as the case may be (but prior to the last day of the
Initial Term or the then current Extended Term and prior to the expiration of
the thirty (30) day period referenced below), and in such event this Lease shall
terminate on the date which is twenty-four (24) months after the date upon which
Tenant delivers such Notice; except that if, after the beginning of the
twenty-four (24) month period prior to the expiration of the Initial Term or the
then current Extended Term, as the case may be, Tenant does not give a Notice of
termination within thirty (30) days after Landlord requests Tenant to notify
Landlord whether Tenant intends to terminate this Lease, the Term of this Lease
shall be automatically extended for the next Extended Term and Tenant's right to
terminate this Lease prior to the expiration of the next Extended Term shall
cease to have any further force or effect.
Section 3.04 Obligations of Parties at Termination
A. Promptly upon the effective date of any termination of this Lease,
Tenant shall peaceably surrender the Premises to Landlord in the same condition
as the Premises were in as of the Commencement Date subject only to such
additions and alterations as have been permitted pursuant to Article 9 hereof
and subject to reasonable wear and tear. Tenant shall assign and deliver to
Landlord Tenant's entire interest in any and all service contracts, guaranties
and warranties relating to the construction, improvement, alteration and repair
of the Premises and all architectural and engineering plans, drawings and
specifications related thereto; and if Landlord so requests, cause any person or
entity occupying the Premises by, through or under Tenant to be evicted and
removed from the Premises.
B. Rental shall be paid through the date of termination. Within ninety
(90) days after this Lease terminates, Tenant shall deliver to Landlord a
complete and final accounting, prepared in accordance with the provisions of
Section 5.03 hereof of Operating Revenues together with
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all payments of Rental due hereunder. Landlord's right to audit Tenant's books
and records as described in Section 5.03 and to receive Percentage Rental and
Additional Rental, if any, together with interest at the Lease Interest Rate
shall survive the termination of this Lease.
C. If Landlord, directly or indirectly, intends to conduct upon
termination of this Lease a business or use at the Premises similar to Tenant's
business or use, Tenant, at Landlord's request, shall (i) make available to
Landlord such books and records as are appropriate to such business and/or use
(but not including employee or resident records which must remain confidential
either under Legal Requirements or reasonable policies of Tenant, or any
proprietary information or property of Tenant), and (ii) assign or transfer to
Landlord or its designee, to the extent permitted by Legal Requirements, all
licenses, permits, permissions and approvals pertinent to the conduct of such
business or use on the Premises, provided that if Tenant has expended any of its
own funds within the five (5) year period preceding the termination date in the
acquisition or maintenance of any such license, permit, permission or approval
(other than annual license fees whether prepaid or paid currently), or if there
are any deposits or escrow funds relevant thereto that Tenant assigns and
transfers to Landlord, Landlord shall, as a condition of receiving an assignment
or transfer of such license, permit, deposit, escrow fund, permission or
approval (if requested by Landlord), reimburse Tenant therefor. The cost of
effectuating any such transfer of any licenses, permits, permissions or
approvals shall be borne by Landlord except when termination is due to Tenant's
default.
D. The provisions of Section 10.02 shall apply upon termination of this
Lease and Tenant shall take all other appropriate actions as required under all
other applicable provisions of this Lease. The provisions of this Section 3.04,
as well as all Surviving Obligations, Landlord's right to receive the late
charges described in Section 5.02B, interest on sums outstanding at the Lease
Interest Rate and legal fees (but if termination was not due to an Event of
Default such Legal Fees shall be reasonable legal fees) and court costs, shall
survive termination of this Lease.
END OF ARTICLE 3
ARTICLE 4
ABSOLUTELY NET LEASE
Section 4.01 Net Lease
Notwithstanding any other provision of this Lease - other than Sections
5.03 and 9.03C it is expressly understood and agreed by and between the parties
that this Lease is an absolutely net lease, and the Rentals and all other sums
payable hereunder to or on behalf of Landlord shall be paid without Notice or
demand and without set-off, counterclaim, abatement, suspension, deduction, or
defense, and Landlord is not obligated to expend any of its funds in connection
with the Premises or this Lease.
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Section 4.02 Non-Terminability of Lease
A. Except as otherwise expressly provided herein, this Lease shall not
terminate, nor shall Tenant have any night to terminate this Lease, nor shall
the obligations hereunder of Tenant be otherwise affected, by reason of any
damage to or destruction of all or any portion of the Premises from whatever
cause, the taking of the Premises or any portion thereof by condemnation, the
prohibition, limitation or restriction of Tenant's use of the Premises, or
interference with such use by any private person or corporation or by reason of
any eviction or otherwise, or Tenant's acquisition of ownership of the Premises
otherwise than pursuant to an express provision of this Lease, or for any other
cause whether similar or dissimilar to the foregoing, any present or future
Legal Requirement to the contrary notwithstanding, it being the intention of the
parties hereto that the Rental and all other charges payable hereunder to or on
behalf of Landlord, shall continue to be payable in all events and the
obligations of Tenant hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall be terminated pursuant to an
express provision of this Lease.
B. Tenant covenants and agrees that it will remain obligated under this
Lease in accordance with its terms, and that Tenant will not take any action to
terminate, rescind, reject or avoid this Lease or any term, part, or provision
hereof, notwithstanding the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding-up or other proceeding affecting
Landlord or any assignee of Landlord in any such proceeding and notwithstanding
any action with respect to this Lease which may be taken by any trustee or
receiver of Landlord or of any assignee of Landlord in any such proceeding or by
any court in any such proceeding.
C. Except as otherwise expressly provided in this Lease, Tenant waives
all rights now or hereafter conferred by law or obtainable in equity (i) to
quit, terminate or surrender this Lease or the Premises, or any part thereof, or
(ii) to any abatement, suspension, deferment or reduction of any Rentals or
charges payable hereunder to or on behalf of Landlord, regardless of whether
such rights shall arise from any present or future constitution, statute or rule
of law.
END OF ARTICLE 4
ARTICLE 5
RENTAL
Section 5.01 Rental
Tenant covenants to pay Landlord Rental for the Premises as follows:
(i) Commencing with the Commencement Date and continuing to
the end of the Term (including all Extended Terms), Minimum Rental in an amount
equal to Seven Hundred Thirty-seven Thousand Dollars ($737,000.00) per Year for
each Year; plus
(ii) For each Fiscal Year or Partial Fiscal Year (including
all Extended Terms), Percentage Rental equal to four and one-half percent (4.5%)
of that portion of the Operating Revenues for such Fiscal Year or Partial Fiscal
Year that exceed $2,355,000.00
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multiplied, in the case of a Partial Fiscal Year, by a fraction the numerator of
which is the number of days in such Partial Fiscal Year and the denominator of
which is 365.
Section 5.02 Payment of Rental
A. Minimum Rental shall be paid quarterly, in advance, on or before the
first day of January, April, July and October during each Year. Minimum Rental
for any Partial Fiscal Year shall be prorated and computed by multiplying the
annual Minimum Rental by a fraction, the numerator of which is the number of
days in such partial Year and the denominator of which is three hundred and
sixty-five (365) or three hundred sixty-six (366) as the case may be. Payments
for any Partial Fiscal Year shall be made in the same manner and at the same
times as payments are to be made during a full Fiscal Year as provided in this
Section. Percentage Rental shall be calculated on a Fiscal Year (or Partial
Fiscal Year) basis and shall be paid in arrears on or before forty-five (45)
days after the end of each Fiscal Year or Partial Fiscal Year in which
Percentage Rental become due. All installments of Rental not paid by Tenant when
same become due shall bear interest from the date due until paid at the Lease
Interest Rate. Time is of the essence, and installments of Rental shall become
due and payable without Notice or demand. All Rental payments shall be made in
lawful money of the United States of America and shall be paid to Landlord at
Landlord's address for receipt of Notices or to such other party and/or to such
other address as Landlord may from time to time designate by Notice to Tenant in
accordance with this Lease.
B. Tenant acknowledges that late payment of Rental by Tenant to
Landlord will cause Landlord to incur costs not contemplated in 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 and late
charges that may be imposed upon Landlord by the terms of any mortgage covering
the Premises. Accordingly, in addition to the interest payable by Tenant
pursuant to Section 5.02A, after a period of five (5) days following the date
all or any portion of Rental is due and unpaid Tenant shall pay to Landlord an
amount equal to five percent (5 %) of the amount of such unpaid instillment or
portion thereof. The parties agree such late charges represent a fair and
reasonable estimate of the cost Landlord will incur by reason of the late
payment by Tenant.
C. In the event that the Premises are damaged by fire or other casualty
and Tenant discontinues all or substantially all business operations therein,
Tenant's obligation to pay Percentage Rental for the Fiscal Year in which Tenant
has so discontinued its business operations shall be computed as if such Fiscal
Year was a Partial Fiscal Year and as if the number of days in such Partial
Fiscal Year excluded the number of days during which Tenant discontinued all or
substantially all of its business operations in the Premises.
D. If, at any time during the Term, there is a good faith dispute
between Landlord and Tenant with respect to the amount of Percentage Rental
properly due hereunder Tenant's failure to pay the disputed amount shall not be
deemed an Event of Default with respect to the provisions of Section 20.01 and
20.02 until such time as the dispute is resolved; provided, that Tenant shall
pay any such disputed amount of Percentage Rental into an escrow account to be
held and invested by the Insurance Trustee or such other escrow agent as may be
mutually approved by Landlord and Tenant (specifically created for such purpose
with interest to follow
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final distribution of principal) as soon as such disputed amount becomes known,
and the provisions of Section 5.02B shall apply to any such disputed amount
ultimately determined to be due Landlord but with payment into the escrow
account being deemed payment to Landlord for purposes of Section 5.02B.
Section 5.03 Records; Audit by Landlord
A. Tenant shall keep, in appropriate detail and in accordance with
standard accounting practices, at its principal business office, records of all
sums, constituting, and specifically excluded from, Operating Revenues with
respect to each Fiscal Year for a period of not less than four (4) Fiscal Years
after the expiration of the Fiscal Year to which such records relate. Tenant
shall deliver to Landlord a statement from an appropriate corporate officer, or
general partner of Tenant, certifying the annual Operating Revenues within sixty
(60) days after the end of each Fiscal Year. If there is any overpayment of
Percentage Rental, the excess shall be credited against any future Percentage
Rental when next due. If Landlord delivers its written request to Tenant, within
thirty (30) days after receipt of any such certified statement, for copies of
records and data to support such statement, then Tenant shall provide same to
Landlord within thirty (30) days after receipt of such written request. Landlord
shall be entitled, at its own expense, to audit such statement and supporting
records and data, provided Landlord shall cause such audit to commence within
ninety (90) days after receipt of said statement and to be completed within one
hundred twenty (120) days after receipt of all information requested by Landlord
reasonably related to such audit. In order to provide finality, absent fraud
and, except as otherwise provided below in this Section, Tenant shall be
entitled to treat such statement as being correct if Landlord does not so audit
or otherwise challenge said statement within the time period above provided, and
Landlord shall have no right thereafter to question or examine the same. If the
audit or any audit hereinafter referred to in this Section (collectively a
"Landlord's Audit") discloses an understatement of annual Operating Revenues,
Tenant shall immediately pay Landlord the additional Percentage Rental found to
be due plus interest thereon at the Lease Interest Rate. However, if Landlord's
Audit discloses that Percentage Rental has been overpaid by Tenant, the excess
shall be credited against any future Percentage Rental when next due hereunder.
Tenant shall have the right to be informed as to any interim and/or final
results of any such audit. In addition, if Landlord's Audit discloses any
underpayment of the total payment of Percentage Rental for any Fiscal Year so
audited, which underpayment is in excess of three percent (3 %) of the
Percentage Rental due for such Fiscal Year, Tenant shall, upon demand and
receipt of evidence of payment, pay Landlord as Additional Rental the reasonable
cost of Landlord's Audit; and Landlord shall have the option, at Tenant's
expense, to audit the certified statements and supposing records and data for
the two (2) immediately preceding Fiscal Years, with such audit to be commenced
by Landlord within sixty (60) days after Landlord's receipt of the initial audit
showing an underpayment of Percentage Rental, and to be completed within one
hundred twenty (120) days after receipt of all information requested by Landlord
reasonably related to such audit.
B. Landlord shall keep all information regarding annual Operating
Revenues with respect to the Premises in strict confidence and shall not divulge
such information to third parties except (i) to Landlord's accountants and
attorneys, or (ii) to then existing or prospective purchasers, Mortgagees,
partners, lenders, or trustees of Landlord, or (iii) in connection with any
claim relating to Percentage Rental payable under this Lease, or (iv) as may be
required by
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law, or (v) to the holders of direct and indirect beneficial ownership interests
in Landlord and its Affiliates.
Section 5.04 Subleases, Licenses and Concessions
A. If Tenant should sublease all or substantially all of the Premises,
then notwithstanding any other provision of this Lease to the contrary,
Operating Revenues shall not include any rent or other consideration paid by
such subtenant to Tenant but Operating Revenues shall include all gross receipts
of such subtenant that would be included in Operating Revenues if realized by
Tenant.
B. If Tenant should ever contract with a third party subtenant,
licensee or concessionaire to deliver goods or services to the residents,
clients or customers at the Premises, which goods and services had previously
been provided by Tenant to Tenant's residents, clients or customers at the
Premises, then notwithstanding any other provision of this Lease to the
contrary, the gross receipts of such subtenant(s), licensee(s) and
concessionaire(s) that would be included in Operating Revenues if realized by
Tenant shall be included in Operating Revenues; and in any case in which the
gross receipts of any subtenant, licensee, or concessionaire are included in
Operating Revenues hereunder the rental, license, or concession fees, if any,
paid by such subtenant, licensee, or concessionaire to Tenant shall not be
included in Operating Revenues; provided, however, that the provisions of this
Section 5.04B shall not apply to the gross receipts of any one or more
subtenants, licensees or concessionaires in the event that the gross receipts of
all such subtenants, licensees or concessionaires in the applicable Fiscal Year
do not exceed Fifty Thousand Dollars ($50,000), which $50,000 amount shall be
increased on the fifth (5th) anniversary of the Commencement Date and every
fifth (5th) anniversary thereof by an amount proportionate to the percentage
increase in the GDP Deflator over the preceding five (5) year period.
C. If any subtenant, licensee or concessionaire that delivers goods or
services to Tenant's residents, clients or customers at the Premises is an
Affiliate of Tenant, the gross receipts of such subtenant, licensee or
concessionaire that would be included in Operating Revenues if realized by
Tenant shall be included in Operating Revenues and the rental, license or
concession fees, if any, paid by such subtenant, licensee or concessionaire to
Tenant shall not be included in Operating Revenues.
D. Tenant shall not enter into any sublease, license or concession
agreement or amendment thereto in which the determination of the amount of rent,
license cr concession fee depends in whole or in part on, or is expressed in
whole or in part as, a percentage of the income or profits derived by such
subtenant, licensee or concessionaire or any other person or entity. In any
lease, license or concession agreement or amendment thereto executed by Tenant
in which the amount of rent, license or concession fee is determined in whole or
in part by reference to the gross sales or gross receipts of the subtenant,
licensee or concessionaire or any other person or entity, such sublease, license
or concession agreement shall contain a provision stating that the gross
receipts or gross sales of the subtenant, licensee or concessionaire or any
other person or entity shall not be determined in whole or in part by reference
to the income or profits derived by the subtenant, licensee or concessionaire or
any other person or entity from the Premises or the subject matter or such
lease, license or concession agreement (other than an
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amount based on a fixed percentage or percentages of gross receipts or gross
sales). In the event that Tenant violates the provisions of this paragraph with
respect to any sublease, license or concession agreement, then in addition to
any other rights and remedies that Landlord may have under this Lease or
applicable law, the gross receipts of such subtenant, licensee or concessionaire
under such sublease, license or concession agreement that would be included in
Operating Revenues if realized by Tenant shall be included in Operating Revenues
and the rental, license or concession fee, if any, paid by such subtenant,
licensee or concessionaire shall not be included in Operating Revenues.
Section 5.05 Rental Upon Change of Use
Upon any Change of Use as described in Section 7.02, Tenant's
obligation to pay Percentage Rental pursuant to Section 5.01(ii) shall cease and
in lieu thereof Tenant shall pay Alternative Rental for each Fiscal Year during
the remainder of the Term of this Lease in an amount equal to the average amount
per Fiscal Year of Percentage Rental payable by Tenant for the two (2) full
Fiscal Years immediately preceding the earlier of (i) the commencement of
construction of improvements for such Change of Use, or (ii) the commencement of
such Change of Use; provided, however, that the amount of Alternative Rental
shall be increased on the anniversary of the occurrence of the Change of Use and
each annual anniversary thereafter by an amount proportionate to the percentage
increase in the GDP Deflator over the preceding twelve (12) month period. Such
Alternative Rental will be paid in arrears within forty five (45) days after the
end of each Fiscal Year and will be prorated for any partial Fiscal Years.
Section 5.06 Rental Upon Certain Expansions
A. If Tenant completes any Expansion at the Premises and Tenant is
either then paying, or as the result of said Expansion will be paying,
Alternative Rental pursuant to the provisions of Section 5.05, the provisions of
this Section 5.06 shall not apply.
B. If Tenant completes any Expansion at the Premises that does not
constitute a Change of Use and no such Change of Use has previously occurred
with respect to which (i) the cost of such Expansion exceeds One Million Dollars
($1,000,000), and (ii) such Expansion results, either by itself or aggregated
with any and all prior Expansions, in an increase greater than five percent (5%)
in the capacity (measured either in terms of net useable building square footage
' or the aggregate number of independent living units, assisted living units,
and nursing care rooms) of the buildings on the Premises, then, from the first
day of the first month following the date of completion of such Expansion
throughout the remaining Term of this Lease, Tenant shall pay in lieu of
Percentage Rental the lesser of either (x) Percentage Rental calculated pursuant
to Section 5.01(ii) hereof, or (y) Expansion Rental for each Fiscal Quarter
during the remainder of the Term hereof in an amount equal to the average amount
of Percentage Rental payable by Tenant for the two (2) full Fiscal Years
immediately preceding the commencement of construction of such Expansion;
provided, however, that the amount of Expansion Rental shall be increased on
each anniversary of the date such Expansion Rental first became effective by an
amount proportionate to the percentage increase in the GDP Deflator over the
preceding twelve (12) month period.
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Section 5.07 Special Rental Advance
A. Guarantor shall maintain a long-term debt rating of either (i)
"BBB-" (triple B minus) or greater by Standard & Poor's Corporation or (ii)
"Baa3" or greater by ▇▇▇▇▇'▇ (an "Investment Grade Rating"). If throughout any
period of time during the Term Guarantor fails to maintain an Investment Grade
Rating, Tenant shall pay a Special Rental Advance to Landlord to be held by
Landlord as security against Tenant's obligation to pay Rental hereunder. The
Special Rental Advance shall be in an amount equal to one quarterly payment of
Minimum Rental and shall be paid as follows: thirty (30) days after the date on
which Guarantor's long term debt rating was downgraded as aforesaid, Tenant
shall pay Landlord one-third (1/3) of the Special Rental Advance, thirty (30)
days later Tenant shall pay Landlord an additional one-third (1/3) of the
Special Rental Advance, and thirty (30) days later Tenant shall pay Landlord the
final one-third (1/3) of the Special Rental Advance. Tenant shall continue to
make all Rental payments due under this Lease without regard to the payment of
the Special Rental Advance. If Landlord should apply all or any portion of the
Special Rental Advance to any Rental due from Tenant under this Lease, Tenant,
within two (2) business days after Notice from Landlord, shall replace said
amount. If Guarantor subsequently achieves an Investment Grade Rating, or, on
the last day of the penultimate Fiscal Quarter of the Term of this Lease, Tenant
may then credit the Special Rental Advance against its next due Rental under
this Lease.
B. Throughout the Term, Tenant shall cause Guarantor at all times to
maintain a long-term debt rating of its senior, unsecured debt by either
Standard & Poor's Corporation or ▇▇▇▇▇'▇ (or a successor of each or both of them
acceptable to Landlord) provided that if either or both of such companies (or
any successor(s)) shall not issue such a credit rating notwithstanding Tenant's
best efforts to obtain same, then Tenant shall propose a substitute rating
agency and such substitute rating agency's ratings for purposes of this Section
5.07 and Landlord shall in its reasonable discretion approve or disapprove such
proposed substitute rating agency and its ratings. If Tenant shall fail to
propose such a substitute rating agency, or if Landlord shall disapprove a
substitute rating agency proposed by Tenant, then Landlord, on notice to Tenant
shall have the right to reasonably designate such substitute rating agency and
rating.
