LEASE AGREEMENT
by and between
CNL RETIREMENT PC1 NAPLES FL, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 VENICE FL, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 NEW JERSEY, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 FRIENDSHIP HEIGHTS MD, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 NORTH CAROLINA, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 STAMFORD CT, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 BUCKHEAD GA, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 BRENTWOOD TN, LP
a Delaware limited partnership,
(collectively as "Lessor")
and
PRIME CARE ONE, LLC
an Indiana limited liability company
and
PRIME CARE TWO, LLC,
an Indiana limited liability company,
(collectively as "Lessee")
for
Eleven Senior Living Communities
DATED AS OF SEPTEMBER 30, 2002
TABLE OF CONTENTS
I. DEFINITIONS..............................................................1
II. LEASED PROPERTY AND TERM................................................14
Section 2.1 Leased Property.....................................14
Section 2.2 Condition of Leased Property........................14
Section 2.3 Term................................................15
Section 2.3 Nature of Lease.....................................15
III. RENT...................................................................16
Section 3.1 Rent................................................16
Section 3.2 Additional Charges..................................16
Section 3.3 Late Payment of Rent, Etc...........................18
Section 3.4 Net Lease...........................................18
Section 3.5 Non-Terminability...................................19
IV. USE OF THE LEASED PROPERTY..............................................19
Section 4.1 Permitted Use.......................................19
Section 4.2 Necessary Approvals.................................20
Section 4.3 Lawful Use, Waste, Etc..............................20
Section 4.4 Compliance with Legal/Insurance Requirements, Etc...20
Section 4.5 Environmental Matters...............................21
4.5.1 Restriction on Use, Etc....................21
4.5.2 Indemnification............................21
4.5.3 Hazardous Substance Abatement..............22
4.5.4 Survival...................................22
Section 4.6 Title Encumbrances.............................22
4.6.1 Existing Title Encumbrances...........22
4.6.2 Future Title Encumbrances.............22
V. MAINTENANCE AND REPAIRS..................................................23
Section 5.1 Maintenance and Repair; Completion of
Improvement; FF&E Reserve...........................23
5.1.1 Lessee's Obligations..................23
5.1.2 Lessor Disclaimer.....................23
5.1.3 FF&E Reserve..........................24
5.1.4 Non-responsibility of Lessor..........25
5.1.5 Rent Reserve..........................25
Section 5.2 Lessee's Personal Property....................26
Section 5.3 Surrender.....................................26
VI. IMPROVEMENTS, ETC.......................................................27
Section 6.1 Improvements to the Leased Property...........27
Section 6.2 Salvage.......................................27
VII. LIENS..................................................................27
VIII. PERMITTED CONTESTS....................................................27
IX. INSURANCE...............................................................28
Section 9.1 General Insurance Requirements................28
Section 9.2 General Insurance Provisions..................30
Section 9.3 Costs and Expenses............................31
Section 9.4 Indemnification of Lessor.....................32
Section 9.5 Limitation on Liability.......................32
X. CASUALTY.................................................................32
Section 10.1 Damage and Repair.............................32
Section 10.2 Lessee's Property.............................33
Section 10.3 Restoration of Lessee's Property..............33
Section 10.4 No Abatement of Rent..........................33
Section 10.5 Waiver........................................34
XI. CONDEMNATION............................................................34
Section 11.1 Condemnation..................................34
Section 11.2 Material Condemnation.........................34
Section 11.3 Non-Material Condemnation;
Temporary Condemnation........................35
Section 11.4 Net Award.....................................36
Section 11.5 Condemnation for Roads, Highways..............36
Section 11.6 No Abatement of Rent..........................36
XII. DEFAULTS AND REMEDIES..................................................36
Section 12.1 Events of Default.............................36
Section 12.2 Remedies......................................38
Section 12.3 Application of Funds..........................40
Section 12.4 Lessor's Right to Cure Lessee's Default.......40
Section 12.5 Good Faith Dispute............................40
XIII. HOLDING OVER..........................................................41
XIV. TRANSFERS OR TERMINATION BY LESSOR OR LESSEE...........................41
Section 14.1 Transfer by Lessor of Leased Property.........41
Section 14.2 Special Right of Termination by Lessor........41
XV. SUBLETTING AND ASSIGNMENT...............................................42
Section 15.1 Subletting and Assignment.....................42
Section 15.2 Required Sublease Provisions..................43
Section 15.3 Permitted Sublease and Assignment.............44
Section 15.4 Sublease Limitation...........................44
XVI. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.........................44
Section 16.1 Estoppel Certificates.........................44
Section 16.2 Financial Statements..........................44
Section 16.3 General Operations............................45
XVII. LESSOR'S RIGHT TO INSPECT.............................................45
XVIII. FACILITY MORTGAGES...................................................45
Section 18.1 Lessor May ▇▇▇▇▇ ▇▇▇▇.........................45
Section 18.2 Subordination of Lease........................46
Section 18.3 Lessee's Cooperation..........................46
Section 18.4 Notices.......................................47
XIX. RE-ACQUISITION OPTION; RE-ACQUISITION PROCEDURE........................47
Section 19.1 Purchase Upon Put Option or Call Option.......47
Section 19.2 Purchase Procedure............................48
XX. ADDITIONAL COVENANTS OF LESSEE..........................................50
Section 20.1 Conduct of Business...........................50
Section 20.2 Maintenance of Accounts and Records...........50
Section 20.3 Distributions, Payments to Affiliates, Etc....51
Section 20.4 Compliance with Operating Agreement...........51
20.4.1 Material Terms of the
Operating Agreement...................51
20.4.2 Subordination of Operating Agreement..51
20.4.3 Modification of Operating Agreement...51
20.4.4 Absence of Default....................52
20.4.5 Communication with the Operator.......52
20.4.6 Enforcement of the
Operating Agreement...................52
20.4.7 Replacement of Operator...............52
XXI. MISCELLANEOUS..........................................................53
Section 21.1 Limitation on Payment of Rent;
No Usurious Amounts...........................53
Section 21.2 No Waiver.....................................53
Section 21.3 Remedies Cumulative...........................53
Section 21.4 Severability..................................53
Section 21.5 Acceptance of Surrender.......................54
Section 21.6 No Merger of Title............................54
Section 21.7 Conveyance by Lessor..........................54
Section 21.8 Quiet Enjoyment...............................54
Section 21.9 Entire Agreement; Memorandum of Lease.........55
Section 21.10 Notices.......................................55
Section 21.11 Construction; Non-recourse....................57
Section 21.12 Counterparts; Headings........................58
Section 21.13 Applicable Law, Etc...........................58
Section 21.14 Right to Make Agreement.......................58
Section 21.15 Disclosure of Information.....................59
Section 21.16 Non-Compete; Protected Territory..............59
Section 21.17 Attorneys' Fees...............................60
Section 21.18 Waiver of Jury Trial..........................60
Section 21.19 Composite Lease...............................60
Section 21.20 Recording of Documents........................60
Section 21.21 Lessee Entity Separateness....................61
Section 21.22 Relationship of the Parties...................62
Section 21.23 State Specific Provisions.....................62
EXHIBITS
A- Rent Addendum
B- Composite Assignment of Operating Agreement, Subordination,
Non-Disturbance and Attornment Agreement
C- Cash Management Agreement
D- Collective Leased Properties
E- Property Expenses
F- Composite Descriptions of Land
G- Composite Title Commitments
H- Composite Memorandum of Lease I- Lessee Organizational Chart
LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into as of this 30th day of September, 2002,
by and between CNL RETIREMENT PC1 NAPLES FL, LP a Delaware limited partnership,
CNL RETIREMENT PC1 VENICE FL, LP a Delaware limited partnership, CNL RETIREMENT
PC1 NEW JERSEY, LP a Delaware limited partnership, CNL RETIREMENT PC1 FRIENDSHIP
HEIGHTS MD, LP a Delaware limited partnership, CNL RETIREMENT PC1 NORTH
CAROLINA, LP a Delaware limited partnership, CNL RETIREMENT PC1 STAMFORD CT, LP
a Delaware limited partnership, CNL RETIREMENT PC1 BUCKHEAD GA, LP a Delaware
limited partnership, CNL RETIREMENT PC1 BRENTWOOD TN, LP a Delaware limited
partnership (collectively as "Lessor") with offices at CNL Center at City
Commons, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, and PRIME CARE ONE,
LLC, a Indiana limited liability company and PRIME CARE TWO, LLC, a Indiana
limited liability company, as Lessee (collectively the "Lessee") with offices at
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
W I T N E S S E T H :
WHEREAS, Lessor has acquired fee simple title to each of the Collective
Leased Properties (this and other capitalized terms used and not otherwise
defined herein having the meanings ascribed to such terms in Article I) which is
improved as an assisted living nursing facility; and
WHEREAS, Lessor desires to lease each of the Collective Leased Properties to
Lessee (such that Prime Care One, LLC shall be the Lessee for the four (4)
Leased Properties so indicated on Exhibit D and Prime Care Two, LLC shall be the
Lessee for the seven (7) Leased Properties so indicated on Exhibit D) and Lessee
desires to lease each of the Collective Leased Properties from Lessor, all
subject to and upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the mutual receipt and legal
sufficiency of which are hereby acknowledged, Lessor and Lessee hereby agree as
follows:
I. DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, (i) the terms defined in this Article
I shall have the meanings assigned to them in this Article and include the
plural as well as the singular, (ii) all accounting terms not otherwise defined
herein shall have the meanings assigned to them in accordance with GAAP, (iii)
all references in this Agreement to designated "Articles," "Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Agreement, and (iv) the words "herein," "hereof," "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Accounting Period" shall mean four (4) week accounting periods having the
same beginning and ending dates as Operator's four (4) week accounting periods,
except that an Accounting Period may, from time to time, include five (5) weeks
in order to conform Operator's accounting system to a Fiscal Year. If Operator
shall, for a bona fide business reason, change its Accounting Period during the
Term, appropriate adjustments, if any, shall be made with respect to the timing
of certain accounting and reporting requirements of this Agreement; provided,
however, that, in no event shall any such change or adjustment alter the amount
or frequency of payment of Minimum Rent within any Fiscal Year, or alter the
frequency of payment of Additional Rent to less than four (4) times within any
Fiscal Year, or otherwise increase or reduce any monetary obligation under this
Agreement. In the event that the Commencement Date is not the first day of
Operator's four (4) week accounting periods, the first Accounting Period under
this Lease shall consist of the first four (4) week accounting period of
Operator commencing after the Commencement Date and the period from the
Commencement Date until the commencement of such first four (4) week accounting
period.
"Additional Charges" shall have the meaning given such term in Section
3.2.
"Additional Rent" shall have the meaning given such term in the Rent
Addendum.
"Advance Minimum Rent" shall have the meaning given such term in the Rent
Addendum.
"Adjusted Lease Basis" shall have the meaning given such term in the Rent
Addendum.
"Adjusted Lease Rate" shall have the meaning given such term in the Rent
Addendum.
"Administration Fee" shall mean the First-Tier Administration Fee and the
Second-Tier Administration Fee.
"Affiliate(s)" means 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 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.
"Aggregate Differential Amount" shall have the meaning given such term in
the Rent Addendum.
"Agreement" shall mean this Lease Agreement, including all Exhibits hereto,
as it and they may be amended from time to time as herein provided.
"Applicable Laws" shall mean all applicable laws, statutes, regulations,
rules, ordinances, codes, licenses, permits and orders, from time to time in
existence, of all courts of competent jurisdiction and Government Agencies, and
all applicable judicial and administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury to,
or the protection of, real or personal property or human health (except those
requirements which, by definition, are solely the responsibility of employers)
or the Environment, including, without limitation, all valid and lawful
requirements of courts and other Government Agencies pertaining to reporting,
licensing, permitting, investigation, remediation and removal of underground
improvements (including, without limitation, treatment or storage tanks, or
water, gas or oil ▇▇▇▇▇), or emissions, discharges, releases or threatened
releases of Hazardous Substances, chemical substances, pesticides, petroleum or
petroleum products, pollutants, contaminants or hazardous or toxic substances,
materials or wastes whether solid, liquid or gaseous in nature, into the
Environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances,
underground improvements (including, without limitation, treatment or storage
tanks, or water, gas or oil ▇▇▇▇▇), or pollutants, contaminants or hazardous or
toxic substances, materials or wastes, whether solid, liquid or gaseous in
nature.
"Applicable Percentage" shall mean, with respect to any Accounting Period,
or portion thereof, (i) two percent (2%) of Gross Revenues or $350 per bed,
whichever is greater, with respect to the period beginning on the Commencement
Date and ending on the last day of the third (3rd) full Fiscal Year, (ii) three
percent (3%) of Gross Revenues, with respect to the fourth (4th) through tenth
(10th) full Fiscal Years, and (iii) with respect to each Fiscal Year thereafter,
three and one-half percent (3.5%) of Gross Revenues.
"Assignment of Operating Agreement, Subordination, Non-Disturbance and
Attornment Agreement" shall mean the Assignment of Operating Agreement,
Subordination, Non-Disturbance and Attornment Agreement dated as of the date
hereof, among Lessor, Lessee and Operator with respect to each of the Retirement
Communities, which Agreement is attached hereto as Exhibit "B" and as may be
amended and/or replaced from time to time pursuant to Section 18.3 of this
Agreement or the Assignment of Operating Agreement, Subordination,
Non-Disturbance and Attornment Agreement.
"Award" shall mean all compensation, sums or other value awarded, paid or
received by virtue of a total or partial Condemnation of the Leased Property
(after deduction of all reasonable legal fees and other reasonable costs and
expenses, including, without limitation, expert witness fees, incurred by Lessor
or Lessee in connection with obtaining any such award).
"Base Year" shall mean the 2003 calendar year.
"Business Day(s)" means Monday through Friday except for New Year's Day,
President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
"Calculation Period" shall mean each successive period of thirteen (13)
consecutive Accounting Periods commencing with the first Accounting Period
following the Commencement Date.
"Call Option" shall have the meaning given such term in Article XIX.
"Capital Expenditure" shall mean expenditures necessary for major repairs,
alterations, improvements, renewals and replacements to the structure or
exterior facade of the Facility, or to the mechanical, electrical, heating,
ventilating, air conditioning, plumbing, or vertical transportation elements of
the Facility, or required under Section 4.4 or 4.5.
"Case Goods" shall mean furniture and furnishings used in the Facility,
including, without limitation: chairs, beds, chests, headboards, desks, lamps,
tables, television sets, mirrors, pictures, wall decorations and similar items.
"Cash Management Agreement" shall mean the Cash Management Agreement dated
as of the date hereof, among Lessor, Lessee and Operator with respect to the
Retirement Communities, which Agreement is attached hereto as Exhibit "C", and
as may be amended and or/or replaced from time to time pursuant to Section 18.3
of this Agreement.
"Claim" shall have the meaning given such term in Article VIII.
"Code" shall mean the Internal Revenue Code of 1986 and, to the extent
applicable, the Treasury Regulations promulgated thereunder, each as amended
from time to time.
"Collective Leased Properties" shall mean, collectively, each of the Leased
Properties described in Exhibit "D".
"Commencement Date" shall mean the date of this Agreement.
"Condemnation" shall mean (a) the exercise of any governmental power with
respect to an individual Leased Property, whether by legal proceedings or
otherwise, by a Condemnor of its power of condemnation, (b) a voluntary sale or
transfer of an individual Leased Property by Lessor to any Condemnor, either
under threat of condemnation or while legal proceedings for condemnation are
pending, or (c) a taking or voluntary conveyance of all or part of an individual
Leased Property, or any interest therein, or right accruing thereto or use
thereof, as the result or in settlement of any Condemnation or other eminent
domain proceeding affecting an individual Leased Property, whether or not the
same shall have actually been commenced.
"Controlling Interest" shall mean with respect to a corporation, the right
to the exercise, directly or indirectly, of more than fifty percent (50%) of the
voting 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.
"Date of Taking" shall mean the date the Condemnor has the right to
possession of the Leased Property, or any portion thereof, in connection with a
Condemnation.
"Default" shall mean any event or condition existing which with the
giving of notice and/or lapse of time would ripen into an Event of Default.
"Deposit Account Pledge Agreement" shall mean the Deposit Account Pledge
Agreement of even date herewith by Lessee in favor of Lessor.
"Deposit Account Control Agreement" shall mean the Deposit Account Control
Agreement of even date herewith among Lessee, CNL Retirement Properties, Inc.
and CNLBank.
"Differential Amount" shall have the meaning given such term in the Rent
Addendum.
"Disbursement Rate" shall mean an annual rate of interest equal to the Prime
Rate plus one percentage point (1%).
"Distribution" shall mean (a) any declaration or payment of any dividend
(except dividends payable in common stock of Lessee) on or in respect of any
shares of any class of capital stock of Lessee, if Lessee is a corporation, or
any cash distributions in respect of any partnership or membership interests in
Lessee, if Lessee is a partnership or limited liability company, (b) any
purchase, redemption, retirement or other acquisition of any shares of any class
of capital stock of Lessee, if Lessee is a corporation, or any purchase,
redemption, retirement or other acquisition of any partnership or membership
interests in Lessee, if Lessee is a partnership or limited liability company,
(c) any other distribution on or in respect of any shares of any class of
capital stock of Lessee, if Lessee is a corporation, or any other distribution
in respect of any partnership or membership interests in Lessee, if Lessee is a
partnership or a limited liability company, or (d) any return of capital to
shareholders of Lessee, if Lessee is a corporation, or any return of capital to
partners or members in Lessee, if Lessee is a partnership or limited liability
company.
"Encumbrance" shall have the meaning given such term in Section 18.1.
"Entity" shall mean any corporation, general or limited partnership, limited
liability company, limited liability partnership, stock company or association,
joint venture, company, trust, bank, trust company, land trust, business trust,
cooperative, any government or agency or political subdivision thereof or any
other entity.
"Environment" shall mean soil, surface waters, ground waters, land, streams,
sediments, surface or subsurface strata and ambient air.
"Environmental Law(s)" shall mean: (i) the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq., as
now or hereafter amended and the Resource Conservation and Recovery Act of 1976,
as now or hereafter amended; (ii) the regulations promulgated thereunder, from
time to time; and (iii) 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 Substances or protection
of human health or the environment.
"Environmental Notice" shall have the meaning given such term in Section
4.5.1.
"Environmental Obligation" shall have the meaning given such term in Section
4.5.1.
"Event of Default" shall have the meaning given such term in Section 12.1.
"Existing Title Encumbrances" shall mean as of the Commencement Date, the
Title Encumbrances as shown on the title commitments identified on Composite
Exhibit "G" attached hereto and by this reference incorporated herein.
"Facility" shall mean each individual assisted living facility being
operated on each of the Collective Leased Properties.
"Facility Mortgage" shall mean any Encumbrance placed upon the Leased
Property in accordance with Article XVIII.
"Facility Mortgagee" shall mean the holder of any Facility Mortgage.
"FAS" shall mean items included within "Property and Equipment" under GAAP,
including, but not limited to, linen, china, glassware, silver, uniforms, and
similar items, whether used in connection with public space or in resident
rooms.
"FF&E" means furniture, furnishings, fixtures, Soft Goods, Case Goods,
vehicles and equipment (including, but not limited to, telephone systems,
facsimile machines, communications and computer systems hardware) but shall not
include FAS or any Software.
"FF&E Reserve" shall have the meaning given such term in Section 5.1.3(a).
"FF&E Reserve Payment" shall mean the FF&E Reserve Payment required by
Section 8.02E of the Operating Agreement.
"First-Tier Administration Fee" shall mean a fee payable to Prime Care
Management, LLC in the amount of $75,000 per year, which shall be payable in
equal Accounting Period installments as the next priority after Property
Expenses.
"First-Tier Minimum Rent" shall have the meaning given such term in the Rent
Addendum.
"Fiscal Quarter" shall mean, with respect to the first, second and third
quarter of any Fiscal Year, Accounting Periods one (1) through three (3), four
(4) through six (6) and seven (7) through nine (9), respectively, of such Fiscal
Year and, with respect to the fourth quarter of any Fiscal Year, Accounting
Periods ten (10) through thirteen (13) of such Fiscal Year.
"Fiscal Year" shall mean the fiscal year of Operator that 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. Any
partial Fiscal Year between Commencement Date and the commencement of the first
full Fiscal Year shall constitute a separate Fiscal Year. A partial Fiscal Year
between the end of the last Fiscal Year and the termination of this Agreement
shall, for purposes of this Agreement, constitute a separate Fiscal Year. If
Operator shall, for a bona fide business reason, change its Fiscal Year during
the Term, appropriate adjustments, if any, shall be made with respect to the
timing of certain accounting and reporting requirements of this Agreement;
provided, however, that, in no event shall any such change or adjustment
increase or reduce any monetary obligation under this Agreement, or alter or in
any way reduce any payments due Lessor under this Agreement.
"Fixtures" shall have the meaning given such term in Section 2.1(d).
"Future Title Encumbrances" shall have the meaning given such term in
Section 4.6.2.
"GAAP" means Generally Accepted Accounting Principles as adopted by the
American Institute of Certified Public Accountants, as may be amended from time
to time.
"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 Lessee
and reasonably satisfactory to Operator, if the Operating Agreement is in effect
and to Lessor, (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 or decrease 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.
"Government Agencies" shall mean any court, agency, authority, board
(including, without limitation, environmental protection, planning and zoning),
bureau, commission, department, office or instrumentality of any nature
whatsoever of any governmental or quasi-governmental unit of the United States
or the State or any county or any political subdivision of any of the foregoing,
whether now or hereafter in existence, having jurisdiction over Lessee or the
Leased Property or any portion thereof or the Retirement Community operated
thereon.
"Gross Revenues" shall mean, for each Accounting Period, all revenues and
receipts of every kind derived from operating the Retirement Community and all
departments and parts thereof, including, but not limited to: income (from both
cash and credit transactions) from monthly occupancy fees, entrance fees,
community fees, health care fees and ancillary services fees received pursuant
to various agreements with residents of the Retirement Community; income from
food and beverage, and catering sales; income from telephone charges; income
from vending machines; and proceeds, if any, from business interruption or other
loss of income insurance, all determined in accordance with GAAP; provided,
however, that Gross Revenues shall not include: (i) gratuities to employees at
the Retirement Community; (ii) federal, state or municipal excise, sales or use
taxes or similar taxes imposed at the point of sale and collected directly from
residents or guests of the Retirement Community or included as part of the sales
price of any goods or services; (iii) proceeds from the sale of FF&E; (iv)
interest received or accrued with respect to the monies in any operating or
reserve accounts of the Retirement Community; (v) any cash refunds, rebates or
discounts to residents of the Retirement Community, or cash discounts and
credits of a similar nature, given, paid or returned in the course of obtaining
Gross Revenues or components thereof; (vi) proceeds from any sale of the
Retirement Community, or any other capital transaction; (vii) proceeds of any
financing transaction affecting the Retirement Community; (viii) security
deposits until such time as the same are applied to current fees and other
charges due and payable; (ix) awards of damages, settlement proceeds and other
payments received by Lessee in respect of any Litigation other than Litigation
to collect fees due for services rendered from the Retirement Community; (x)
proceeds of any condemnation; (xi) proceeds of any casualty insurance, other
than loss of rents or business interruption insurance; and (xii) payments under
any policy of title insurance.