END OF ARTICLE 5
ARTICLE 6
OPERATION AND MAINTENANCE OF PREMISES
Section 6.01 Operation and Maintenance of Premises
Throughout the Term, Tenant, at its own expense, shall keep and
maintain the Premises in good condition and repair, reasonable wear and tear
excepted, and in conformity with all Legal Requirements and shall make or cause
to be made all ordinary and extraordinary, foreseen and unforeseen items of
maintenance, repair, replacement and alteration to the Premises as necessary for
such purpose. Landlord shall not be required to maintain, repair, or rebuild all
or any part of the Premises. Tenant shall provide all services required and
perform all
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obligations incurred in connection with the use, operation and maintenance of
the Premises, and Tenant shall be responsible for the payment of all costs and
expenses incurred in the use, operation, or maintenance of the Premises,
including, but not limited to, management fees, real estate taxes, insurance,
supplies and materials used in the operation and maintenance of the Premises,
the cost of all maintenance, janitorial, security and service agreements for the
Premises and the equipment therein and thereon, and the cost of electricity,
water and any and all other utilities supplied to the Premises, but not
including any costs or expenses affirmatively incurred by Landlord that arc not
attributable to a default by Tenant in the performance of Tenant's obligations
under this Lease.
Section 6.02 Taxes
A. Tenant shall pay, prior to delinquency: (i) all taxes, including
sales, excise, value added, use and real estate taxes, assessments, levies,
fees, water and sewer rents and charges, and all other governmental charges,
general and special, ordinary and extraordinary, foreseen and unforeseen, which
are imposed or levied upon or assessed against or which arise with respect to
the Premises, any Rental or other sums payable hereunder, this Lease or the
leasehold estate hereby created or which arise in respect of the operation,
possession or use of the Premises by Tenant or the leasing, operation,
possession or use of the Premises; (ii) all gross receipts, sales, excise or
similar taxes (i.e., taxes based upon gross income which fail to take into
account deductions with respect to the Premises, such as depreciation, interest,
taxes or ordinary and necessary business expenses) imposed or levied upon,
assessed against or measured by any Rental or others payable hereunder; and
(iii) all charges of utilities, communications and other services serving the
Premises.
B. Notwithstanding the foregoing provisions of Section 6.02A but
subject to the provisions of Section 6.02C, Tenant shall not be required to pay
any franchise, estate, inheritance, transfer, income or similar tax assessed or
imposed against Landlord, any Rental or other sums payable hereunder, this
Lease, the Land or Improvements (other than any tax referred to in clause (ii)
of Section 6.02A). Tenant will furnish to Landlord, within ten (10) days after
demand therefor, proof of payment of all items referred to above which are
payable by Tenant.
C. If, at any time, any Federal, state or local governmental entity
shall impose upon the Rental payable to Landlord any tax or other imposition in
lieu of any existing real estate or other tax payable by Tenant as of the
Commencement Date, then notwithstanding the provisions of Section 6.02B, Tenant,
at its sole cost and expense, shall pay such tax or imposition on Landlord's
behalf the same as if such tax or imposition had been levied against Tenant or
Tenant's interest in the Premises as well as any additional income taxes
assessed against Landlord with respect to such payment.
Section 6.03 Compliance with Requirements, Covenants and Restrictions
A. Tenant shall comply with and cause the Premises to comply with all
obligations and liabilities with respect to all Insurance Requirements
(including, without limitation, to the extent necessary to prevent cancellation
thereof and to insure full payment of any claims made under such policies)
required to be maintained by Tenant under this Lease. Tenant shall comply with,
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cause the Premises to comply with, and shall assume all easements, agreements,
covenants, conditions and restrictions applicable to the Premises or the
ownership, operation, use or possession thereof that are of record on the
Commencement Date or are hereafter executed by Tenant or are hereafter consented
to by Tenant in a writing.
B. During the Term, Tenant will not enter into or consent to any
easements, covenants, conditions or restrictions which would affect the Premises
beyond the Term or any termination of this Lease without the prior consent of
Landlord, which consent will not be unreasonably withheld, conditioned, or
delayed.
Section 6.04 Landlord's Right to Perform Tenant Obligations
If Tenant fails promptly to make any repairs, payments or otherwise
take any actions that are Tenant's obligation to make or do under this Lease,
Landlord, at its option, may make or perform same at the expiration of any
applicable Notice and grace period provided for herein (except that in the event
of any emergency presenting immediate danger to person or property, such Notice
and grace period shall only be what is reasonable under the circumstances), and
Tenant shall pay Landlord, upon demand and receipt of evidence of payment, as
Additional Rental, Landlord's actual costs plus interest thereon from the date
of expenditure until paid at the Lease Interest Rate. The provisions of this
Section 6.04 shall be for the sole and exclusive benefit of Landlord. Nothing
contained herein shall be construed so as to require Landlord to exercise any of
its rights under this Section 6.04.
Section 6.05 Compliance with Laws
Subject to the provisions of Section 6.06, Tenant, at its sole expense,
shall comply with and cause the Premises to comply with, and assume all
obligations and liabilities with respect to all laws, orders, ordinances, and
regulations of Federal, state, county, municipal and other authorities having
jurisdiction over the Premises and/or the business or operations conducted
thereon, or the matters which are the subject of this Lease, including but not
limited to any building, zoning or use laws, ordinances, regulations or orders,
Environmental Laws, fire department rules, and health department regulations;
whether such rules, orders, and regulations are presently in effect or hereafter
enacted (whether or not presently contemplated) which would impose any
violation, requirement, order or duty with respect to the Premises, or the use,
ownership, operation or occupation thereof (such laws, orders, ordinances and
regulations being herein referred to as "Legal Requirements").
Section 6.06 Tenant's Right to Contest
Notwithstanding any other provision of this Lease, Tenant shall have
the right to contest (i) the payment of any tax or other imposition, (ii)
compliance with any Legal Requirement or (iii) any lien referred to in Section
6.07 so long as (w) at the time of any such contest, no Event of Default exists,
(x) no such contest shall subject Landlord to the risk of criminal liability,
(y) any such taxes or impositions are paid prior to the assessment of penalties
or interest thereon unless such payment would deprive Tenant of the right to
contest the validity or amount of such taxes or impositions, and (z) Tenant
shall contest, in good faith, the existence, amount or validity thereof, the
amount of the damages caused thereby, or the extent of its or Landlord's
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liability therefor by appropriate proceedings which shall operate during the
pendency thereof to prevent or stay (1) the collection of, or other realization
upon, the matter contested, (2) the sale, forfeiture or loss of any of the
Premises or any portion thereof or any Rental to satisfy or to pay any damages
caused by any of the matters described in clauses (i), (ii), and (iii), (3) any
interference with the use or occupancy of any of the Premises (4) any
interference with the payment of any Rental (5) the cancellation of any
insurance policy and (6) the enforcement or execution of any injunction, order
or Legal Requirement with respect to such matter. Tenant further agrees that any
such contest shall be prosecuted to a final conclusion or settled as
expeditiously as is reasonably possible under the circumstances. Any rebate made
on account of any taxes or other impositions shall be repaid to the party who
made such payment. If and to the extent required by applicable law or
regulation, Landlord shall render to Tenant, at no cost to Landlord, any and all
reasonable assistance in contesting the validity or amount of an), impositions,
including (if requested by Tenant) joining in the signing of any protests or
pleading which Tenant may reasonably deem advisable to file. Tenant shall pay
any and all losses, judgments, decrees and costs in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest and costs thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof. Upon termination of this Lease for any reason other
than an Event of Default, Landlord shall promptly reimburse Tenant for any such
payment made by Tenant for taxes and impositions described in Section 6.02A
attributable to the Premises applicable to any period subsequent to the
termination of the Lease.
Section 6.07 Liens
Tenant shall keep the Premises free from any liens arising from any
work performed, materials furnished, or obligations incurred by or at the
request of Tenant or any subtenant, licensee or concessionaire of Tenant or
arising from any breach by Tenant of its obligations under this Lease, and any
liens with respect to any taxes Tenant is obligated to pay under this Lease or
Legal Requirements. If any lien is filed against the Premises or Tenant's
leasehold interest therein, or if any lien is filed against the Premises which
arises out of any purported act or agreement of Tenant, or any subtenant,
licensee or concessionaire of Tenant, Tenant shall discharge the same within
thirty (30) days after Tenant receives Notice of its filing by payment, filing
of the bond required by law or otherwise. If Tenant fails to discharge such lien
within such period, then, in addition to any other right or remedy of Landlord,
Landlord may, at its election, discharge the lien by paying the amount claimed
to be due, by obtaining the discharge by deposit with a court or a title
company, or by bonding. Tenant shall pay on demand, as Additional Rental, any
amount paid by Landlord for the discharge or satisfaction of any such lien,
together with interest thereon from the date of such expenditure until paid at
the Lease Interest Rate, and all reasonable attorneys' fees and other costs and
expenses of Landlord incurred in defending any such action or in obtaining the
discharge of such lien, together with all necessary disbursements in connection
therewith. Nothing contained in this Lease shall be construed as constituting
the consent or request of Landlord, express or implied, to or for the
performance by any contractor, laborer, materialman, or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Premises or any part
thereof. Notice is hereby given that Landlord will not be liable
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for any labor, services or materials furnished or to be furnished to Tenant, or
to anyone holding an interest in the Premises or any part thereof through or
under Tenant, and that no mechanic's, materialmen's or other liens for any such
labor, services or materials shall attach to or affect the interest of Landlord
in and to the Premises; and appropriate notice to this effect will be included
in the Lease Memorandum and all construction contracts entered into by Tenant.
END OF ARTICLE 6
ARTICLE 7
USE
Section 7.01 Use
Tenant shall have the right to use the Premises for a residential
retirement community, including nursing care, congregate care, and all other
uses reasonably incidental thereto.
Section 7.02 Change of Use
In addition to the uses permitted under Section 7.01, Tenant may
discontinue the uses permitted under Section 7.01 and use the Premises for
office, retail sales, commercial uses and residential purposes other than a
retirement community and for any other lawful business or commercial purpose
permitted under applicable Legal Requirements (a "Change of Use"), provided such
Change of Use is commercially reasonable and does not diminish the value of the
Premises and provided further that such Change of Use occurs prior to the date
that is three (3) years prior to the expiration of the Term of this Lease
(including all Effective Extended Terms). At the request of Tenant, Landlord
shall execute such applications, petitions or other documents that may be
required to be filed with any governmental authority that are reasonably
necessary to seek and obtain such a Change of Use, provided, that Landlord shall
not be required to incur any expense in connection therewith, and provided
further that the execution of any such document shall not expose Landlord to any
personal liability.
END OF ARTICLE 7
ARTICLE 8
INDEMNIFICATION
Section 8.01 General Indemnification by Tenant
A. In addition to the provisions of any indemnity provided elsewhere in
this Lease (other than Section 8.02 hereof), Tenant shall pay, protect,
indemnify, defend, save and hold harmless, Landlord, any Mortgagee, ground
lessor, and any Affiliate, partner, trustee, officer, director, employee, agent
or shareholder of Landlord, or any holder of any beneficial interest in any of
them (the "Indemnified Parties'), from and against all liabilities, obligations,
claims, damages (including punitive damages), penalties and causes of action or
judgments of any nature
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whatsoever, howsoever caused and arising out of events or circumstances causing
personal injury or property damage during the Term (except that this indemnity
shall not cover liabilities or claims arising by reason of the gross negligence
or willful misconduct of an Indemnified Party, or its employees or agents),
without regard to the form of action and whether based on strict or statutory
liability, gross negligence, negligence (including the negligence of any
Indemnified Party) or any other theory of recovery at law or in equity, and all
reasonable and documented costs and expenses (including reasonable attorneys'
fees and legal costs and expenses), imposed upon or incurred by or asserted
against any of the Indemnified Parties by reason of or in connection with:
(a) Any matter pertaining to the leasing, use, non-use,
occupancy, operation, management, condition, design, construction, maintenance,
repair or restoration of any of the Premises or the employment of any persons on
the Premises;
(b) Any casualty in any manner arising from or in connection
with any of the Premises or any operations or activities thereon, whether or not
Landlord has or should have knowledge or notice of any default or condition
causing or contributing to the casualty;
(c) Any violation by Tenant (or any subtenant, concessionaire
or licensee of Tenant) of any provision of this Lease, any contract or agreement
to which Tenant (or any subtenant, concessionaire or licensee of Tenant) is a
party, any violation or alleged violation of any Legal Requirement (including
anti-discrimination laws) or any Insurance Requirement;
(d) Any contest undertaken by or on behalf of Tenant with
respect to any Legal Requirement, Insurance Requirement, tax imposition or
otherwise, regardless of whether the same is permitted pursuant to the terms
hereof; except in each case to the extent the same directly result from the
gross negligence or willful misconduct by an Indemnified Party; and
B. In addition to the provisions of any indemnity provided elsewhere in
this Lease (other than Section 8.02 hereof), Tenant shall pay, protect,
indemnify, defend, save and hold harmless, the Indemnified Parties, from and
against all liabilities, obligations, claims, damages (including punitive
damages), penalties and causes of action or judgments of any nature whatsoever,
howsoever caused, arising out of events or circumstances causing personal injury
or property damage prior to the Commencement Date (except that this indemnity
shall not cover liabilities or claims arising by reason of the gross negligence
or willful misconduct of an Indemnified Party or its employees or agents),
without regard to the form of action and whether based on strict or statutory
liability, gross negligence, negligence (including the negligence of any
Indemnified Party) or any other theory of recovery at law or in equity, and all
reasonable and documented costs and expenses (including reasonable attorneys'
fees and legal costs and expenses), imposed upon or incurred by or asserted
against any of the Indemnified Parties by reason of or in connection with:
(a) Any matter pertaining to the leasing, use, non-use,
occupancy, operation, management, maintenance, or repair (but not to the design,
development or construction) of all or any pan of the Premises, or the
employment of any persons on the Premises;
(b) Any casualty in any manner arising from or in connection
with any operations or activities on the Premises (but not casualties arising
from the structural condition, design, development, or construction of the
Premises), whether or not Landlord has or should have knowledge or notice of any
default or condition causing or contributing to the casualty;
(c) Any violation by Landlord (or any tenant, affiliate,
concessionaire or licensee of Landlord) of any provision of any contract or
agreement pertaining to the retirement community operations of Landlord at the
Premises, any violation or alleged violation of any
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Legal Requirement (including anti-discrimination laws) or any Insurance
Requirement pertaining to the retirement community operations of Landlord at the
Premises;
(d) Any contest undertaken by or on behalf of Landlord with
respect to any, Legal Requirement, Insurance Requirement, tax imposition or
otherwise relating to the Premises, regardless of whether the same is permitted
pursuant to the terms hereof; except in each case to the extent the same
directly result from the gross negligence or willful misconduct by an
Indemnified Party; and
C. Any matter covered by Section 8.02 shall be deemed excluded from
this Section 8.01.
Section 8.02 Environmental Indemnification
Tenant shall pay, protect, indemnify, defend, save and hold harmless
the Indemnified Parties, from and against all liabilities, obligations, claims
(including without limitation, claims by third parties alleging violation of or
liability under any Environmental Law), damages (including punitive damages),
penalties and causes of action or judgments, without regard to the form of
action and whether based on strict or statutory liability, Tenant's gross
negligence, negligence (including the negligence of any Indemnified Party or
their agents but not including liabilities, obligations, claims, damages, causes
of action, or judgments arising out of any gross negligence or willful
misconduct of any Indemnified Party or their agents) any other theory of
recovery at law or in equity, and all reasonable and documented costs and
expenses (including reasonable attorneys' fees, expert's legal costs and
expenses), imposed upon or incurred by, or asserted against any of the
Indemnified Parties by reason of or in connection with:
(a) Tenant's failure to perform its duties and obligations as
set forth in Article 12; and
(b) All claims asserted during or after the Term by any third
party for personal or bodily injury or death where such claims allege injury or
damages as a result of exposure, that occurred during the Term, to Hazardous
Material that existed at or were located in, on, or under the Premises at any
time prior to or during the Term provided, however, that this indemnity shall
not cover claims arising by reason of the gross negligence or willful misconduct
of Landlord and its agents, or an Indemnified Party and their agents.
Section 8.03 Defense of Indemnified Parties
Promptly after receipt by an Indemnified Party of Notice of the
commencement or assertion against it of any claim, action or proceeding, such
Indemnified Party shall, if a claim in respect thereof is to be made against
Tenant under this Article Eight, notify Tenant thereof; but the omission so to
notify Tenant shall not relieve Tenant from any liability which it may have to
such Indemnified Party under this Article Eight except to the extent that Tenant
shall have been prejudiced by such failure. As long as no Event of Default
exists and provided that representation by counsel selected by Tenant will not,
in Indemnified Party's reasonable judgment, prejudice Indemnified Party in any
manner, Tenant, at its sole cost and expense, shall have the right by counsel
reasonably satisfactory to the Indemnified Party, to contest, resist and defend
any claim, action or proceeding with respect to which it shall have received the
Notice described in the preceding sentence; provided, however, that Tenant may
not compromise or otherwise dispose of the same without the prior written
approval of the Indemnified Party, such
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approval not to be unreasonably withheld, conditioned, or delayed so long as the
Indemnified Party receives a full release with respect to the claim, action or
proceeding. If an Event of Default exists, or, in Indemnified Party's judgment,
representation by counsel selected by Tenant will prejudice Indemnified Party in
any manner, such Indemnified Party shall have the right to retain its own
counsel and defend such action. If Tenant shall have assumed responsibility for
such contest and defense, Tenant shall not be obligated to pay any attorneys'
fees or other legal costs incurred by or on behalf of the Indemnified Party
unless an Event of Default exists. Notwithstanding the foregoing, each
Indemnified Party shall, at Tenant's request and expense, cooperate with Tenant,
at no cost or expense to the Indemnified Party, in the defense of any such
claim, action or proceeding.
Section 8.04 Payment by Tenant
Any amounts which become payable by Tenant under this Article Eight
shall be paid as Additional Rental no later than ten (10) days after demand by
the Indemnified Party entitled thereto (which demand shall not be made more than
ten (10) days prior to the proposed date of actual payment by the Indemnified
Party to a third party) and, if such payment is not timely paid, shall bear
interest at the Lease Interest Rate from the date when due to the date of
payment.
Section 8.05 Survival
Tenant's liability under this Article Eight shall survive the
expiration or earlier termination of this Lease. The failure or inability on the
part of Tenant to carry insurance required to be maintained under Article
Thirteen shall not affect in any way its indemnification obligations hereunder.
Section 8.06 Continuing Obligations
The indemnities set forth herein shall in no way affect or impact any
other obligations on the part of Tenant or any of its Affiliates that may exist
under law or under any other agreement in favor of any Indemnified Party.
END OF ARTICLE 8
ARTICLE 9
ALTERATIONS AND EXPANSIONS
Section 9.01 Alterations and Expansions
A. Tenant may at its expense and without Landlord's prior written
consent, make any replacements or alterations to the Premises and may expand the
existing Improvements or construct additional Improvements on the Land (an
"Expansion"), provided, that (i) the fair market value of the Premises shall not
be lessened thereby, and (ii) no structural elements of the Improvements shall
be demolished without obtaining Landlord's prior written consent, which
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consent shall not be unreasonably withheld, conditioned, or delayed, and (iii)
such replacements, alterations and/or Expansions will not adversely affect the
structure or the safety of the Improvements, or adversely affect the electrical,
heating, ventilating, air-conditioning, plumbing or mechanical systems or the
functioning thereof. Landlord has the right to require from Tenant assurances,
reasonably acceptable to Landlord, to be delivered to Landlord prior to the
commencement of any work, that Tenant will fully perform and complete its
Expansion, free and clear of any mechanics' and materialmen's liens. Tenant
shall procure at its own expense such governmental approvals and permits as may
be required for any alterations made by Tenant. At Tenant's expense, Landlord
shall join in submitting Tenant's plans for any necessary governmental approval,
if required by Legal Requirements. All such construction, alterations, and
maintenance work done by, or for, Tenant shall comply with all Legal
Requirements and Insurance Requirements, be completed in a good and workmanlike
manner and with reasonable diligence, and will be completed in all material
respects in accordance with plans prepared by a licensed architect. In the event
any Expansion will cost more than One Million Dollars ($1,000,000), adjusted by
the GDP Deflator, (w) Tenant shall furnish Landlord with the plans and
specifications therefor prior to commencing work, (x) the contractor selected by
Tenant to perform the work shall be subject to Landlord's approval, which
approval shall not be unreasonably withheld, conditioned, or delayed, (y) Tenant
shall carry builder's risk insurance in amounts reasonably sufficient to cover
the cost of replacement of the work during the course of such construction, and
(z) upon the request of Landlord or any Mortgagee, provide appropriate
securities, completion bonds, or like reasonable assurances that construction
will be completed. Tenant shall also furnish Landlord with copies of any and all
final plans and specifications (including all changes and modifications thereto)
and all necessary governmental permits prepared or issued for all alterations
(whether or not Landlord's consent was required in connection with such
alterations).