"Hazardous Substances" shall mean any waste, materials or substances
(whether in the form of liquids, solids or gasses, and whether or not
air-borne), which are or are deemed to be pollutants or contaminants, or which
are or are deemed to be hazardous, toxic, ignitable, reactive, corrosive,
dangerous, harmful or injurious including, without limitation, any fungi,
bacterial or microbial matter which reproduces through the release of spores or
the splitting of cells (e.g., mold), or which present a risk to public health or
to the environment, or which are or may become regulated by or under the
authority of any Environmental Laws, judgments, ordinances, orders, rules,
regulations, codes or other governmental restrictions, guidelines or
requirements, any amendments or successors thereto, replacements thereof or
publications promulgated pursuant to thereto, including, without limitation, any
such items or substances which are or may become regulated by any of the
Environmental Laws.
"Impositions" means all real estate and personal property taxes, levies,
assessments and similar charges including, without limitation, the following:
all water, sewer or similar fees, rents, rates, charges, excises or levies;
vault license fees or rentals; License fees; inspection fees and other
authorization fees; and all taxes and assessments of every kind and nature
whatsoever arising in any way from the use, occupancy or possession of the
Retirement Community, or the improvements located thereon, together with all
taxes levied against Lessee's Personal Property and other governmental charges
of any kind or nature whatsoever, whether general or special, ordinary or
extraordinary, foreseen or unforeseen, or hereinafter levied or assessed of
every character (including all interest and penalties thereon), which at any
time during or in respect of the Term of this Agreement may be assessed, levied,
confirmed or imposed on Lessor, Lessee or Operator with respect to the
Retirement Community or the operation thereof, or otherwise in respect of or be
a lien upon the Retirement Community (including, without limitation on any of
the FF&E, Inventories or FAS now or hereafter located therein). Impositions
shall not include any franchise, corporate, estate, inheritance, succession,
capital levy imposed on Lessor or Lessee, or any income tax imposed on any
income of Lessor or Lessee (including the Rent payable pursuant to this
Agreement and any distributions to Lessee pursuant to Section 9.01 of the
Operating Agreement), all of which shall be paid solely by Lessor or Lessee as
the recipient of such income, not from Gross Revenues nor from the FF&E Reserve.
"Indebtedness" shall mean all obligations, contingent or otherwise, which in
accordance with GAAP should be reflected on the obligor's balance sheet as
liabilities.
"Individual Lease Balance" shall mean the portion of the Lease Balance
allocable to an individual Leased Property.
"Insurance Requirements" shall mean all terms of any insurance policy
required by this Agreement and all requirements of the issuer of any such policy
and all orders, rules and regulations and any other requirements of the National
Board of Fire Underwriters (or any other body exercising similar functions)
binding upon Lessor, Lessee or the Leased Property.
"Inventories" means "Inventories" as defined by GAAP such as, but not
limited to, provisions in storerooms, refrigerators, pantries and kitchens;
medical supplies; other merchandise intended for sale; fuel; mechanical
supplies; stationery; and other expensed supplies and similar items.
"Land" shall have the meaning given such term in Section 2.1(a).
"Lease Balance" shall mean the sum equal to the Adjusted Lease Basis, plus
all Rent due as of Lessee's purchase of the Collective Leased Properties
pursuant to the terms of this Lease.
"Lease Basis" shall mean the sum of $109,720,000.00, which Lease Basis is
allocated among the Leased Properties as set forth in Exhibit "D" next to each
Property.
"Lease Basis Adjustment" shall have the meaning given such term in the Rent
Addendum.
"Lease Rate" shall mean ten and one-half percent (10.5%) per annum for the
calendar years 2002 and 2003, with annual increases pursuant to the definition
of "Adjusted Lease Rate".
"Lease Year" shall mean any Fiscal Year during the Term and any partial
Fiscal Year at the beginning or end of the Term.
"Leased Improvements" shall have the meaning given such term in Section
2.1(b).
"Leased Intangible Property" shall mean all Intangible Property (as defined
in the Refinance and Acquisition Agreement) acquired by Lessor with respect to
the Leased Property pursuant to the Refinance and Acquisition Agreement.
"Leased Personal Property" shall have the meaning given such term in Section
2.1(e).
"Leased Property" shall have the meaning given such term in Section 2.1.
"Leased Property" shall mean each individual Leased Property described in
Exhibit "D".
"Legal Requirement(s)" means any federal, state or local law, code, rule,
ordinance, regulation or order of any governmental authority or agency having
jurisdiction over the business or operation of the Retirement Community or the
matters which are the subject of this Agreement, including, without limitation,
any resident care or health care, building, zoning or use laws, ordinances,
regulations or orders, environmental protection laws and fire department rules,
and those which require structural, unforeseen or extraordinary changes,
including, but not limited to the Americans With Disabilities Act of 1990, 42
U.S.C. Section 12101 et seq.
"Lessee" shall have the meaning given such term in the preamble to this
Agreement and shall include its permitted successors and assigns.
"Lessee's Personal Property" shall mean all motor vehicles, Inventories, FAS
and any other tangible personal property of Lessee, if any, acquired by Lessee
at its election and with its own funds on and after the date hereof and located
at the Leased Property or used in Lessee's business at the Leased Property and
all modifications, replacements, alterations and additions to such personal
property installed at the expense of Lessee, other than any items included
within the definition of Proprietary Information.
"Lessor" shall have the meaning given such term in the preambles to this
Agreement and shall include its permitted successors and assigns.
"License(s)" means any license, permit, decree, act, order, authorization or
other approval (including Medicare/Medicaid certification to the extent
applicable) or instrument which is necessary in order to operate the Facility in
accordance with Legal Requirements or if the Operating Agreement is in effect,
otherwise in accordance with the Operating Agreement.
"Lien" shall mean any mortgage, security interest, pledge, collateral
assignment, or other encumbrance, lien or charge of any kind, or any transfer of
property or assets for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors.
"Litigation" means: (i) any cause of action commenced in a federal, state or
local court; or (ii) any claim brought before an administrative agency or body
(for example, without limitation, employment discrimination claims) relating to
the Retirement Community and/or the ownership and/or operation thereof.
"Marriott" shall mean Marriott Senior Living Services, Inc., a Delaware
corporation.
"Marriott Retirement Community" shall mean at any particular time the entire
system or group of Brighton Gardens retirement communities then owned and/or
operated and/or managed by Operator (or one or more of its Affiliates).
"Memorandum of Lease" shall mean the Memorandum of Lease and Precautionary
Mortgage or Deed to Secure Debt for each of the Leased Properties attached
hereto as Composite Exhibit "H."
"Minimum Rent" shall have the meaning given such term in the Rent Addendum.
"Notice" shall mean a notice given in accordance with Section 21.10.
"Obligations" shall mean all monetary and nonmonetary obligations of Lessee
under this Lease and all other Operative Documents.
"Operating Agreement" shall mean each individual Operating Agreement, each
dated as of the date hereof, between Lessee and Operator, with respect to the
Retirement Communities, as amended and/or replaced from time to time, subject to
Lessor's consent, as required pursuant to Section 20.4.3 of this Agreement.
"Operative Documents" shall mean this Lease, the Memorandum of Lease, the
Assignment of Operating Agreement, Subordination, Non-Disturbance and Attornment
Agreement, the Cash Management Agreement, and all other agreements executed by
Lessor and Lessee in connection with the Collective Leased Properties, including
such agreements which may involve Operator.
"Operator" shall mean Marriott, or an Affiliate of Marriott designated by
and acting as Operator pursuant to the Operating Agreements, and any successor
operator approved by Lessor in its sole discretion, or appointed pursuant to
Section 20.4.7.
"Overdue Rate" shall mean, on any date, a per annum rate of interest equal
to the greater of (i) the Lease Rate or (ii) the maximum rate then permitted
under applicable law.
"Parent" shall mean, with respect to any Person, any Person which directly,
or indirectly through one or more Subsidiaries or Affiliates, (i) owns fifty-one
percent (51%) or more of the voting or beneficial interest in, or (ii) otherwise
has the right or power (whether by contract, through ownership of securities or
otherwise) to control, such Person.
"Permitted Use" shall mean any use of the Leased Property permitted pursuant
to Section 4.1.
"Person" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so admits.
"Prime Rate" means the "prime rate" as published in the "Money Rates"
section of The Wall Street Journal; however, if such rate is, at any time during
the Term, no longer so published, the term "Prime Rate" means the average of the
prime interest rates which are announced, from time to time, by the three (3)
largest banks (by assets) headquartered in the United States which publish a
"prime rate."
"Property Expenses" is defined in Exhibit E attached hereto.
"Proprietary Information" shall mean (a) all computer software and
accompanying documentation (including all future upgrades, enhancements,
additions, substitutions and modifications thereof), other than that which is
commercially available to the retail customer, which are used by Lessee or
Operator (as long as the Operating Agreement is in effect) in connection with
the property management system and all future electronic systems developed by
Operator or any Affiliate of Operator for use in the Retirement Community, (b)
all manuals, brochures and directives used by Lessee or Operator at the
Retirement Community regarding the procedures and techniques to be used in
operating the Retirement Community, (c) customer lists, and (d) employee records
which must remain confidential either under Legal Requirements or under
reasonable corporate policies of Operator or any Affiliate of Operator.
"Prospectus" shall have the meaning given such term in Section 21.15 hereof.
"Protective Territory" shall mean the area within a 7.5 mile radius of a
Leased Property.
"Purchase Offer" shall have the meaning given such term in Article XIX.
"Put Option" shall have the meaning given such term in Article XIX.
"Rating Agencies" shall mean each of S&P, ▇▇▇▇▇'▇ and Fitch, or any other
nationally-recognized statistical rating agency which has been approved by
Lessor or any Facility Mortgagee.
"Refinancing and Acquisition Agreement" shall mean that certain Refinancing
and Acquisition Agreement between Lessor and Lessee dated as of the date hereof.
"Related Person" shall mean any entity in which Lessor, or any direct or
indirect partner of Lessor, has a direct or indirect interest, and any
individual or Entity whose ownership of the lease of Property would cause such
Leased Property to be a "related party Lessee", with respect to the Lessor or
any direct or indirect partner of the Lessor, within the meaning of Section
865(d)(2)(B) of the Code.
"Rent" shall mean the Rent payable under this Lease as set forth in the Rent
Addendum and shall include Minimum Rent, Additional Rent and Additional Charges.
"Rent Addendum" shall mean the Rent Addendum attached hereto as Exhibit "A".
"Rent Reserve" shall mean a hypothetical bookkeeping account with respect to
monies funded by Lessee, in four installments made on a quarterly basis, the sum
of which shall equal 120% of Additional Rent with respect to such Fiscal Year,
as determined pursuant to the Rent Addendum (the "Adjusted Additional Rent
Amount"), provided however, for purposes of determining the amount of each of
the first three quarterly installments required to be funded with respect to a
Fiscal Year, the amount of Additional Rent shall be determined on a quarterly
basis by prorating the amounts set forth on Schedule A to the Rent Addendum
based upon the Facility Occupancy Level achieved during such Fiscal Year as
referring to the applicable fiscal quarter, and making appropriate adjustments
thereto to determine the portion of the Additional Rent, as so prorated, which
would accrue with respect to such fiscal quarter, and with respect to the fourth
fiscal quarter of each Fiscal Year, the amount required to be funded shall be
appropriately adjusted to take into account amounts of Additional Rent
previously funded with respect to such Fiscal Year.
The Adjusted Additional Rent Amount shall be paid to Lessor in addition to
the Additional Rent with respect to such Fiscal Year, subject to the following:
the Adjusted Additional Rent Amount shall be treated, for purposes of the
hypothetical bookkeeping account, as funded in to the Rent Reserve, and shall be
deemed used (on a first in first out basis), first, to pay accrued but unpaid
Additional Rent with respect to a prior fiscal quarter, second, to pay
Additional Rent with respect to such Fiscal Year, and third to pay Additional
Rent which accrues in a subsequent Fiscal Year, but only to the extent amounts
funded in to the Rent Reserve with respect to such subsequent Fiscal Year are
insufficient to cover the Additional Rent obligation with respect to such Fiscal
Year. To the extent any such amounts are not deemed used to pay Additional Rent
in the manner described above (an "Excess Adjusted Additional Rent Amount"), the
Excess Adjusted Additional Rent Amount deemed funded in to the Rent Reserve with
respect to a Fiscal Year (each, a "Funding Year") shall be offset against, and
reduce dollar for dollar, Lessee's obligation to pay the Adjusted Additional
Rent Amount with respect to the Fiscal Year which ends ten years after the
applicable Funding Year.
"Restricted Cash" shall mean the sum of $2,000,000, which shall be held in
escrow in an interest bearing account at CNL Bank pursuant to the Deposit
Account Pledge Agreement, and at Lessor's sole election, used to fund payments
of Minimum Rent, Property Expenses, and the Administration Fee.
"Retirement Community" shall mean the Leased Property and all FF&E, FAS and
Inventories installed therein.
"SEC" shall mean the Securities and Exchange Commission.
"Second-Tier Administration Fee" shall mean a fee payable to Prime Care
Management, LLC in the amount of 0.35% of Gross Revenues from the Collective
Leased Properties or $175,000 per year, whichever is greater, payable in equal
monthly installments, and reconciled in the manner provided in the Rent
Addendum.
"Second-Tier Minimum Rent" shall have the meaning given such term in the
Rent Addendum.
"Site Lease" shall have the meaning given such term in Section 21.19.
"Soft Goods" shall mean all fabric, textile and flexible plastic products
(not including items which are classified as "Fixed Asset Supplies" under GAAP)
which are used in furnishing the Facility, including, without limitation:
carpeting, drapes, bedspreads, wall and floor coverings, mats, shower curtains
and similar items.
"Software" means all computer software and accompanying documentation
(including all future upgrades, enhancements, additions, substitutions and
modifications thereof), other than computer software which is commercially
available to the retail customer, which are used by Operator in connection with
its operations at the Facility.
"State" shall mean the State in which an individual Leased Property is
located.
"Subsidiary" shall mean, with respect to any Person, any Entity in which
such Person directly, or indirectly through one or more Subsidiaries or
Affiliates, (a) owns fifty-one percent (51%) or more of the voting or beneficial
interest or (b) which such Person otherwise has the right or power to control
(whether by contract, through ownership of securities or otherwise).
"Target Rent" shall have the meaning given such term in the Rent Addendum.
"Term" shall have the meaning set forth in Section 2.3 of this Agreement.
"Title Encumbrance" means any covenant, easement, condition, restriction or
agreement affecting title to the Retirement Community but not including any
mortgage.
"Total Casualty" shall mean any fire or other casualty which results in
damage to the Facility and its contents to the extent that the total cost of
repairing and/or replacing the damaged portion of the Facility to the same
condition as existed previously would be thirty percent (30%) or more of the
then total replacement cost of the Facility.
II. LEASED PROPERTY AND TERM
Section 2.1 Leased Property
Upon and subject to the terms and conditions hereinafter set forth, Lessor
leases to Lessee and Lessee leases from Lessor all of Lessor's right, title and
interest in and to all of the following (collectively, the "Leased Property"):
(a)each parcel of land that is more particularly described in Exhibit
F, attached hereto and made a part hereof (the "Land");
(b) all buildings, structures and other improvements of every kind
including, but not limited to, the Retirement Community, alleyways and
connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site and
off-site), parking areas and roadways appurtenant to such buildings and
structures presently situated upon each parcel of Land (collectively, the
"Leased Improvements");
(c) all easements, rights and appurtenances relating to each parcel of
Land and the Leased Improvements;
(d) all equipment, machinery, fixtures, and other items of property,
now or hereafter permanently affixed to or incorporated into the Leased
Improvements, including, without limitation, all furnaces, boilers, heaters,
electrical equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and theft
protection equipment, all of which, to the maximum extent permitted by law, are
hereby deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto, but specifically
excluding all items included within the category of Lessee's Personal Property
(collectively, the "Fixtures");
(e) all machinery, equipment, furniture, furnishings, moveable walls or
partitions, computers or trade fixtures located on or in the Leased
Improvements, and all modifications, replacements, alterations and additions to
such property, except items, if any, included within the category of Fixtures,
but specifically excluding all items included within the category of Lessee's
Personal Property (collectively, the "Leased Personal Property"); and
(f) all of the Leased Intangible Property.
Section 2.2 Condition of Leased Property
Lessee acknowledges receipt and delivery of possession of the Collective
Leased Properties and Lessee accepts the Collective Leased Properties in its "as
is" condition, subject to the rights of parties in possession, the existing
state of title, including all covenants, conditions, restrictions, reservations,
mineral leases, easements and other matters of record or that are visible or
apparent on the Leased Properties, all applicable Legal Requirements, the lien
of any financing instruments, mortgages and deeds of trust permitted by the
terms of this Agreement, and such other matters which would be disclosed by an
inspection of the Collective Leased Properties and the record title thereto or
by an accurate survey thereof. LESSEE REPRESENTS THAT IT HAS INSPECTED THE
COLLECTIVE LEASED PROPERTIES AND ALL OF THE FOREGOING AND HAS FOUND THE
CONDITION THEREOF SATISFACTORY AND IS NOT RELYING ON ANY REPRESENTATION OR
WARRANTY OF LESSOR OR LESSOR'S AGENTS OR EMPLOYEES WITH RESPECT THERETO, EXCEPT
AS EXPRESSLY SET FORTH HEREIN, AND LESSEE WAIVES ANY CLAIM OR ACTION AGAINST
LESSOR IN RESPECT OF THE CONDITION OF THE COLLECTIVE LEASED PROPERTIES. EXCEPT
AS EXPRESSLY SET FORTH HEREIN, LESSOR MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, IN RESPECT OF THE COLLECTIVE LEASED PROPERTIES OR ANY PART
THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY
PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE
TO BE BORNE BY LESSEE. To the maximum extent permitted by law, however, Lessor
hereby assigns to Lessee all of Lessor's rights to proceed against any
predecessor in title, contractors and materialmen for breaches of warranties or
representations or for latent defects in the Leased Property. Lessor shall fully
cooperate with Lessee in the prosecution of any such claims, in Lessor's or
Lessee's name, all at Lessee's sole cost and expense.
Section 2.3 Term
The term of this Agreement (the "Term") shall commence on the Commencement
Date and shall expire on the thirty fifth (35th) anniversary of the Commencement
Date.
Section 2.4 Nature of Lease
It is the intention of the parties hereto that for state, real estate,
commercial law, bankruptcy and federal, state and local income tax purposes, but
not for financial accounting purposes, the transaction contemplated by this
Lease is a financing arrangement and preserves ownership of the land and
improvements in the Lessee. It is the intent of the parties hereto that the
obligations of the Lessee under the Lease to pay (x) Minimum Rent and Additional
Rent and (y) the Adjusted Lease Basis in connection with any reacquisition of
any individual Leased Property pursuant to the Lease shall be treated as
payments of interest on and principal of, loans from the Lessor to the Lessee,
and the Lease and the precautionary mortgages or deeds of trust, as set forth in
the Memorandum of Lease, grant a present and immediate first priority security
interest and mortgage or deed of trust lien, as the case may be, on all of the
Land, Improvements, Fixtures and Leased Personal Property to the Lessor to
secure the Lessee's performance under and payment of all amounts under the Lease
and the other Operative Documents.
Lessor and Lessee further agree that when an Event of Default has occurred,
Lessor may enforce the terms of this Lease in accordance with the terms of
Article XII, or, at Lessor's sole election, Lessor may enforce the precautionary
mortgage granted within the Memorandum of Lease, which precautionary mortgage
shall be perfected upon the recording of the Memorandum of Lease in the public
records of the County wherein the particular Leased Property is located. In
connection with such enforcement, Lessor shall be entitled to collect all costs
and expenses reasonably incurred in pursing such remedies, including without
limitation, reasonable attorneys' fees, costs incurred at trial, on appeal or in
monitoring or litigating within any bankruptcy proceeding involving the Lessee.
III. RENT
Section 3.1 Rent
Lessee shall pay, in lawful money of the United States of America which
shall be legal tender for the payment of public and private debts, without
offset, abatement, demand or deduction, Minimum Rent and Additional Rent to
Lessor as provided in the Rent Addendum attached hereto as Exhibit "A", together
with the Additional Charges described in Section 3.2. Consistent with the
intention of the parties to treat the transaction described in this Lease as a
financing for Federal Income Tax purposes, the Lessor intends that payment of
Minimum Rent and Additional Rent qualify as "interest" which is secured by a
mortgage on real property within the meaning of and for all purposes of Section
856(c)(2)(B) of the Code. Notwithstanding the foregoing, in the event the
provisions of Section 467 of the Code were determined to apply to the payments
of Minimum Rent and Additional Rent, the parties agree that (1) the provisions
of the Rent Addendum shall be treated as a Rent Allocation Provision within the
meaning of Section 467(3)(B) of the Code pursuant to which Rents are allocated
as described in Section 467(b)(1)(A) of the Code and (2) the timing and amounts
of the payments of Minimum Rent and Additional Rent pursuant to the provisions
of the Rent Addendum have been negotiated and agreed to in accordance with the
economic arrangement of the parties and not for purposes of differing or
accelerating the receipt of any such amount. The Second-Tier Administration Fee
shall not be paid unless and until all Minimum Rent required to be paid for all
prior and current Accounting Periods has been paid, it being the intent of the
parties that the payment of the Second-Tier Administration Fee is subordinate in
all respects to the timely payment of Minimum Rent hereunder.
Section 3.2 Additional Charges
In addition to the Minimum Rent and Additional Rent payable hereunder,
Lessee shall pay to the appropriate parties and discharge as and when due and
payable the following (collectively, "Additional Charges"):
(a) Impositions. Subject to Article VIII relating to permitted
contests, Lessee shall pay, or cause to be paid, all Impositions before any
fine, penalty, interest or cost (other than any opportunity cost as a result of
a failure to take advantage of any discount for early payment) may be added for
non-payment, such payments to be made directly to the taxing authorities where
feasible, and shall promptly furnish to Lessor copies of official receipts or
other reasonably satisfactory proof evidencing such payments. To that end,
Lessor shall not be required to pay any taxes or assessments whatsoever which
relate to or may be assessed against this Lease, the Rent and other amounts due
hereunder, the Leased Property, improvements and Lessee's Property; provided,
however, that any taxes or assessments which may be levied or assessed against
the Leased Property for a period ending after the termination of this Lease
shall be prorated on a cash basis between Lessor and Lessee as of such date. If
any such Imposition may, at the option of the taxpayer, lawfully be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Lessee may exercise the option to pay the same (and any accrued
interest on the unpaid balance of such Imposition) in installments and, in such
event, shall pay such installments during the Term as the same become due and
before any fine, penalty, premium, further interest or cost may be added
thereto. Lessor, at its expense, shall, to the extent required or permitted by
Applicable Law, prepare and file all tax returns and pay all taxes due in
respect of Lessor's net income, single business, franchise taxes and taxes on
its capital stock, and Lessee, at its expense, shall, to the extent required or
permitted by Applicable Laws, prepare and file all other tax returns and reports
in respect of any Imposition as may be required by Government Agencies,
including, without limitation, gross receipts, sales and use taxes and ad
valorem taxes. If any refund shall be due from any taxing authority in respect
of any Imposition paid by Lessee, the same shall be paid over to or retained by
Lessee. Lessor and Lessee shall, upon request of the other, provide such data as
is maintained by the party to whom the request is made with respect to the
Leased Property as may be necessary to prepare any required returns and reports.
In the event Government Agencies classify any property covered by this Agreement
as personal property, Lessee shall file all personal property tax returns in
such jurisdictions where it may legally so file. Each party shall, to the extent
it possesses the same, provide the other, upon request, with cost and
depreciation records necessary for filing returns for any property so classified
as personal property. Where Lessor is legally required to file personal property
tax returns for property covered by this Agreement and/or gross receipts tax
returns for Rent received by Lessor from Lessee, Lessor shall file the same with
reasonable cooperation from Lessee. Subject to Lessee's contest right set forth
in Article VIII below, if Lessee fails to pay any such taxes or assessments
prior to delinquency at any time during the, term of this Lease, thereafter,
upon demand by Lessor, Lessee shall deliver and pay over to Lessor such
additional sums as are necessary to satisfy any deficiency in the amount
necessary to pay the taxes or assessments before the same become due. In the
event that Lessee fails to pay any tax obligation of Lessee hereunder, Lessor
may, but shall not be required to, pay such taxes, and such taxes having been
paid by Lessor shall become immediately due and payable as Additional Charges
owed by Lessee, together with the Overdue Rate until paid.
(b) Utility Charges. Lessee shall pay or cause to be paid all charges
for electricity, power, gas, oil, water and other utilities used in connection
with the Leased Property.
(c) Insurance Premiums. Lessee shall pay or cause to be paid all
premiums for the insurance coverage required to be maintained pursuant to
Article IX. In the event that Lessee fails to pay any insurance premiums
obligation of Lessee hereunder, Lessor may, but shall not be required to, pay
such insurance premiums, and such insurance premiums having been paid by Lessor
shall become immediately due and payable as Additional Charges owed by Lessee,
together with the Overdue Rate until paid.
(d) Other Charges. Lessee shall pay or cause to be paid all other
amounts, liabilities and obligations arising in connection with the Leased
Property except those obligations expressly assumed by Lessor pursuant to the
provisions of this Agreement or expressly stated not to be an obligation of
Lessee pursuant to this Agreement. Without limitation, Lessee shall pay or cause
to be paid all amounts, liabilities and obligations arising in connection with
the Contracts, as defined in the Refinancing and Acquisition Agreement.
(e) Reimbursement for Additional Charges. If Lessee pays or causes to
be paid property taxes or similar or other Additional Charges attributable to
periods after the end of the Term, whether upon expiration or sooner termination
of this Agreement, Lessee may, within a reasonable time after the end of the
Term, provide Notice to Lessor of its estimate of such amounts. Lessor shall
promptly reimburse Lessee for all payments of such taxes and other similar
Additional Charges.
Section 3.3 Late Payment of Rent, Etc.
If any installment of Minimum Rent, Additional Rent or Additional Charges
(but only as to those Additional Charges which are payable directly to Lessor)
shall not be paid on its due date, as provided in the Rent Addendum, Lessee
shall pay Lessor, within five (5) days after Lessor's written demand therefor,
as Additional Charges, a late charge (to the extent permitted by law) with
interest at the Overdue Rate on the amount of such installment, from the due
date of such installment to the date of payment thereof. To the extent that
Lessee pays any Additional Charges directly to Lessor or any Facility Mortgagee
pursuant to any requirement of this Agreement, Lessee shall be relieved of its
obligation to pay such Additional Charges to the Entity to which they would
otherwise be due and Lessor shall pay when due, or cause the applicable Facility
Mortgagee to pay when due, such Additional Charges to the Entity to which they
are due. If any payment due from Lessor to Lessee shall not be paid within ten
(10) days after its due date, Lessor shall pay to Lessee, on demand, a late
charge (to the extent permitted by law) computed at the Overdue Rate on the
amount of such installment from the due date of such installment to the date of
payment thereof.
In the event of any failure by Lessee to pay any Additional Charges when
due, except as expressly provided in Section 3.2(a) with respect to permitted
contests pursuant to Article VIII, Lessee shall promptly pay (unless payment
thereof is in good faith being contested and enforcement thereof is stayed) and
discharge, as Additional Charges, every fine, penalty, interest and cost which
may be added for non-payment or late payment of such items. Lessor shall have
all legal, equitable and contractual rights, powers and remedies provided either
in this Agreement or by statute or otherwise in the case of non-payment of the
Additional Charges as in the case of non-payment of the Minimum Rent and
Additional Rent.
Section 3.4 Net Lease
The Rent shall be absolutely net to Lessor so that this Agreement shall
yield to Lessor the full amount of the installments or amounts of the Rent
throughout the Term. This Agreement is a net lease and it is agreed and intended
that Rent payable hereunder by Lessee shall be paid without notice, demand,
counterclaim, setoff, deduction or defense and without abatement, suspension,
deferment, diminution or reduction and that Lessee's obligation to pay all such
amounts, throughout the Term is absolute and unconditional and the respective
obligations and liabilities of Lessee and Lessor hereunder shall in no way be
released, discharged or otherwise affected for any reason, including without
limitation: (a) any defect in the condition, merchantability, design, quality or
fitness for use of the Leased Property or any part thereof, or the failure of
the Leased Property to comply with all Applicable Laws, including any inability
to occupy or use the Leased Property by reason of such noncompliance; (b) any
damage to, removal, abandonment, salvage, loss, condemnation, theft, scrapping
or destruction of or any requisition or taking of the Leased Property or any
part thereof, or any environmental conditions on the Leased Property or any
property in the vicinity of the Leased Property; (c) any restriction, prevention
or curtailment of or interference with any use of the Leased Property or any
part thereof including eviction; (d) any defect in title to or rights to the
Leased Property or any lien on such title or rights to the Leased Property; (e)
any change, waiver, extension, indulgence or other action or omission or breach
in respect of any obligation or liability of or by any Person; (f) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to Lessee or any other Person, or
any action taken with respect to this Agreement by any trustee or receiver of
Lessee or any other Person, or by any court, in any such proceeding; (g) any
right or claim that Lessee has or might have against any Person, or any vendor,
manufacturer, contractor of or for the Leased Property; (h) any failure on the
part of Lessor or any other Person to perform or comply with any of the terms of
this Agreement, or of any other agreement; (i) any invalidity, unenforceability,
rejection or disaffirmance of this Agreement by operation of law or otherwise
against or by Lessee or any provision hereof; (j) the impossibility of
performance by Lessee or Lessor, or both; (k) any action by any court,
administrative agency or other Government Agencies; (l) any interference,
interruption or cessation in the use, possession or quiet enjoyment of the
Leased Property or otherwise; or (m) any other occurrence whatsoever, whether
similar or dissimilar to the foregoing, whether foreseeable or unforeseeable,
and whether or not Lessee shall have notice or knowledge of any of the
foregoing.
Section 3.5 Non-Terminability
This Agreement shall be noncancellable by Lessee for any reason whatsoever
and, Lessee, to the extent now or hereafter permitted by Applicable Laws, waives
all rights now or hereafter conferred by statute or otherwise to quit, terminate
or surrender this Agreement or to any diminution, abatement or reduction of Rent
payable hereunder. Under no circumstances or conditions shall Lessor be expected
or required to make any payment of any kind hereunder or have any obligations
with respect to the use, possession, control, maintenance, alteration,
rebuilding, replacing, repair, restoration or operation of all or any part of
the Leased Property, so long as the Leased Property or any part thereof is
subject to this Agreement, and Lessee expressly waives the right to perform any
such action at the expense of Lessor pursuant to any law. It is the intention of
the parties hereto that the obligations of Lessee hereunder shall be separate
and independent covenants and agreements, that the Minimum Rent and Additional
Rent, and all other sums payable by Lessee hereunder shall continue to be
payable in all events and that the obligations of Lessee hereunder shall
continue unaffected, unless the requirement to pay or perform the same shall
have been terminated pursuant to an express provision of this Lease.
IV. USE OF THE LEASED PROPERTY
Section 4.1 Permitted Use
Lessee shall, at all times during the Term and at any other time that Lessee
shall be in possession of the Leased Property, continuously use and operate the
Leased Property exclusively as an assisted living facility or skilled nursing
facility, and any uses incidental thereto. Subject to Section 15.3, Lessee shall
not use the Leased Property or any portion thereof for any other use without the
prior written consent of Lessor. No use shall be made or permitted to be made of
the Leased Property and no acts shall be done thereon which will cause the
cancellation of any insurance policy covering the Leased Property or any part
thereof (unless another adequate policy is available), nor shall Lessee sell or
otherwise provide or permit to be kept, used or sold in or about the Leased
Property any article which may be prohibited by law or by the standard form of
fire insurance policies, or any other insurance policies required to be carried
hereunder, or fire underwriter's regulations. Lessee shall, at its sole cost,
comply with all Insurance Requirements. Subject to Article X (Casualty) and
Article XI (Condemnation), Lessee shall not take or omit to take any action, the
taking or omission of which materially impairs the value or the usefulness of
the Leased Property or any part thereof for its Permitted Use.
Section 4.2 Necessary Approvals
Lessee, or Operator at the direction of Lessee, shall proceed with all due
diligence and exercise commercially reasonable efforts to obtain and maintain
all Licenses, approvals and contracts necessary to use and operate, for its
Permitted Use, the Leased Property and the Facility located thereon under
applicable law. Lessor shall cooperate with Lessee and Operator, as applicable,
in this regard, including executing all applications and consents required by
Applicable Laws to be signed by Lessor in order for Lessee and Operator, as
applicable, to obtain and maintain such approvals. Lessee shall, simultaneously
with the execution of this Lease, provide Lessor with a Collateral Assignment of
all such Licenses, approvals and contracts now or hereafter required or issued
by or entered into with any Government Agency, in a form and substance
satisfactory to Lessor in its sole and absolute discretion.
Section 4.3 Lawful Use, Waste, Etc.
Lessee shall not use or suffer or permit the use of the Leased Property or
Lessee's Personal Property, if any, for any unlawful purpose. Lessee shall not
commit or suffer to be committed any waste on the Leased Property, or in the
Facility, nor shall Lessee cause or permit any unlawful nuisance thereon or
therein. Lessee shall not suffer nor permit the Leased Property, or any portion
thereof, to be used in such a manner as (i) might reasonably impair Lessor's
title thereto or to any portion thereof, or (ii) may reasonably allow a claim or
claims for adverse usage or adverse possession by the public, as such, or of
implied dedication of the Leased Property or any portion thereof.
Section 4.4 Compliance with Legal/Insurance Requirements, Etc.
Subject to the provisions of Article VIII, Lessee, at its sole expense,
shall (or shall cause Operator, if applicable, to) (i) comply with Legal
Requirements and Insurance Requirements in respect of the use, operation,
maintenance, repair, alteration and restoration of the Leased Property, and (ii)
comply with all appropriate Licenses, and other authorizations and agreements
required for any use of the Leased Property and Lessee's Personal Property, if
any, then being made and which are material to the operation of the Leased
Property as an assisted living facility, and for the proper operation and
maintenance of the Leased Property or any part thereof.
Section 4.5 Environmental Matters
4.5.1 Restriction on Use, Etc.
If, at any time prior to the termination of this Agreement, Hazardous
Substances (other than those maintained in accordance with Environmental Laws)
are discovered on the Leased Property, subject to Lessee's right to contest the
same in accordance with Article VIII, Lessee shall take all actions and incur
any and all expenses, as may be reasonably necessary and as may be required by
any Government Agency, (i) to clean up and remove from and about the Leased
Property all Hazardous Substances thereon, (ii) to contain and prevent any
further release or threat of release of Hazardous Substances on or about the
Leased Property and (iii) to use good faith efforts to eliminate any further
release or threat of release of Hazardous Substances on or about the Leased
Property. Lessee shall promptly: (a) upon receipt of Notice or knowledge, notify
Lessor in writing of any material change in the nature or extent of Hazardous
Substances at the Leased Property, (b) transmit to Lessor a copy of any
Community Right to Know report which is required to be filed by Lessee with
respect to the Leased Property pursuant to ▇▇▇▇ Title III or any other
Environmental Law, (c) transmit to Lessor copies of any citations, orders,
notices or other governmental communications received by Lessee or its agents or
representatives with respect thereto (collectively, "Environmental Notice"),
which Environmental Notice requires a written response or any action to be taken
and/or if such Environmental Notice gives notice of and/or presents a material
risk of any material violation of any Environmental Law and/or presents a
material risk of any material cost, expense, loss or damage (an "Environmental
Obligation"), (d) observe and comply with all Environmental Laws relating to the
use, maintenance and disposal of Hazardous Substances and all orders or
directives from any official, court or agency of competent jurisdiction relating
to the use or maintenance or requiring the removal, treatment, containment or
other disposition thereof, and (e) pay or otherwise dispose of any fine, charge
or Imposition related thereto, unless Lessee shall contest the same in good
faith and by appropriate proceedings and the right to use and the value of the
Leased Property is not materially and adversely affected thereby.
4.5.2 Indemnification.
Lessee shall protect, indemnify and hold harmless Lessor and its
trustees, directors, officers, agents, employees and beneficiaries, and any of
their respective successors or assigns with respect to this Agreement
(collectively, the "Indemnitees" and, individually, an "Indemnitee") for, from
and against any and all debts, liens, claims, causes of action, administrative
orders or notices, costs, fines, penalties or expenses (including, without
limitation, reasonable attorney's fees and expenses) imposed upon, incurred by
or asserted against any Indemnitee resulting from, either directly or
indirectly, the presence during the Term in, upon or under the soil or ground
water of the Leased Property or any properties surrounding the Leased Property
of any Hazardous Substances in violation of any Applicable Law or otherwise
(collectively, the "Environmental Claims"), so long as any of the foregoing does
not arise by reason of the affirmative gross negligence, or willful misconduct
of the Indemnitee. This duty includes, but is not limited to, costs associated
with personal injury or property damage claims as a result of Environmental
Claims prior to the expiration or sooner termination of the Term and the
surrender of the Leased Property to Lessor in accordance with the terms of this
Agreement free of Hazardous Substances in, upon or under the soil or ground
water of the Leased Property in violation of an Applicable Law. Upon Notice from
the Indemnitee party and any other of the Indemnitees, the indemnifying party
shall undertake the defense, at its sole cost and expense, of any
indemnification duties set forth herein, in which event, the indemnifying party
shall not be liable for payment of any duplicative attorneys' fees incurred by
the other party or any Indemnitee.
4.5.3 Hazardous Substance Abatement.
Lessee agrees that during the Term of this Lease, the Leased Property
shall not be in violation of any Federal, state or local law, ordinance or
regulation applicable to the Leased Property relating to industrial hygiene,
soil, water or environmental conditions. In response to the presence of any
Hazardous Substance on, under or about the Leased Property, Lessee shall
immediately take, at Lessee's sole cost and expense, all action required to
clean up and remove such Hazardous Substance, to restore the Leased Property and
to prevent future contamination. In furtherance of the foregoing, Lessee shall
take any action required by any Environmental Law or any judgment, consent to
create settlement or compromise with respect to the presence of a Hazardous
Substance at the Leased Property.
4.5.4 Survival.
As to conditions which exist prior to the expiration or sooner
termination of this Agreement, the provisions of this Section 4.5 shall survive
the expiration or sooner termination of this Agreement.
Section 4.6 Title Encumbrances
4.6.1 Existing Title Encumbrances.
Lessee hereby acknowledges and consents to all Existing Title
Encumbrances. All costs, expenses and charges which are imposed on the
Retirement Community under the Existing Title Encumbrances shall be a Property
Expense and shall be payable solely by Lessee.
4.6.2 Future Title Encumbrances.
Title Encumbrances which are entered into, or become encumbrances on
the Retirement Community and/or the Leased Property, after the Commencement Date
shall be referred to in this Agreement as "Future Title Encumbrances." Lessor
agrees that it will give Lessee and Operator, if applicable, Notice of its
intention to execute any Future Title Encumbrances, such Notice to be reasonably
in advance of the execution thereof and that such Future Title Encumbrances
shall not be inconsistent with Lessee's Permitted Use or quiet enjoyment,
provided however, Lessor shall have no restriction in granting Encumbrances in
accordance with Article XVIII. Lessee may subject the Leased Property to
easements necessary for the provision of public utilities and services provided
Lessee has first obtained Lessor's prior consent, which consent shall not be
unreasonably withheld in the event such easements: (i) would not impose any
financial obligations on the Retirement Community other than the cost of public
utilities, (ii) would not permit persons other than residents, invitees or
employees of the Retirement Community to use Facility facilities (for example,
parking spaces), and (iii) would not adversely affect the value on future use of
the Retirement Community.
V. MAINTENANCE AND REPAIRS
Section 5.1 Maintenance and Repair; Completion of Improvement; FF&E Reserve
Lessee acknowledges that it has received the Leased Property in good
condition, repair and appearance. Lessee agrees that, at its expense, it shall
keep and maintain the Leased Property, including any altered, rebuilt,
additional or substituted buildings, structures and other improvements thereto,
in good repair and appearance, except for ordinary wear and tear. Lessee shall
also make promptly, all structural and nonstructural, foreseen and unforeseen,
ordinary and extraordinary changes and repairs of every kind which may be
required to be made to keep and maintain the Leased Property in such good
condition, repair and appearance and it will keep the Leased Property orderly
and free and clear of rubbish. Lessee covenants to perform or observe all terms,
covenants or conditions of any reciprocal easement or maintenance agreement to
which it may at any time be a party or to which the Leased Property are
currently subject. Lessee shall, at its expense, use its best efforts to enforce
compliance with any reciprocal easement or maintenance agreement benefiting the
Leased Property by any other person subject to such agreement. Lessor shall not
be required to maintain, repair or rebuild, or to make any alterations,
replacements or renewals of any nature to the Leased Property, or any part
thereof, whether ordinary or extraordinary, structural or nonstructural,
foreseen or not foreseen to maintain the Leased Property or any part thereof in
any way. Lessee hereby expressly waives the right to make repairs at the expense
of Lessor which may be provided for in any law in effect at the time of the
commencement of the Term or which may thereafter be enacted. If Lessee shall
abandon the Leased Property, it shall give Lessor and any Facility Mortgagee
immediate notice thereof.
5.1.1 Lessee's Obligations.
Lessee shall maintain (including necessary replacements) the Leased
Property and all buildings and improvements thereon (interior and exterior,
structural and otherwise) in good order and repair and, subject to the
provisions of Article 10 of this Lease with respect to damage within the last
twenty-four (24) months of this Lease, and Article XI of this Lease, return the
Leased Property and all buildings and improvements thereon at the expiration of
the term of this Lease or any extension thereof in as reasonably as good
condition as when received, ordinary wear and tear excepted.
5.1.2 Lessor Disclaimer.
Lessee agrees that Lessor shall have no obligation under this Lease to
make any repairs or replacements (including the replacement of obsolete
components) to the Leased Property or the buildings or improvements thereon, or
any alteration, addition, change, substitution or improvement thereof or
thereto, whether structural or otherwise. The terms "repair" and "replacement",
as used in Section 5.1.1, above, include the replacement of any portions of the
Leased Property which have outlived their useful life during the term of this
Lease (or any extensions thereof). Lessor and Lessee intend that the Rent
received by Lessor shall be free and clear of any expense to Lessor for the
construction, care, maintenance (including common area maintenance charges and
charges accruing under easements or other agreements relating to the Leased
Property), operation, repair, replacement, alteration, addition, change,
substitution and improvement of or to the Leased Property and any building and
improvement thereon. Upon the expiration or earlier termination of this Lease,
Lessee shall remain responsible for, and shall pay to Lessor, any cost, charge
or expense which Lessee is otherwise responsible for hereunder attributable to
any period (prorated on a daily basis) prior to the expiration or earlier
termination of this Lease.
5.1.3 FF&E Reserve.
(a) Lessee, or Operator at Lessee's direction, shall establish
throughout the Term an interest bearing reserve account (the "FF&E Reserve") in
the amount of the Applicable Percentage, together with such additional amount
(if any) necessary to equal the FF&E Reserve Payment required to be paid by
Lessee under Section 8.02E and Section 8.02F of the Operating Agreement, in CNL
Bank or such other bank designated by Lessor, or Operator at the direction of
Lessor, and reasonably approved by Lessee, or in such account and at such bank
as Lessor, Lessee and Operator may agree in the Cash Management Agreement. All
interest earned on the FF&E Reserve shall be added to and remain a part of the
FF&E Reserve. Lessee or Lessor, or Operator if so required by the Operating
Agreement or designated by Lessee, shall be the only party entitled to withdraw
funds from the FF&E Reserve. The purpose of the FF&E Reserve is to cover the
cost of:
(i) Replacements and renewals to the Facility's FF&E;
(ii) Certain routine repairs and maintenance to the Facility
building (which are normally capitalized under GAAP) such as exterior and
interior repainting, resurfacing building walls, floors, roofs and parking
areas, and replacing folding walls and the like; and
(iii) Capital Expenditures required to be made by Lessee under
Section 5.1.
(b) Commencing with the Commencement Date and continuing throughout the
Term, Lessee shall transfer, or shall direct Operator to transfer (as of the end
of each Accounting Period of the Term), into the FF&E Reserve an amount equal to
the Applicable Percentage of Gross Revenues for such Accounting Period.
(c) Lessee, or Operator at the direction of Lessee, shall from time to
time make expenditures from the FF&E Reserve as it deems necessary in accordance
with Section 5.1.3(a). Lessee, or Operator at Lessee's direction, shall provide
to Lessor, within twenty (20) days after the end of each Accounting Period, a
statement setting forth FF&E Reserve expenditures made to date during the Fiscal
Year. Except as otherwise provided in the Cash Management Agreement,
Expenditures from the FF&E Reserve shall be subject to Lessor's approval.
(d) All funds in the FF&E Reserve, all interest earned thereon and all
property purchased with funds from the FF&E Reserve shall be and remain the
property of Lessor and any such property purchased with funds from the FF&E
Reserve shall be part of the Leased Property and leased by Lessor to Lessee
pursuant to this Agreement. Following expiration or earlier termination of this
Agreement and payment in full on all contracts entered into prior to such
expiration or termination for work to be done or furniture, furnishings,
fixtures and equipment to be supplied in accordance with this Section 5.1.3 out
of the FF&E Reserve, Lessee's rights hereunder or under the Operating Agreement
relating to the FF&E Reserve shall be transferred from Lessee to Lessor, subject
to the provisions of the Operating Agreement if applicable.