B. All replacements, alterations, substitutions and Expansions made to
the Premises (but not the FF&E, Fixed Asset Supplies, or Inventories) pursuant
to this Article 9 shall be and remain part of the realty and the property of
Landlord and shall be subject to this lease.
Section 9.02 Alterations and Expansions During, Last Five Years of Term
Landlord's prior written consent, which may be withheld in Landlord's
sole, absolute, and subjective discretion, shall be required for any
replacements, alterations or Expansions of or to the Premises to be constructed
during the last five (5) years of the Term (including any Effective Extended
Term), provided however, if Tenant shall then exercise its rights under Section
3.02 to extend the Term hereof so that at least ten (10) years will remain in
the Term once the construction is completed, then the provisions of Section
9.01A shall apply.
Section 9.03 Recovery of Mandated Expenditures
A. Mandated Expenditures shall be amortized by Tenant in equal monthly
installments in accordance with generally accepted accounting principles
consistently applied, but in no event shall any category of Mandated
Expenditures be amortized for longer than fifteen (15) years. If, as of any date
that would otherwise be a date of expiration or termination of the Term of this
Lease, there exists an unamortized balance of Mandated Expenditures, Tenant
shall have the right, exercisable by giving Landlord Notice to such effect at
least ninety (90) days
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prior to the end of the then current term, but not the obligation, to extend the
Term as hereinafter provided and receive a credit against Minimum Rental as
herein provided. If Tenant exercises its right to extend the Term under this
Section 9.03A, Tenant shall have no further right to extend the Term of the
Lease pursuant to any of the provisions of Article 3.
B. The length of any extension of the Lease Term pursuant to this
Section 9.03, shall be determined as follows: the unamortized balance of
Mandated Expenditures shall be divided by a number equal to forty percent (40%)
of the annual Minimum Rental; the result shall be rounded to the next whole
number; and, the Term shall be extended by a number of years equal to said whole
number.
C. During any such extended Term, Tenant shall receive a credit against
Minimum Rental equal to 50% of such Minimum Rental until such time as the
aggregate amount of such rent credit equals the unamortized balance of Mandated
Expenditures plus interest thereon at the Lease Interest Rate.
D. Landlord shall have the right, but not the obligation, of avoiding
any extension of the Term pursuant to this Section 9.03, by paying to Tenant,
within thirty (30) days after Tenant's Notice pursuant to Section 9.03A, an
amount equal to the unamortized balance of Mandated Expenditures.
E. The provisions of this Section 9.03 shall not apply in the case of
any termination of this Lease due to the default of Tenant.
F. Within six (6) months after the close of each Fiscal Year, Tenant
shall deliver to Landlord a written statement of (i) the amount of Mandated
Expenditures incurred by Tenant during such Fiscal Year with sufficient
information to establish that such expenditure qualifies as a Mandated
Expenditure, (ii) the amortization period that will be applicable to each such
Mandated Expenditures and (iii) the unamortized balance of all Mandated
Expenditures as of the last day of such Fiscal Year that has been incurred
during the Term. No expenditure shall be treated as a Mandated Expenditure
unless included within the annual statement referred to in the preceding
sentence.
END OF ARTICLE 9
ARTICLE 10
FF&E, FIXED ASSET SUPPLIES AND INVENTORIES
Section 10.01 FF&E Upon Commencement Date
On the Commencement Date, Landlord shall make available to Tenant all
of the FF&E, Fixed Asset Supplies, and Inventories indicated on the schedules
attached hereto as Exhibit C located at the Premises and to be used and consumed
at the Premises during the Term at no further cost to Tenant. Landlord shall
have no further obligations to provide any additional FF&E, Fixed Asset Supplies
or Inventories. Thereafter during the Term, Tenant shall, at its
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own cost, replace FF&E, Fixed Asset Supplies, and Inventories as it deems
necessary and all such replacement FF&,E, Fixed Asset Supplies and Inventories
shall be and remain the property of Tenant. Any net proceeds realized by Tenant
from the sale or other disposition of any FF&E owned by Landlord and identified
in Exhibit C shall be paid promptly by Tenant to Landlord.
Section 10.02 FF&E Upon Termination
A. Landlord shall have the option, to be exercised by sending Notice to
Tenant on or before the date that is either (i) six (6) months prior to the date
of expiration of the Term of this Lease or (ii) the date of expiration or
termination of the Term of this Lease, if this Lease terminates prior to the
expiration of the Term, to purchase from Tenant upon the date of termination of
this Lease any or all of the items of FF&E, Fixed Asset Supplies, and
Inventories then located at the Premises at their then fair market value. If the
parties are unable to agree upon such fair market value within thirty (30) days
following such expiration or termination, the parties shall appoint an
independent appraiser mutually agreeable to them to determine such fair market
value, which determination shall be net of the cost to Tenant to remove such
items from the Premises, and which shall be binding on the parties. The costs of
such appraiser shall be shared equally by the parties. If Landlord exercises its
option to purchase, Landlord shall have the right to use, after the date of
expiration or termination of this Lease, the items of FF&E, Fixed Asset Supplies
and Inventories so elected to be purchased by Landlord and Landlord shall pay
such fair market value to Tenant within thirty (30) days after agreement by the
parties or determination by the appraiser; and this provision shall survive such
expiration or termination. Landlord shall not have the option of purchasing from
Tenant any computer software that is proprietary to Tenant, any Affiliate, or
the licensor of any of them (including without limitation applications used by
Tenant as part of Tenant's accounting, centralized or local sales, business
management systems and otherwise), or any leased equipment.
B. Subject to the provisions of Section 10.02A, Tenant shall remove, at
Tenant's expense, all of its FF&E, Fixed Asset Supplies, and Inventories from
the Premises on or before the date of expiration or termination of this Lease
and repair any damage caused to the Premises by such removal. If Tenant fails to
remove such items by such date and/or fails to repair such damage, Landlord
shall have the right to do so and charge Tenant the cost therefor together with
interest thereon from the date of such expenditure until paid at the Lease
Interest Rate. The provisions of this Section 10.02 shall survive the expiration
or termination of this Lease.
Section 10.03 Landlord's Security Interest in Tenant's FF&E, Fixed
Asset Supplies and Inventories
As security for payment by Tenant of the Rentals payable hereunder and
the performance of all of Tenant's obligations under this Lease, Tenant hereby
grants to Landlord a security interest under the Uniform Commercial Code of the
jurisdiction in which the Premises are situated in all FF&E, Fixed Asset
Supplies and Inventories now or hereafter owned by Tenant and now or hereafter
ordinarily used on or in the Premises. Tenant shall execute and deliver to
Landlord such Uniform Commercial Code financing statements and continuation
statements as Landlord determines to be necessary from time to time to perfect
and continue the perfection of Landlord's security interest in such collateral.
Tenant shall have the right to replace any such
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collateral, to remove any such collateral from the Premises and dispose of any
such collateral, in the ordinary course of Tenant's business.
END OF ARTICLE 10
ARTICLE 11
TRADEMARKS, TRADE NAMES AND SERVICE MARKS
Section 11.01 Trademarks, Trade Names and Service Marks
A. During the Term, the Premises may be known as a Marriott Retirement
Community, or such other name as Tenant may from time to time designate with
additional identification utilizing one or more trademarks and/or trade names of
Tenant as may be necessary to provide local identification. All Tenant's
trademarks, service marks, trade names, logos, symbols and designs shall in all
events remain the exclusive property of Tenant and its Affiliates, and nothing
contained herein shall confer on Landlord the right to use such names,
trademarks, service marks, trade names, logos, symbols or designs other than in
strict accordance with the terms of this Lease. Except as provided in Section
11.01B, upon the expiration or termination of this Lease, any use of or right to
use said names, trademarks, service marks, trade names, logos, symbols or
designs by Landlord shall cease forthwith and Tenant shall (at Tenant's sole
cost and expense) promptly remove from the Premises any signs or similar items
which contain any of Tenant's names, trademarks, trade names, service marks,
logos, symbols or designs, provided however, that Tenant shall be responsible
for the cost of any resulting repairs that may be necessary as a result of such
removal. Included under the terms of this Section are all trademarks, service
marks, trade names, symbols, logos or designs used in conjunction with the
Premises, including but not limited to restaurant times, lounge names, etc.,
whether or not the marks contain the "Marriott" name. The right to use such
trademarks, service marks, trade names, symbols, logos or designs belongs
exclusively to Tenant, and the use thereof inures to the benefit of Tenant
whether or not the same are registered and regardless of the source of the same.
B. Landlord covenants that any items of FF&E, Inventories or Fixed
Asset Supplies which are purchased by Landlord upon the expiration or
termination of this Lease, and which are marked with the Tenant's name or any
Tenant trademark, trade name, logo, symbol or design, shall be used exclusively
in connection with the Premises until they are consumed.
C. Any computer software (including upgrades and replacements) at the
Premises owned by Tenant, an Affiliate, or the licensor of any of them is
proprietary to Tenant, such Affiliate, or the licensor of any of them and shall
in all events remain the exclusive property of Tenant, the Affiliate, or the
licensor of any of them, as the case may be, and nothing contained in this Lease
shall confer on Landlord the right to use any of such software. Upon expiration
or termination of this Lease, Tenant shall have the right to remove from the
Premises without compensation to Landlord any computer software (including
upgrades and replacements) owned by Tenant, any Affiliate, or the licensor of
any of them. Notwithstanding anything contained in this Section 11.01C to the
contrary, any computer software directly relating to the operation
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and maintenance of the Improvements and their various systems shall be and
remain the property of Landlord through the term hereof and upon any expiration
or termination of this Lease.
D. Notwithstanding any provision of Section 11.01 to the contrary, the
parties acknowledge and agree that the trade name(s), trademark(s), service
▇▇▇▇(s), logo(s), symbol(s) or design(s) shown on Exhibit D associated with the
Premises, are proprietary to, and the property of, Landlord and upon expiration
or termination of this Lease Tenant shall not, thereafter, make any further use
thereof.
E. Tenant and/or its Affiliates and Landlord and/or its Affiliates
shall each be entitled, in case of any breach of the covenants of Article 11 by
Landlord or Tenant or others claiming through Landlord or Tenant, to injunctive
relief and to any other night or remedy available at law. The provisions of
Article 11 shall survive expiration or termination of this Lease.
F. Nothing contained herein shall diminish or abrogate the rights of
Landlord, its subsidiaries and Affiliates to use the trademarks of Tenant and
its subsidiaries and Affiliates granted under that certain Assignment & License
Agreement of even date herewith between Host Marriott Corporation and Marriott
International, Inc. Nothing contained herein shall be construed so as to require
Landlord, after the expiration or termination of this Lease, to remove any trade
names, trademarks, logos, symbols, service marks or designs which are integral
to the Improvements, including without limitation marked wallpaper, marked
plumbing and electrical fixtures, floors, carpets and distinctive color schemes.
END OF ARTICLE 11
ARTICLE 12
ENVIRONMENTAL HAZARDS
Section 12.01 Compliance with Environmental Law
A. During the Term, Tenant at its cost shall cause the Premises to be
in compliance with all Environmental Laws, whether or not such noncompliance is
the result of a breach of Tenant's obligations under Section 12.01B or 12.0IC.
B. Tenant shall never during the Term permit to be discharged at,
released at, or otherwise disposed of Hazardous Materials in, on or under the
Premises other than in insignificant concentrations or amounts that do not
impose a significant risk of any clean up, removal, monitoring or,
responsibility under any applicable Environmental Laws and do not impose a
significant risk of harm to guests, invitees, or employees of the Premises. In
the event that with or without Tenant's knowledge or permission there is any
discharge at, release at or disposal of Hazardous Materials in, on or under the
Premises during the Term other than in insignificant concentrations or amounts
that do not impose a significant risk of any clean up, removal, monitoring or
responsibility under any applicable Environmental Law and do not impose a
materially significant risk of harm to guests, invitees or employees of the
Premises,
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Tenant shall, subject to the provisions of this Article 12, diligently
clean up and remove such Hazardous Materials.
C. During the Term and for a period of five (5) year commencing after
the expiration of the Term, if any Hazardous Materials are discovered in, on or
under the Premises and result from, are introduced by, or arise out of, or the
damage from which is materially expanded as a result of Tenant's acts, its
negligence, or the acts or negligence of its employees or agents, or the acts or
negligence of any subtenants, licensees, concessionaires, contractors or
entities acting on behalf of Tenant or any of their employees or agents, the
cost incurred in complying with Environmental Laws with respect to such
Hazardous Materials shall be borne by Tenant. Tenant's obligation under this
subparagraph C shall continue after expiration of the Term until no further
compliance is required with respect to such Hazardous Materials.
D. If during the Term any Hazardous Materials are discovered in, on or
under the Premises and are the result of migration from a source other than the
Premises and are not a result of Tenant's acts, its negligence, or the acts or
negligence of its employees or agents, or the acts or negligence of any
subtenants, licensees, concessionaires, contractors or entities acting on behalf
of Tenant or any of their employees or agents, the cost incurred in complying
with Environmental Laws for such Hazardous Materials shall be borne by Tenant
until the expiration of the Term. After the expiration of the Term, Tenant shall
have no further liability to Landlord for complying with Environmental Laws for
such Hazardous Materials and Landlord shall indemnify Tenant for any liability
associated with the compliance of Environmental Laws with respect to such
Hazardous Materials.
E. In the event Tenant is required to implement a plan to investigate,
monitor, ▇▇▇▇▇ or remove Hazardous Materials pursuant to the requirements of any
Environmental Law, Tenant shall notify Landlord of its planned method, time and
procedure for such implementation and Landlord shall have the right to require
reasonable changes in such method, time or procedure. Nothing contained herein
shall be deemed to vest any control whatsoever in Landlord with respect to
Tenant's use, management, or disposal of Hazardous Materials on the Premises.
F. During the Term, Landlord may not enter into any agreement,
settlement or consent order with any third party or governmental entity
concerning the payment or possible payment of funds, or the investigation,
monitoring, abatement or removal of Hazardous Materials located in, on, or near
the Premises without the written consent of Tenant which consent shall not be
unreasonably withheld, conditioned or delayed. If Landlord fails to obtain
Tenant's written consent prior to entering into any such agreement, settlement
or consent order, any terms, conditions, obligations or liabilities contained
therein shall be non-binding on Tenant, Tenant shall have no responsibility to
Landlord under this Article 12, and Landlord shall indemnify Tenant for any
costs or losses incurred by Tenant as a result of such agreement, settlement or
consent order.
G. During the Term, Tenant may not enter into any agreement, settlement
or consent order with any third party or governmental entity concerning the
payment or possible payment of funds, or the investigation, monitoring,
abatement or removal of Hazardous Materials located in, on, or near the Premises
without the written consent of Landlord if such agreement, settlement or consent
order will impose any financial obligations on Tenant or Landlord, which
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are to be paid in whole or in part, after the expiration of the Term. Landlord's
consent shall not be unreasonably withheld, conditioned or delayed. Failure by
Tenant to obtain the Landlord's written consent shall be an Event of Default.
H. During the Term, Tenant may elect to defend any imposition, order,
demand, decree, lawsuit or governmental action that seeks to impose liability on
Tenant or Landlord due to the existence of Hazardous Materials in, on, or near
the Premises. If Tenant elects to take such action, Tenant shall not be deemed
to be in violation of any provision of this Article 12 so long as such action or
contest by Tenant does not result in a risk of the imposition of any criminal
sanctions against Landlord or any of its directors, officers or employees,
provided however, if Landlord or Tenant is ultimately held liable for the costs
associated with the existence of such Hazardous Materials, Tenant's liability
shall not be reduced by reason of any delay in such remediation.
Section 12.02 Environmental Assessments
A. If Landlord has reasonable cause to believe that an Environmental
Violation may exist on the Premises, or if Landlord desires to sell or finance
the Premises, or if any Mortgagee desires to sell or participate its interest in
the Premises, or if requested by the Senior Mortgagee, or if an Event of Default
exists, or if there is less than one (1) year remaining prior to the expiration
of the Term, then, upon written direction by Landlord to Tenant, Tenant shall
engage such persons as Tenant shall select ("Site Reviewers"), such selection
subject to the reasonable approval of Landlord, to visit the Premises and
perform, as agents of Tenant, such environmental site investigations and
assessments ("Site Assessments") as may be necessary to determine whether there
exists on the Premises any Environmental Violation, and, if any Environmental
Violation exists, to estimate the cost of remediating any such Environmental
Violation; provided, however, if an Event of Default exists or if there is less
than one year remaining prior to the expiration of the Term, Tenant shall select
the Site Reviewer from a list of no less than five (5) nationally recognized
Site Reviewers, such list to be provided by Landlord, and Landlord shall have
the right to approve the Site Reviewer, such approval to be exercised in a
reasonable manner recognizing Landlord's significant interest in the adequacy of
the report and the scope of work to be performed by such Site Reviewer. Landlord
shall have the right to approve any guidance or instruction requested by such
Site Reviewer during the Site Assessment, and Landlord shall have the right to
confirm that any draft or final reports furnished by such Site Reviewers conform
to approved scope of work, guidance and instructions. if Tenant fails or refuses
to engage Site Reviewers within thirty (30) days after such direction, Landlord
may engage the Site Reviewers. If an Event of Default or a material
Environmental Violation exists that was caused by Tenant, its employees or
agents, or by any Subtenant, licensee, concessionaire, contractor or entity
acting on behalf of Tenant, or any of their employees or agents, the cost of any
Site Assessment shall be paid by Tenant. In all other cases, the costs of an
Environmental Assessment shall be paid by Landlord (or Landlord shall cause such
costs to be paid by any Mortgagee requesting such Environmental Assessment) and
Tenant may demand adequate assurances that such costs will be paid before
engaging the Site Reviewers. Such Site Assessments may, at the option of
Landlord, include both above and below the ground testing and such other tests
as may be necessary, in the reasonable opinion of the Site Reviewers, to verify
the existence of an Environmental Violation or to estimate the cost of
remediating any such Environmental Violation. Tenant shall supply to the Site
Reviewers
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such historical and operational information regarding the Premises as may be
reasonably requested by the Site Reviewers to facilitate the Site Assessments,
and shall make available for meetings with the Site Reviewers appropriate
personnel having knowledge of such matters. The Site Reviewers shall include in
their report a statement estimating the cost of any remediation, monitoring and
other compliance program, if any, necessary to cure or remediate such
Environmental Violation. All of the Site Reviewers' work shall be made available
to Landlord and Tenant.
B. If Tenant fails diligently to pursue any of its obligations under
this Section 12.02 and such failure continues for a period of thirty (30) days
after Notice from Landlord, Landlord shall have the right (but no obligation),
in addition to any other rights or remedies it may have pursuant to this Lease
or under applicable law, to take any and all reasonable actions as Landlord
shall deem necessary or advisable in order to effect such compliance, for and on
behalf of Tenant and at the cost and expense of Tenant, including to enter the
Premises for the purpose of making tests, obtaining samples and surveys and
performing any other acts as may be reasonably necessary or desirable in the
reasonable discretion of Landlord, and reimbursement to Landlord of the cost
thereof shall be due and payable by Tenant as Additional Rental on demand with
interest thereon at the Lease Interest Rate from the date such cost is incurred.
C. If, during the Term, an Environmental Violation occurs or is found
to exist at the Premises which shall impose a liability to Tenant after the
expiration of the Term pursuant to this Article 12, and in the judgment of the
Site Reviewers, remediation, monitoring or other compliance program relating to
any such Environmental Violation has not or will not be completed as required by
any applicable Environmental Laws by the expiration or earlier termination of
the Term, then Tenant shall provide to Landlord, no later than thirty (30) days
prior to the expiration or earlier termination of the Term, a bond, letter of
credit or other security reasonably satisfactory to Landlord for 110% of the
amount determined by the Site Reviewers to be necessary to complete such
remediation, monitoring or other compliance program. If an Environmental
Violation occurs because of the existence of Hazardous Material in, on or under
the Premises in excess of any reportable quantity established under any
Environmental Law, and Tenant makes all notifications and undertakes and
diligently prosecutes to completion all regulatory, remedial or other actions
which are required by any applicable Environmental Law by any federal, state or
local governmental agency having jurisdiction over such affected Premises, then
Tenant shall not be in default under this Lease so long as Tenant diligently
pursues any and all such actions toward completion, and any action or non-action
by Tenant does not result in a risk of the imposition of any criminal sanctions
against Landlord or any of its directors, officers or employees.
END OF ARTICLE 12
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ARTICLE 13
INSURANCE
Section 13.01 Property & Business Interruption Insurance
Tenant shall, at its own expense, commencing with the Commencement Date
and continuing throughout the Term, procure and maintain with insurance
companies of recognized responsibility (with a rating of no less than A-VII by
A.M. Best, except that such rating shall not be applicable to those insurers
providing flood and earthquake insurance under this Section) property insurance
with the following minimum coverages:
(i) insurance on the Premises (including contents) against
loss or damage by fire, lightning and all other risks covered by the
usual standard extended coverage endorsement, and with coverage in the
amount of not less than one hundred percent (100%) of the replacement
cost thereof, exclusive of footings and foundations;
(ii) insurance against loss or damage from explosion of
boilers, pressure vessels, pressure pipes and sprinklers installed in
the Premises;
(iii) business interruption insurance covering loss of profits
and necessary continuing expenses (including Rentals payable under this
Lease) for interruptions caused by any occurrences covered by the
insurance referred to in subparagraphs (i) and (ii) of this Section
13.01, for a period of at least eighteen (18) months and of a type and
in amounts generally carried by prudent owners of similar properties;
(iv) flood insurance in an amount not less than the maximum
limit available under the National Flood Insurance Program (but only if
the Premises are located in a zone identified by the Federal Emergency
Management Agency as a flood hazard area);
(v) earthquake insurance and, if the Premises are not located
in a zone identified by the Federal Emergency Management Agency as a
flood hazard area, flood insurance (but only to the extent such
insurance is then carried by prudent owners of similar properties); and
(vi) such other property risk insurance, as may from time to
time be generally carried by prudent owners of similar properties, in
such amounts and against such risks as are then customary for property
similar in use to the Premises.
Section 13.02 Application of Proceeds
A. All proceeds of any insurance payable on account of any casualty
other than proceeds attributable to Tenant's personal property and other than
the proceeds of insurance referred to in Section 13.01(iii) shall be paid to the
Insurance Trustee who shall hold said proceeds in trust for the parties in
accordance with the provisions of this Section 13.02; provided, however, that in
the event that the aggregate amount of such proceeds with respect to any such
casualty is less than Two Hundred Fifty Thousand Dollars ($250,000), such
proceeds shall be paid to Tenant who shall use such proceeds for the purpose of
restoration of the Premises. Insurance proceeds attributable to Tenant's
personal property shall be paid directly to Tenant and shall not be considered
when making calculations pursuant to the preceding sentence. The proceeds of the
insurance referred to in Section 13.01(iii) shall be paid to Tenant except that
any such proceeds attributable to the Rentals payable under this Lease shall
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be paid to Landlord (as a credit against such Rentals) to the extent that such
Rentals have not been previously paid by Tenant to Landlord.
B. Provided that no default hereunder has occurred and is continuing,
and provided that Tenant complies with all of the terms and conditions of this
Section 13.02, all insurance proceeds received with respect to a casualty shall
be applied to the restoration of the Premises.
C. Tenant shall commence the restoration of the Premises not later than
the date which is one hundred eighty (180) days after the date upon which the
casualty occurred and thereafter prosecute the restoration with diligence and
continuity.
D. In the case of any casualty, prior to commencing any restoration
work that will cost more than Five Hundred Thousand Dollars ($500,000) to
repair, as adjusted by the GDP Deflator, Tenant, at its sole cost shall (i)
obtain the services of a licensed architect to prepare any required plans and
specifications for such restoration to the extent that such restoration work
cannot be performed based upon previously existing plans and specifications for
the Improvements; and (ii) submit a set of final plans and specifications to
Landlord and the Senior Mortgagee for approval to the extent that such
restoration work involves a departure from or addition to previously existing
plans and specifications for the Premises (which approval may not be
unreasonably withheld, conditioned, or delayed); and further, with respect to
any casualty that will cost more than One Million Dollars to repair, (iii) the
contractor selected by Tenant to perform the work shall be subject to Landlord's
approval, which approval shall not be unreasonably withheld, conditioned or
delayed, and (iv) Tenant shall carry builder's risk insurance in amounts
reasonably sufficient to cover the cost of replacement of the work during the
course of such construction.
E. In proceeding with such restoration work, Tenant shall first expend
an amount, if any, equal to the excess of the projected cost of the restoration
work over the amount of all insurance proceeds paid to the Insurance Trustee.
Thereafter, Tenant shall be entitled to submit to the Insurance Trustee, not
more frequently than once every thirty (30) days, an invoice together with such
other documentation (including mechanics lien waivers and title insurance policy
endorsements obtained at Tenant's sole cost and expense) as is customarily
required by lenders at such time making construction loans. Upon receipt of an
invoice in proper form, the Insurance Trustee shall make a disbursement within
ten (10) business days equal to ninety percent (90%) of the amount shown on the
invoice, provided, however, that upon final completion of the restoration work,
the Insurance Trustee shall disburse the final amount due Tenant, but only if it
has received any of the following: (a) final mechanics lien waivers from all
parties having rights to mechanics liens against the Premises on account of such
restoration work, (b) appropriate endorsements or policies of title insurance
protecting Landlord and Mortgagee against mechanics liens arising out of the
restoration work, or (c) a mechanic's ▇▇▇▇ ▇▇▇▇. In the event that the amount
disbursed upon final completion of the restoration work in accordance with the
previous sentence shall be less than the total insurance proceeds then held by
the Insurance Trustee, such excess shall be paid to Tenant.
F. In the event that Tenant shall fail to prosecute the restoration
work with diligence and continuity until completion, regardless of whether an
Event of Default has occurred, Landlord shall have the right to use any proceeds
held by Insurance Trustee to complete such renovation work. Tenant shall be
liable for any sums incurred by Landlord to complete such
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restoration work in excess of the amount held and disbursed by the Insurance
Trustee.
G. In the event that an Event of Default has occurred, Tenant shall not
have access to any insurance proceeds unless and until Tenant shall have cured
such Event of Default, and until such time, Tenant shall use its own funds to
prosecute the restoration work.
H. Upon the expiration or termination of the Term of this Lease, all
insurance proceeds received by the Insurance Trustee or Tenant and not applied
to the costs of restoration shall be paid to Landlord except as otherwise
provided in Article 21.
Section 13.03 Waiver of Rights of Subrogation
Landlord and Tenant hereby waive their rights of recovery against each
other, their respective officers, directors, agents and employees for loss or
damage to the Premises and any resultant business interruption to the extent
covered by the insurance maintained under Section 13.01. Should any such
policies of insurance require an endorsement to effect such a waiver, the Tenant
shall cause them to be so endorsed.
Section 13.04 Operational Insurance
Tenant shall, at its own expense, commencing with the Commencement Date
and continuing throughout the Term, procure and maintain operational insurance
with reputable insurance companies of recognized responsibility; provided,
however, that, with respect to the first One Million Dollars ($1,000,000) of
coverage required by this Section such coverage shall be obtained from insurance
companies authorized to do business in the United States with a rating of no
less than A-VII by A.M. Best. All other coverage shall be obtained from one or
more insurance companies with an A.M. Best rating of no less than B+V with
respect to domestic insurance companies or of at least comparable standing if a
foreign-based insurer. Operational insurance required herein shall have the
following minimum coverage:
(i) comprehensive or commercial general liability insurance
against claims for death, bodily injury, or property damage occurring
on, in or about the Premises, and automobile liability insurance on
vehicles operated in conjunction with the Premises with a combined
single limit of not less than One Hundred Million Dollars
($100,000,000) per occurrence.
(ii) such other insurance as Tenant in its reasonable judgment
deems advisable for protection against claims, liabilities and losses
arising out of or connected with its operation of the Premises.
Section 13.05 Blanket and Self-Insurance
All insurance described in Sections 13.01 and 13.0.4 may be obtained by
Tenant by endorsement or equivalent means under its blanket insurance policies,
provided that such blanket policies fulfill the requirements specified herein.
With respect to the insurance described in Section 13.04 the deductible or
self-insured retention limits shall not exceed Two Hundred Fifty Thousand
Dollars ($250,000) (to be increased on the fifth (5th) anniversary of the
Commencement Date and every subsequent fifth (5th) anniversary thereof, by an
amount proportionate to the percentage increase in the GDP Deflator over the
preceding five (5) year
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period) or such lesser amount as is then applicable to a majority of the other
properties covered under Tenant's company wide insurance program. As to all
insurance described in Section 13.01, deductible limits or self-insured
retentions shall not exceed Fifty Thousand Dollars ($50,000) (to be increased on
the fifth (5th) anniversary of the Commencement Date and every subsequent fifth
(5th) anniversary thereof, by an amount proportionate to the percentage increase
in the GDP Deflator over the preceding five (5) year period) or, with respect to
"high hazard classification" (as such term is customarily understood in the
insurance industry), such other amount as may then be required by responsible
insurance companies for similar properties and risks.
Section 13.06 Costs of Insurance
Insurance premiums and any costs or expenses with aspect to the
insurance described in this Article 13 shall be borne' by Tenant. Any losses,
costs, damages or expenses which fall within the deductible limits or are
included within an allowed self-insurance program pursuant to Section 13.05
above shall be borne by Tenant. If Tenant shall fail to pay any premium for any
such insurance, or if an Event of Default with respect to any of the provisions
of this Article 13 shall occur, Landlord may pay such premium or procure the
insurance coverages required by this Article 13 and all amounts paid by Landlord
in accordance herewith shall become Additional Rent which is due and payable
within five (5) Business Days after such expenditures are made.
Section 13.07 Defense of Claims after Termination
With respect to any claim relating to an accident or other occurrence
within a given Year for which Tenant is obligated to indemnify Landlord under
Article 8 which is not finally resolved either through litigation or settlement
prior to the expiration or termination of this Lease, Tenant shall be obligated
to continue to defend such accrued claims regardless of such expiration or
termination.
Section 13.08 Coverage and Certificates
All insurance policies provided for under Section 13.01 or Section
13.04 above shall be carried in the name of Tenant, with Landlord and any
Mortgagee on the Premises as additional insureds, and with loss payable, in the
case of any policies procured under Section 13.01, in accordance with the
provisions of Section 13.02. Tenant shall deliver to Landlord certificates of
insurance with respect to all policies so procured under Section 13.01 or
Section 13.04, including existing, additional and renewal policy certificates
and, in the case of insurance about to expire, shall deliver certificates of
insurance with respect to the renewal policies prior to the respective dates of
expiration. All insurance policies provided for under Section 13.01 or Section
13.04 above shall, to the extent obtainable, have attached thereto an
endorsement that such policy shall not be cancelled or materially changed
without at least thirty (30) days' prior written Notice to Landlord, Tenant, and
the holder of any Mortgage. Upon request by Landlord or any Mortgagee, the
requesting party or its representatives shall be entitled to examine at Tenant's
corporate headquarters all insurance policies maintained by Tenant with respect
to the Premises.
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Section 13.09 Alternative Insurance Coverage
Notwithstanding any other provisions of this Lease to the contrary, if
at any time during the Term hereof Tenant is not able to obtain any one or more
of the insurance coverages required pursuant to this Article 13 because the
subject insurance coverage(s) are not then reasonably available in the insurance
marketplace, then, Tenant's failure to so obtain such insurance coverage(s)
shall not constitute an Event of Default so long as Tenant does obtain coverage
as similar to that required under this Lease as is reasonably available. For
purposes of this Section 13.09 the term "reasonably available" means that type
of coverage then obtainable from reputable insurance companies for properties
similar to the Premises and purchased by prudent owners of businesses similar to
that operated by Tenant at the Premises.
END OF ARTICLE 13
ARTICLE 14
DAMAGE BY FIRE OR OTHER CASUALTY
Section 14.01 Damage by Fire or Other Casualty
Subject to the provisions of Section 14.06, if during the Term the
Premises shall be damaged or destroyed by fire, or any other casualty or cause
whatsoever, Tenant shall forthwith proceed to repair and/or rebuild the same,
free of all liens, claims and encumbrances, to the same general design and
specification as existed immediately before such damage or destruction occurred,
subject to such delays as may be reasonably attributable to governmental
restrictions or failure to obtain materials or labor, or other causes (other
than financial), whether similar or dissimilar beyond the control of Tenant.
Materials used in repair shall be as nearly like or superior in quality to
original materials as may then be reasonably procured in regular channels of
supply. All proceeds of insurance carried on the Premises pursuant to Article 13
hereof, payable as a result of such damage or destruction, shall be used for the
purpose of such repair or rebuilding in accordance with the provisions of
Article 13, and, if such insurance proceeds are not so made available by the
Insurance Trustee or Landlord in accordance with the provisions of Article 13
and such failure shall continue for a period of 90 days after Notice of such
failure is delivered by Tenant to Landlord, Tenant's obligation to repair and
rebuild hereunder shall be suspended until such time as such insurance proceeds
are so made available. If such insurance proceeds are not so made available
within one (1) year thereafter, Tenant, at its option may terminate this Lease
upon ninety (90) days prior Notice to Landlord. Upon any such termination,
Landlord shall have all rights to any insurance proceeds. In the event Tenant is
not required to repair or rebuild by the terms or conditions of this Lease, all
such insurance proceeds (whether paid to the Insurance Trustee or Tenant) shall
be paid to Landlord. If Tenant is required to, and does repair or rebuild, any
excess insurance proceeds shall be paid to Tenant.
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Section 14.02 Partial Damage by Fire or Other Casualty
In the event of any partial damage or destruction, Tenant shall
continue to occupy and use the Premises to the extent that it may be practicable
to do so, and Tenant shall proceed to repair and/or rebuild the Premises in the
manner and at the time described in Sections 13.02 and 14.01.
Section 14.03 Damage Occurring After the 10th Anniversary of
Commencement Date
A. In the event of a Major Casualty occurring after the tenth (10th)
anniversary of the Commencement Date, Tenant shall have the right to terminate
this Lease by so notifying Landlord not later than the date which is sixty (60)
days after the occurrence of such Major Casualty. If Tenant elects to exercise
the right described in the preceding sentence, it shall, simultaneously with its
delivery of its Notice of termination, deliver to Landlord its irrevocable offer
to purchase the Premises for an amount equal to the Lease Purchase Price.
B. Landlord may accept or reject Tenant's irrevocable offer to purchase
the Premises by sending Tenant a Notice of rejection or acceptance within thirty
(30) days from the date upon which Landlord received Tenant's Notice of
termination. If Landlord fails to send Tenant a Notice of rejection or
acceptance within thirty (30) days of its receipt of Tenant's irrevocable offer
to purchase the Premises, Landlord shall be deemed to have accepted such offer.
If Landlord accepts or is deemed to have accepted Tenant's offer to purchase,
the Lease shall terminate and closing of such purchase shall occur in accordance
with the provisions of Article 21. Upon such termination, Tenant shall pay to
Landlord all Rental due through such date of termination. Landlord shall convey
the Premises to Tenant in accordance with the provisions of Section 21.01.
C. If Landlord rejects Tenant's irrevocable offer to purchase pursuant
to Section 14.03A, this Lease shall terminate on a Minimum Rental payment date
specified by Tenant in its Notice of termination which occurs not earlier than
ninety (90) days nor later than one hundred twenty (120) days after Landlord's
receipt of Tenant's irrevocable offer to purchase, provided that this Lease
shall not terminate unless and until Tenant shall have paid all sums due
hereunder (including, without limitation, all taxes and insurance premiums) as
of the actual date of termination. Upon such termination, Tenant shall vacate
the Premises in accordance with the provisions of Section 3.04.
Section 14.04 No Abatement of Rent Due to Casualty
No damages, compensation, or claim shall be payable by Landlord for
inconvenience, loss of business, or annoyance arising from any repair or
restoration of any portion of the Premises or the Improvements. If this Lease is
not terminated as a result of a casualty pursuant to Section 14.03, all proceeds
of insurance carried pursuant to Section 13.01(iii) shall be paid to Tenant
(except as otherwise provided in Section 13.02). There shall be no abatement of
Rentals following any casualty and during any period of repair or reconstruction
contemplated in this Article 14.
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Section 14.05 Early Termination
In the event of the termination of this Lease pursuant to the
provisions of Sections 14.03 or 15.04 of this Lease, the Term and the estate
hereby granted shall expire as of the date of such termination in the same
manner and with the same effect as if it were the date set for the normal
expiration of the Term, and Rental shall be apportioned as of the date of
termination.
Section 14.06 Uninsurable Loss
A. If there is a casualty at or to the Premises with respect to which
all or a portion of such loss is an "uninsurable loss", then Tenants obligations
under this Lease to repair and/or rebuild the Premises shall be limited to only
such casualties where the cost of repair and/or rebuilding (in addition to any
available insurance proceeds and exclusive of all applicable deductible limits
and self-insured retentions) will not exceed forty percent (40%) of the fair
market value of the Premises immediately prior to the casualty. In all other
circumstances, Tenant shall have the right, but not the obligation, to terminate
this Lease upon ninety (90) days Notice to Landlord and, upon such termination,
Tenant shall have no further obligations to pay any Rentals or otherwise under
this Lease.
B. All costs incurred by Tenant in repairing and/or replacing the
Premises in the event of an "uninsurable loss" shall constitute Mandated
Expenditures.
C. As used in this Section 14.06, the term "uninsurable loss" shall
mean any casualty for which insurance coverage was not then obtainable from
reputable insurance companies for properties similar to the Premises and being
purchased by prudent owners of businesses similar to that operated by Tenant at
the Premises. In no event shall the phrase "uninsurable loss" mean a loss which
is uninsurable because such loss was caused by the intentional, willful or
grossly negligent acts of Tenant, its agents, employees or contractors.
D. Upon receipt of any Notice from Tenant of a proposed termination of
this Lease pursuant to the provisions of Section 14.0.4A above, Landlord shall
have the right, but not any obligation, to avoid such termination by paying to
Tenant a sum equal to the amount by which the costs (in addition to any
available insurance proceeds and exclusive of all applicable deductible limits
and self-insured retention) to repair and/or rebuild the Premises in the event
of an uninsurable loss that exceeds forty percent (40%) of the fair market value
of the Premises immediately prior to the casualty. Such right in Landlord shall
be exercised by Landlord giving Notice to such effect to Tenant within ten (10)
days following Landlord's receipt of Tenant's Notice of Termination, and by
Landlord paying the requisite sum to the Insurance Trustee within thirty (30)
days thereafter, to be disbursed by the Insurance Trustee in accordance with the
provisions of Section 13.02.
END OF ARTICLE 14
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ARTICLE 15
CONDEMNATION
Section 15.01 Notice of Condemnation and Assignment of Rights
A. The party receiving any Notice of the kinds specified below shall
promptly give the other party Notice of the receipt, contents and date of the
Notice received:
(i) Notice of intended condemnation;
(ii) Service of any legal process relating to condemnation of
any portion of the Premises or Improvements;
(iii) Notice in connection with any proceedings or
negotiations with respect to such a condemnation; or
(iv) Notice of intent or willingness to make or negotiate a
private purchase, sale, or transfer in lieu of condemnation.
B. Subject to the rights of each party as set forth in this Article 15,
each party hereby irrevocably assigns to Insurance Trustee any award or payment
to which they may be or become entitled by reason of any taking of the Premises
or any part thereof, in or by condemnation or other eminent domain proceedings
pursuant to any law, general or special. Insurance Trustee shall distribute all
such condemnation proceeds to the benefit of Landlord and/or Tenant in
accordance with the provisions of this Article 15. Each party shall be entitled
to participate at its own expense in any such proceedings.
Section 15.02 Tenant's Right to Pursue a Claim
Notwithstanding anything herein to the contrary, Tenant shall have the
right to pursue a claim with and retain any award from the condemning authority
or entity for damage to or loss of Tenant's leasehold estate in the Premises as
well as for any other separate damages that Tenant may suffer, provided,
however, that such award or payment to Tenant is completely separate from and
shall in no manner reduce the award or payment to Landlord for the value of the
Premises unencumbered by the Lease. If the foregoing contingency is not met, any
Tenant's award or payment shall be deemed assigned to the Insurance Trustee
pursuant to Section 15.01.