(e) If Lessor wishes to grant a security interest in or create another
encumbrance on the rights of Lessor with respect to the FF&E Reserve, the
instrument granting such security interest or creating such other encumbrance
shall expressly provide that such security interest or encumbrance is subject to
the rights of Lessee with respect to the FF&E Reserve as set forth herein and
the rights of the Operator pursuant to the Operating Agreement during the term
of the Operating Agreement. The form and substance of such provision shall be
subject to obtaining Lessee's prior written approval, which approval shall not
be unreasonably withheld, delayed or conditioned.
(f) In addition to the foregoing obligations to fund the FF&E Reserve,
Lessee shall be obligated to fund the "803 Expenditures Reserve," as may be
required under Section 8.03 of the Operating Agreement.
5.1.4 Non-responsibility of Lessor.
All materialmen, contractors, artisans, mechanics and laborers and other
persons contracting with Lessee with respect to the Leased Property, or any part
thereof, are hereby charged with notice that liens on the Leased Property or on
Lessor's interest therein are expressly prohibited and that they must look
solely to Lessee to secure payment for any work done or material furnished by
Lessee or for any other purpose during the term of this Agreement. Nothing
contained in this Agreement shall be deemed or construed in any way as
constituting the consent or request of Lessor, express or implied, by inference
or otherwise, to any contractor, subcontractor, laborer or materialmen for the
performance of any labor or the furnishing of any materials for any alteration,
addition, improvement or repair to the Leased Property or any part thereof or as
giving Lessee any right, power or authority to contract for or permit the
rendering of any services or the furnishing of any materials that would give
rise to the filing of any lien against the Leased Property or any part thereof
nor to subject Lessor's estate in the Leased Property or any part thereof to
liability under any Mechanic's Lien Law of the State in any way, it being
expressly understood Lessor's estate shall not be subject to any such liability.
Lessee will not, directly or indirectly, create or permit to be created or
to remain, and will promptly discharge, at its expense, any mortgage, lien,
encumbrance or charge on, pledge of, or conditional sale or other title
retention agreement with respect to, the Leased Property or any part thereof or
Lessee's interest therein or the Minimum Rent, Additional Rent or other sums
payable by Lessee under this Lease, other than any encumbrances permitted as a
Future Title Encumbrance.
5.1.5 Rent Reserve.
Lessee shall establish and maintain throughout the Term the Rent Reserve and
shall have the authority to invest amounts deposited into the Rent Reserve in
cash, cash equivalents and government securities. With the exception of interest
earned on any such investments, all funds in the Rent Reserve shall be held in
reserve for a period of ten (10) years from the date each such sum is funded
into the Rent Reserve, except to the extent drawn upon by Lessor on an annual
basis to pay accrued and unpaid Additional Rent.
Section 5.2 Lessee's Personal Property
At the expiration or sooner termination of the Term, Lessor may, in its sole
and absolute discretion, elect either (i) to give Lessee Notice that Lessee
shall be required, within ten (10) Business Days after such expiration or
termination, to remove all FAS and Inventories from the Leased Property or (ii)
to deliver and transfer to Lessor all FAS and Inventories located at the Leased
Property, in which event Lessor shall acquire such FAS and Inventories for
$10.00. Failure of Lessor to make such election shall be deemed an election to
proceed in accordance with clause (ii) preceding.
Section 5.3 Surrender
Upon the expiration or sooner termination of this Agreement, and if Lessor
elects not to make a Put Option, and Lessee elects not to make a Call Option,
each as provided in Article XIX, Lessee shall peaceably vacate and surrender the
Leased Property to Lessor in substantially the same condition in which the
Leased Property was in on the Commencement Date, except as repaired, replaced,
rebuilt, restored, altered or added to as permitted or required by the
provisions of this Agreement, reasonable wear and tear and Condemnation (and
casualty damage, in the event that this Agreement is terminated following a
casualty in accordance with Article X) excepted.
In addition, as of the expiration or earlier termination of this Agreement,
Lessee shall, at Lessor's sole cost and expense, use its good faith,
commercially reasonable efforts to transfer to Lessor and cooperate with Lessor
or Lessor's nominee in connection with the processing of all applications for
all licenses, operating permits, certificates of need, and other governmental
authorizations and all contracts entered into by Lessee, including contracts
with governmental or quasi-governmental Entities which may be necessary for the
use and operation of the Retirement Community as then operated, but excluding
(i) all insurance contracts and multi-property contracts not limited in scope to
the Collective Leased Properties and the Site Leases which are being terminated
simultaneously, (ii) all contracts and leases with Affiliates, (iii) utility
deposits and (iv) telephone numbers. Lessor shall indemnify and hold Lessee
harmless for all claims, costs and expenses (including reasonable attorneys'
fees and paralegals' fees) arising from acts or omissions by Lessor under such
contracts subsequent to the date of transfer thereof to Lessor; and Lessee shall
indemnify and hold Lessor harmless for all claims, costs and expenses (including
reasonable attorney's fees and paralegals' fees) arising from acts or omission
by Lessee under such contracts prior to the date of transfer thereof to Lessor.
Without limiting the generality of the foregoing, Lessee agrees to sublease the
Leased Property to a new licensee or remain on the Licenses until such time as
new Licenses are granted to Lessor or such other Entity which is approved by
Lessor.
VI. IMPROVEMENTS, ETC.
Section 6.1 Improvements to the Leased Property
Lessee shall not finance the cost of any construction by the granting of a
lien on or security interest in the Leased Property, or Lessee's interest
therein, without the prior written consent of Lessor, which consent may be
withheld by Lessor in Lessor's sole discretion. Any such improvements shall,
upon the expiration or sooner termination of this Agreement, remain or pass to
and become the property of Lessor, free and clear of all encumbrances other than
Title Encumbrances.
Section 6.2 Salvage
Other than Lessee's Personal Property, all materials which are scrapped or
removed in connection with the making of repairs, alterations, improvements,
renewals, replacements and additions pursuant to Article V shall be disposed of
by Lessee and the net proceeds thereof, if any, shall be deposited in the FF&E
Reserve.
VII. LIENS
Subject to Article VIII, Lessee shall not, directly or indirectly, create or
allow to remain and shall promptly discharge, at its expense, any lien,
attachment, title retention agreement or claim upon the Leased Property or
Lessee's leasehold interest therein or any attachment, levy, claim or
encumbrance in respect of the Rent, other than (a) Existing Title Encumbrances
(b) Future Title Encumbrances, (c) restrictions, liens and other encumbrances
which are consented to in writing by Lessor, (d) liens for those taxes of Lessor
(as set forth in the definition of Impositions) which Lessee is not required to
pay hereunder, (e) subleases permitted by Article XV, (f) liens for Impositions
or for sums resulting from noncompliance with Legal Requirements so long as (A)
the same are not yet due and payable, or (B) are being contested in accordance
with Article VIII, and (g) liens of mechanics, laborers, materialmen, suppliers
or vendors incurred in the ordinary course of business that are not yet due and
payable (but will be paid in full by Lessee) or are for sums that are being
contested in accordance with Article VIII, (h) any Facility Mortgages or other
liens which are the responsibility of Lessor pursuant to the provisions of
Article XIX.
VIII. PERMITTED CONTESTS
Lessee, or Operator at the direction of Lessee, shall have the right to
contest the amount or validity of any Imposition, Legal Requirement, Insurance
Requirement, Environmental Obligation, lien (excluding any Encumbrance under
Section 18.01), attachment, levy, encumbrance, charge or claim (collectively,
"Claims") as to the Leased Property, by appropriate legal proceedings, conducted
in good faith and with due diligence, provided that (a) the foregoing shall in
no way be construed as relieving, modifying or extending Lessee's obligation to
pay any Claims required hereunder to be paid by Lessee as finally determined,
(b) such contest shall not cause Lessor or Lessee to be in default under any
mortgage, deed of trust or other agreement encumbering the Leased Property or
any part thereof (Lessor agreeing that any such mortgage, deed of trust or other
agreement shall permit Lessee to exercise the rights granted pursuant to this
Article VIII) or any interest therein or result in a lien attaching to the
Leased Property, unless such lien is fully bonded or is otherwise secured to the
reasonable satisfaction of Lessor, and (c) no part of the Leased Property nor
any Rent therefrom shall be in any immediate danger of sale, forfeiture,
attachment or loss, and (d) Lessee hereby indemnifies and holds harmless Lessor
from and against any cost, claim, damage, penalty or reasonable expense,
including reasonable attorneys' fees and paralegals' fees, incurred by Lessor in
connection therewith or as a result thereof. Lessor agrees to join in any such
proceedings if required legally to prosecute such contest, provided that Lessor
shall not thereby be subjected to any liability therefor (including, without
limitation, for the payment of any costs or expenses in connection therewith)
unless Lessee agrees to assume and indemnify Lessor with respect to the same.
Lessee shall be entitled to any refund of any Claims and such charges and
penalties or interest thereon which have been paid by Lessee or paid by Lessor
to the extent that Lessor has been reimbursed by Lessee. If Lessee shall fail
(x) to pay or cause to be paid any Claims when finally determined, (y) to
provide reasonable security therefor, or (z) to prosecute or cause to be
prosecuted any such contest diligently and in good faith, Lessor may, upon
Notice to Lessee, pay such charges, together with interest and penalties due
with respect thereto, and Lessee shall reimburse Lessor therefor, upon demand,
as Additional Charges.
IX. INSURANCE
Section 9.1 General Insurance Requirements
Lessee shall, at all times during the Term and at any other time Lessee
shall be in possession of the Collective Leased Properties, at Lessee's sole
cost and expense, keep or cause Operator to keep with respect to each of the
Collective Leased Properties and all property located therein or thereon,
insured against the risks and in the amounts as follows:
(a) Property insurance, including boiler and machinery coverage, (and
to the extent applicable, Builder's Risk Insurance) on the Leased Improvements
and all items of business personal property, including but not limited signs,
awnings, canopies, gazebos, fences and retaining walls, and all P&E, including
without limitation, insurance against loss or damage from the perils insured on
an Insurance Services Office Special Causes of Loss property insurance form, all
in an amount equal to or greater than one hundred percent (100%) of the
replacement value of the Leased Improvements (excluding excavation and
foundation costs), business personal property and P&E, and shall include an
Agreed Value endorsement. In addition, the policy shall provide Ordinance or Law
Coverage with limits of not less than the Leased Improvements for Coverage A
Loss to the undamaged portion of the building, limits not less than $500,000.00
for Coverage B (Demolition Cost Coverage), and limits not less than $500,000.00
for Coverage C (Increased Cost of Construction Coverage);
(b) Business interruption insurance including extra expense covering at
least one (1) year loss of profits, necessary continuing expenses, and if
applicable, Rent, for interruptions at the Retirement Community caused by any
occurrence covered by the insurance referred to in Section 9.1(a) above, and
9.1(c) and 9.1(d) below to the extent available at commercially reasonable
terms;
(c) Flood insurance, if the Retirement Community is located in whole or
in part within an area identified as having a special flood hazard under the
National Flood Insurance Program in commercially reasonable amounts;
(d) If the Retirement Community is located in an "earthquake prone
zone" as reasonably determined by Lessor and Lessee (or Operator during the term
of the Operating Agreement), Lessee, or during the term of the Operating
Agreement, Operator, on Lessee's behalf, shall maintain coverage for loss or
damage caused by earthquake, but only to the extent that the same is available
on commercially reasonable terms (for example, Lessee or Operator on Lessee's
behalf, shall not be required to carry earthquake insurance if coverage is
completely unavailable or if the cost is unreasonable) and Lessee and Operator,
if applicable, shall provide Lessor with prompt Notice of Unavailability or
material restriction of earthquake coverage. Lessee, or Operator on Lessee's
behalf, may provide such earthquake insurance through a blanket insurance
program with limits adequate to protect the regional aggregate probable maximum
loss for all properties in the applicable region in which the Retirement
Community is located under the blanket program and Lessee, or Operator on
Lessee's behalf, shall provide written Notice to Lessor if actual losses meet or
exceed such limits. In the event that Lessor and Lessee or Operator, if the
Operating Agreement is in effect, shall fail to agree if the Retirement
Community is located in an "earthquake prone zone" the issue shall be promptly
referred to EQE International, Inc. for its determination, which shall be
binding on Lessee, Lessor and Operator. Lessee, Lessor and Operator, as
applicable, agree that if EQE International, Inc. is not available or willing to
make such determination, Lessor and Lessee or Operator, if the Operating
Agreement is in effect, shall select another recognized earthquake analysis
company to make such termination;
(e) Such other property insurance as is customarily maintained by
Operator at similar retirement communities;
(f) Such additional insurance as may be reasonably required from time
to time, by (A) holders of Existing Title Encumbrances in effect on the date
hereof and any holder of Future Title Encumbrances, approved in writing by
Lessee, or Operator on Lessee's behalf, or (B) a Facility Mortgagee pursuant to
Article XVIII hereof;
(g) Commercial general liability insurance against claims for bodily
injury, death or property damage, fire, legal liability, and if applicable
liquor liability occurring on, in or in conjunction with the operations of the
Retirement Community, and automobile liability insurance on owned, non-owned and
hired vehicles operated in conjunction with the Retirement Community, with
limits of not less than One Million Dollars ($1,000,000.00) per occurrence and
Two Million Dollars ($2,000,000.00) per location aggregate;
(h) Umbrella/Excess liability against claims for damages covered under
the commercial general liability, automobile liability, if applicable liquor
liability and employer's liability with limits of not less than $50,000,000.00
per occurrence;
(i) Workers' compensation coverage as may be required under applicable
laws covering all of Operator's employees at the Retirement Community, and
employer's liability insurance of not less than One Million Dollars
($1,000,000.00) per accident/disease;
(j) Fidelity bond coverage in an amount not less than Two Million
Dollars ($2,000,000.00) covering Operator at the Retirement Community;
(k) Employment practices liability insurance covering all of Operator's
employees at the Retirement Community, to the extent available at commercially
reasonable rates and terms, in an amount not less than One Million Dollars
($1,000,000.00);
(l) To the extent applicable, garage keepers legal liability (Primary
Form) covering both comprehensive and collision-type losses with a limit of
liability of not less than One Million Dollars ($1,000,000.00) per occurrence;
(m) Professional Liability insurance in an amount not less than
$2,000,000.00 for each claim, $6,000,000.00 annual aggregate to cover the
professional medical care providers working on the Leased Property. If the
professional liability insurance is written on a claims-made basis, and if the
existing primary policies are canceled and non-renewed or canceled and
rewritten, an Extended Period of Discovery coverage shall be purchased for the
existing policy for not less than one (1) year; and
(n) Such other insurance in amounts as Operator, or Lessor if the
Operating Agreement is not in effect, in its reasonable judgment, deems
advisable for protection against claims, liabilities and losses arising out of
or connected with the operation of the Retirement Community.
Section 9.2 General Insurance Provisions
(a) All insurance described in Section 9.1 may be obtained through
blanket insurance programs, provided that such blanket programs substantially
fulfill the requirements specified herein. The blanket insurance programs may
include deductibles or risk retention levels; however, the Retirement
Community's responsibility for such deductibles or risk retention levels shall
be limited to the Insurance Retention as defined in Section 9.3(c). The
Retirement Community's allocated Insurance Retention for general liability
insurance and workers' compensation insurance shall not exceed One Hundred
Thousand Dollars ($100,000.00) unless such greater amount is agreeable to both
Lessor and Lessee. The Retirement Community's property insurance deductible
shall not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) unless such
greater amount is agreeable to both Lessor and Lessee, or if a higher deductible
for high hazard risks (i.e., earthquake, wind or flood) is mandated by the
insurance carrier.
(b) All insurance described in Section 9.1 shall be carried in the name
of Lessee or Operator if the Operating Agreement is in effect. The insurance
required under Section 9.1 shall include Lessor and Lessee and any Facility
Mortgagees specified by Lessor, in writing, as additional insureds, mortgagee or
loss payee as their interest may appear, as applicable. Any property losses
covered by insurance obtained pursuant to Section 9.1 shall be payable to the
respective parties as their interests may appear. Any Facility Mortgage on the
Retirement Community shall contain provisions to the effect that proceeds of the
Section 9.1(a) through Section 9.1(c) insurance shall be available for repair
and restoration of the Retirement Community. With respect to the Retirement
Community, all insurance policies pursuant to Section 9.1 shall provide that the
coverage shall be primary and any insurance carried by any additional insured
shall be excess and non-contributory.
(c) Lessee or Operator if the Operating Agreement is in effect, upon
request, shall deliver to Lessor certificates of insurance evidencing the
insurance coverages required under Section 9.1 and any renewals thereof. All
such certificates of insurance shall, to the extent obtainable, state that the
insurance shall not be canceled or materially reduced without at least thirty
(30) days' prior written notice to the certificate holder. Excluding workers'
compensation and earthquake coverage, all insurance policies pursuant to this
Article IX, shall be issued by insurance carrier having an AM Best rating of at
least A-, VII and all excess insurance policies above Twenty-Five Million
Dollars ($25,000,000.00) shall be issued by insurance carriers having an AM Best
rating of at least B+, VII. All such insurance shall be evaluated by Lessee or
Operator if the Operating Agreement is in effect from time to time to ensure
that the limits and coverages are adequate.
(d) The parties agree that the insurance coverages and deductibles
maintained by Lessee or Operator if the Operating Agreement is in effect
pursuant to this Article IX shall be adjusted throughout the Term in accordance
with Lessee's or Operator's standard insurance policies, as applicable which
shall be consistent with industry standards for similar facilities.
Section 9.3 Costs and Expenses
(a) With respect to Section 9.1, all insurance premiums, costs and
other expenses, including any Insurance Retention (as defined below), shall be
treated as an Imposition payable by Lessee as Additional Charges. All charges
under the blanket programs shall be allocated to the Retirement Community and
other similar participating retirement communities on a reasonable basis. Any
losses and associated costs and expenses, that are uninsured shall be treated as
a cost of insurance and shall also be treated as an Imposition.
(b) Upon termination of the Operating Agreement while this Lease is in
effect, a reserve in an amount determined by Operator based on loss projections,
shall be established from Gross Revenues to cover the amount of any Insurance
Retention and all other costs and expenses that will eventually have to be paid
by either Lessee or Operator, as applicable, with respect to pending or
contingent claims, including those that arise after the termination of this
Agreement for causes arising during the Term. If Gross Revenues are insufficient
to meet the requirements of such reserve, Lessee shall fund sums necessary to
establish such reserve; and if Lessee fails to timely deliver such sums to
Operator, Lessor shall have the right to declare Lessee in Default and exercise
the remedies available upon an Event of Default.
(c) "Insurance Retention" shall mean the insurance policy deductible;
however, for any insurance obtained through the blanket insurance programs,
"Insurance Retention" shall mean the Retirement Community's per occurrence limit
for any loss or reserve as established for the Retirement Community, which limit
shall be the same as is applied to other similar retirement communities
participating in the blanket insurance programs, or such higher amount if
mandated by the insurer for high hazard risks such as earthquake, flood and
wind.
Section 9.4 Indemnification of Lessor
Lessee shall indemnify and hold harmless Lessor (and any officer, director,
employee, advisor, partner or shareholder of Lessor) in respect of, and, at
Lessor's request, shall defend any action, cause of action, suit, debt, cost,
expense (including without limitation reasonable attorneys' fees), claim or
demand whatsoever brought or asserted by any third person whomsoever, at law or
in equity, arising by reason of: (i) liabilities stemming from general corporate
matters of Lessee or its Affiliates, to the extent the same are not directly and
primarily related to the Retirement Community; (ii) infringement and other
claims relating to the proprietary marks of Lessor; (iii) if Lessee fails to
maintain or cause Operator to maintain insurance coverage that it is required to
maintain pursuant to this Agreement, the excess of the amount of any liability
or loss that would have been covered over the amount of any applicable
deductible; and (iv) the bad faith or willful misconduct of Lessee or its
Affiliates, or any of their employees, servants or agents or other persons for
whom they are responsible, result in a claim for bodily injury, death or
property damage occurring on, in or in conjunction with the business of the
Retirement Community, to the extent that such claim exceeds the insurance
proceeds (including Insurance Retention) which are available to pay such claim.
Section 9.5 Limitation on Liability
To the maximum extent permitted by applicable law, and except in a
capacity as guarantor, no shareholder, director, officer or employee of any
party to this Agreement shall have any personal liability with respect to the
liabilities or obligations of such party hereunder. Furthermore, Lessor and
Lessee agree that if Lessor is in default hereunder, the liability of Lessor
shall be absolutely limited to the Lease Basis.
X. CASUALTY
Section 10.1 Damage and Repair
If the Leased Property is damaged or destroyed by fire, flood, tornado or
other element, or by any other casualty, this Lease shall continue in full force
and effect and Lessee shall, as promptly as possible, restore, repair or rebuild
the Leased Property to substantially the same condition as existed before the
damage or destruction or, in the event of a Total Casualty to the Leased
Property, and Lessee provides Notice to Lessor within thirty (30) days following
the occurrence of such casualty that, in Lessee's reasonable business judgment,
the restoration, repair or rebuilding of the Leased Property is not economically
feasible, Lessor may elect, within thirty (30) days of receiving such Notice
from Lessee, to make a Put Option requiring Lessee to purchase the Leased
Property at a price equal to the Individual Lease Balance, less the amount of
any casualty insurance proceeds payable directly to Lessor or any Facility
Mortgagee, after deducting therefrom all costs and expenses, including, but not
limited to, reasonable attorneys fees, in collecting such casualty insurance
proceeds (the "Net Casualty Proceeds"). The procedure and documentation for such
re-acquisition shall be in accordance with the procedures and documentation set
forth in Article XIX. In the event Lessor elects not to make a Put Option,
Lessee shall be required to restore, repair and rebuild the Leased Property, and
shall, for such purposes, use all, or such part as may be necessary, of the Net
Casualty Proceeds received from insurance policies carried on the Leased
Property under the provisions of Article IX. In such event, Lessor shall make
such Net Casualty Proceeds available to Lessee for such purposes. If such Net
Casualty Proceeds are not sufficient to pay such costs, Lessee shall pay any
deficit between the insurance proceeds and the costs of restoration, repair or
rebuilding. In the event Lessee: fails to (A) close on the re-acquisition of the
Leased Property after a Lessor Put Option made under this Section 10.1, or (B)
timely restore, repair and rebuild the Leased Property, using the Net Casualty
Proceeds and by funding any deficit amounts not covered by insurance (the
"Deficiency Amounts"), then Lessor shall be entitled to treat such failure as an
Event of Default under Section 12.1(d) for which Lessor may exercise its right
to terminate this Lease as to the individual Leased Property affected by the
casualty (a "Damaged Property"). In the event Lessor elects to terminate this
Lease as to the Damaged Property as a result of Lessee's failure to perform the
requirements of (A) or (B) above, then: (i) Lessee shall vacate and surrender
the Damaged Property and perform all other obligations required of Lessee under
Section 5.3, (ii) Lessee shall transfer to Lessor all right, title and interest
in and to all insurance proceeds available under all insurance policies carried
on the Damage Property, (iii) Lessee shall execute and deliver to Lessor, in
recordable form, any and all documents required by Lessor or any title company
providing title insurance to Lessor in order to disclaim any and all interest in
the Damaged Property and to evidence termination of this Lease as to the Damaged
Property, and (iv) the Lease Balance shall be reduced by that portion of the
Lease Basis allocated to the Damaged Property, less the Deficiency Amount.
Section 10.2 Lessee's Property
All insurance proceeds payable by reason of any loss of or damage to any of
Lessee's Personal Property shall be paid solely to Lessor and, to the extent
necessary to repair or replace Lessee's Personal Property in accordance with
Section 10.3, Lessor shall hold such proceeds in trust to pay the cost of
repairing or replacing damaged Lessee's Personal Property. If after paying the
costs associated with replacing and repairing Lessee's Personal Property in
accordance with this Section 10.2 any insurance proceeds remain, Lessor shall
pay such remaining proceeds to Lessee.
Section 10.3 Restoration of Lessee's Property
If Lessee is required to restore the Leased Property as hereinabove
provided, Lessee shall replace such alterations and improvements and Lessee's
Personal Property with improvements or items of the same or better quality and
utility in the operation of the Leased Property.
Section 10.4 No Abatement of Rent
Subject to the provisions set forth in Section 10.1 in connection with a
Lessor Put Option, this Agreement shall remain in full force and effect and
Lessee's obligation to make all payments of Rent and to pay all other charges as
and when required under this Agreement shall remain unabated during the Term
notwithstanding any damage involving the Leased Property (provided that Lessor
shall credit against such payments any amounts paid to Lessor as a consequence
of such damage under any business interruption insurance obtained by Lessee
hereunder). The provisions of this Article X shall be considered an express
agreement governing any cause of damage or destruction to the Leased Property
and, to the maximum extent permitted by Applicable Laws, no Applicable Laws in
effect during the Term which provide for such a contingency shall have any
application in such case.
Section 10.5 Waiver
Lessee hereby waives, to the maximum extent permitted by Applicable Laws,
any statutory rights of termination which may arise by reason of any damage or
destruction of the Leased Property.
XI. CONDEMNATION
Section 11.1 Condemnation
Subject to the exercise of a Put Option by Lessor, or the presumed exercise
of a Call Option by Lessee, each as set forth in Section 11.2, Lessee hereby
irrevocably assigns to Lessor, for application in accordance with the provisions
hereinafter set forth, any award or payment to which Lessee may be or become
entitled with respect to the taking of the Leased Property or any part thereof,
by condemnation or other eminent domain proceedings pursuant to any law, general
or special, or by reason of the temporary taking of the use or occupancy of the
Leased Property or any part thereof, by any governmental authority, civil or
military, whether the same shall be paid or payable in respect of Lessee's
leasehold interest hereunder or otherwise. Lessor shall be entitled to
participate in any such proceeding and the expenses thereof (including counsel
fees and expenses) shall be paid by Lessee.
Section 11.2 Material Condemnation
If during the term of this Lease (i) the entire Leased Property shall be
taken by or on account of any actual or threatened condemnation or other eminent
domain proceeding pursuant to any law, general or special or (ii) if 30% of the
improvements or 30% of the land parcel is taken and Lessee provides Notice to
Lessor that the taking of said portion renders the remaining Leased Property
uneconomic for the continued use or occupancy for the Permitted Use, in the good
faith judgment of Lessee (the same being a "Material Condemnation"), then Lessor
may elect to make a Put Option requiring the Lessee to purchase the Leased
Property at a price equal the Lease Balance. The procedure and documentation for
such purchase shall be in accordance with the procedures and documentation set
forth in Article XIX. Lessee shall deliver to Lessor Lessee's Notice of Material
Condemnation within thirty (30) days following the occurrence of the Date of
Taking. The Notice shall be accompanied by a Lessee's Certificate stating that
the conditions set forth in either clause (i) or (ii) of this Section 11.2 have
been fulfilled. If the conditions set forth in clause (i) or (ii) of this
Section 11.2 are fulfilled except that Lessee shall have failed to deliver a
Notice as required above, Lessee conclusively shall be presumed to have made a
Call Option to re-acquire the Leased Property upon the date set forth in Article
XIX; but nothing in this sentence shall relieve Lessee of its obligation
actually to deliver such Notice of Material Condemnation. In the event Lessee
fails to: (A) close on the re-acquisition of the Leased Property after a Lessor
Put Option or a presumed Call Option under this Section 11.2, or (B) timely
restore, repair and rebuild the Leased Property, using the Net Award (as defined
in Section 11.4) and by funding any deficit amounts not covered by the Net Award
(the "Deficiency Amounts"), then Lessor shall be entitled to treat such failure
as an Event of Default under Section 12.1(d) for which Lessor may exercise its
right to terminate this Lease as to the individual Leased Property affected by
the Condemnation (a "Condemned Property"). In the event Lessor elects to
terminate this Lease as to the Condemned Property as a result of Lessee's
failure to perform the requirements of (A) or (B) above, then: (i) Lessee shall
vacate and surrender the Condemned Property and perform all other obligations
required of Lessee under Section 5.3, (ii) Lessee shall transfer to Lessor all
right, title and interest to the Gross Award, (iii) Lessee shall execute and
deliver to Lessor, in recordable form, any and all documents required by Lessor
or any title company providing title insurance to Lessor in order to disclaim
any and all interest in the Condemned Property and to evidence termination of
this Lease as to the Condemned Property, and (iv) the Lease Balance shall be
reduced by that portion of the Lease Basis allocated to the Condemned Property,
less the Deficiency Amount.
Section 11.3 Non-Material Condemnation; Temporary Condemnation
If during any Term (i) a portion of the Leased Property shall be taken by
condemnation or other eminent domain proceedings, which taking is not sufficient
to require that Lessee to re-acquisition the Leased Property or (ii) the use or
occupancy of the Leased Property or any part thereof shall be temporarily taken
by any governmental authority; then this Lease shall continue in full effect
without abatement or reduction of Minimum Rent, Additional Rent or other sums
payable by Lessee hereunder notwithstanding such partial or temporary taking.
Lessee shall, promptly after any such temporary taking ceases, at its expense,
repair any damage caused thereby in conformity with the requirements of Section
11.1 so that, thereafter, the Leased Property shall be, as nearly as possible,
in a condition as good as the condition thereof immediately prior to such
taking. In the event of any such partial taking, Lessor shall make the Net Award
available to Lessee to make such repair but, if such Net Award shall be in
excess of $100,000, only against certificates of Lessee delivered to Lessor from
time to time as such work or repair progresses, each such certificate describing
the work or repair for which Lessee is requesting payment and the cost incurred
by Lessee in connection therewith and stating that Lessee has not theretofore
received payment for such work. Any Net Award remaining after such repairs have
been made, shall be delivered to Lessee; but only to the extent that the
aggregate amount of such Net Award so remaining and all amounts theretofore paid
to Lessee pursuant to this sentence do not exceed $100,000. If such amounts
exceed $100,000, the excess may be retained by Lessor and held by Lessor in
reserve for application to future payments of Rent. If Lessor retains any such
amount the Minimum Rent payable on or after the second Minimum Rent Payment Date
occurring after such retention shall be reduced equitably but in no event shall
Minimum Rent be reduced lower than the monthly debt payments under any Facility
Mortgage with respect to such individual Leased Property. In the event of such
temporary requisition, Lessee shall be entitled to receive the entire Net Award
payable by reason of such temporary requisition or portion of such temporary
requisition occurring during the term hereof, less any costs incurred by the
Lessor in connection therewith. If the cost of any repairs required to be made
by Lessee pursuant to this Section 11.3 shall exceed the amount of the Net
Award, the deficiency shall be paid by Lessee. Notwithstanding anything herein
to the contrary, no payments shall be made to Lessee pursuant to this Section
11.3 if any default or Event of Default shall have happened and shall be
continuing under this Lease.
Section 11.4 Net Award
For the purposes of this Lease the term "Net Award" shall mean: (i) all
amounts payable as a result of any condemnation or other eminent domain
proceeding (the "Gross Award"), less all expenses for such proceeding not
otherwise paid by Lessee in the collection of such amounts plus (ii) all amounts
payable pursuant to any agreement with any condemning authority (which agreement
shall be deemed to be a taking) which has been made in settlement of or under
threat of any condemnation or other eminent domain proceeding affecting the
Leased Property, less all expenses incurred as a result thereof not otherwise
paid by Lessee and the collection of such amounts.
Section 11.5 Condemnation for Roads, Highways
Any minor condemnation or taking of the Leased Property for the construction
or maintenance of roads or highways shall not be considered a condemnation or
taking for purposes of this Article 11 so long as the Leased Property shall not
be materially or adversely affected, ingress and egress for the remainder of the
Leased Property shall be adequate for the business of Lessee and the provisions
of any Facility Mortgage relating thereto shall be complied with. Lessee agrees
that it will notify Lessor of any such condemnation.
Section 11.6 No Abatement of Rent
Other than as specifically provided in this Agreement, this Agreement shall
remain in full force and effect and Lessee's obligation to make all payments of
Rent and to pay all other charges as and when required under this Agreement
shall remain unabated during the Term notwithstanding any Condemnation involving
the Leased Property. The provisions of this Article XI shall be considered an
express agreement governing any Condemnation involving the Leased Property and,
to the maximum extent permitted by law, no Applicable Laws in effect during the
Term which provide for such a contingency shall have any application in such
case.
XII. DEFAULTS AND REMEDIES
Section 12.1 Events of Default
The occurrence of any one or more of the following events shall constitute
an "Event of Default" hereunder:
(a) should Lessee fail to make any payment of the Second-Tier Minimum
Rent, or fail to pay the Additional Rent as and when such payments are due
pursuant to the Rent Addendum, or fail to make payment of any other Rent or any
other sum (including, but not limited to, funding of the FF&E Reserve), payable
hereunder when due and such failure shall continue for a period of ten (10) days
after Notice thereof from Lessor to Lessee; or
(b) should Lessee fail to make any payment of the First-Tier Minimum
Rent due with respect to any Fiscal Year as such payments are due pursuant to
the Rent Addendum; or
(c) should Lessee take any action or fail to take any action which
would cause Operator to fail to maintain the insurance coverage required under
the Operating Agreement or Article IX of this Agreement, and such failure shall
continue for three (3) Business Days after Notice thereof; or
(d) subject to Article VIII relating to permitted contests, should
Lessee default in the due observance or performance of any of the terms,
covenants or agreements contained herein to be performed or observed by it
(other than as specified in clauses (a) and (b) above) and such default shall
continue for a period of thirty (30) days after Notice thereof from Lessor to
Lessee; provided, however, that if such default is susceptible of cure but such
cure cannot be accomplished with due diligence within such period of time and
if, in addition, Lessee commences to cure or cause to be cured such default
within fifteen (15) days after Notice thereof from Lessor and thereafter
prosecutes the curing of such default with all due diligence, such period of
time shall be extended to such period of time (not to exceed one hundred eighty
(180) days) as may be necessary to cure such default with all due diligence; or
(e) should Lessee generally not be paying its debts as they become due
(other than Lessee's failure to pay Second-Tier Minimum Rent which shall be a
default under Section 12.1(a)), or should Lessee make a general assignment for
the benefit of creditors; or
(f) should any petition be filed by or against Lessee or any guarantor
under the Federal bankruptcy laws, or should any other proceeding be instituted
by or against Lessee or any guarantor of Lessee's obligations under the Lease
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for Lessee or for any
substantial part of the property of Lessee or any guarantor and such proceeding
is not dismissed within ninety (90) days after institution thereof, or should
Lessee or any guarantor take any action to authorize any of the actions set
forth above in this paragraph; or
(g) should Lessee cause or institute any proceeding for its dissolution
or termination; or
(h)should Lessee attempt to grant a mortgage or deed of trust which is
secured by Lessee's leasehold interest hereunder; or
(i) should Lessee fail to maintain all Licenses necessary for the
operation of the Retirement Communities, and such failure shall continue for a
period of thirty (30) days after Notice thereof from Lessor; provided, however,
Lessee shall not be in default of this subparagraph (i) solely because an
Individual Leased Property is not entitled to reimbursement under Medicare or
Medicaid programs; or
(j) unless Lessee shall be contesting such lien or attachment in good
faith in accordance with Article VIII, should the estate or interest of Lessee
in the Leased Property or any part thereof be levied upon or attached in any
proceeding and the same shall not be vacated, discharged or fully bonded or
otherwise secured to the reasonable satisfaction of Lessor within the later of
(x) one hundred and twenty (120) days after such attachment or levy, unless the
amount in dispute is less than $500,000 (as adjusted each year by increases in
the GDP Deflator), in which case Lessee shall give Notice to Lessor of the
dispute but Lessee may defend in any suitable way, and (y) thirty (30) days
after receipt by Lessee of Notice thereof from Lessor; it being understood and
agreed that Lessee may commence a contest of such matter pursuant to Article
VIII above following such Notice from Lessor; or
(k) should Lessee, its successors and assigns, cause an "Event of
Default" under this Lease (or any Site Lease, if applicable under Section 21.19)
with respect to any Individual Leased Property; or
(l) should Lessee be in default under the Operating Agreement or the
Assignment of Operating Agreement, Subordination, Non-Disturbance and Attornment
Agreement beyond any applicable cure period, including without limitation, by a
failure to timely fund any sums required to be funded by Lessee pursuant to the
terms of the Operating Agreement.
(m) should Lessee (or either of them) fail to comply with the Lessee
entity separateness covenants specified in Section 21.21 hereof or any other
reasonable Rating Agency requirements relating to bankruptcy remote, special
purpose entities, and such failure shall continue for a period of thirty (30)
days after notice thereof from Lessor;
then, and in any such event, Lessor, in addition to all other remedies available
to it, except in the case of a default under (a) above, may terminate this
Agreement by giving Notice thereof to Lessee and upon the expiration of the time
fixed in such Notice but in any event not less than thirty (30) days, this
Agreement shall terminate and all rights of Lessee under this Agreement shall
cease. Lessor shall have and may exercise all rights and remedies available at
law and in equity to Lessor as a result of Lessee's breach of this Agreement,
including, without limitation, the right of re-entry upon the Leased Property
upon and at any time after the occurrence of an Event of Default. Upon the
occurrence of an Event of Default under Section 12.1(a) above, Lessor may not
terminate this Agreement, provided, however, the Aggregate Differential Amount
and Additional Rent shall continue to be due and payable as provided in the Rent
Addendum.
During the term of the Operating Agreement, Lessor hereby agrees and
consents to accept any cure of any Default or Event of Default on the part of
Lessee which may be tendered or performed by Operator or any Affiliate of
Operator within the same cure period afforded to Lessee herein.
Section 12.2 Remedies
None of (a) the termination of this Agreement pursuant to Section 12.1, (b)
the repossession of the Leased Property or any portion thereof, (c) the failure
of Lessor to re-let the Leased Property or any portion thereof, nor (d) the
re-letting of all or any portion of the Leased Property, shall relieve Lessee of
its liability and obligations hereunder, all of which shall survive any such
termination, repossession or re-letting. In the event of any such termination,
repossession or re-letting, Lessee shall forthwith pay to Lessor all Rent due
and payable with respect to the Leased Property through and including the date
of such termination, repossession or re-letting. Thereafter, Lessee, until the
end of what would have been the Term of this Agreement (assuming no extension
beyond the then-current Term) in the absence of such termination, repossession
or re-letting, and whether or not the Leased Property or any portion thereof
shall have been re-let, shall be liable to Lessor for, and shall pay to Lessor,
as current damages, the Rent and other charges which would be payable hereunder
for the remainder of the Term had such termination, repossession or re-letting
not occurred, less the net proceeds, if any, of any re-letting of the Leased
Property or any other operation of the Leased Property by Lessor (if Lessor
repossesses the Leased Property), after deducting all reasonable expenses in
connection with such re-letting or operation, as applicable, including, without
limitation, all repossession costs, brokerage commissions, legal expenses,
attorneys' fees, advertising, expenses of employees, alteration costs and
expenses of preparation for such re-letting (such expenses being hereinafter
referred to as the "Re-letting Expenses"). Lessee shall pay such current damages
to Lessor monthly on the days on which the Minimum Rent would have been payable
hereunder if this Agreement had not been so terminated with respect to such of
the Leased Property.
At any time after such termination, repossession or re-letting, in addition
to Lessor's right to receive any Rent owing and due up to and including the date
of termination, repossession or re-letting under the preceding paragraph, Lessee
shall pay to Lessor, at Lessor's election, as liquidated final damages incurred
beyond the date of such termination, repossession or re-letting and in lieu of
Lessor's right to receive any further damages due to the such termination,
repossession or re-letting, the Re-letting Expenses incurred to date (and not
theretofore paid by Lessee or deducted by Lessor as set forth herein) and an
amount equal to the present value (discounted at the Lease Rate) of the excess,
if any, of the Rent and other charges which would be payable hereunder from the
date of such termination, repossession or re-letting (assuming that, for the
purposes of this paragraph, annual payments by Lessee on account of Impositions
and Additional Rent would be the same as payments required for the immediately
preceding thirteen Accounting Periods, or if less than thirteen Accounting
Periods have expired since the Commencement Date, the payments required for such
lesser period projected to an annual amount) for what would be the then
unexpired Term of this Agreement (assuming no extension beyond the then-current
Term) if the same remained in effect, over the fair market rental for the same
period, but excluding any period after the date of such termination,
repossession or re-letting for which amounts have become payable by Lessee under
the first paragraph of this Section 12.2. Nothing contained in this Agreement
shall, however, limit or prejudice the right of Lessor to prove and obtain in
proceedings for bankruptcy or insolvency an amount equal to the maximum allowed
by any statute or rule of law in effect at the time when, and governing the
proceedings in which, the damages are to be proved, whether or not the amount be
greater than, equal to, or less than the amount of the loss or damages referred
to above.
In case of any Event of Default, re-entry, expiration or dispossession by
summary proceedings or otherwise, Lessor may (a) re-let the Leased Property or
any part or parts thereof, either in the name of Lessor or otherwise, for a term
or terms which may at Lessor's option, be equal to, less than or exceed the
period which would otherwise have constituted the balance of the Term and may
grant concessions or free rent to the extent that Lessor considers advisable and
necessary to re-let the same, and (b) may make such reasonable alterations,
repairs and decorations in the Leased Property or any portion thereof as Lessor,
in its sole and absolute discretion, considers advisable and necessary for the
purpose of re-letting the Leased Property; and the making of such alterations,
repairs and decorations shall not operate or be construed to release Lessee from
liability hereunder as aforesaid. Subject to the last sentence of this
paragraph, Lessor shall in no event be liable in any way whatsoever for any
failure to re-let all or any portion of the Leased Property, or, in the event
that the Leased Property is re-let, for failure to collect the rent under such
re-letting. To the maximum extent permitted by law, Lessee hereby expressly
waives any and all rights of redemption granted under any present or future laws
in the event of Lessee being evicted or dispossessed, or in the event of Lessor
obtaining possession of the Leased Property, by reason of the occurrence and
continuation of an Event of Default hereunder. Lessor covenants and agrees, in
the event of any such termination, repossession or re-letting as a result of an
Event of Default, to use reasonable efforts to mitigate its damages.
In the alternative to the foregoing remedies, Lessee understands and agrees
that Lessor may enforce the precautionary mortgage granted within the Memorandum
of Lease, as more particularly described therein, and in Section 2.4 of this
Agreement.
Section 12.3 Application of Funds
Any payments received by Lessor under any of the provisions of this
Agreement during the existence or continuance of any Event of Default (and any
payment made to Lessor rather than Lessee due to the existence of any Event of
Default) shall be applied to Lessee's current and past due obligations under
this Agreement in such order as Lessor may determine or as may be prescribed by
the laws of the State.
Section 12.4 Lessor's Right to Cure Lessee's Default
If an Event of Default shall have occurred and be continuing, Lessor, after
Notice to Lessee (which Notice shall not be required if Lessor shall reasonably
determine immediate action is necessary to protect person or property), without
waiving or releasing any obligation of Lessee and without waiving or releasing
any Event of Default, may (but shall not be obligated to), at any time
thereafter, make such payment or perform such act for the account and at the
expense of Lessee, and may, to the maximum extent permitted by law, enter upon
the Leased Property or any portion thereof for such purpose and take all such
action thereon as, in Lessor's sole and absolute discretion, may be necessary or
appropriate therefor. No such entry shall be deemed an eviction of Lessee. All
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and paralegals' fees) incurred by Lessor in connection
therewith, together with interest thereon (to the extent permitted by Applicable
Laws) at the Overdue Rate from the date such sums are paid by Lessor until
repaid, shall be paid by Lessee to Lessor, on demand.
Section 12.5 Good Faith Dispute
If Lessee shall in good faith dispute the occurrence of any Default and
Lessee, before the expiration of the applicable cure period, shall give Notice
thereof to Lessor, setting forth, in reasonable detail, the basis therefor and,
provided Lessee shall escrow disputed amounts, if any, pursuant to an escrow
arrangement reasonably acceptable to Lessor and Lessee, no Event of Default
shall be deemed to have occurred; provided, however, that in the event of any
eventual adverse determination, Lessee shall pay to Lessor interest on any
disputed funds at the Disbursement Rate, from the date demand for such funds was
made by Lessor until the date of final adverse determination and, thereafter, at
the Overdue Rate until paid.
XIII. HOLDING OVER
Any holding over by Lessee after the expiration or sooner termination of
this Agreement shall be treated as a daily tenancy at sufferance at a rate equal
to two (2) times the Rent and other charges herein provided (prorated on a daily
basis). Lessee shall also pay to Lessor all damages (direct or indirect)
sustained by reason of any such holding over. Otherwise, such holding over shall
be on the terms and conditions set forth in this Agreement, to the extent
applicable. Nothing contained herein shall constitute the consent, express or
implied, of Lessor to the holding over of Lessee after the expiration or earlier
termination of this Agreement.
XIV. TRANSFERS OR TERMINATION BY LESSOR OR LESSEE
Section 14.1 Transfer by Lessor of Leased Property
Lessor may, in its sole and absolute discretion, sell, assign, transfer,
convey or otherwise dispose of (a "Transfer") its interest in the Leased
Property, or any portion thereof or interest therein, directly or indirectly, to
any Person without the consent of Lessee.