Section 15.03 Temporary Taking
A. In the event that the use of the Premises or any part thereof is
taken in condemnation by any governmental authority under the power of eminent
domain for a period of time, whether definite or indefinite (but less than the
acquisition of a fee simple interest in perpetuity), or whether less than, equal
to or greater than the unexpired portion of the Term of this Lease, this Lease
shall nevertheless continue in full force and effect and Tenant shall have the
right (except as hereinafter provided) to receive the entire award ("Use Award")
attributable to the unexpired portion of the Term of this Lease (including any
Effective Extended Term), and Landlord shall have the right to receive the
entire award ("Landlord's Temporary Taking Award") attributable to the period
after the expiration of the Term of this Lease (including any Effective Extended
Term), and no claim or demand of any kind shall be made by Tenant against
Landlord by reason
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of such taking, no claim for abatement of Minimum Rental or Percentage Rental
and other amounts which may become due under this Lease shall be made by reason
of such taking and the rights and liabilities of the parties hereto shall be the
same as if there had been no such taking.
B. The Use Award, in such amount as may be eventually determined, shall
be paid to and held in trust by the Insurance Trustee and shall be administered
as hereinafter set forth. There shall first be deducted therefrom and paid out
all legal and other expenses, reasonable in amount, which were incurred in
obtaining such Use Award, except that Landlord shall pay that portion of such
expenses (but not to exceed the amount of Landlord's Temporary Taking Award)
that Landlord's Temporary Taking Award bears to the sum of Landlord's Temporary
Taking Award and the Use Award. The Use Award shall be administered as follows:
(i) If any such Use Award shall be in the form of rent
recoverable for such taking and shall be payable in quarterly (or more
frequent) installments, the Insurance Trustee shall pay to Landlord
quarterly such installments of the Use Award on account of and to the
extent of Tenant's obligations to pay Minimum Rental and Percentage
Rental under this lease; any balance remaining from each such quarterly
(or more frequent) installment shall be paid by the Insurance Trustee
to Tenant. The entire amount of such quarterly (or more frequent)
installments of the Use Award received by the Insurance Trustee
(whether paid to Landlord or Tenant) shall be included in the cash
receipts of Tenant during the quarter when received by the Insurance
Trustee for purposes of determining Operating Revenues.
(ii) If any such Use Award is made in a lump sum or in the
form of rent recoverable for such taking and is payable in installments
less frequently than quarterly, the lump sum or other installment shall
be divided by the number of calendar quarters included in the period
for which such award has been paid, and the Insurance Trustee shall pay
to Landlord such quotient quarterly on account of and to the extent of
Tenant's obligation to pay Minimum Rental and Percentage Rental under
this Lease; any balance remaining from each such quarterly quotient
shall be paid by the Insurance Trustee to Tenant. The entire amount of
such quarterly installments of the Use Award received by the Insurance
Trustee (whether paid to Landlord or Tenant) shall be included in the
cash receipts of Tenant during the quarter in which such quarterly
quotient is distributed by the Insurance Trustee to Landlord and Tenant
for purposes of determining Operating Revenues.
(iii) If any such Use Award shall be made for the cost of
repairs and restoration following termination of such temporary taking,
then the Insurance Trustee shall apply the same to Tenant's obligation
hereunder to repair and restore as herein provided.
C. Any Use Award deposited with the Insurance Trustee shall be invested
by the Insurance Trustee in an interest-bearing account, with interest to be
added to the amount of the Use Award and distributed as pan of the Use Award in
accordance with the provisions of this Section 15.03. All such interest shall be
included in Operating Revenues for the month in which such interest is
distributed by the Insurance Trustee.
Section 15.04 Total Taking
If, during the Term, all or substantially all of the Premises shall be
taken in or by condemnation or other eminent domain proceedings pursuant to any
law, general or special, then this Lease shall terminate on the date such taking
becomes effective. Tenant shall pay all Rental
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and all other sums due hereunder (including, without limitation, all taxes and
insurance premiums) through such date. All condemnation proceeds shall belong to
and be paid to Landlord, except that to the extent such proceeds exceed the
Leasehold Purchase Price as of such termination date, such excess shall first be
payable to Tenant up to an amount equal to any unamortized Mandated
Expenditures, with any remaining portion of such excess being payable to
Landlord.
Section 15.05 Substantial Taking
A. In the event of a Substantial Taking, Tenant shall have the right to
terminate this Lease by so notifying Landlord not later than the date which is
sixty (60) days after the occurrence of such Substantial Taking. If Tenant
elects to exercise the right described in the preceding sentence, it shall,
simultaneously with its delivery of its Notice of termination, deliver to
Landlord its irrevocable offer to purchase the Premises for an amount equal to
the Lease Purchase Price.
B. Landlord may reject or accept Tenant's irrevocable offer to purchase
the Premise by sending Tenant a Notice of such rejection or acceptance within
thirty (30) days from the date upon which Landlord received Tenant's Notice of
termination. If Landlord fails to send Tenant a Notice of rejection or
acceptance within thirty (30) days of its receipt of Tenant's irrevocable offer
to Purchase the Premises, Landlord shall be deemed to have accepted such offer.
If Landlord accepts or is deemed to have accepted Tenant's offer to purchase,
the Lease shall terminate on a Minimum Rental payment date specified by Tenant
in its Notice of termination which occurs not earlier than ninety (90) days nor
later than one hundred twenty (120) days after Landlord's receipt of Tenant's
irrevocable offer to purchase. Upon such termination, Tenant shall pay Landlord
all Rental due through such date and Landlord and the Insurance Trustee shall
assign all their right, title and interest in condemnation proceeds payable and
shall deliver any condemnation proceeds previously paid to, and then held by,
the Insurance Trustee with respect to such Substantial Taking to Tenant and
Landlord shall convey the Premises to Tenant in accordance with the provisions
of Section 21.01.
C. If Landlord rejects Tenant's irrevocable offer to purchase pursuant
to Section 15.05A, this Lease shall terminate on a Minimum Rental payment date
specified by Tenant in its Notice of termination which occurs not earlier than
ninety (90) days nor later than one hundred twenty (120) days after Landlord's
receipt of Tenant's irrevocable offer to purchase, provided that this Lease
shall not terminate unless and until Tenant shall have paid all sums due
hereunder (including, without limitation, all taxes and insurance premium) as of
the actual date of termination. Upon such termination, all condemnation proceeds
shall be delivered to Landlord and Tenant shall vacate the Premises in
accordance with the provisions of Section 3.04.
Section 15.06 Partial Taking
A. In the event of a Substantial Taking pursuant to which this Lease is
not terminated pursuant to the provisions of Section 15.05, then, in the event
of any condemnation of less than all to substantially all of the Premises,
Tenant shall be obligated to restore the Premises not taken by the governmental
authority to a condition as good as or better than the condition which
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prevailed thereon and therein prior to such condemnation as is practicable under
the circumstances; provided, however, that Tenant shall not be obligated to
expend any sums in excess of the condemnation proceeds. In the event of an
Insubstantial Taking, the Tenant shall not be obligated to replace any
landscaping or facilities taken by the governmental authority but shall only be
obligated to repair any damage to the Premises not taken by the governmental
authority. Materials used in repair and restoration shall be as nearly like or
superior in quality to the original materials as may then be reasonably procured
in regular channels of supply, and construction shall be completed in a
workmanlike manner free of all liens and encumbrances. All condemnation proceeds
payable on account of such condemnation other than proceeds attributable to
Tenant's personal property shall be paid to the Insurance Trustee who shall hold
said proceeds in trust for the parties in accordance with the provisions of this
Section 15.06.
B. Tenant shall commence the restoration of the Premises as soon as
practicable not later than the date which is one hundred eighty (180) days after
the date upon which the condemnation occurred and thereafter prosecute the
restoration with diligence and continuity.
C. Prior to commencing any restoration! work, Tenant, at its sole cost
shall (i) obtain the services of a licensed architect to prepare any required
plans and specifications for such restoration; and (ii) submit a set of final
plans and specifications to Landlord and the Senior Mortgagee for approval
(which approval may not be unreasonably withheld, conditioned or delayed), and
further, with any restoration that will cost more than One Million Dollars
($1,000,000), (iii) the contractor selected by Tenant to perform the work shall
be subject to Landlord's approval, which approval shall not be unreasonably
withheld, conditioned, or delayed, or (iv) Tenant shall carry builder's risk
insurance in amounts reasonably sufficient to cover the cost of replacement of
the work during the course of such construction.
D. In proceeding with such restoration work, Tenant shall first expend
an amount, if any, equal to the excess of the projected cost of the restoration
work over the amount of all condemnation proceeds. Thereafter, Tenant shall be
entitled to submit to the Insurance Trustee, not more frequently than once every
thirty (30) days, an invoice together with such other documentation (including
mechanics lien waivers and title insurance policy endorsements obtained at
Tenant's sole cost and expense) as is customarily required by lenders at such
time making construction loans. Upon receipt of an invoice in proper form, the
Insurance Trustee shall make a disbursement equal to ninety percent (90%) of the
amount shown on the invoice, provided, however, that upon final completion of
the restoration work, the Insurance Trustee shall disburse to Tenant the final
ten percent (10%) due that has been so retained, but only if it has received
either final mechanics lien waivers from all parties having rights to mechanics
liens against the Premises on account of such restoration work or appropriate
endorsements or policies of title insurance protecting Landlord and Mortgagee
against mechanics liens arising out of the restoration work. In the event that
the amount disbursed in accordance with the previous sentence shall be less than
the total condemnation proceeds, such excess shall be distributed to Landlord
and Tenant as hereinafter provided in Section 15.06F and Section 15.06G.
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E. Any award attributable to personal property owned by Tenant that is
not attributable to FF&E shall be paid to Tenant. Any award attributable to FF&E
shall be paid to Tenant and applied by Tenant for the purpose of replacing such
FF&E in the event and to the extent that the Premises remaining after such
condemnation requires such replacement FF&E to be fully operational.
F. In the event of a condemnation that is an Insubstantial Taking, the
condemnation proceeds remaining after application thereof to the cost of the
restoration work shall be paid to Landlord and Tenant in the following
proportions: Landlord shall receive that portion of said remaining proceeds
equal to a fraction whose numerator is the number of years in the Term of this
Lease (including all Effective Extended Terms as of the date Tenant receives
notice of such condemnation) that have elapsed as of the effective date of such
condemnation and whose denominator is the number of years in the Term of this
Lease (including all Effective Extended Terms as of the date Tenant receives
notice of such condemnation) and Tenant shall receive the balance of such
remaining proceeds. Thus, for examples if such condemnation occurred on the last
day of the 21st year of the Term and the only Effective Extended Term was the
First Extended Term, Landlord would receive 21/25th of such remaining
condemnation proceeds and Tenant would receive 4/25th of such remaining
condemnation proceeds.
G. In the event of a condemnation that is a Substantial Taking and in
the event that this lease is not terminated pursuant to Section 15.05, the
condemnation proceeds remaining after application thereof to the cost of the
restoration work shall be allocated between Landlord and Tenant in proportion to
the value of their respective interests in the Premises; provided, however, that
in no event shall Landlord receive a portion of such remarketing proceeds that
is less than the Leasehold Purchase Price multiplied by the Partial Condemnation
Reduction Percentage.
H. In the event of a condemnation that is an Insubstantial Taking,
there shall be no reduction in or abatement of the Minimum Rental or Percentage
Rental thereafter payable by Tenant. In the event of a condemnation that is a
Substantial Taking and in the event that this Lease is not terminated pursuant
to Section 15.05, there shall be a reduction in the Minimum Rental payable by
Tenant effective as of the date of the Substantial Taking in an amount equal to
nine percent (9%) of the lesser of (i) the portion of the condemnation award so
distributed to Landlord or (ii) eleven and one tenths (11.1) multiplied by the
annual Minimum Rental multiplied by the Partial Condemnation Reduction
Percentage and there shall be a reduction in the Alternative Rental or Expansion
Rental (if then applicable) in an amount equal to the Alternative Rental or
Expansion Rental payable immediately prior to such condemnation multiplied by
the Partial Condemnation Reduction Percentage.
I. In the event that Tenant shall fail to prosecute the restoration
work with diligence and continuity until completion, regardless of whether an
Event of Default has occurred, Landlord shall have the right to use any proceeds
held by Insurance Trustee to complete such restoration work. Tenant shall be
liable for any sums incurred by Landlord to complete such restoration work in
excess of the amount held and disbursed by the Insurance Trustee.
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J. In the event that an Event of Default has occurred Tenant shall not
have access to any condemnation proceeds unless and until Tenant shall have
cured such Event of Default, and until such time, Tenant shall use its own funds
to prosecute the restoration work.
END OF ARTICLE 15
ARTICLE 16
ASSIGNMENT, SALE AND SUBLETTING
Section 16.01 Sale or Assignment by Landlord
Landlord shall have the right to assign or transfer its interest in
this Lease in connection with a Sale of the Premises subject to this Lease which
shall remain in fall force and effect, provided Tenant's ability to obtain and
maintain the licenses and permits necessary for the operation of its retirement
and health care facilities is not materially and adversely affected by any
proposed sale or assignment of Landlord's interest in the Premises. Furthermore,
Landlord shall have the right to assign or transfer without restriction its
interest in this Lease as collateral security with respect to any financing
secured by an interest in the Premises. Upon any Sale of the Premises, Landlord
shall assign this Lease to the purchaser and, concurrently with the finalization
thereof, the purchaser shall, by an appropriate written instrument, assume
(subject to the provisions of Section 24.21) all of Landlord's obligations
hereunder. Any attempted sale or assignment in violation of the provisions of
this Section 16.01 shall be void and without effect. Within thirty (30) days
after Landlord sends Notice to Tenant advising Tenant of the name, identity and
address of any proposed assignee or transferee and requesting a determination as
to whether the proposed assignment or transfer would violate the requirements of
the first sentence of this Section 16.01, Tenant shall advise Landlord by Notice
to Landlord whether or not such proposed assignment or transfer would violate
such requirements and, if so, setting forth in reasonable detail the basis for
such violation (which Notice shall be binding upon Tenant), and if Tenant fails
to send such Notice to Landlord prior to the expiration of such thirty (30) day
period, such assignment or transfer shall be deemed to comply with the
requirements of the first sentence of this Section 16.01.
Section 16.02 Assignment by Tenant
Tenant shall have the right to transfer or assign its interest in this
Lease without Landlord's consent provided that (w) the transferee or assignee is
a corporation organized under the laws of any state in the United States and in
good standing and authorized to do business in the state in which the Premises
is located, (x) such transferee or assignee assumes this Lease by an appropriate
writing, (y) Tenant shall continue to remain liable under all of the provisions
of this Lease, and (z) the Guaranty of Tenant's performance hereunder shall not
be terminated or altered by any such assignment.
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Section 16.03 Tenant's Right to Sublease
Tenant may sublease space or grant concessions or licenses at the
Premises so long as the terms of any such subleases, concessions or licenses do
not exceed the Term and shall expire upon any termination of this Lease.
END OF ARTICLE 16
ARTICLE 17
HOLDING OVER
Section 17.01 Holdover
Should Tenant continue to hold the Premises after the termination of
this lease, whether the termination occurs by lapse of time or otherwise, such
holding over, unless otherwise agreed to by Landlord in writing, shall
constitute and be construed as a tenancy at sufferance at a daily Rental equal
to 1/91st of an amount equal to two hundred percent (200%) of the quarterly
Minimum Rental last in effect and subject to all of the other obligations
imposed on Tenant hereunder, but the foregoing shall not constitute a consent by
Landlord to such holding over and shall not prevent Landlord from exercising any
of its remedies under this Lease or applicable law by reason of such holding
over.
END OF ARTICLE 17
ARTICLE 18
ESTOPPEL CERTIFICATES
Section 18.01 Estoppel Certificates
Tenant agrees to furnish periodically, within ten (10) days after
written request therefor by Landlord; or any actual or prospective Mortgagee
covering the Premises, or any interest of Landlord therein or any actual or
prospective purchaser of Landlord's interest, a certificate signed by Tenant
(which may require a true and correct copy of this Lease and any and all
amendments hereto to be attached) certifying (to the extent same is true) that
this Lease is in full force and effect and unmodified; that the Term has
commenced and the full Rental is then accruing hereunder; that, subject to the
provisions of Section 5.07, no Rental under this Lease has been paid more than
ninety (90) days in advance of its due date; that the address for Notices to be
sent to Tenant is as set forth in this Lease (or has been changed by Notice duly
given and is as set forth in the certificate); that Tenant has no knowledge of
any default by Landlord then existing under this Lease; and such other matters
as may be reasonably requested by Landlord or any Mortgagee, prospective
Mortgagee or prospective purchaser. If Tenant is unable to so certify as to one
or more of the foregoing items, Tenant shall specify its reason therefor in
writing. Any such certificate may be relied upon by any prospective purchaser,
ground lessor, Mortgagee, or any beneficiary under any deed of trust on the
Improvements or the Land or any
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part thereof. Landlord agrees to furnish periodically, within ten (10) days
after written request therefor by Tenant, a certificate signed by Landlord
containing substantially the same information as described above.
END OF ARTICLE 18
ARTICLE 19
LANDLORD FINANCING
Section 19.01 Right to Finance
Landlord shall have the right, at any time, and from time to time, to
subject its interest in the Premises to one or more Mortgages without Tenant's
consent.
Section 19.02 Priority
A. Landlord agrees that this Lease and any extensions, renewals,
replacements or modifications thereto and all right and interest of Tenant in
and to the Premises shall be superior to any and all Mortgages now or hereafter
granted by Landlord.
B. As more particularly described herein, Tenant has no right to
cancel, rescind or terminate this Lease except as expressly provided in the
particular provisions specified herein. Without limiting the foregoing or the
effect of Tenant's waivers set forth herein, or any other provisions herein that
negates Tenant's right to cancel, terminate or rescind this lease or any of its
obligations hereunder, if any circumstances nevertheless as a matter of law or
otherwise would give Tenant the right, immediately or after lapse of a period of
time, to cancel, rescind or terminate this Lease, or to claim a partial or total
eviction, Tenant shall not exercise such right (a) until it has given written
notice of such circumstance to the Senior Mortgagee and (b) until a reasonable
period for remedying such circumstance shall have elapsed following such written
notice by Tenant to the Senior Mortgagee (which reasonable period, if required
by the Senior Mortgagee, shall in no event be less than the greater of (i) the
period to which Landlord would be entitled (under this Lease or otherwise),
after similar notice, to effect such remedy, plus ninety (90) days, and (ii) the
period of time needed by the Senior Mortgagee to obtain possession of the
Premises by foreclosure or otherwise), plus ninety (90) days, provided that the
Senior Mortgagee shall be entitled to the additional time period referred to in
the preceding clause (i) only if the Senior Mortgagee shall with due diligence
(a) give Tenant notice of intention to remedy such circumstance and (b) commence
and continue to remedy such circumstances to the extent it is reasonably able to
do so without possession or seek possession, directly or through a receiver, and
upon obtaining possession of the Premises, commence and continue to remedy such
circumstance.
C. If at any time there shall occur a foreclosure action with respect
to the interest of Landlord under this Lease, or a deed in lieu of foreclosure,
or any similar action or proceeding, then (i) this Lease shall not terminate,
and (ii) Tenant shall attorn to and recognize the purchaser at such foreclosure
sale (whether such person is the Mortgagee or another person or entity) or
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the grantee of a deed in lieu of foreclosure as Tenant's landlord under this
Lease, except that neither such purchaser or grantee, nor anyone claiming by,
through or under any such person or grantee, shall be:
(x) liable for any action or omission of Landlord (or its
predecessors in interest);
(y) subject to any offsets or defenses which Tenant may have
against Landlord (or its predecessors in interest); or
(z) bound by any payment of Rental, other than the Special
Rental Advance if any, which Tenant might have made to landlord (or its
predecessors in interest) for more than one Fiscal Quarter in advance of the
date the same was due under this Lease; but the foregoing shall not relieve any
such purchaser or grantee, or anyone claiming by, through or under any such
purchaser or grantee from performing all obligations of Landlord under this
Lease after it acquires title to the Premises.
Section 19.03 Mortgage Amendments
If at any time, any prospective Mortgagee requests any change or
modification to this Lease as a condition of granting a Mortgage to Landlord,
Tenant shall consent to such change or modification provided that (i) Landlord
bears the cost of preparing all documentation required to effect such change or
modification; (ii) such change or modification does not materially and adversely
increase Tenant's cost of operating the Premises or performing its obligations
under this Lease; and (iii) such change does not materially and adversely affect
Tenant's rights hereunder. Examples of modifications to which Tenant shall
consent include, without limitation, obligations to give copies of notices and
other documents to Mortgagees where Tenant has previously agreed to give same to
Landlord, to obtain a Mortgagee's consent or approval where Tenant has
previously agreed to obtain Landlord's consent or approval, to allow a Mortgagee
to act for Landlord in the event that Landlord fails to exercise a right granted
to Landlord hereunder, and provisions which govern the relationship between
Landlord and Mortgagee.