Section 14.2 Special Right of Termination by Lessor
Notwithstanding anything to the contrary herein contained, Lessor may, in
its sole and absolute discretion, terminate this Agreement upon prior Notice to
Lessee effective as of the date designated in such Notice in the event of the
occurrence of a change in operation or occupancy of any Leased Property and, as
a result thereof, Lessor determines, based upon an opinion of counsel, that such
change in operation or occupancy may result in the failure of Lessor to qualify
as a REIT. Termination of this Agreement pursuant to this Section 14.2 shall not
relieve either party of its obligations under this Lease that have accrued as of
the effective date of such termination, appropriately prorated on a daily basis.
If Lessor elects to terminate this Lease, pursuant to this Section 14.2, the
Lessor shall provide the Lessee with written notice (the "Termination Notice"),
provided, however, that within thirty (30) days of its receipt of the
Termination Notice, Lessee may elect to make a Call Option to purchase the
Leased Property for the Lease Balance, in lieu of allowing such termination. In
the event Lessee elects to make a Call Option to reacquire the Leased Property,
the procedure and documentation for such purchase shall be in accordance with
the procedure and documentation set forth in Article XIX.
If this Lease Agreement is terminated for any reason, in consideration for
the Termination Notice and Lessee's election not to make a Call Option, Lessee
shall cooperate with Lessor in the manner described in Section 5.3 to facilitate
the issuance or transfer of Licenses to the Lessor or such other Entity which is
approved by the Lessor.
XV. SUBLETTING AND ASSIGNMENT
Section 15.1 Subletting and Assignment
(a) Except as provided in Sections 15.2, Lessee shall not, without
Lessor's prior written consent (which may be given or withheld by Lessor in its
sole discretion), assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer this Agreement or sublease (which term shall be deemed to include the
granting of concessions, licenses and the like), all or any part of the Leased
Property or suffer or permit this Agreement or the leasehold estate created
hereby or any other rights arising under this Agreement to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law, or permit the
use or operation of the Leased Property by anyone other than Lessee, or the
Leased Property to be offered or advertised for assignment or subletting. For
purposes of this Section 15.1, an assignment of this Agreement shall be deemed
to include any direct or indirect transfer of any interest in Lessee such that
Lessee shall cease to be directly or indirectly owned by: (a) in the case of
Prime Care One, LLC, on or after the date of this Agreement, by Prime Care
Corporation and PC1, LLC; (b) in the case of Prime Care One, LLC, on or after
the date of this Agreement, by Prime Care Corporation and Prime Care Properties,
LLC and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. ("Phillippe"); (c) and, in the case of Prime
Care Two, LLC, on or after the date of this Agreement, by Prime Care 2 Corp. and
PC2, LLC; (d) in the case of Prime Care Two, LLC, on or after the date of this
Agreement, by Prime Care Corporation and Prime Care Properties, LLC and
Phillippe (the same being the "Members") or any direct or indirect transfer of
any interest in the Members by ▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ Holdings,
LLC, or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (other than routine assignments made by any such
Member to a family member for estate planning purposes or to an affiliated
entity under such Member's control, and then only in compliance with Section
21.21 of this Agreement, or any transaction pursuant to which Lessee (or either
of the individual Lessees) is merged or consolidated with another Entity which
is not owned by Prime Care Properties, LLC or pursuant to which all or
substantially all of Lessee's assets are transferred to any other Entity, as if
such change in control or transaction were an assignment of this Agreement.
Additionally, for so long as Lessor or any Affiliate as to Lessor shall seek to
qualify as a real estate investment trust, anything contained in this Agreement
to the contrary not withstanding, Lessee shall not sublet the Leased Property on
any basis such that the rental to be paid by any sublessee thereunder will be
based, in whole or in part, on either (a) the income or profits derived by the
business activities of such sublessee, or (b) any other formula such that any
portion of such sublease rental would fail to qualify as "rents from real
property" within the meaning of Section 856(d) of the Code, including for
purposes of Section 856(f)(2)(B) of the Code or any similar or successor
provisions thereto, or "interest" for purposes of Section 856(f) of the Code, or
any similar or successor provision thereto.
(b) If this Agreement is assigned or if the Leased Property or any part
thereof is sublet (or occupied by anybody other than Lessee) in violation of
this Agreement, Lessor may collect the rents from such assignee, sublessee or
occupant, as the case may be, and apply the net amount collected to the Rent
herein reserved, but no such collection shall be deemed a waiver of the
provisions set forth in the first paragraph of this Section 15.1, the acceptance
by Lessor of such assignee, sublessee or occupant, as the case may be, as a
Lessee, or a release of Lessee from the future performance by Lessee of its
covenants, agreements or obligations contained in this Agreement.
(c) No subletting or assignment shall in any way impair the continuing
primary liability of Lessee hereunder (unless Lessor and Lessee expressly
otherwise agree that Lessee shall be released from all obligations hereunder),
and no consent to any subletting or assignment in a particular instance shall be
deemed to be a waiver of the prohibition set forth in this Section 15.1. No
assignment, subletting or occupancy shall affect any Permitted Use. Any
subletting, assignment or other transfer of Lessee's interest under this
Agreement in contravention of this Section 15.1 shall be voidable at Lessor's
option.
Section 15.2 Required Sublease Provisions
Any sublease of all or any portion of the Leased Property entered into on or
after the date hereof in accordance with and subject to the provisions of
Section 15.3 shall provide (a) that it is subject and subordinate to this
Agreement and to the matters to which this Agreement is or shall be subject or
subordinate; (b) that in the event of termination of this Agreement or reentry
or dispossession of Lessee by Lessor under this Agreement, Lessor may, at its
option, terminate such sublease or take over all of the right, title and
interest of Lessee, as sublessor under such sublease, and, except as provided
below, such sublessee shall, at Lessor's option, attorn to Lessor pursuant to
the then executory provisions of such sublease, except that neither Lessor nor
any Facility Mortgagee, as holder of a mortgage or as Lessor under this
Agreement, if such mortgagee succeeds to that position, shall (i) be liable for
any act or omission of Lessee under such sublease, (ii) be subject to any
credit, counterclaim, offset or defense which theretofore accrued to such
sublessee against Lessee, (iii) be bound by any previous prepayment of more than
one (1) Accounting Period, (iv) be bound by any covenant of Lessee to undertake
or complete any construction work on the Leased Property or any portion thereof,
(v) be required to account for any security deposit of the sublessee other than
any security deposit actually delivered to Lessor by Lessee, (vi) be bound by
any obligation to make any payment to such sublessee or grant any credits,
except for services, repairs, maintenance and restoration provided for under the
sublease that are performed after the date of such attornment, (vii) be
responsible for any monies owing by Lessee to the credit of such sublessee, or
(viii) be required to remove any Person occupying any portion of the Leased
Property; and (c), in the event that such sublessee receives a written Notice
from Lessor or any Facility Mortgagee stating that an Event of Default has
occurred and is continuing, such sublessee shall thereafter be obligated to pay
all rentals accruing under such sublease directly to the party giving such
Notice or as such party may direct. All rentals received from such sublessee by
Lessor or the Facility Mortgagee, as the case may be, shall be credited against
the amounts owing by Lessee under this Agreement and such sublease shall provide
that the sublessee thereunder shall, at the request of Lessor, execute a
suitable instrument in confirmation of such agreement to attorn. An original
counterpart of each such sublease duly executed by Lessee and such sublessee
shall be delivered promptly to Lessor and Lessee shall remain liable for the
payment of the Rent and for the performance and observance of all of the
covenants and conditions to be performed by Lessee hereunder. The provisions of
this Section 15.2 shall not be deemed a waiver of the provisions set forth in
Section 15.1(a).
Section 15.3 Permitted Sublease and Assignment
Notwithstanding the foregoing, but subject to the provisions of Section 15.4
and any other express conditions or limitations set forth herein, Lessee may,
without Lessor's consent, sublease space at the Leased Property so long as (i)
such sublease will not cause an event of default under the Operating Agreement,
if applicable, and such sublease has been approved by the Operator, if
applicable, and (ii) such subleases do not demise, in the aggregate, in excess
of six hundred (600) square feet of area.
Section 15.4 Sublease Limitation
For so long as Lessor or any Affiliate as to Lessor shall seek to qualify as
a real estate investment trust, anything contained in this Agreement to the
contrary notwithstanding, Lessee shall not sublet the Leased Property on any
basis such that the rental to be paid by any sublessee thereunder would be
based, in whole or in part, on either (a) the income or profits derived by the
business activities of such sublessee, or (b) any other formula such that any
portion of such sublease rental would fail to qualify as "rents from real
property" within the meaning of Section 856(d) of the Code, or any similar or
successor provision thereto or "interest" for purposes of Section 856(f) of the
Code, or any similar or successor provision thereto.
XVI. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
Section 16.1 Estoppel Certificates
At any time and from time to time, upon not less than ten (10) Business Days
prior Notice by either party, the party receiving such Notice shall furnish to
the other a certificate certifying that this Agreement is unmodified and in full
force and effect (or that this Agreement is in full force and effect as modified
and setting forth the modifications), the date to which the Rent has been paid,
that to its knowledge no Default or an Event of Default by the other party has
occurred and is continuing or, if a Default or an Event of Default shall exist,
specifying in reasonable detail the nature thereof, and the steps being taken to
remedy the same, and such additional information as the requesting party may
reasonably request. If such additional information reasonably requires more than
ten (10) Business Days to provide, the party furnishing such information shall
be entitled to such additional period to respond to such request as may be
reasonably required under the circumstances. Any such certificate furnished
pursuant to this Section 16.1 may be relied upon by the requesting party, its
lenders and any prospective purchaser or mortgagee of the Leased Property or the
leasehold estate created hereby.
Section 16.2 Financial Statements
Lessee shall prepare and deliver to Lessor, or shall cause Operator to
prepare and deliver to Lessor during the term of the Operating Agreement, a copy
of any and all Interim Reports, Annual Financial Reports and Annual Operating
Projections (as such terms are defined in Article 9 of the Operating Agreement)
and all other reports or projections prepared by Lessee or prepared by Operator,
if applicable, in accordance with the terms of the Operating Agreement. During
the term of the Operating Agreement, Lessee shall use commercially reasonable
efforts to enforce the Operator's obligations under the Operating Agreement to
prepare any and all Interim Reports and Annual Financial Reports and shall
provide copies of all documentation obtained, produced, or caused to be produced
by Lessee in connection with Lessee's audit rights under Section 9.01 of the
Operating Agreement. Lessee shall deliver, or shall cause Operator to deliver,
the reports referenced in this Section 16.2 within seventy-five (75) days after
the close of each Accounting Period. Lessor may at any time, and from time to
time, provide any Facility Mortgagee with copies of any of the foregoing
statements. On an annual basis and within one hundred eighty (180) days
following Lessor's request, Lessee shall provide audited Financial Statements
with respect to each of the Leased Properties.
Section 16.3 General Operations
Lessee shall deliver to Lessor, or shall cause Operator to deliver to Lessor
during the term of the Operating Agreement, a copy of any and all Annual
Operating Projections (as such term is defined in the Operating Agreement)
prepared by the Lessee or the Operator, if applicable. During the term of the
Operating Agreement, Lessee shall use commercially reasonable efforts to enforce
Operator's obligations to prepare the Annual Operating Projections referenced in
this Section 16.3. In addition, at Lessor's request, Lessee, and Operator, at
Lessee's direction, shall meet with Lessor not less than quarterly to discuss
the Annual Operating Projection and any other items related to the operation of
the Retirement Community, which Lessor wishes to discuss. The Annual Operating
Projection shall be delivered to Lessor by Lessee, or Operator at the direction
of Lessee, within three (3) days of when the Annual Operating Projection is due
to Lessee from Operator each Fiscal Year.
XVII. LESSOR'S RIGHT TO INSPECT
Lessee shall permit Lessor and its authorized representatives to inspect the
Leased Property at reasonable times of the day upon not less than twenty-four
(24) hours' Notice to Lessee and Lessor, provided that any inspection by Lessor
or its representatives will not unreasonably interfere with Lessee's or
Operator's use and operation of the Leased Property and further provided that in
the event of an emergency, as determined by Lessor in its reasonable discretion,
prior Notice shall not be necessary.
XVIII. FACILITY MORTGAGES
Section 18.1 Lessor May ▇▇▇▇▇ ▇▇▇▇
Upon Notice from Lessor to Lessee, Lessor may from time to time, directly or
indirectly, create or otherwise cause to exist any lien, encumbrance or title
retention agreement ("Encumbrance") upon the Leased Property, or any portion
thereof or interest therein, whether to secure any borrowing or other means of
financing or refinancing. Any Encumbrance upon the Leased Property shall be
non-recourse to the Lessee and shall not impose an increase in Rent nor require
any material amendment or modification of Lessee's rights or obligations under
this Lease.
Section 18.2 Subordination of Lease
Upon Notice from Lessor, Lessee shall execute and deliver an agreement, in
form and substance reasonably satisfactory to Lessor, subordinating this
Agreement to any Encumbrance permitted pursuant to Section 18.1 and Lessee shall
join in and execute any loan documents approved by Lessor and the Facility
Mortgagee that are for the purpose of granting to the Facility Mortgagee a
security interest in the interest of Lessor under this Lease and in any and all
other assets relating to the Leased Property, including, without limitation, the
Operating Agreement, Case Goods, Inventories, subleases, license and permits
provided that the same shall not impose any liability on Lessee beyond Lessee's
interest under this Lease and the aforesaid assets; provided, however, that in
each instance, the Facility Mortgagee shall acknowledge that, consistent with
Lessor's rights under this Agreement, it will not: (A) disturb the Call Options
in favor of Lessee pursuant to Sections 14.2 and Article 19, (B) impose an
increase in Rent or (C) require any other material amendment or modification of
Lessee's rights or obligations under this Lease.
Section 18.3 Lessee's Cooperation
Without limiting the generality of the provisions of Section 18.2, Lessee
acknowledges that Lessor intends to finance its interest in and to this Lease.
In connection with the placement of an Encumbrance upon the Leased Property in
to secure any such financing, Lessee agrees, to cooperate with Lessor and the
Facility Mortgagee in such Facility Mortgagee's examination of the Retirement
Communities and in the execution of any and all documentation which is requested
by any such Facility Mortgagee for such financings and which is consistent with
Lessee's obligations under Sections 18.1, 18.2 and this Section 18.3. In this
regard, Lessee covenants to cooperate with Lessor and the Facility Mortgagee,
including without limitation:
(a) making or causing to be made any amendments or modifications to
this Lease or any of the other Operative Documents provided no such amendments
or modifications shall impose any increase in Rent, or require any other
material amendment or modification of Lessee's rights or obligations under this
Lease;
(b) creating eleven special purpose bankruptcy-remote entities which
shall become the lessees of each of the eleven Collective Leased Properties,
subject to Lessee's receipt of a reasoned opinion of its legal and tax counsel
confirming that the creation of such entities will not have material adverse
effects on (i) Lessee's tax treatment of this Agreement, as specified in Section
2.4 of this Agreement or (ii) the Licenses for each Facility;
(c) separating the leased properties from this Composite Lease into one
or more (and as many as eleven) separate leases;
(d) providing opinions of counsel, at Lessor's expense, which may be
relied upon by the Facility Mortgagee, the Rating Agencies and the respective
counsel, agents and representatives, as to non-consolidation, fraudulent
conveyance, or any other opinions customary in a single asset securitization or
a pooled loan securitization ("Secondary Market Transaction") or required by the
Rating Agencies with respect to any of the Individual Leased Properties and
Lessee and its affiliates, which counsel and opinions shall be satisfactory to
the Facility Mortgagee and the Rating Agencies;
(e) providing Estoppel Certificates, which shall include, in addition
to the matters described in Section 16.1 of the Lease, such representations and
warranties of Lessee as may be reasonably required by the Facility Mortgagee or
the Rating Agencies with respect to the status and authority of the Lessee and
then current information concerning the condition and operation of the
Retirement Communities, qualified to the knowledge of Lessee;
(f) entering into or modifying, as determined by the Facility
Mortgagee, all documentation reasonably requested by the Facility Mortgagee,
including, without limitation, a modification of the Cash Management Agreement,
the execution of a new Cash Management Agreement directly in favor of the
Facility Mortgagee, entering into a new Assignment of Operating Agreement,
Subordination, Non-Disturbance and Attornment Agreement, and assisting Lessor
and the Facility Mortgagee in obtaining new such agreements from the Operator;
provided, however, no such documentation shall impose an increase in Rent or
require any other material amendment or modification of Lessee's rights or
obligations under such documents or this Lease;
(g) promptly delivering updated information concerning the Lessee, the
operating performance of each of the Retirement Communities, and all other
records required under Article 20 of this Lease and copies of all Financial
Reports required under Article 9 of the Operating Agreement;
(h) providing such level of cooperation to the Facility Mortgagee in
the event the Facility Mortgagee intends to sell all or a portion of the
Facility Mortgage loan through one (1) or more Secondary Market Transactions.
Section 18.4 Notices
Subsequent to the receipt by Lessee of Notice from Lessor as to the identity
of any Facility Mortgagee (which Notice shall be accompanied by a copy of the
applicable Encumbrance and the address of such Facility Mortgagee), no Notice
from Lessee to Lessor as to any default by Lessor under this Agreement shall be
effective unless and until a copy of the same is given to such Facility
Mortgagee at the address set forth in the above described Notice, and the curing
of any of Lessor's defaults by such Facility Mortgagee shall be treated as
performance by Lessor.
XIX. RE-ACQUISITION OPTION; RE-ACQUISITION PROCEDURE
Section 19.1 Purchase Upon Put Option or Call Option
The Lessee shall re-acquire the Leased Property (the "Re-acquisition
Option"): (a) in connection with a Put Option by Lessor or a Call Option by
Lessee at the end of the Lease Term, (b) following a Put Option by Lessor in
connection with a Casualty as specified in Article 10, (c) following a Put
Option by Lessor or the presumed exercise of a Call Option by Lessee in
connection with a Condemnation as specified in Article 11; and (d) following
Lessee's Call Option in connection with Lessor's Special Right to Terminate this
Lease as specified in Section 14.2, in each instance for an amount equal to the
Lease Balance. At Lessor's election, except with respect to Lessee's Call Option
under Section 14.2, it shall be a condition precedent to such re-acquisition
that no Event of Default shall have occurred and be continuing on the day on
which the Leased Property is to be reacquired by Lessee; provided, however, in
the case of a re-acquisition by Lessee pursuant to a Call Option under Section
14.2, all Rent then due shall be brought current through Lessee's payment of the
Lease Balance as a condition precedent to such purchase. Lessor and Lessee may
exercise their respective Options only by delivering Notice to the other party.
The re-acquisition of any Leased Property pursuant to this Section 19.1 shall
occur in accordance with the procedure set forth in Section 19.2.
Section 19.2 Purchase Procedure
In the event of the re-acquisition by the Lessee of a Leased Property or the
Collective Leased Properties pursuant to any provision of this Lease, the terms
and conditions of this Section 19.2 shall apply.
(a) In the event of a re-acquisition at the end of the Lease Term,
Lessee shall provide Lessor with Notice of its election to purchase the Leased
Property (such Notice being a "Call Option") not later than six (6) months prior
to the end of the Lease Term and Lessor shall provide Lessee with Notice of its
election to require Lessee to re-acquire the Leased Property (such Notice being
a "Put Option") not later than six (6) months prior to the end of the Lease
Term. In the event of either a Put Option or Call Option the parties shall close
on re-acquisition and sale of the Leased Property not later than the last
business day before the expiration of the Term.
(b) In the case of a casualty or condemnation, and Notice of a Put
Option by Lessor, as provided in Article 10 or Notice of a Put Option or a Call
Option as provided in Article 11 shall have been given, or is presumed to have
been given, the parties shall close on the re-acquisition of such Leased
Property within one hundred eighty (180) days following receipt of such Notice.
(c) In the case of Lessee's exercise of a Call Option in connection
with the Lessor's Special Right to terminate the Lease as specified in Section
14.2, Lessee shall close on the re-acquisition of the Leased Property within one
hundred eighty (180) days following Lessee's receipt of Lessor's Termination
Notice pursuant to Section 14.2.
(d) At a time and place on the date established for such re-acquisition
in this Lease, or at such other place, time or date as Lessor and Lessee shall
mutually agree:
(i) the Lessee shall pay the Lease Balance (or, in the case of a
re-acquisition of an individual Leased Property pursuant to Article 10 or
Article 11, the Individual Lease Balance) to Lessor by wire transfer of
immediately available Federal funds, in lawful money of the United States, to an
account or accounts designated by Lessor, subject, in the case of a
re-acquisition of an individual Leased Property pursuant to Article 10 or
Article 11, to the reduction of the Individual Lease Balance of such individual
Leased Property by the amount of any Net Casualty Proceeds or Net Award paid to
and retained by Lessor, or the applicable Facility Mortgagee with respect to
such individual Leased Property;
(ii) Lessor shall execute and deliver to Lessee a Special Warranty
Deed in recordable form, or, at Lessee's election, an assignment of the
membership and partnership interests in the Lessor entities, and such other
instrument or instruments as may be appropriate to transfer the Leased Property
free and clear of all liens with the exception of the Existing Title
Encumbrances and any Future Title Encumbrances consented to by Lessee, together
with such evidence of Lessor's authority to sell the Leased Property to Lessee
and of the authorization of the sale of the Leased Property and the execution
and delivery of the Special Warranty Deed by Lessor, and such other matters as
Lessee may reasonably request, and a certification of non-foreign status as
required by the Foreign Investment in Real Property Tax Act and the regulations
promulgated thereunder and any other similar certificates required by the State
in which the Leased Property is located. In the case of a re-acquisition of the
Leased Property by Lessee pursuant to Article X or Article XI, and provided
Lessor has not previously applied the Net Casualty Proceeds or the Net Award as
a credit against the Individual Lease Balance, Lessor shall assign to the Lessee
the right to receive the Lessor's portion of the Net Casualty Proceeds or the
Net Award relating to such Leased Property when the same is paid;
(iii) the Lessee shall pay all charges incident to such transfer
including all recording fees, reasonable attorneys fees, costs and expenses,
title insurance premiums, survey costs and transfer taxes or other similar taxes
("Transaction Costs");
(iv) in the event of a termination of this Lease with respect to
any Leased Property as herein provided, the obligations and liabilities of the
Lessor and the Lessee, as the case may be, whether actual or contingent under
this Lease that arose at or prior to such termination and that are expressly
stated herein to survive the termination of the Lease shall survive such
termination until payment or satisfaction thereof;
(v) the Lessee shall execute and deliver to Lessor an
Environmental Indemnity Agreement in form, scope and substance satisfactory in
all respects to Lessor, pursuant to which Lessee shall agree to be liable for
and pay, and shall indemnify, hold harmless and defend any Lessor Indemnitee,
and its successors and assigns from and against any Environmental Claims arising
under Applicable Law both before and after the effective date of the purchase
pursuant to this Section 19.2.
(vi) in the event of Lessee's re-acquisition of the Collective
Leased Properties, the Lessor shall return any remaining and unused Restricted
Cash to Lessee.
(e) Until the closing of the re-acquisition of the Leased Property and
payment of all sums due under this Section 19.2, or termination of this Lease
pursuant to Section 5.3, this Lease shall continue in full force and effect.
XX. ADDITIONAL COVENANTS OF LESSEE
Section 20.1 Conduct of Business
Lessee shall not engage in any business other than the leasing and operation
of the Collective Leased Properties for the Permitted Use, and shall do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect and in good standing its existence and its rights and licenses necessary
to conduct such business.
Section 20.2 Maintenance of Accounts and Records
Lessee shall keep and during the term of the Operating Agreement shall cause
Operator to keep true records and books of account of Lessee and Operator,
respectively, in which full, true and correct entries will be made of dealings
and transactions in relation to the business and affairs of Lessee, Operator and
the Retirement Community. Lessor may at reasonable intervals during Lessee's or
Operator's normal business hours examine, copy (including copying any such
records contained in software other than records relating to current or former
residents of the Retirement Community), and audit such records. The parties
shall, within thirty (30) Business Days after the receipt of the Annual
Financial Report, make any adjustments, by cash payment, needed because of the
final figures set forth in the Annual Financial Report, or send a Notice of
disputed items or matters in appropriate detail. Final adjustments, if any, will
be made at the time any disputed items or matters are resolved by the parties.
If Lessor desires, at its own expense, to audit, examine and/or review, the
Annual Financial Report and supporting records and/or certain procedures at the
Retirement Community, as may be agreed upon by Lessor, Lessee and Operator, with
respect to internal financial controls, accounting policies and accounting
procedures, or other procedures at the Retirement Community, Lessee shall notify
Operator in writing within sixty (60) days after receipt of such statement of
its intention to audit and/or review such procedures and begin such audit and/or
review no sooner than thirty (30) days and no later than sixty (60) days after
Lessee and Operator's receipt of such Notice. Lessor shall complete such audit
and/or review within ninety (90) days after commencement thereof. If Lessor does
not make such an audit and/or review, then such Annual Financial Report and
procedures shall be deemed to be conclusively accepted by Lessor as being
correct, and Lessor shall have no right thereafter, except in the event of fraud
by Lessee and/or Operator during the term of the Operating Agreement, to
question or examine the same. If such review by Lessor determines that the
procedures specified above are not in compliance with the terms of this
Agreement, Lessorwill provide Lessee and/or Operator, as applicable, with
written notice of such deficiency and Lessee and/or Operator, as applicable
shall remedy such deficiency. If any audit by Lessor discloses an underpayment
of any amounts to Lessor, Lessee and/or Operator, as applicable, shall promptly
pay Lessor such amounts found to be due, plus interest thereon at the
Disbursement Rate from the date such amounts should originally have been paid.
Lessor shall keep in confidence all information which it might gain or gather
from the examination or audit of Lessee's and Operator's accounts and records,
unless required to disclose such information pursuant to Applicable Laws.
Section 20.3 Distributions, Payments to Affiliates, Etc.
Lessee shall not declare, order, pay or make, directly or indirectly, any
Distributions if, at the time of such proposed action, or immediately after
giving effect thereto, any Event of Default with respect to the payment of Rent
shall have occurred and be continuing.
Section 20.4 Compliance with Operating Agreement
20.4.1 Material Terms of the Operating Agreement.
Lessee shall diligently perform and observe all of the terms, covenants and
conditions of the Operating Agreement on the part of Lessee to be performed and
observed and shall promptly notify Lessor of any notice received by Lessee of
any default in the performance or observance of any of the terms, covenants or
conditions of the Operating Agreement on the part of Lessee or Operator to be
performed and observed. If Lessee shall default in the performance or observance
of any material term, covenant or condition of the Operating Agreement on the
part of Lessee to be performed or observed, then, without limiting Lessor's
other rights or remedies under this Lease or any of the Operative Documents, and
without waiving or releasing Lessee from any of its obligations hereunder or
under the Operating Agreement, Lessor shall have the right, but shall be under
no obligation, to pay any sums and to perform any act as may be appropriate to
cause all of the material terms, covenants and conditions of the Operating
Agreement on the part of Lessee to be performed or observed.
20.4.2 Subordination of Operating Agreement.
The Operating Agreement shall be subordinate to the Lease, and the
precautionary mortgage provided for in the Lease, as further evidenced by the
Assignment of Operating Agreement, Subordination, Non-Disturbance and Attornment
Agreement, and shall provide that the Operating Agreement may be terminated at
Lessor's option upon the occurrence of any of the following: (i) an Event of
Default under the Operating Agreement allowing the Lessee to terminate same; and
(ii) a default by Operator in its obligations under the Cash Management
Agreement and expiration of any applicable cure period thereunder. The Operating
Agreement shall provide that such Operating Agreement will not be amended,
modified or terminated without the consent of Lessor, except as permitted in
Section 20.4.3 below.
20.4.3 Modification of Operating Agreement.
Except as expressly provided below, Lessee shall not consent to or enter
into any of the following transactions, or any combination thereof, unless it
has received the prior written consent of Lessor and, after a Secondary Market
Transaction, Rating Agency Confirmation: (i) the surrender of the Operating
Agreement; (ii) the assignment by Operator of its interest under the Operating
Agreement except to an affiliate of Operator; (iii) the termination or
cancellation of the Operating Agreement; (iv) the modification, change,
supplement, alteration or amendment of the Operating Agreement; (v) the change,
replacement or termination of Operator; or (vi) the entering into of any new
Operating Agreement. Notwithstanding anything to the contrary contained herein,
Lessee shall be permitted, without any such written confirmation from the Rating
Agencies or the approval of Lessor, to make any non-material modification,
change, supplement, alteration or amendment to the Operating Agreement and to
waive any non-material rights thereunder (provided that (y) no such
modification, change, supplement, alteration, amendment or waiver shall affect
Lessor's rights and remedies thereunder, affect the cash management procedures
set forth in the Cash Management Agreement or in the Operating Agreement,
adversely affect the marketability of the Leased Property, change the
definitions of "Default" or "Event of Default," change the definition of
"Operating Expense" to exclude additional items to such definition, change the
definition of "Gross Revenues" to add additional amounts thereto, change the
term of the Operating Agreement or increase the Management Fees payable under
the Operating Agreement, and (z) Lessor shall have the right to approve any
replacement operator).
20.4.4 Absence of Default.
Lessee hereby represents that the Operating Agreement is in full force and
effect and: (i) there is no default, breach or violation existing thereunder by
any party thereto, and (ii) no event has occurred that, with the passage of time
or the giving of notice, or both, would constitute a default, breach or
violation by any party thereunder.
20.4.5 Communication with the Operator.
Lessor and Lessee acknowledge and agree that the Lessor is hereby authorized
to communicate directly with the Operator in connection with the operation of
the Retirement Community and in connection with certain terms and provisions set
forth in the Operating Agreement, and the Assignment of Operating Agreement,
Subordination of Operating Agreement, Non-Disturbance and Attornment Agreement,
provided that Lessor shall not take any action inconsistent with Lessor's rights
under the Operating Agreement or the Assignment of Operating Agreement,
Subordination, Non-Disturbance and Attornment Agreement, or that would solely by
reason of such action cause Lessee to be in default under the Operating
Agreement. Lessor acknowledges that it will accept the performance, by Operator
on behalf of Lessee, of all of the covenants, conditions and obligations of
Lessee contained in this Agreement.
20.4.6 Enforcement of the Operating Agreement.
The Lessee hereby agrees to use commercially reasonable efforts to pursue
and enforce any and all rights available to Lessee under the terms of the
Operating Agreement.
20.4.7 Replacement of Operator.
Lessor shall have the right to require Lessee to replace the Operator with a
new operator chosen by Lessee and approved by Lessor upon the occurrence of any
one of the events described in Section 20.4.2.
XXI. MISCELLANEOUS
Section 21.1 Limitation on Payment of Rent; No Usurious Amounts
It is intended by the parties that Florida law govern all aspects of this
Agreement, except those which the parties may not by agreement lawfully
designate Florida law as being applicable. Anything herein contained to the
contrary notwithstanding, it is the intent of the parties that Lessee shall not
pay or be obligated to pay any Rent or other amounts which would be considered
interest at a rate which is in excess of the maximum rate permitted by Florida
law or, if notwithstanding the agreement of the parties that Florida law shall
govern, a court may determine that the law of some other state is applicable,
then at a rate which is in excess of the maximum allowed by such other state. If
by the terms of this Agreement, Lessee is at any time required to pay sums
deemed interest at a rate in excess of such maximum lawful rate, then the
amounts to be paid by Lessee as interest or Rent under this Agreement shall be
deemed to be immediately reduced until the amounts deemed to be paid as interest
under this Agreement are reduced to a level such that the interest rate charged
and paid shall not exceed the maximum legal rate, and the portion of all prior
payments which would otherwise be deemed interest in excess of such maximum
legal rate shall be applied to and shall be deemed to have been made as payments
in reduction of any amounts deemed to be outstanding principal balance, unless
Lessee shall notify Lessor in writing that Lessee elects to have such excess sum
returned to it forthwith. Lessee agrees that in determining whether or not any
interest payable under this Agreement exceeds the highest rate permitted by law,
any non-principal payment, including without limitation, any late charges, shall
be deemed to the extent permitted by law to be an expense, fee or premium rather
than interest.
Section 21.2 No Waiver
No failure by Lessor or Lessee to insist upon the strict performance of any
term hereof or to exercise any right, power or remedy consequent upon a breach
thereof, and no acceptance of full or partial payment of Rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
of any such term. To the maximum extent permitted by law, no waiver of any
breach shall affect or alter this Agreement, which shall continue in full force
and effect with respect to any other then existing or subsequent breach.
Section 21.3 Remedies Cumulative
To the maximum extent permitted by law, each legal, equitable or contractual
right, power and remedy of Lessor or Lessee, now or hereafter provided either in
this Agreement or by Applicable Laws or otherwise, shall be cumulative and
concurrent and shall be in addition to every other right, power and remedy and
the exercise or beginning of the exercise by Lessor or Lessee (as applicable) of
any one or more of such rights, powers and remedies shall not preclude the
simultaneous or subsequent exercise by Lessor of any or all of such other
rights, powers and remedies.
Section 21.4 Severability
Any clause, sentence, paragraph, section or provision of this Agreement held
by a court of competent jurisdiction to be invalid, illegal or ineffective shall
not impair, invalidate or nullify the remainder of this Agreement, but rather
the effect thereof shall be confined to the clause, sentence, paragraph, section
or provision so held to be invalid, illegal or ineffective, and this Agreement
shall be construed as if such invalid, illegal or ineffective provisions had
never been contained therein.
Section 21.5 Acceptance of Surrender
No surrender to Lessor of this Agreement or of the Leased Property or any
part thereof, or of any interest therein, shall be valid or effective unless
agreed to and accepted in writing by Lessor and no act by Lessor or any
representative or agent of Lessor, other than such a written acceptance by
Lessor, shall constitute an acceptance of any such surrender.
Section 21.6 No Merger of Title
It is expressly acknowledged and agreed that it is the intent of the parties
that there shall be no merger of this Agreement or of the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly this Agreement or the leasehold estate created
hereby and the fee estate or ground Lessor's interest in the Leased Property.
Section 21.7 Conveyance by Lessor
If Lessor or any successor owner of all or any portion of the Leased
Property shall convey all or any portion of the Leased Property in accordance
with the terms of this Agreement (including, without limitation, under Article
XIV) other than as security for a debt, and the grantee or transferee of such of
the Leased Property shall expressly assume all obligations of Lessor hereunder
arising or accruing from and after the date of such conveyance or transfer,
Lessor or such successor owner, as the case may be, shall thereupon be released
from all future liabilities and obligations of Lessor under this Agreement with
respect to such of the Leased Property arising or accruing from and after the
date of such conveyance or other transfer and all such future liabilities and
obligations shall thereupon be binding upon the new owner.
Section 21.8 Quiet Enjoyment
Provided that no Event of Default shall have occurred and be continuing,
Lessee shall peaceably and quietly have, hold and enjoy the Leased Property for
the Term, free of hindrance or molestation by Lessor or anyone claiming by,
through or under Lessor, but subject to (a) any Encumbrance permitted under
Article XVIII or otherwise permitted to be created by Lessor hereunder, (b) all
Title Encumbrances, (c) liens as to obligations of Lessor that are either not
yet due or which are being contested in good faith and by proper proceedings,
provided the same do not materially interfere with Lessee's ability to operate
the Retirement Community and (d) liens that have been consented to in writing by
Lessee. Except as otherwise provided in this Agreement, no failure by Lessor to
comply with the foregoing covenant shall give Lessee the right to cancel or
terminate this Agreement or ▇▇▇▇▇, reduce or make a deduction from or offset
against the Rent or any other sum payable under this Agreement, or to fail to
perform any other obligation of Lessee hereunder.
Section 21.9 Entire Agreement; Memorandum of Lease
This Lease contains the entire agreement between the parties hereto with
respect to this Lease and may not be modified in any manner other than in
writing signed by the parties hereto or their successors. A Memorandum of this
Lease, in the form attached hereto as Exhibit "H" shall be recorded in the
public records of the county where the Leased Property is located. The
Memorandum of Lease shall be modified by the parties in the manner that Lessor
may desire. All costs and expenses of recording such memorandum shall be payable
by the party that records such memorandum.
Section 21.10 Notices
(a) Notices, statements and other communications to be given under the
terms of this Agreement shall be in writing and delivered by hand against
receipt or sent by certified or registered mail or Express Mail service, postage
prepaid, return receipt requested or by nationally utilized overnight delivery
service, addressed to the parties as follows:
(b) All such Notices shall be addressed as follows, if to Lessor to:
c/o CNL Retirement Corp.
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or
Chief Operating Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Marriott Senior Living Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Lessee to:
c/o Prime Care Properties, LLC
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇, President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bose, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Prime Care Properties, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Marriott Senior Living Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇ ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as is from time to time designated by the party
receiving the Notice. Any such Notice that is mailed in accordance herewith
shall be deemed received when delivery is received or refused, as the case may
be.
Section 21.11 Construction; Non-recourse
Anything contained in this Agreement to the contrary notwithstanding, all
claims against, and liabilities of, Lessee arising prior to any date of
termination or expiration of this Agreement with respect to the Leased Property
shall survive such termination or expiration. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated except by an
instrument in writing signed by all the parties thereto. All the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective permitted successors and assigns. Each
term or provision of this Agreement to be performed by Lessee shall be construed
as an independent covenant and condition. Time is of the essence with respect to
the exercise of any rights of Lessee or Lessor under this Agreement. Except as
otherwise set forth in this Agreement, any obligations arising prior to the
expiration or sooner termination of this Agreement of Lessee (including without
limitation, any monetary, repair and indemnification obligations) and Lessor
shall survive the expiration or sooner termination of this Agreement; provided,
however, that each party shall be required to give the other Notice of any such
surviving and unsatisfied obligations within one year after the expiration or
sooner termination of this Agreement. Except in the case of any guarantor of
Lessee's obligations hereunder or except in the case of acts of fraud or
negligence by Lessee, nothing contained in this Agreement shall be construed to
create or impose any liabilities or obligations on any of the shareholders,
beneficial owners, direct or indirect, officers, directors, trustees, employees
or agents of Lessor or Lessee for the payment or performance of the obligations
or liabilities of Lessor or Lessee hereunder. Further, in the event Lessor shall
be in default under this Agreement, and if as a consequence of such default,
Lessee shall recover a money judgment against Lessor, such judgment shall be
satisfied only out of the proceeds of sale received upon execution of such
judgment against the right, title and interest of Lessor in the Leased Property.
Section 21.12 Counterparts; Headings
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but which, when taken together, shall constitute
but one instrument and shall become effective as of the date hereof when copies
hereof, which, when taken together, bear the signatures of each of the parties
hereto shall have been signed. Headings in this Agreement are for purposes of
reference only and shall not limit or affect the meaning of the provisions
hereof.
Section 21.13 Applicable Law, Etc.
THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES, EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LEASEHOLD
ESTATES THEREUNDER AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO,
WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW FOR THE
STATE IN WHICH A LEASED PROPERTY IS LOCATED. WITHOUT LIMITING THE FOREGOING, IN
THE EVENT THAT THIS LEASE IS DEEMED TO CONSTITUTE A FINANCING, WHICH IS THE
INTENTION OF THE PARTIES, THE LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, SHALL GOVERN THE CREATION, TERMS AND PROVISIONS OF
THE INDEBTEDNESS EVIDENCED THEREBY, BUT THE LIEN CREATED THEREBY AND BY THE
MEMORANDUM OF LEASE AND THE CREATION AND ENFORCEMENT OF SAID LIEN SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH THE
LEASED PROPERTY IS LOCATED.
Section 21.14 Right to Make Agreement
Each party warrants, with respect to itself, that neither the execution of
this Agreement, nor the consummation of any transaction contemplated hereby,
shall violate any provision of any Applicable Laws, or any judgment, writ,
injunction, order or decree of any court or governmental authority having
jurisdiction over it; nor result in or constitute a breach or default under any
indenture, contract, other commitment or restriction to which it is a party or
by which it is bound; nor require any consent, vote or approval which has not
been given or taken, or at the time of the transaction involved shall not have
been given or taken. Each party covenants that it has and will continue to have
throughout the term of this Agreement and any extensions thereof, the full right
to enter into this Agreement and perform its obligations hereunder.
Section 21.15 Disclosure of Information
(a) Any Proprietary Information obtained by Lessor with respect to
Lessee pursuant to the provisions of this Agreement shall be treated as
confidential, except that such information may be used, subject to
confidentiality safeguards mutually acceptable to Lessor and Lessee, in any
litigation between the parties and except further that, Lessor may disclose such
information to its prospective lenders, provided that Lessor shall direct and
obtain the agreement of such lenders to maintain such information as
confidential.
(b) The parties hereto agree that the matters set forth in this
Agreement and any revenue, expense, net profit, fee rates and occupancy
information provided by Lessee or any of the Affiliates of Lessee are strictly
confidential and each party will make every effort to ensure that the
information is not disclosed to any Person that is not an Affiliate as to any
party (including the press) other than the Operator, or any other Affiliate of
Marriott, without the prior written consent of the other party, except as may be
required by Applicable Laws and as may be reasonably necessary to obtain
licenses, permits and other public approvals necessary for the refurbishment or
operation of the Retirement Community, or, subject to the restrictions of
Section 21.15(c) relative to the contents of any Prospectus, in connection with
a Lessor financing, a sale of the Retirement Community, or a sale of a
Controlling Interest in Lessor.
(c) No reference to Lessee, or any of Lessee's Affiliates will be made
in any prospectus, private placement memorandum, offering circular or offering
documentation related thereto (collectively, the "Prospectus"), issued by Lessor
or any of its Affiliates, which is designed to interest potential investors in
the Retirement Community, unless Lessee has previously received a copy of all
such references and has approved in writing the use of such references. No
Prospectus shall include fee rate and occupancy data or revenue, expense or net
profit information pertaining to the Retirement Community. Regardless of whether
Lessee so receives a copy of the Prospectus or has approved any references to
Lessee or any of Lessee's Affiliates in the Prospectus, neither Lessee nor
Lessee's Affiliates will be deemed a sponsor of the offering described in the
Prospectus, nor will they have any responsibility for the Prospectus, and the
Prospectus will so state. Unless Lessee agrees in advance, the Prospectus will
not include any trademark, symbols, logos or designs of Lessee, or any of
Lessee's Affiliates. Lessor shall indemnify, defend and hold Lessee and Lessee's
Affiliates harmless from and against all loss, costs, liability and damage
(including reasonable attorneys' fees and expenses, and all costs of litigation)
arising out of any Prospectus or the offering described therein; and this
obligation of Lessor shall survive the termination of this Agreement.
(d) The obligations of Lessee and Lessor contained in this Section
21.15 shall survive the expiration or earlier termination of this Agreement.
Section 21.16 Non-Compete; Protected Territory
Throughout the Term of this Lease, Lessee, nor any of its affiliates shall,
without Lessor's consent, own, lease, operate, license, manage, or franchise, an
assisted living facility, skill nursing facility or any other similar business
operation within the Protected Territory. As a means of enforcement of Lessor's
rights, in addition to the remedies provided to Lessor under Article 12, Lessee
agrees that Lessor shall have the right of injunctive relief to enjoin any
violation by Lessee of the provisions of this Section 21.16.
Section 21.17 Attorneys' Fees
Notwithstanding anything to the contrary contained in this Lease or any
other instruments or documents executed in connection with the Leased Property
between Lessor and any Parent Affiliate, in the event any party to such
instrument should bring suit against the other party in respect to any matters
provided for herein or therein, the prevailing party shall be entitled to
recover from the non-prevailing party its costs of court, legal expenses and
reasonable attorneys' fees.
Section 21.18 Waiver of Jury Trial
LESSEE AND LESSOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY WITH REGARDS TO ANY LITIGATION BASED ON THIS LEASE AND
ANY OBLIGATION RESULTING FROM OR RELATED TO THIS LEASE OR ANY GUARANTY RELATING
TO THIS LEASE, OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF DEALING, COURSE OF CONDUCT, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF LESSEE, ANY GUARANTOR OR LESSOR. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR LESSOR ENTERING INTO THIS LEASE.
Section 21.19 Composite Lease
This Lease, although executed and delivered as a composite instrument for
convenience, constitutes a separate Lease and Agreement between the Lessor and
the Lessee with respect to each Leased Property. All provisions of this Lease
shall be applicable separately to each of the Leased Properties with the same
effect as if a separate Lease with respect to each of the Leased Properties have
been executed and delivered by the Lessor and the Lessee. Therefore, among other
effects, an Event of Default with respect to an Individual Leased Property shall
constitute an Event of Default with respect to each of the Collective Leased
Properties. If any such separate lease shall be voluntarily terminated or
extended pursuant to any provision hereof, such determination or extension shall
have no effect upon the remaining leases. Upon the request of the Lessor or the
Lessee, a separate lease of a Leased Property (a "Site Lease"), in the same form
of this Lease except for such mutually satisfactory modifications as shall be
required by the fact that such Lease relates only to such Leased Property, shall
be executed, acknowledged and delivered by the Lessor and the Lessee, at the
requesting party's sole expense (including the non-requesting party's reasonable
attorneys fees, costs and expenses).
Section 21.20 Recording of Documents
Lessor and Lessee shall execute, acknowledge and deliver, and Lessee shall
contemporaneously with the Commencement Date or as soon as practicable
thereafter cause to be recorded or filed in the manner and place required by any
Applicable Laws, the documents required to be recorded under the Refinancing and
Acquisition Agreement including, without limitation, for each Leased Property, a
deed and a memorandum of lease, and all other instruments which shall be
reasonably requested by the Lessor or the Lessee as being necessary or
appropriate in order to protect their respective interests in the Collective
Leased Properties. Thereafter, the Lessor and the Lessee shall execute,
acknowledge and deliver, and the Lessee shall record or cause to be recorded or
filed, any instruments (other than this entire Lease, as compared to a
memorandum hereof) which shall be reasonably requested by the Lessor or the
Lessee as being necessary or appropriate in order to protect their respective
interests in the Collective Leased Properties.