END OF ARTICLE 19
ARTICLE 20
DEFAULT BY TENANT
Section 20.01 Events of Default
The occurrence of any one or more of the following events shall
constitute an Event of Default by Tenant under this Lease:
A. Tenant shall fail to pay any Rental or other sums payable by Tenant
hereunder as and when such Rental or other sums become due and payable and such
failure shall continue for more than five (5) Business Days after Notice;
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B. Tenant shall fail to perform or observe any covenant or obligation
hereunder (other than the financial obligations referred to in subparagraph A
above) and such failure shall continue for more than thirty (30) days after
Notice; or, if such failure cannot be cured with reasonable diligence within
such thirty (30) day period, if Tenant does not commence to correct same within
said thirty (30) day period and thereafter prosecute the correction of same with
reasonable diligence and continuity to completion;
C. Any petition is filed by or against Tenant or Guarantor under any
section or chapter of the present or any future Federal Bankruptcy Code or under
any similar law or statute of the United States or any state thereof (which, in
the case of an involuntary proceeding, is not permanently discharged, dismissed,
stayed, or vacated, as the case may be, within ninety (90) days of its filing),
or if any order for relief shall be entered against Tenant in proceedings filed
under any section or chapter of the present or any future Federal Bankruptcy
Code or under any similar law or statute of the United States or any state
thereof;
D. A receiver, trustee or liquidator of Tenant or Guarantor or of all
or substantially all of the assets of Tenant or Guarantor shall be appointed.
E. An Event of Default shall have occurred under any lease that is a
Related Landlord Lease as of the date of such Event of Default thereunder. IN
THIS REGARD, IT IS SPECIFICALLY UNDERSTOOD AND AGREED THAT THE PRECEDING
SENTENCE IS A MATERIAL PART OF THE CONSIDERATION DUE LANDLORD FROM TENANT WITH
RESPECT TO THIS LEASE AND THAT LANDLORD WOULD NOT HAVE ENTERED INTO THIS LEASE
WITH TENANT WITHOUT INCLUSION IN THIS LEASE OF THE PRECEDING SENTENCE.
F. A third party lender to either Guarantor or Tenant accelerates any
indebtedness of Guarantor or Tenant, the amount of which then equals or exceeds
Fifty Million Dollars ($50,000,000), and Guarantor or Tenant fails to fully
satisfy such accelerated indebtedness within five (5) business days next
following the date such indebtedness was accelerated.
Section 20.02 Landlord's Rights Upon an Event of Default
A. If an Event of Default occurs, then, subject to the provisions of
Section 20.02B and C, Landlord may commence doing any one or more of the
following provided that such commencement is prior to the date that Tenant or
Guarantor cures such default:
(1) Terminate this Lease upon ten (10) days Notice to Tenant,
in which event Tenant shall immediately surrender the Premises to Landlord and
Tenant shall be liable to Landlord for all Surviving Obligations and to the
extent provided in Section 17.01 and to the extent hereinafter provided in this
Section 20.02A. If Tenant fails to do so, Landlord may, without Notice and
without prejudice to any other remedy Landlord may have, enter upon and take
possession of the Premises and expel or remove Tenant and its effects without
being liable to prosecution or any claim for damages therefor. Tenant shall
indemnify Landlord for all loss and damage which Landlord may suffer by reason
of such Termination, whether through inability to relet the Premises or
otherwise, including any loss of Rental for the remainder of the Term. In
connection with Landlord's exercise of the remedy described in this
Subparagraph, Landlord shall have the right to seize and take possession of all
of Tenant's FF&E located
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on the Premises and either use same in connection with operating the property or
dispose of same as Landlord sees fit to do. To the greatest extent permitted by
law, Tenant hereby fully, formally and forever waives any and all protections
provided by applicable law against Landlord's right of distraint.
(2) Enter upon and take possession of the Premises as Tenant's
agent, with the right but not the obligation of terminating this Lease and
without being liable to prosecution or any claim for damages therefor, and
Landlord may relet the Premises either in its own name or as Tenant's agent and
in either event receive the rent therefor, in any of which events Tenant shall
pay to Landlord on demand (i) any and all costs of re-leasing, renovating,
repairing, and altering the Premises (including but not limited to advertising
costs, commissions, finders fees, legal fees and other costs) for a new tenant
or tenants, and (ii) any deficiency that may arise by reason of such reletting
from the net income from the Premises that Landlord would have received if there
had not been a default by Tenant. In addition, to the extent the Premises are
not relet, Tenant shall continue to be obligated to satisfy all of its
obligations under this Lease. In connection with Landlord's exercise of the
remedy described in this Subparagraph, Landlord shall have the right to seize
and take possession of all of Tenant's FF&E located on the Premises and either
use same in connection with operating the property or dispose of same as
Landlord sees fit to do. To the greatest extent permitted by law, Tenant hereby
fully, finally and forever waives any and all protections provided by applicable
law against Landlord's right of distraint.
(3) Do whatever Tenant is obligated to do under this Lease and
enter the Premises without being liable to prosecution or any claim for damages
therefor to accomplish this purpose. Tenant shall reimburse Landlord, as
Additional Rental, immediately upon demand for any expenses which Landlord
incurs in thus effecting compliance with this Lease on Tenant's behalf, together
with interest thereon from the date of such expenditure until paid at the Lease
Interest Rate.
(4) Bring a summary proceeding/action for ejectment in order
to recover possession of the Premises.
(5) Landlord hereby reserves the right to institute successive
legal actions to collect any damages payable to Landlord hereunder, it being
intended that a suit for damages shall not bar any subsequent suit for damages
that have subsequently accrued.
(6) Accelerate the Minimum Rentals due under this Lease. The
discount rate to be used in computing the amount of Minimum Rental due hereunder
shall be equal to the effective annual yield prevailing on the date the Event of
Default occurred with respect to United States treasury obligations having a
maturity date that is the same or nearest to the date on which this Lease would
have expired if no Event of Default occurred.
B. If an Event of Default has occurred under Section 20.01A, or if an
Event of Default has occurred under Section 20.01E that consists of the failure
of Tenant to pay any Rental or other sums payable to the Landlord under a
Related Landlord Lease as and when such Rental or other sums become due and
payable, Landlord, prior and as a condition precedent to exercising any rights
pursuant to Subsections 20.02(A)(1), (2), (4) or (6) above, shall give Guarantor
Notice of the Event of Default and afford Guarantor a period of five (5)
Business Days after Guarantor receives Notice pursuant to this Section 20.02B
within which to cure such Event of Default. If Guarantor cures such Event of
Default, Landlord shall have no further rights under this Section 20.02 with
respect to the particular Event of Default in question.
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C. If an Event of Default has occurred under Section 20.01B, or under
Section 20.01B of any Related Landlord Lease Landlord, prior and as a condition
precedent to exercising any rights pursuant to Subsections 20.02A(l), (2), (4)
or (6) above, shall give Guarantor notice of such Event of Default and Guarantor
shall have thirty (30) days within which either to cure such Event of Default;
or, if such Event of Default cannot be cured with reasonable diligence within
such thirty (30) day period, to commence to correct same within said thirty (30)
day period and thereafter prosecute the correction of same with reasonable
diligence and continuity to completion. If and so long as Guarantor commences
and continues to take action to cure such Event of Default as required pursuant
to the preceding sentence and cures such Event of Default, Landlord shall have
no further rights under this Section 20.02 with respect to the particular Event
of Default in question.
D. If an Event of Default has occurred under Section 20.01A, or if an
Event of Default has occurred under Section 20.01E that consists of the failure
of Tenant to pay any Rental or other sums payable to the Landlord under a
Related Landlord Lease as and when such Rental or other sums become due and
payable, then, notwithstanding anything in applicable law, to the contrary,
Landlord shall have no obligation whatsoever to mitigate any of its damages. If
any other Event of Default shall have occurred, Landlord shall be obligated to
mitigate its damages only to the extent it is required to do so under applicable
law.
Section 20.03 Implied Waiver
A. No act or thing done by Landlord or its agents during the Term shall
constitute an acceptance of an attempted surrender of the Premises, and no
agreement to accept a surrender of the Premises shall be valid unless made in
writing and signed by Landlord. No re-entry or taking possession of the Premises
by Landlord pursuant to Section 20.02(B) or otherwise shall constitute an
election by Landlord to terminate this Lease, unless a written Notice of such
intention is given to Tenant. No waiver by Landlord of any breach of this Lease
shall constitute a waiver of any other violation or breach of any of the terms
hereof.
B. No provision of this Lease shall be deemed to have been waived by
Landlord or Tenant unless such waiver is in writing and signed by such party.
The rights granted to Landlord and Tenant in this Lease shall be cumulative of
every other right or remedy which Landlord or Tenant may otherwise have at law
or in equity or by statute, and the exercise of one or more rights or remedies
shall not prejudice or impair the concurrent or subsequent exercise of other
rights or remedies.
Section 20.04 Injunctive Relief
Landlord shall be entitled to obtain injunctive relief in case of the
violation, or attempted or threatened violation, of any of the provisions
hereof, or to a decree compelling performance of any of the provisions hereof,
to the extent that any such relief is provided by a court of equity.
END OF ARTICLE 20
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ARTICLE 21
PROVISIONS APPLICABLE TO PURCHASE
BY TENANT OF THE PREMISES
Section 21.01 Procedures Upon Purchase
A. If Tenant is to acquire the Premises pursuant to Section 1.03,
Section 14.03 or Section 15.05 of this Lease, the Premises shall be transferred
"As Is" on the date of transfer and otherwise as provided in Section 1.01
hereof. Landlord shall convey title to the Premises to Tenant in the same
condition of title (including all restrictions, limitations, covenants and
easements of record and all encroachments) that existed as of the Commencement
Date, subject, however, to (i) the lien of real estate taxes, water and sewer
charges and other governmental charges that are not then due and payable, (ii)
all restrictions, limitations, covenants, easements and encroachments that were
created after the Commencement Date other than those created by Landlord without
the written consent of Tenant, and (iii) all Legal Requirements, but free of the
following items ("Landlord Obligations"): (x) the lien of any security interest
created by any Mortgage on Landlord's interest, (y) the lien of any judgment,
tax assessment or other obligation incurred by Landlord that is not the
responsibility of Tenant under this Lease, and (z) any liens created on and
after the Commencement Date which have been created by or resulted solely from
acts of Landlord undertaken without the written consent of Tenant. Landlord
shall pay off and discharge all Landlord Obligations at closing of Tenant's
purchase of the Premises, but Landlord shall have the right to apply the
purchase price proceeds for the purpose of discharging such Landlord
Obligations.
B. If Landlord accepts Tenant's irrevocable offer pursuant to Section
1.03, Section 14.03 or Section 15.05 to purchase the Premises, closing of such
purchase shall be held on the date (the "Purchase Closing Date") specified by
Tenant in its notice of Termination pursuant to Section 1.03, Section 14.03 or
Section 15.05 which occurs not earlier than ninety (90) days nor later than one
hundred twenty (120) days after Landlord's receipt of Tenant's irrevocable offer
to purchase. Closing of such purchase shall be conducted by an escrow agent (the
"Closing Escrow Agent") which shall be a national title insurance company
designated by Tenant that meets with the reasonable satisfaction of Landlord.
C. On the Purchase Closing Date, Landlord shall deliver to the Closing
Escrow Agent a deed ("Landlord's Deed") conveying the Premises to Tenant or
Tenant's designee and containing no warranties other than a warranty that the
Premises are not subject to (i) the lien of any security interest created by any
Mortgage executed by Landlord on Landlord's interest, (ii) the lien of any
judgment, tax assessment or other obligation incurred by Landlord that is not
the responsibility of Tenant under this Lease and (iii) any liens created on or
after the Commencement Date which have been created by or resulted solely from
acts of Landlord undertaken without the consent of Tenant.
D. On the Purchase Closing Date, Landlord shall deliver to the Closing
Escrow, Agent a written instrument (the "Assignment"), without warranty of
title, assigning and transferring to Tenant or Tenant's designee (i) Landlord's
interest in any FF&E leased by
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Landlord to Tenant hereunder and any licenses or permits relating to the
Premises and (ii) Landlord's interest in any insurance proceeds payable with
respect to any casualty that has previously occurred to the Premises (if any)
(which assignment of insurance proceeds shall be consented to by the Insurance
Trustee). If and to the extent that there are any insurance proceeds previously
paid to Landlord or the Insurance Trustee which have not been applied for the
purpose of repair or restoration and are then held by Landlord or the Insurance
Trustee, Landlord and the Insurance Trustee, as the case may be, shall deliver
such insurance proceeds (the "Escrowed Insurance Proceeds") to the Closing
Escrow Agent. The Tenant shall deliver to the Closing Escrow Agent current
immediately available funds in the amount of. the purchase price and any costs
payable by Tenant hereunder that are set forth in Section 21.01H ("Tenant's
Funds"). Closing Agent shall then proceed to consummate the Closing in
accordance with local custom and practice.
E. In the event that Tenant fails to perform its obligations under this
Section 21.01 on the Purchase Closing Date for any reason other than the default
of Landlord, the Tenant's Notice of Termination pursuant to Section 1.03,
Section 14.03 or Section 15.05 shall be rescinded and deemed null and void, the
Lease shall continue in full force and effect and neither Tenant nor Landlord
shall have any liability or obligation to the other by reason of such failure to
consummate settlement of such purchase except that Tenant shall pay to Landlord,
as fixed, agreed and liquidated damages for Tenant's default, the sum of Fifty
Thousand Dollars ($50,000).
F. In the event that Landlord fails to perform its obligations under
this Section 21.01 on the Purchase Closing Date for any reason other than the
default of Tenant and an order of specific performance is not obtained by Tenant
and complied with, the Lease shall terminate as of the Purchase Closing Date and
neither Tenant nor Landlord shall have any liability or obligation to the other
by reason of such failure to consummate settlement of such purchase except that
Landlord shall pay to Tenant, as fixed, agreed and liquidated damages for
Landlord's default, the sum of Fifty Thousand Dollars ($50,000).
G. All costs and expenses in connection with any such purchase,
including title insurance, transfer taxes, recording costs and the reasonable
attorney's fees of Landlord and any Mortgagee, shall be paid by Tenant.
H. Percentage Rental shall be prorated as of the date of such purchase
based upon the number of days in the Fiscal Year in which such purchase occurs
that precede the date of such purchase by prorating the dollar figure set forth
in Section 5.01(ii) so that such dollar figure is multiplied by a fraction whose
numerator is the number of days in such Fiscal Year that precede the date of
such purchase and whose denominator is three hundred sixty five (365).
END OF ARTICLE 21
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ARTICLE 22
NOTICES
Section 22.01 Notices
A. Any Notice or demand, consent, approval or disapproval, or statement
(collectively called "Notice" or "Notices") required or permitted to be given by
the terms and provisions of this Lease, or by any law or governmental
regulation, shall be in writing (unless otherwise specified herein) and unless
otherwise required by such law or regulation, shall be personally delivered with
receipt acknowledged in writing or sent by United States mail postage prepaid as
registered or certified mail, return receipt requested or by courier service
guarantying overnight delivery. Any Notice shall be addressed to Landlord or
Tenant, as applicable, at its address specified below as said address may be
changed from time to time as hereinafter provided. By giving the other party at
least ten (10) days' prior written Notice, either party may designate a
different address or addresses for Notices. Landlord may elect to require Tenant
to send a copy of any Notice of Landlord's default to Landlord's Mortgagee(s)
simultaneously with the sending of Notice to Landlord, provided that Landlord
shall have supplied to Tenant the name and address of such Mortgagee(s).
B. Any Notice shall be deemed given as of the date of delivery as
indicated by affidavit in case of personal delivery or by the return receipt in
the case of mailing or by the confirmation of the courier service making
delivery; and in the event of failure to deliver by reason of changed address of
which no Notice was given or refusal to accept delivery, as of the date of such
failure as indicated by affidavit or on the return receipt or by Notice of the
postal service or by the confirmation of the courier service making delivery, as
the case may be.
C. A copy of each Notice given pursuant to Section 22.01A above shall
also be sent to the addressee by FAX.
D. Notices shall be sent as follows:
To Tenant:
Marriott Senior Living Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
FAX No: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
FAX No: (▇▇▇) ▇▇▇-▇▇▇▇
and,
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
FAX No: (▇▇▇) ▇▇▇-▇▇▇▇
To Landlord:
Host Marriott, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
FAX No: (▇▇▇) ▇▇▇-▇▇▇▇
and,
Host Marriott, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
FAX No: (▇▇▇) ▇▇▇-▇▇▇▇
and,
The Senior Mortgagee
(as identified by Notice from Landlord to Tenant)
END OF ARTICLE 22
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ARTICLE 23
MEMORANDUM OF LEASE
Section 23.01 Memorandum of Lease
A. Landlord and Tenant shall execute, acknowledge and deliver a
memorandum of this Lease (a "Lease Memorandum") in recordable form selling forth
the date of this Lease, the names of the parties hereto, the Commencement Date,
the Expiration Date, a description of the Land and the Premises, Tenant's rights
to renew this Lease, Landlord's disclaimer of liability for mechanic's liens
attributable to Tenant's use, occupancy and possession of the Premises, and such
other provisions of this Lease as either party may designate. Said Lease
Memorandum shall not in any circumstances be deemed to modify or to change any
of the provisions of this Lease.
B. Tenant shall after the expiration or Termination of the Term, at the
request of Landlord, execute, acknowledge and deliver to Landlord a memorandum
in recordable form evidencing the expiration or Termination of this Lease.
END OF ARTICLE 23
ARTICLE 24
MISCELLANEOUS
Section 24.01 Partial Invalidity
In the event that any portion of this Lease shall be declared invalid
by order, decree or judgment of a court, or governmental agency having
jurisdiction, this Lease shall be construed as if such portion had not been
inserted herein, except when such construction would operate as an undue
hardship on Tenant or Landlord, constitute a substantial deviation from the
general intent and purpose of said parties as reflected in this Lease, or deny
either Tenant or Landlord to a material extent a right or benefit pursuant to
this Lease as originally written, in which event this Lease in pertinent part
shall be reformed so as to place both Landlord and Tenant to the greatest extent
permitted by law in the same relative positions as they would have enjoyed under
the Lease as originally written.
Section 24.02 Headings
The article and section headings and the Table of Contents contained in
this Lease are for convenience only and shall not enlarge or limit the scope or
meaning of the various and several provisions hereof.
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Section 24.03 Binding Effect
All agreements and covenants herein contained shall be binding upon the
respective heirs, personal representatives, successors, and, to the extent
permitted under this Lease, assigns of the parties hereto.
Section 24.04 Representations
Neither Landlord nor Landlord's agents have made any representations or
promises with respect to the Premises except as herein expressly set forth and
all reliance with respect to any representations or promises is based solely on
those contained herein.
Section 24.05 Amendments
No amendment or modification of this Lease shall be binding or valid
unless expressed in a writing executed by both parties hereto.
Section 24.06 Brokers
Neither party has engaged any agents or brokers with respect to the
negotiation and execution of this Lease and each party shall indemnify and
defend the other with respect to any claim by an agent or broker claiming
through the indemnifying party against the indemnified party.
Section 24.07 Authority to Execute
A. Tenant represents and warrants that Tenant has the full right and
authority to enter into this Lease, and that all persons signing on behalf of
the Tenant were authorized to do so by any and all necessary or appropriate
corporate actions.
B. Landlord represents and warrants that Landlord has the full right
and authority to enter into this Lease, and that all persons signing on behalf
of Landlord were authorized to do so by any and all necessary or appropriate
corporate or partnership actions.
Section 24.08 Applicable Law
This Lease shall be governed by and construed under the laws of the
state within which the Land is located.
Section 24.09 Construction
All exhibits referred to in this Lease are by this reference
incorporated fully herein. The term "this Lease" shall be considered to include
all such exhibits.
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Section 24.10 Impossibility of Performance
In the event that any covenant or obligation of Tenant under this Lease
(other than a covenant or obligation to pay Rental or other sums payable by
Tenant hereunder) as applied to a particular circumstance cannot be fully
performed by any person or entity that had funds available for the performance
of such covenants or obligations under this Lease, then Tenant shall only be
obligated to perform such covenant or obligation as applied to such circumstance
to the extent that such covenant or obligation can be so performed.
Section 24.11 Time of Essence
Time is of the essence with respect to the rights and obligations of
Landlord and Tenant under this Lease.
Section 24.12 Attorney's Fees
Except as otherwise provided herein, in any action or proceeding
(including without limitation appellate proceedings) brought by either party
against the other under this Lease, the prevailing party shall be entitled to
recover from the other party reasonable attorneys' fees, investigation costs,
and other reasonable legal expenses and court costs incurred by such plan in
such action or proceeding.
Section 24.13 No Merger
There shall be no merger of this Lease or of the leasehold estate
hereby created with the fee estate in the Premises by reason of the fact that
the same person acquires or finds, directly or indirectly, this Lease or the
leasehold estate hereby created or any interest herein or in such leasehold
estate as well as the fee estate in the Premises or any interest in such fee
estate.
Section 24.14 Landlord's Right to Enter
Landlord and its agents and designees may enter upon and examine the
Premises at reasonable times, accompanied by a representative of Tenant that
Tenant shall make available to Landlord, and show the Premises to prospective
purchasers, partners, investors, mortgagees or lessees as long as such
examination or showing shall not unreasonably interfere with the business
operations of Tenant on the Premises.
Section 24.15 Corporate Reorganization of Tenant
In the event of the merger of Tenant into another corporation where
Tenant is not the surviving corporation or the consolidation of Tenant with one
or more other corporations where Tenant is not the surviving corporation, or the
sale or other disposition of all or substantially all of the assets of Tenant to
one or more other entities, the surviving entity or transferee of assets, as the
case may be, shall be deemed to have assumed all obligations, covenants and
responsibilities of Tenant under this Lease. Promptly after such corporate
reorganization, such entity shall deliver to Landlord an instrument in
recordable form reasonably acceptable to counsel for both parties, evidencing
such assumption.
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Section 24.16 No Waiver
The failure of either party to insist upon a strict performance of any
of the terms or provisions of this Lease or to exercise any option, right or
remedy herein contained shall not be construed as a waiver or as a
relinquishment for the future of such term, provision, option, right or remedy,
but the same shall continue and remain in full force and effect. No waiver by
either party of any term or provision hereof shall be deemed to have been made
unless expressed in writing and signed by such party.
Section 24.17 Confidentiality
The parties hereby agree that the matters set forth in this Lease are
strictly confidential and each party will make every effort to ensure that such
information is not disclosed to any outside persons or entities (including the
press) without the consent of the other party, except as required by ERISA or
any other Legal Requirement reporting and disclosure rules or otherwise
specifically provided herein. For purposes of the preceding sentence, the words
"outside persons or entities" do not include the parties' attorneys,
accountants, consultants, shareholders, lenders, partners, investors, or any
prospective lenders, partners and investors. No references to Tenant or to any
Affiliate will be made in any prospectus, private placement memorandum, offering
circular or offering documentation related thereto (collectively referred to as
the "Prospectus"), issued by Landlord or one of its affiliates, which is
designated to interest potential investors in the Premises, unless Tenant has
previously received a copy of all such references. However, regardless of
whether Tenant does or does not so receive a copy of all such references,
neither Tenant nor any Affiliate will be deemed a sponsor of the offering
described in the Prospectus, nor will it have any responsibility for the
Prospectus, and the Prospectus will so state. Landlord shall indemnify, defend
and hold Tenant harmless from and against all loss, costs, liability and damage
(including reasonable attorneys' fees and expenses, and the cost of litigation)
arising out of any Prospectus or the offering described therein; and this
obligation of Landlord shall survive Termination of this Lease.
Section 24.18 Gender and Number
Words of any gender used in the Lease shall be held to include any
other gender, and words in the singular shall be held to include the plural and
vice versa, when the sense requires and the following words and phrases shall
have the following meanings: (i) "including" shall mean "including without
limitation"; (ii) "provisions" shall mean "provisions, terms, agreements,
covenants and/or conditions"; (iii) "lien" shall mean "lien, charge,
encumbrance, title retention agreement, pledge, security interest, mortgage
and/or deed of trust"; (iv) "obligation" shall mean "obligation, duty,
agreement, liability, covenant and/or condition"; (v) "any of the Premises'
shall mean "the Premises or any part thereof or interest therein"; (vi) "any of
the Land" shall mean "the Land or any part thereof or interest therein"; (vii)
"any of the Improvements" shall mean "the Improvements or any part thereof or
interest therein"; and (viii) "any of the personal property" shall mean "the
personal property or any part thereof or interest therein."
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Section 24.19 Survival
All claim and liabilities of either party existing or arising prior to
the expiration or earlier termination of the Lease, unless otherwise
specifically provided herein, and all Surviving Obligations shall survive such
expiration or earlier Termination.
Section 24.20 Acceptance of Surrender
No surrender to Landlord of this Law or of the Premises or of any part
thereof or of any interest therein shall be valid or effective unless agreed to
and accepted in writing by Landlord and the Senior Mortgagee if any, and no act
by Landlord or any representative or agent of Landlord, other than a written
acceptance, shall constitute an acceptance of any such surrender.
Section 24.21 Non-Recourse as to Landlord
Anything contained herein to the contrary notwithstanding, any claim
based on or in respect of any liability of Landlord under this Lease shall be
enforced only against the Premises and not against any other tangible or
intangible assets, properties or funds of (i) Landlord, (ii) any shareholder of
Landlord or any director, officer, general partner, limited partner, employee or
agent of Landlord, (or any legal representative, heir, estate, successor or
assign of any thereof), (iii) any predecessor or successor partnership or
corporation (or other entity) of Landlord, or any of its shareholders, either
directly or through Landlord or its shareholders or any predecessor or successor
partnership or corporation or their shareholders, officers, directors, employees
or agents (or other entity), or (iv) any other Affiliate of any of the
foregoing, or any director, officer, employee or agent of any thereof; provided,
however, that if, as a result of a judicial foreclosure of any Mortgage, the
interest of Landlord in the Premises is transferred to a Mortgagee or any other
person or entity and at the date of such foreclosure, Tenant has a legal
proceeding against Landlord, which is determined adversely to Landlord after the
exhaustion of all appeal periods, Tenant shall have the right to enforce any
judgment from any assets or other properties of Landlord but not against any
Mortgagee or any other person or any of the parties listed at (ii) through (iv)
above.
Section 24.22 Entire Agreement; Integration
A. The Lease contains all the agreements and conditions made between
the parties hereto with respect to the matters contained herein and may not be
modified orally or in any manner other than by an agreement in writing signed by
all the parties hereto or their respective successors and assigns. All prior
written and oral understandings and agreements shall be deemed to have merged
into the Lease and have no further force and effect.
B. Landlord and Tenant are business entities having substantial
experience with the subject matter of this Lease and have each fully
participated in the negotiation and drafting of this Lease. Accordingly, this
Lease shall be construed without regard to the rule that ambiguities in a
document are to be construed against the drafter.
-61-
C. No inferences shall be drawn from the fact that the final, duty
executed Lease differs in any respect from any previous draft hereof.
D. If there is more than one Tenant, the obligations of each shall be
joint and several.
Section 24.23 Waiver of Trial by Jury
The parties hereto each waive all right to elect a trial by jury in any
litigation relative to this Lease.
Section 24.24 Tenant's Remedies
Tenant shall have the right to seek all remedies at law and/or in
equity, including an order for specific performance, to obtain full performance
of all Landlord's obligations under this Lease, and/or to recover damages for
any breach by Landlord hereunder; provided, however, that Tenant shall not have
the right (i) to terminate this Lease (except as otherwise specifically provided
in this Lease) by reason of any breach of Landlord's obligations hereunder; (ii)
to set-off against Rentals hereunder any amounts owing to Tenant by Landlord; or
(iii) to assert by way of defense, cross-claim or counterclaim in any action by
Landlord to recover Rental or other sums due from Tenant any right to withhold
Rental or to pay less than the amount due hereunder. Any exercise of Tenant's
rights hereunder shall be through a separate and independent action unrelated to
any claim Landlord has against Tenant for Rental due hereunder.
Section 24.25 Landlord and Tenant Relationship
The parties hereto specifically acknowledge and agree that,
notwithstanding any other provision contained in this Lease (including the
provisions for payment of Percentage Rental), it is the intent of the parties
that their relationship thereunder is and shall at all times be that of Landlord
and Tenant and not that of partners, joint venturers, lender and borrower, or
any other relationship other than that of Landlord and Tenant.
END OF ARTICLE 24
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ARTICLE 25
SPECIAL PROVISIONS
Section 25.01 Supremacy of Article 25
Notwithstanding anything contained in this Lease to the contrary, the
provisions of this Article 25 shall be controlling and any inconsistencies
between the provisions of this Article 25 and any other provision contained in
this Lease shall be decided in favor of this Article 25.
Section 25.02 Completion of Construction
Landlord is obligated to complete construction of the Premises in
accordance with the plans and specifications set forth in Exhibit A, (the
"Work"). The Work is not an Expansion as defined in Section 9.01 and the
provisions of Article 9 does not apply to the Work.
EXECUTED under seal as of the date first written above.
TENANT: LANDLORD:
MARRIOTT SENIOR LIVING SERVICES, INC. HMC RETIREMENT
PROPERTIES, INC.
By: /s/ By: /s/
Its: President Its: Vice President
ATTEST: ATTEST:
By: /s/ By: /s/
[Assistant] Secretary [Assistant] Secretary
[Corporate Seal]
-63-
Omitted Exhibits
The following exhibits to the Assignment and Assumption of Leases,
Guarantees and Permits have been omitted:
Exhibit Letter Exhibit Title
A The Premises.
B The Leases.
C The Guarantees
The registrant agrees to furnish supplementally a copy of the foregoing
omitted exhibits to the Securities and Exchange Commission upon request.
SCHEDULE TO EXHIBIT 10.8
Pursuant to Instruction 2 to Item 601 of Regulation S-K, the following
Leases and Sublease, which are substantially identical in all material respects
to the Lease for the Marriott Brighton Gardens Facility located in Scottsdale,
Maricopa County, Arizona filed herewith, are omitted. The following list sets
forth the material differences in the leased premises, landlord, minimum annual
rental, the Percentage Rent "Break Point," and Section 25.
Minimum Percentage
Annual Rent
Leased Premises Landlord Rental "Break Point" Section 25
-------------------------------------------------------------------------------------------------------------------------
Sun City HMC Retirement $918,000 $2,508,000 See attached
Maricopa County, AZ Properties, Inc. Schedule D.
Port St. Lucie, HMC Retirement $945,000 $2,287,000 See attached
St. Lucie County FL Properties, Inc. Schedule D.
Bellaire/Houston HMC Retirement $1,213,000 $3,086,000 See attached
▇▇▇▇▇▇ County, TX Properties, Inc. Schedule E.
Virginia Beach HMC Retirement $717,000 $1,960,000 See attached
City of Virginia Beach, VA Properties, Inc. Schedule E.
Bedfort Court HMC Retirement $4,054,000 $7,379,000 See attached
▇▇▇▇▇▇▇▇▇▇, MD Properties, Inc. Schedule E.
Deerfield Beach/ HMH Properties, Inc. $127,900 $4,227,000 See attached
Horizon Club Schedule E.
Broward County, FL
Palms Harbor HMC Retirement $2,346,000 $5,592,000 See attached
Pinellas County, FL Properties, Inc. Schedule E.
Boca Pointe HMH Properties, Inc. $3,376,000 $6,473,000 See attached
Palm Beach, FL Schedule E.
Church Creek HMC Retirement See attached $6,576,000 See attached
▇▇▇▇ County, IL Properties, Inc. Schedule B. Schedule ▇.
▇▇▇▇▇ Valencia HMC Retirement $3,319,000 $9,326,000 See attached
Orange County, CA Properties, Inc. Schedule G.
Calusa Harbour HMC Retirement See attached $6,731,000 See attached
▇▇▇ County, FL Properties, Inc. Schedule C. Schedule H.
The Jefferson HMC Retirement $2,208,000 $6,579,000 See attached
Arlington County, VA Properties, Inc. Schedule I.
The Colonnades HMC Retirement $2,892,000 $6,434,000 See attached
Albermarle County, CA Properties, Inc. Schedule J.
SCHEDULE B TO EXHIBIT 10.8
MINIMUM RENTAL SCHEDULE
Period Minimum Rental
------ --------------
Commencement Date though end of 2001 $1,600,000
2002 through the end of 2010 $3,000,000
SCHEDULE C TO EXHIBIT 10.8
EXHIBIT F
MINIMUM RENTAL SCHEDULE
YEAR PRINCIPAL AMORTIZATION ADMINISTRATIVE FEES
---- ---------------------- -------------------
1993 $424,000 $23,502
1994 $468,000 $23,502
1995 $517,000 $23,502
1996 $571,000 $23,502
1997 $631,000 $23,502
1998 $697,000 $23,502
1999 $770,000 $23,502
2000 $850,000 $23,502
2001 $940,000 $23,502
2002 $1,038,000 $23,502
2003 $1,147,000 $23,502
2004 $1,267,000 $23,502
2005 $1,399,000 $23,502
2006 $1,546,000 $23,502
2007 $1,708,000 $23,502
2008 $1,887,000 $23,502
2009 $1,903,000 $23,502
SCHEDULE D TO EXHIBIT 10.8
ARTICLE 25
SPECIAL PROVISIONS
Section 25.01 Supremacy of Article 25
Notwithstanding anything contained in this Lease to the contrary, the
provisions of this Article 25 shall be controlling and any inconsistencies
between the provisions of this Article 25 and any other provision contained in
this Lease shall be decided in favor of this Article 25.
Section 25.02 Work in Progress
The parties acknowledge that there is ongoing construction at the
Premises that includes, among other things, the conversion of personal care
rooms to nursing rooms, the construction of new nursing rooms and increased
dining, pantry, storage and parking areas (collectively, the "Work"). The Work
is not an Expansion as defined in Section 9.01 and the provisions of Article 9
do not apply to the Work.
END OF ARTICLE 25
SCHEDULE E TO EXHIBIT 10.8
ARTICLE 25
SPECIAL PROVISIONS
[INTENTIONALLY NOT USED]
END OF ARTICLE 25
SCHEDULE F TO EXHIBIT 10.8
ARTICLE 25
SPECIAL PROVISIONS
Section 25.01 Definitions
The capitalized terms contained in this Article 25 which are not
defined below or elsewhere in this Lease shall have the meanings ascribed to
them in the Reimbursement Agreement (the "Reimbursement Agreement"), dated as of
April 15, 1991, between Landlord and Allied Irish Banks, p.l.c.
Section 25.02 Landlord's Bond Obligations
In 1991, Landlord refinanced its Indebtedness related to the Premises
by entering into, among other agreements with the Bank, the Reimbursement
Agreement, the Borrower Documents, and the Related Documents. Landlord remains
obligated to the Bank under the terms of the Reimbursement Agreement, the
Borrower Documents, and the Related Documents, and Landlord intends to
restructure this Indebtedness (the "Restructuring") in accordance with the terms
of that certain Letter of Intent, dated July 29, 1993, between Landlord and the
Bank. In the event that Tenant is dispossessed of the Premises as a direct
result of Landlord's default under the terms of the Reimbursement Agreement, the
Borrower Documents, or the Related Documents, this Lease shall automatically
terminate and Tenant's obligations to landlord hereunder shall expire.
Section 25.03 Collateral Assignment of Lease
In connection with the Restructuring, Landlord intends to grant to the
Bank a collateral assignment and security interest in this Lease to secure
Landlord's obligations under the Borrower Documents and the Related Documents.
Landlord hereby acknowledges and recognizes the Bank's interests in this Lease
under the terms of the Restructuring and agrees not to interfere with such
interests.
Section 25.04 Lease Subordination
Notwithstanding anything to the contrary contained in this Lease,
including, without limitation, the provisions of Section 19.02, all rights and
interests of Tenant in and to the Premises are and shall be expressly junior,
subject and subordinate in all respects to (i) that certain Mortgage Security
Agreement and Assignment of Leases and Occupancy Agreements, Rents and Profits
dated as of May 8, 1991 and are recorded on that date with the Recorder's Office
of Orange County, Florida (the "Mortgage"), (ii) the Reimbursement Agreement;
and (iii) any other Related Documents; provided, however, that the Bank, at any
time, may permit, in its sole and absolute discretion, upon written
confirmation, this Lease to be treated as having priority over the lien of the
Mortgage. Notwithstanding any provision of this Lease to the contrary, the terms
of the Mortgage shall govern with respect to the disposition of any insurance
proceeds or eminent domain awards, and any obligations of Landlord to restore
the Property shall, insofar as they apply to the Bank, be limited to insurance
proceeds or eminent domain
-2-
awards received by the Bank after the deduction of all reasonable costs and
expenses incurred in obtaining such proceeds or awards. Section 25.05 Tenant's
Bond Obligations
Notwithstanding anything to the contrary contained in this Lease,
Tenant covenants to pay Landlord as Additional Rental in an amount and when due
and payable, in each and every case, all amounts due and payable under the
Borrower Documents and the Related Documents, including, whether upon maturity,
as a result of acceleration or otherwise, the full principal amount of the
Bonds; however, such Additional Rental shall not include interest on the Bonds
or the sinking Fund Payments mandated by ss.3.02 of the Indentures, such
obligations having been included in the calculation of Minimum Rental. Except as
set forth in the preceding sentence, Tenant's obligations contained in this
Section 25.04 shall be in addition to, and not to the exclusion of, Tenant's
other obligations under this Lease, including, but not by way of limitation,
Tenant's obligations under Article 5 of this lease.
Section 25.06 Prepaid Rental
If, under the terms of this Article 25, Tenant is required to pay the
full principal amount of the Bonds, whether upon maturity, acceleration, or
otherwise, Tenant shall be entitled to a credit against Minimum Rental for such
payment, which credit until it is exhausted shall constitute Prepaid Rental and
be applicable to future Minimum Rental due. The unapplied portion of such
Prepaid Rental shall bear interest at the Prime Rate as set from time to time by
Bankers Trust Company, New York, New York, with such interest constituting
additional Prepaid Rental.
Section 25.07 Delivery of Rental
In accordance with the provisions of Sections 5.02A and 22.01 of this
lease, Landlord hereby directs Tenant to pay directly to the Bank all Rentals
required under this Lease at the Bank's address for the receipt of payments
specified in the Reimbursement Agreement.
Section 25.08 Notices
Tenant agrees to give to the Bank a copy of any notice of default under
the Lease served by Tenant upon Landlord. Landlord agrees to give to the Bank a
copy of any notice of default under the Lease served by Landlord upon Tenant.
Section 25.09 Limitation on Termination Rights
Tenant hereby waives, to the extent permitted by law, the provisions of
any statute or rule of law now or hereafter in effect which may give or purport
to give Tenant any right or election to terminate or otherwise adversely affect
this Lease or the obligations of Tenant under this Lease by reason of any
foreclosure proceedings, so long as the Bonds remain outstanding.
END OF ARTICLE 25
SCHEDULE G TO EXHIBIT 10.8
ARTICLE 25
SPECIAL PROVISIONS
Section 25.01 Supremacy of Article 25
Notwithstanding anything contained in this Lease to the contrary, the
provisions of this Article 25 shall be controlling and any inconsistencies
between the provisions of this Article 25 and any other provision contained in
this Lease shall be decided in favor of this Article 25.
Section 25.02 Definitions
The capitalized terms contained in this Article 25 which are not
defined below or elsewhere in this Lease shall have the meanings ascribed to
them in the Reimbursement Agreement (the "Reimbursement Agreement"), dated as of
April 15, 1991, between Landlord and Allied Irish Banks, p.l.c.
Section 25.03 Landlord's Bond Obligations
In 1991, Landlord refinanced its Indebtedness related to the Premises
by entering into, among other agreements with the Bank, the Reimbursement
Agreement, the Borrower Documents, and the Related Documents. Landlord remains
obligated to the Bank under the terms of the Reimbursement Agreement, the
Borrower Documents, and the Related Documents, and Landlord intends to
restructure this Indebtedness (the "Restructuring") in accordance with the terms
of that certain Letter of Intent, dated July 29, 1993, between Landlord and the
Bank. In the event that Tenant is dispossessed of the Premises as a direct
result of Landlord's default under the terms of the Reimbursement Agreement, the
Borrower Documents, or the Related Documents, this Lease shall automatically
terminate and Tenant's obligations to landlord hereunder shall expire.
Section 25.04 Lease Subordination
Notwithstanding anything to the contrary contained in this Lease,
including, without limitation, the provisions of Section 19.02, all rights and
interests of Tenant in and to the Premises are and shall be expressly junior,
subject and subordinate in all respects to (i) that certain Mortgage Security
Agreement and Assignment of Leases and Occupancy Agreements, Rents and Profits
dated as of May 8, 1991 and are recorded on that date with the Recorder's Office
of Orange County, Florida (the "Mortgage"), (ii) the Reimbursement Agreement;
and (iii) any other Related Documents; provided, however, that the Bank, at any
time, may permit, in its sole and absolute discretion, upon written
confirmation, this Lease to be treated as having priority over the lien of the
Mortgage. Notwithstanding any provision of this Lease to the contrary, the terms
of the Mortgage shall govern with respect to the disposition of any insurance
proceeds or eminent domain awards, and any obligations of Landlord to restore
the Property shall, insofar as they apply to the Bank, be limited to insurance
proceeds or eminent domain awards received by the Bank after the deduction of
all reasonable costs and expenses incurred in obtaining such proceeds or awards.
-2-
Section 25.05 Asbestos
Landlord and Tenant acknowledge the presence of Asbestos Containing
Material ("ACM") in the Premises. Landlord is in the preliminary stages of
litigation against Versar, Inc., a consulting firm (the "Consultant") that
erroneously represented to Landlord that there was no ACM in the Premises. If
Tenant, as a result of the assignment set forth in Section 25.07, is successful
in its suit against the Consultant and recovers monetary damages attributable to
the presence of ACM in the Premises, Tenant shall deduct from the gross award
obtained in such litigation or settlement thereof (the "Gross Award") all costs
incurred in pursuing said litigation such as, but not limited to, reasonable
attorneys' fees, consultant fees, in-house expenses, and court costs and place
the remainder of such award (the "Net Award") in an interest bearing escrow
account controlled by Tenant ("Escrow Account"). The Net Award and all interest
earned thereon, shall be used by Tenant to pay for any and all costs associated
with the presence of ACM in the Premises and to pay for the remediation,
monitoring or removal of such ACM by Tenant which may be performed at Tenant's
sole discretion, unless required pursuant to any Environmental Law ("ACM
Costs"). Tenant shall be reimbursed for its ACM Costs to the extent there are
funds available in the Escrow Account. Tenant shall provide notice to landlord
prior to drawing any funds out of the Escrow Account and shall provide Landlord
with documentation reasonably satisfactory to Landlord evidencing that the funds
withdrawn from the Escrow Account will be used to reimburse Tenant for its ACM
Costs. Upon expiration of the lease any funds remaining in the Escrow Account,
plus accrued interest, shall become the property of Landlord.
Section 25.06 Landlord's Cooperation
Landlord agrees upon request by Tenant to sign promptly, and without
charge, any documents (i) required by any governmental authority of (ii) that
Tenant determines are necessary or reasonably desirable to pursue litigation
against the Consultant; provided, however, that all costs and expenses
associated therewith shall be the sole obligation of Tenant, and shall not be
deducted from the Gross Award, and Tenant shall promptly pay and discharge the
same, and provided further, that the execution of any such document shall not
expose Landlord to any personal liability. Tenant hereby agrees that it will
fully indemnify, defend and save Landlord harmless from and against any and all
costs, losses and expenses, including, without limitation, any and all legal
fees and court costs incurred or suffered by Landlord as a result of its
compliance with the obligations imposed upon Landlord under this Section 25.06
or as a result of Tenant's actions or failure to act in connection with ACM in
the Premises and the suit against the Consultant.
Section 25.07 Assignment of Rights
During the Term, and except as otherwise provided in this Article 25,
Landlord hereby assigns to Tenant all of its right, title and interest to any
awards or damages resulting from the presence of ACM in the Premises and
Landlord will not pursue any independent right of recovery against any entity by
reason of the presence of ACM in the Premises during the Term.
-3-
Section 25.08 Notices
Tenant agrees to give to the Bank a copy of any notice of default under
the Lease served by Tenant upon Landlord. Landlord agrees to give to the Bank a
copy of any notice of default under the Lease served by Landlord upon Tenant.
Section 25.09 Limitation on Termination Rights
Tenant hereby waives, to the extent permitted by law, the provisions of
any statute or rule of law now or hereafter in effect which may give or purport
to give Tenant any right or election to terminate or otherwise adversely affect
this Lease or the obligations of Tenant under this Lease by reason of any
foreclosure proceedings, so long as the Bonds remain outstanding.
END OF ARTICLE 25
SCHEDULE H TO EXHIBIT 10.8
ARTICLE 25
SPECIAL PROVISIONS
Section 25.01 Definitions
The capitalized terms contained in this Article 25 not defined below or
elsewhere in this Lease shall have the meanings ascribed to them in the
Assignment, Assumption and Consent Agreement (the "Assignment Agreement"), dated
December 21, 1989, between Landlord, Host Marriott Corporation, Congregate
Housing Partnership, Sun Bank, N.A., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust, N.A., and Citizens
Fidelity Mortgage Company; and those meanings ascribed to them in the Bond
Documents, as defined in the Assignment Agreement, including, but not by way of
limitation, the Developer Agreement, the Regulatory Agreement as to tax
exemption, the Deed Restrictions Agreement, and the Mortgage.
Section 25.02 Landlord's Bond Obligations
In connection with Landlord's purchase of the Premises, Landlord, as
evidenced in the Assignment Agreement, assumed various obligations of the
obligor under the Bond Documents. Landlord remains obligated under the Bond
Documents as provided in the Assignment Agreement. Provided that Tenant is not
in default under the terms of the Lease, in the event that Tenant is
dispossessed of the Premises solely as a result of Landlord's default under the
terms of the Bond Documents, the Lease shall automatically terminate as of the
date of any such dispossession and Tenant's obligations to Landlord thereunder
shall expire.
Section 25.03 Non-Interference
Tenant acknowledges Landlord's obligations under the Bond Documents and
agrees not to interfere with the rights of the Trustee, the Bondholder, or the
Issuer thereunder. Notwithstanding anything to the contrary contained in this
Lease, Tenant shall be prohibited from taking any action or failing to take any
action under the Lease which would result in a default under the Bond Documents,
until the earlier of the expiration of the Term or Landlord's satisfaction of
its obligations under the Bond Documents. The foregoing prohibition is expressly
applicable to, but not by way of limitation, Sections 7.02, 9.01, 16.02, 16.03,
and 21.01 among others.
Section 25.04 Tenant's Bond Obligations
Notwithstanding anything to the contrary contained in this Lease,
Tenant agrees to pay Landlord as Additional Rental, in an amount and when due
and payable, all interest due and payable on the Bonds in accordance with the
provisions of Section 2.02 of the Trust Indenture. Tenant's obligations
contained in this Section 25.04 shall be in addition to, and not to the
exclusion of Tenant's other obligations under this Lease, including, but not by
way of limitation, Tenant's obligations under Article 5 of this Lease.
-2-
Section 25.05 Bond Acceleration
Notwithstanding anything to the contrary contained in this Lease, if
Landlord is required to pay the full principal amount of the Bonds prior to
maturity, Tenant shall continue to pay the Minimum Rental required to be paid
under Article 5 of this Lease and the Additional Rental required to be paid
under this Article 25 as if the bond obligations had continued in existence
until maturity. Tenant's obligations to pay Minimum Rental and the Additional
Rental required to be paid under this Article 25 shall be unaffected by
Landlord's satisfaction of its obligations under the Bonds.
Section 25.06 Delivery of Rental
In accordance with the provisions of Sections 5.02A and 22.01 of this
Lease, Landlord hereby directs Tenants to pay directly to Sun Bank, as Trustee,
all Minimum Rental required to be paid under Article 5 of this Lease and all
Additional Rental required to be paid under this Article 25, until Landlord's
obligations under the Bond Documents have been satisfied.
Section 25.07 Additional Tenant Indemnifications
Solely for the purposes of the Indemnifications contained in Article 8
of this Lease, the Issuer shall be deemed to be an "Indemnified Party", as such
term is defined in Section 8.01A.
END OF ARTICLE 25
SCHEDULE I TO EXHIBIT 10.8
ARTICLE 25
CONDOMINIUM PROVISIONS
Section 25.01 Supremacy of Article 25
Notwithstanding anything contained in this Lease to the contrary, the
provisions of this Article 25 shall be controlling and any inconsistencies
between the provisions of this Article 25 and any other provision contained in
this Lease shall be decided in favor of this Article 25.
Section 25.02 Definitions
"Condominium Act" shall have the meaning ascribed to it in Section
25.03.
"Condominium Instruments" shall mean the Amended and Restated
Declaration for The Jefferson Senior Living Condominium Community, recorded in
Deed Book 2537 at Page 1269 among the land records of Arlington County,
Virginia, together with the Bylaws and all other exhibits thereto.
"Condominium Unit" shall mean the residential condominium units at The
Jefferson.
"Deed of Bargain and Sale" shall mean that certain Deed of Bargain and
Sale attached hereto as Exhibit G.
"The Jefferson" shall mean the Jefferson Senior Living Condominium
Community in Arlington, Virginia, as recorded in Deed Book 2537 at page number
1289 among the land records of Arlington County, Virginia.
"Minimum Required Fee" shall have the meaning ascribed to it in the
Deed of Bargain and Sale.
"Reverted Unit" shall have the meaning ascribed to it in Section 25.10.
"Revertee" shall have the meaning ascribed to it in the Deed of Bargain
and Sale.
"Revertor" shall have the meaning ascribed to it in the Deed of Bargain
and Sale.
"Sales Period" shall have the meaning ascribed to it in the Deed of
Bargain and Sale.
"Unit Three" shall have the meaning ascribed to it in the Condominium
Instruments.
Section 25.03 Right as Declarant
To the fullest possible extent, Landlord hereby transfers and assigns
all rights, power, and duties as "Declarant" under Section 55-79.39 et seq. of
the Code of Virginia (1950) ("Condominium Act") and the Condominium Instruments
to Tenant and Tenant's successors and assigns until the termination of this
Lease. To evidence and effectuate the transfer, Landlord and
-2-
Tenant shall sign, acknowledge and record a "Transfer of Special Declarant
Rights" in accordance with the Condominium Act and the Condominium Instruments
in form similar to the form attached hereto as Exhibit F.
Section 25.04 Rights as Unit Owner
To the fullest possible extent, Landlord hereby transfers and assigns
all rights, powers, duties and obligations as a "Unit Owner" under the
Condominium Act and the Condominium Instruments to Tenant and Tenant's
successors and assigns until the termination of this Lease; provided, however,
that Tenant is expressly not authorized to exercise Landlord's rights as a "Unit
Owner" under Section 55-79.72:1 of the Virginia Condominium Act.
Section 25.05 Easement and Other Rights
To the fullest possible extent, Landlord hereby transfers and assigns
all rights, powers, duties and obligations under any applicable easement,
license or permit affecting the Premises to Tenant and Tenant's successors and
assigns until the termination of this Lease.
Section 25.06 Compliance with Condominium Act and Condominium
Instruments
Subject to Section 25.07, Tenant's right to use and occupy the Premises
shall be subject and subordinate in all respects to the provisions of the
Condominium Instruments and to such other rules and regulations as the Board of
Directors of the unit owners association may from time to time promulgate
("Rules and Regulations"). Failure to comply with the provisions of the
Condominium Instruments or the Rules and Regulations shall constitute a material
breach of this Lease. Tenant shall indemnify and hold harmless Landlord from and
against any damages, direct or indirect, incurred by Landlord as a result of the
negligent acts or omissions of Tenant and the noncompliance by Tenant and
Tenant's permittees, licensees, employees and agents with the provisions of any
of the Condominium Instruments, the Rules and Regulations, and the Condominium
Act.
Section 25.07 Modification of Insurance, Restoration and Condemnation
Provisions
Because the Premises are subject to the Condominium Instruments and the
Condominium Act, certain portions of Articles 13, 14 and 15 are not applicable
and must be modified. Therefore, notwithstanding the provisions of Section
13.02, the first sentence of Section 13.08, 14.01, 14.02 and 15.06 I and J, the
applicable provisions of the Condominium Instruments and the Condominium Act
shall govern; provided, however, that any reference in this Lease to insurance
or condemnation proceeds shall mean those proceeds to which Tenant is entitled
pursuant to the Condominium Instruments and the Condominium Act and, to the
extent that any right or obligation of the parties is inconsistent with the
Condominium Instruments or the Condominium Act, such right or obligation shall
be void.
-3-
Section 25.08 Further Assurances
Landlord and Tenant shall sign, acknowledge and, if appropriate, record
such further documents as may be required from time to time to effectuate the
provisions of this Article.
Section 25.09 Fees for the Sale of Reverted Units
Tenant shall receive a fee equal to six percent (6%) of the sales price
("Sales Fee"), payable at closing, for each Reverted Unit sold. Tenant shall
provide the marketing, advertising, printing, mailing and other services
necessary to promote the sale of a Reverted Unit.
Section 25.10 Reversion of Condominium Units
The Deed of Bargain and Sale contains a reversionary clause that, under
certain circumstances, can cause title to a Condominium Unit to revert to the
Revertee. The specific conditions that create this event are set forth in the
Deed of Bargain and Sale. If title to a Condominium Unit reverts to the Revertee
during the Term (a "Reverted Unit"), Tenant shall use its best efforts to sell
the Reverted Unit at a reasonable market price, taking into account prevailing
market conditions and in accordance with the provisions contained in the Deed of
Bargain and Sale. If the Reverted Unit is sold during the Sales Period, Landlord
shall pay to the Revertor the gross sales price less the deductions permitted in
the Deed of Bargain and Sale. Upon the sale of a Reverted Unit, Landlord shall
pay to Tenant the Sales Fee payable under Section 25.09 hereof and the Minimum
Required Fee that Landlord is permitted to deduct from the gross sales price.
If the Reverted Unit is not sold during the Sales Period, Tenant shall
purchase the Reverted Unit from Landlord within twenty (20) days after the
expiration of the Sales Period for an amount equal to the price Landlord is
required to pay to the Revertor under Paragraph 3 of the Deed of Bargain and
Sale. Title to any Reverted Unit conveyed to Tenant shall be subject only to the
conditions and encumbrances that existed at the time of the reversion but shall
not include any liens, mortgages or deeds of trust. All closing costs associated
with the transfer of a Reverted Unit to tenant shall be shared equally by tenant
and Landlord.
At the expiration of the Term, provided that Tenant is not in default,
Tenant shall have the option, at its sole discretion, to require Landlord to
purchase any or all of the Reverted Units owned by tenant for a price equal to
the fair market value of the Reverted Units being sold. All closing costs
associated with the transfer of the Reverted Units to Landlord shall be shared
equally by Tenant and Landlord. Tenant shall not be entitled to receive a Sales
Fee upon the sale of Reverted Units to Landlord.
Section 25.11 Limitation on Change of Use
Notwithstanding the provisions contained in Article 7 hereof, at least
ten (10) years of the Term must remain for tenant to make a Change of Use of
Unit Three unilaterally. If the remaining Term is less than ten (10) years but
greater than three (3) and Tenant desires to make a Change of Use of Unit Three,
Tenant must obtain Landlord's prior written approval, which may
-4-
not be unreasonably withheld, conditioned, or delayed. If the remaining Term is
less than three (3) years, the provision of Section 7.02 shall govern Change of
Use.
END OF ARTICLE 25
SCHEDULE J TO EXHIBIT 10.8
ARTICLE 25
SPECIAL PROVISIONS
Section 25.01 Supremacy of Article 25
Notwithstanding anything contained in this Sublease to the contrary,
the provisions of this Article 25 shall be controlling and any inconsistencies
between the provisions of this Article 25 and any other provision contained in
this Sublease shall be decided in favor of this Article 25.
Section 25.02 New Definitions
"Lessee" shall have the meaning ascribed to it in Recital A.
"Lessor" shall have the meaning ascribed to it in Recital A.
"Groundlease" shall have the meaning ascribed to it in Recital A.
Section 25.03 Obligations of Subtenant
During the Term, Subtenant shall pay directly to Lessor all payments
due under the Groundlease and perform all obligations (other than those that can
only be performed by Sublandlord) of Lessee under the Groundlease.
Section 25.04 Affirmative Covenants of Sublandlord
During the Term, Sublandlord shall not take any action that will cause
an Event of Default to occur under the Groundlease as that term is defined in
the Groundlease. Sublandlord shall comply with all of its obligations as Lessee
under the Groundlease including, without limitation, the restrictions imposed
upon Lessee in the Groundlease with respect to: (i) assignment and subletting,
(ii) leasehold financing, (iii) encumbering the feehold interest, and (iv)
supplying financial information about itself to Lessor. Sublandlord shall not
terminate the Groundlease without Subtenants written consent which consent may
be withheld at Subtenant's sole discretion. Sublandlord shall provide copies to
Subtenant of all notices received from Landlord within 7 days of receipt of
same. If Sublandlord breaches any of the covenants set forth above, Subtenant's
exclusive remedy for such breach shall be limited to monetary damages and
Subtenant shall not be entitled to the remedy of injunctive relief.
Section 25.05 Default by Sublandlord Under the Groundlease
If an Event of Default occurs under the Groundlease, as that term is
defined in the Groundlease, and the leasehold mortgagee, if any, fails to cure
such default within the time requirements set forth in the Groundlease,
Subtenant shall have the right to cure such default on behalf of Sublandlord.
Any sums expended by Subtenant in curing such default shall be credited against
the Minimum - Rental, Percentage Rental, and Alternative and/or Expansion
Rental, if any, due Sublandlord under this Sublease.
Section 25.06 Lessor's Right to Sell the Land
If Sublandlord receives notice from Lessor of its intention to sell or
assign the Land pursuant to Article XIV of the Groundlease, Sublandlord will
promptly notify Subtenant of the receipt of such notice and inform Subtenant if
it intends to negotiate with Lessor for the purchase of the Land. If Sublandlord
elects to negotiate with Lessor for the purchase of the Land, Sublandlord will
keep Subtenant informed as to the status of such negotiations. If Sublandlord
elects not to negotiate with Lessor for the purchase of the Land, Sublandlord
will notify Subtenant and Lessor of its decision within thirty (30) days of its
receipt of notice from Lessor, and Subtenant shall have the right, and
Sublandlord hereby assigns to Subtenant all of the rights of Sublandlord, to
negotiate with Lessor for the purchase of the Land as set forth in Article XIV
of the Groundlease.
Section 25.07 Special Insurance Provisions
Notwithstanding any provisions of this Sublease to the contrary, the
terms of the Groundlease shall govern with respect to the disposition of any
insurance proceeds in the event of a casualty. In the event of any
inconsistencies between this Sublease and the Groundlease with respect to the
disposition of any insurance proceeds in the event of a casualty, the
Groundlease shall be controlling. Furthermore, Subtenant shall be obligated to
comply with the insurance provisions that are more stringent, either in the
Groundlease or Sublease.
Section 25.08 Special Condemnation Provisions
In the event of a taking of a portion or all of the Premises, Article
VIII of the Groundlease shall supersede the provisions of Article XV contained
herein. Sublandlord shall not negotiate a settlement with Lessor or any taking
authority without the participation of Subtenant in any such negotiations nor
agree to any settlement without the written approval of Subtenant. The provision
of Article XV herein shall apply to Sublandlord and Subtenant only to the extent
such provisions do not contradict the provision of Article VIII of the
Groundlease.
Section 25.09 Termination of Groundlease by Lessor
In the event Lessor provides notice of its intent to terminate the
Groundlease pursuant to Section 12.1 of the Groundlease, Sublandlord shall
promptly notify Subtenant and shall take such action as Subtenant may direct
Sublandlord to do at no cost or liability to Sublandlord, provided, however,
such action is not an Event of Default under the Groundlease or this Sublease.
In the event the Groundlease is terminated pursuant to Section 12.2 of the
Groundlease, Sublandlord shall not negotiate a settlement with Lessor without
the participation of Subtenant in any such negotiations nor agree to any
settlement without the written approval of Subtenant. Subtenant's participation
shall be limited in a manner and to an extent commensurate with its interest in
the proceeds of the sale. The purchase price agreed to by Lessor, Sublandlord
and Subtenant shall be distributed to Sublandlord and Subtenant and treated as
if such sum were condemnation proceeds in a total taking as of the date the
Premises are sold to Lessor and the provisions of Section 15.04 of the Sublease
shall be controlling.
Section 25.10 Termination of Sublease
Notwithstanding anything to the contrary contained in this Sublease, if
the Groundlease is terminated through no fault of Subtenant, this Sublease shall
automatically terminate and Subtenant's obligations to Sublandlord hereunder
shall expire.
Section 25.11 Subleasing and Assignment of Sublease
Notwithstanding any provisions of this Sublease to the contrary, the
terms of the Groundlease shall govern with respect to any subleasing and
assignment of this Sublease.
END OF ARTICLE 25