Section 21.21 Lessee Entity Separateness
Attached to this Lease as Exhibit "I" is an organizational chart relating to
Lessee and certain affiliates and other parties. Lessee represents that the
organizational chart is a true, complete and correct representation of the
Lessee entity and the Owners of the Lessee, and its respective Owners. Lessee
hereby represents and warrants to and covenants with Lessor that as of the date
hereof and until such time as the Adjusted Lease Basis and all Rent due
hereunder shall be paid in full: (A) Lessee does not own and will not own any
asset or property other than (i) its Leased Properties, as shown on Exhibit "D",
and (ii) incidental personal property necessary for the ownership or operation
thereof; (B) Lessee will not engage in any business other than the ownership,
management and operation of the Retirement Communities which they each own, as
shown on Exhibit "D"; (C) Lessee will not enter into any contractor agreement
with any affiliate of the Lessee, any constituent party of Lessee or any
affiliate of any constituent party, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available on
an arms-length basis with third parties other than any such party; (D) Lessee
has not incurred any indebtedness outstanding on the date hereof and will not
hereafter incur any indebtedness, in each case, secured or unsecured, direct or
indirect, absolute or contingent (including guarantying any obligation) other
than the obligations imposed by this Lease and the other Operative Documents;
(E) except as required by reason of the cross-collateralization provided in this
Lease, Lessee has not acquired and shall not acquire obligations or liabilities
of its affiliates; (F) Lessee is and will remain solvent and shall pay its debts
and liabilities from its assets as the same shall become due; (G) Lessee has
done or caused to be done and will do all things necessary to observe
organizational formalities and preserve its existence, and Lessee will not, nor
will each Lessee permit any constituent party to amend, modify or otherwise
change the Partnership Certificate, Partnership Agreement, Articles of
Incorporation and By-Laws, Operating Agreement, Trust or other organizational
document of Lessee or such constituent party without the prior consent of
Lessor; (H) except to the extent permitted in the Lease, Lessee will maintain
all of its books, records, financial statements and bank accounts separate from
those of its affiliates and any constituent party, and shall prepare separate
financial statements showing its assets and liabilities separate and apart from
those of any other person, and not have its assets listed on the financial
statement of any other person; provided, however, that the Lessee's assets may
be included in a consolidated financial statement of its affiliates provided
that (i) appropriate notation shall be made on such consolidated financial
statements to indicate the separateness of Lessee and such affiliates and to
indicate that Lessee's assets and credit are not available to satisfy the debts
and other obligations of such affiliates or any other person (except by reason
of the cross-collaterization of the Leased Properties herein) and (ii) such
assets shall be listed on Lessee's own separate balance sheet; (I) Lessee will
be, and at all times will hold itself out to the public as, a legal entity
separate and distinct from any other entity (including any affiliate of Lessee
or any constituent party of Lessee), shall correct any known misunderstanding
regarding its status as a separate entity, shall conduct business in its own
name, shall not identify itself or any of its affiliates as a division or part
of the other and shall maintain and utilize separate stationery, invoices and
checks bearing its own name; (J) Lessee will maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character in light of its contemplated business operations; (K) neither Lessee
nor any constituent party will seek or effect the liquidation, dissolution,
consolidation or merger, in whole or in part of Lessee; (L) except as required
by reason of the cross-collaterization provided by this Lease, Lessee will not
commingle the funds and any other assets of Lessee with those of any affiliate
or constituent or any other person, and will hold all of its assets in its own
name except that each of the Lessee's funds may be commingled as contemplated in
the Cash Management Agreement and the Operating Agreement; (M) except as
required by reason of the cross-collaterization provided by this Lease, Lessee
has and will maintain its assets in such a manner that it will not be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any affiliate or constituent party or any other person; (N) except as
required by reason of the cross-collaterization provided by this Lease, Lessee
will not guarantee or become obligated for the debts of any other person and
does not and will not hold itself out to be responsible for or have its credit
available to satisfy the debts or obligations of any other persons; (O) each
Lessee shall appoint and maintain at least one independent director acceptable
to the Rating Agencies, and reasonably acceptable to Lessor and Lessee, and
whose approval shall be required to file or consent to the filing of a
bankruptcy against Lessee; (P) Lessee shall be structured so as to maintain a
status as a bankruptcy remote, special purpose entity consistent with the
reasonable requirements of the Rating Agencies and such that counsel for Lessee
can provide a non-consolidation or insolvency opinion acceptable in form and
content to the Rating Agencies, and shall conduct themselves consistent with the
separateness covenants imposed, from time to time, by the Rating Agencies.
Section 21.22 Relationship of the Parties
The relationship of Lessor and Lessee hereunder shall be that of lessor and
lessee under a financing lease, as described in Section 2.4 of this Agreement.
Neither this Agreement nor any agreements, instruments, documents, or
transactions contemplated hereby shall in any respect be interpreted, deemed or
construed as making Lessor a partner, joint venturer with, or agent of Lessee.
Lessor and Lessee agree that neither party shall make any contrary assertion,
claim or counterclaim in any action, suit or other legal proceeding, or in any
financial or tax accounting or reporting involving Lessor or Lessee.
Section 21.23 State Specific Provisions
(a) Special Florida Provision. It is expressly agreed that Lessor and
Lessee have entered into the transaction contemplated by this Lease, and all of
the Operative Documents to accomplish a single transaction, and intending such
transaction to be characterized as financing in the amount of the Lease Balance.
[SIGNATURES BEGIN ON THE NEXT PAGE.]
IN WITNESS WHEREOF, the parties have executed this Lease Agreement as a
sealed instrument as of the date above first written.
LESSOR:
CNL RETIREMENT PC1 NAPLES FL, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP a Delaware limited
partnership
By: CNL Retirement PC1 GP, LLC, a Delaware
limited liability company, as sole general
partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CNL RETIREMENT PC1 VENICE FL, LP, a Delaware
limited partnership
By: CNL Retirement PC1, LP a Delaware limited
partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CNL RETIREMENT PC1 NEW JERSEY, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP a Delaware limited
partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CNL RETIREMENT PC1 FRIENDSHIP HEIGHTS MD, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CNL RETIREMENT PC1 NORTH CAROLINA, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CNL RETIREMENT PC1 STAMFORD CT, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CNL RETIREMENT PC1 BUCKHEAD GA, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CNL RETIREMENT PC1 BRENTWOOD TN, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
LESSEE:
PRIME CARE ONE, LLC,
an Indiana limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
PRIME CARE TWO, LLC,
an Indiana limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
A-4
EXHIBIT "A"
RENT ADDENDUM
"Additional Rent" means, with respect to any Fiscal Year the greater of (1)
the amounts derived from Schedule A attached hereto which are equal to the
product of (a) the percentage corresponding to the Fiscal Year and average
Facility Occupancy Level for such Fiscal Year times (b) the Gross Revenues for
the Fiscal Year, and (2) the amount required to cause the Aggregate Rent paid
with respect to such Fiscal Year to equal the Target Rent, except that in the
event a court finds that any portion of Additional Rent constitutes interest for
purposes of any applicable usury law, the Additional Rent shall not exceed the
amount permitted by paragraph 3 of this Rent Addendum.
"Adjusted Lease Basis" means, with respect to any Fiscal Year, the sum of
(1) the Differential Amount for the prior Fiscal Year, if any, plus (2) the
amount of the Lease Basis Adjustment with respect to such Fiscal Year.
Notwithstanding the foregoing, until the end of the Base Year the Adjusted Lease
Basis shall equal the Lease Basis plus the Aggregate Differential Amount.
"Adjusted Lease Rate" means, with respect to any Fiscal Year, the Adjusted
Lease Rate in effect for the prior Fiscal Year multiplied by 1.025, provided
that the Adjusted Lease Rate until the end of the Base Year shall be ten and
one-half percent (10.5%); provided further that the Adjusted Lease Rate for the
twenty-ninth (29th) Fiscal Year shall be the Adjusted Lease Rate for the
remainder of the Term.
"Aggregate Rent" means, with respect to any Fiscal Year, the sum of the
Minimum Rent and Additional Rent paid or accrued with respect to such Fiscal
Year.
"Aggregate Differential Amount" means, with respect to any Fiscal Year, the
sum of the accrued but unpaid Differential Amounts for all prior Fiscal Years.
"Differential Amount" means, with respect to any Fiscal Year, the excess of
the sum of the First-Tier Minimum Rent and Second Tier Minimum Rent due with
respect to such Fiscal Year less the sum of the First-Tier Minimum Rent and
Second Tier Minimum Rent paid with respect to such Fiscal Year.
"Facility Occupancy Level" means, with respect to any Fiscal Year, the
average annual occupancy level, as measured by units occupied, determined with
respect to all of the Facilities operated on each of the Collective Leased
Facilities, on a weighted average basis.
"First-Tier Minimum Rent" means, in any Fiscal Year 5% of the Adjusted Lease
Basis for such Fiscal Year.
"Lease Basis" shall have the meaning ascribed thereto in the Lease.
"Lease Basis Adjustment" means, with respect to any Fiscal Year, the product
of (1) the Adjusted Lease Basis as in effect for the prior Fiscal Year reduced
by the difference between the Aggregate Differential Amount as of the beginning
of the prior Fiscal Year and the end of the prior Fiscal Year multiplied by (2)
the Adjusted Lease Rate, less any reduction of the Adjusted Lease Rate required
by paragraph 3 of this Rent Addendum.
"Minimum Rent" means, with respect to any Fiscal Year, the sum of (1) the
Aggregate Differential Amount plus (2) the product of (a) the Adjusted Lease
Basis for such Fiscal Year and (b) the Adjusted Lease Rate, except that such sum
shall not exceed the amount permitted by paragraph 3 of this Rent Addendum.
"Second Tier Minimum Rent" means, with respect to any Fiscal Year, the
difference between (1) the Adjusted Lease Basis with respect to such Fiscal Year
multiplied by the Adjusted Lease Rate and (2) the First Tier Minimum Rent.
"Target Rent" means, with respect to each Fiscal Year the Adjusted Lease
Basis as determined for such Fiscal Year multiplied by thirteen percent (13%).
1. Minimum Rent.
Payment of Minimum Rent. Minimum Rent shall be paid in twelve equal
payments, monthly, in arrears on or before the twentieth (20th) day of the month
for which such payment is due. Notwithstanding the foregoing, the first payment
of Minimum Rent shall be due and payable on or before October 21, 2002 (the
"Advance Minimum Rent"). The amount of Advance Minimum Rent paid to Lessor shall
be applied as a credit against the first payment(s) of Minimum Rent due
hereunder. Minimum Rent for any partial Accounting Period shall be prorated on a
per diem basis. The amount of Minimum Rent paid with respect to any Fiscal Year
shall be treated first as payment of First Tier Minimum Rent with respect to
such Fiscal Year, second as payment of Second Tier Minimum Rent with respect to
such Fiscal Year, and thereafter, to the extent such payments exceed the sum of
the First Tier Minimum Rent and the Second Tier Minimum Rent with respect to
such Fiscal Year, shall reduce the Aggregate Differential Amount.
2. Additional Rent.
(a) Payment of Additional Rent. For each Fiscal Year commencing with
the first Fiscal Year after the Base Year, Lessee shall pay Additional Rent.
Additional Rent shall be reconciled in the manner and at the times set forth in
sub-paragraphs 2(b) and (c) above.
(b) Quarterly Installments. Installments of Additional Rent for each
Fiscal Year or portion thereof shall be calculated and paid each Fiscal Quarter
in arrears. Payment of each such installment shall be made within thirty (30)
days after the end of each Fiscal Quarter and shall be accompanied by (i) a
statement from the Operator setting forth the calculation of Additional Rent due
and payable for such Fiscal Quarter if the Operating Agreement is in effect or
(ii) a certificate from an officer of the Lessee certifying and setting forth
the calculation of Additional Rent due and payable for such Fiscal Quarter if
the Operating Agreement is not in effect. Installments of Additional Rent due
with respect to each Fiscal Quarter shall be equal to the Additional Rent due
for all Fiscal Quarters elapsed during the applicable Fiscal Year less amounts
previously paid with respect thereto by Lessee. If the Additional Rent for such
elapsed Fiscal Quarters as shown on the last quarterly statement is less than
the amount previously paid with respect thereto by Lessee, Lessee shall be
entitled to offset the amount of such difference against Rent next coming due
under this Agreement, such offset to be applied together with interest at the
Disbursement Rate accruing from the date of payment by Lessee until the date the
offset is applied. If the Additional Rent for such elapsed Fiscal Quarters, as
shown on the last quarterly statement, is more than the amount previously paid
with respect thereto by Lessee, Lessee shall pay to Lessor the amount of such
difference, together with Rent next coming due under this Agreement, together
with interest on the amount of such difference at the Disbursement Rate accruing
from the due date of such payment to the date such payment is received by
Lessor.
(c) Reconciliation of Additional Rent. In addition, on or before
seventy-five (75) days after the end of each Fiscal Year, commencing with the
first full Fiscal Year after the Base Year, Lessee shall deliver or shall cause
Operator to deliver, to Lessor a statement setting forth the Gross Revenues for
such preceding Fiscal Year together with a certificate of an officer of the
Lessee, or Operator's chief accounting officer during the term of the Operating
Agreement, certifying that such year-end statement is true and correct. The
Lessor shall within thirty (30) Business Days after the receipt of such
statement send a Notice to the Lessee and to the Operator, if applicable, of any
disputed items or matters in appropriate detail. If Lessor desires, at its own
expense, to audit, examine or review the statement and supporting records and/or
certain procedures at the Retirement Community, as may be agreed upon by Lessor,
Lessee and Operator, if applicable, with respect to internal financial controls,
accounting policies and accounting procedures, or other procedures at the
Retirement Community, Lessor shall notify Lessee in writing within sixty (60)
days after receipt of such statement of its intention to audit and/or review
such procedures and begin such audit and/or review no sooner than thirty (30)
days and no later than sixty (60) days after Lessee's receipt of such Notice.
Lessor shall complete such audit and/or review within ninety (90) days after
commencement thereof. If Lessor does not conduct such an audit and/or review,
then such statement and procedures shall be deemed to be conclusively accepted
by Lessor as being correct, and Lessor shall have no right thereafter, except in
the event of fraud by Lessee and/or Operator, if applicable, to question or
examine the same. If such review by Lessor determines that the procedures
specified above are not in compliance with the terms of this Agreement, Lessor
will provide Lessee and Operator, if applicable, with written Notice of such
deficiency and Lessee and Operator shall remedy such deficiency.
If the annual Additional Rent for such preceding Fiscal Year as shown in the
annual statement exceeds the amount previously paid with respect thereto by
Lessee, Lessee shall pay such excess to Lessor at such time as the annual
statement is delivered. If the annual Additional Rent for such preceding Fiscal
Year as shown in the annual statement is less than the amount previously paid
with respect thereto by Lessee, Lessee shall be entitled to offset the amount of
such difference against Rent next coming due under this Agreement.
3. Limitations on Payment of Rent.
Notwithstanding anything else contained herein to the contrary, the amount of
Minimum Rent and Additional Rent paid by Lessee or charged by Lessor shall not
exceed an amount which would be lawful under any applicable usury laws. In the
event that any amounts previously paid would exceed such lawful amount, such
payments shall be applied so as to reduce the Adjusted Lease Basis, unless
Lessee shall notify Lessor in writing that Lessee elects to have such excess sum
returned to it forthwith.
SCHEDULE A
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
--------------------------------------------------------------------------------------------------
86% Occupancy 0.00% 0.00% 0.47% 0.18% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
--------------------------------------------------------------------------------------------------
87% Occupancy 0.00% 0.00% 0.80% 0.43% 0.11% 0.13% 0.04% 0.06% 0.08% 0.09% 0.07%
88% Occupancy 0.00% 0.00% 1.14% 0.67% 0.21% 0.25% 0.08% 0.12% 0.16% 0.19% 0.15%
89% Occupancy 0.00% 0.00% 1.48% 0.92% 0.32% 0.38% 0.12% 0.19% 0.25% 0.28% 0.22%
--------------------------------------------------------------------------------------------------
90% Occupancy 0.00% 0.00% 1.81% 1.16% 0.42% 0.51% 0.16% 0.25% 0.33% 0.38% 0.30%
--------------------------------------------------------------------------------------------------
91% Occupancy 0.00% 0.00% 2.46% 1.79% 1.07% 1.09% 0.72% 0.74% 0.77% 0.77% 0.68%
92% Occupancy 0.00% 0.00% 3.11% 2.42% 1.72% 1.67% 1.28% 1.24% 1.20% 1.15% 1.07%
93% Occupancy 0.00% 0.00% 3.76% 3.05% 2.37% 2.25% 1.85% 1.74% 1.64% 1.54% 1.46%
--------------------------------------------------------------------------------------------------
94% Occupancy 0.00% 0.00% 4.41% 3.69% 3.02% 2.83% 2.41% 2.24% 2.08% 1.93% 1.85%
--------------------------------------------------------------------------------------------------
95% Occupancy 0.00% 0.00% 4.65% 3.88% 3.22% 3.03% 2.61% 2.44% 2.28% 2.13% 2.05%
96% Occupancy 0.00% 0.00% 4.89% 4.08% 3.41% 3.24% 2.81% 2.64% 2.49% 2.33% 2.26%
97% Occupancy 0.00% 0.00% 5.13% 4.28% 3.61% 3.44% 3.01% 2.85% 2.69% 2.54% 2.46%
--------------------------------------------------------------------------------------------------
98% Occupancy 0.00% 0.00% 5.37% 4.47% 3.81% 3.64% 3.21% 3.05% 2.89% 2.74% 2.67%
--------------------------------------------------------------------------------------------------
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
------------------------------------------------------------------------------------------------------------------------
86% Occupancy 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
------------------------------------------------------------------------------------------------------------------------
87% Occupancy 0.00% 0.00% 0.00% 0.00% 0.01% 0.02% 0.03% 0.04% 0.05% 0.07% 0.08% 0.09% 0.10%
88% Occupancy 0.00% 0.00% 0.00% 0.00% 0.01% 0.04% 0.06% 0.09% 0.11% 0.13% 0.16% 0.18% 0.20%
89% Occupancy 0.00% 0.00% 0.00% 0.00% 0.02% 0.06% 0.09% 0.13% 0.16% 0.20% 0.23% 0.27% 0.30%
------------------------------------------------------------------------------------------------------------------------
90% Occupancy 0.00% 0.00% 0.00% 0.00% 0.03% 0.08% 0.12% 0.17% 0.22% 0.26% 0.31% 0.36% 0.40%
------------------------------------------------------------------------------------------------------------------------
91% Occupancy 0.35% 0.36% 0.37% 0.38% 0.41% 0.46% 0.51% 0.55% 0.60% 0.65% 0.69% 0.74% 0.78%
92% Occupancy 0.69% 0.71% 0.74% 0.76% 0.80% 0.84% 0.89% 0.94% 0.98% 1.03% 1.07% 1.12% 1.17%
93% Occupancy 1.04% 1.07% 1.11% 1.14% 1.18% 1.23% 1.27% 1.32% 1.37% 1.41% 1.46% 1.50% 1.55%
------------------------------------------------------------------------------------------------------------------------
94% Occupancy 1.38% 1.43% 1.48% 1.52% 1.57% 1.61% 1.66% 1.70% 1.75% 1.79% 1.84% 1.88% 1.93%
------------------------------------------------------------------------------------------------------------------------
95% Occupancy 1.59% 1.63% 1.68% 1.73% 1.77% 1.82% 1.86% 1.91% 1.95% 2.00% 2.04% 2.08% 2.13%
96% Occupancy 1.79% 1.84% 1.88% 1.93% 1.97% 2.02% 2.06% 2.11% 2.15% 2.20% 2.24% 2.29% 2.33%
97% Occupancy 2.00% 2.04% 2.09% 2.13% 2.18% 2.22% 2.27% 2.31% 2.36% 2.40% 2.44% 2.49% 2.53%
------------------------------------------------------------------------------------------------------------------------
98% Occupancy 2.20% 2.25% 2.29% 2.34% 2.38% 2.43% 2.47% 2.51% 2.56% 2.60% 2.65% 2.69% 2.73%
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2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
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86% Occupancy 0.00% 0.00% 0.00% 0.02% 0.07% 0.11% 0.39% 0.67% 0.93% 1.19% 1.44% 1.68%
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87% Occupancy 0.11% 0.12% 0.14% 0.16% 0.21% 0.26% 0.53% 0.81% 1.07% 1.32% 1.57% 1.74%
88% Occupancy 0.23% 0.25% 0.27% 0.30% 0.35% 0.40% 0.67% 0.94% 1.20% 1.46% 1.71% 1.79%
89% Occupancy 0.34% 0.37% 0.41% 0.45% 0.49% 0.54% 0.81% 1.08% 1.34% 1.59% 1.84% 1.85%
---------------------------------------------------------------------------------------------------------------
90% Occupancy 0.45% 0.50% 0.54% 0.59% 0.63% 0.68% 0.95% 1.22% 1.48% 1.73% 1.97% 1.91%
---------------------------------------------------------------------------------------------------------------
91% Occupancy 0.83% 0.88% 0.92% 0.97% 1.01% 1.06% 1.24% 1.43% 1.60% 1.78% 1.95% 1.89%
92% Occupancy 1.21% 1.26% 1.30% 1.35% 1.39% 1.43% 1.53% 1.64% 1.73% 1.84% 1.93% 1.87%
93% Occupancy 1.59% 1.64% 1.68% 1.72% 1.77% 1.81% 1.82% 1.85% 1.86% 1.89% 1.91% 1.85%
---------------------------------------------------------------------------------------------------------------
94% Occupancy 1.97% 2.02% 2.06% 2.10% 2.15% 2.19% 2.11% 2.06% 1.98% 1.94% 1.88% 1.83%
---------------------------------------------------------------------------------------------------------------
95% Occupancy 2.17% 2.22% 2.26% 2.30% 2.35% 2.31% 2.24% 2.19% 2.10% 2.06% 2.00% 1.95%
96% Occupancy 2.37% 2.42% 2.46% 2.50% 2.55% 2.44% 2.38% 2.32% 2.21% 2.17% 2.12% 2.07%
97% Occupancy 2.57% 2.62% 2.66% 2.70% 2.75% 2.56% 2.51% 2.46% 2.32% 2.29% 2.23% 2.19%
---------------------------------------------------------------------------------------------------------------
98% Occupancy 2.78% 2.82% 2.86% 2.90% 2.95% 2.69% 2.64% 2.59% 2.43% 2.41% 2.35% 2.32%
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COMPOSITE
EXHIBIT "B"
ASSIGNMENT OF OPERATING AGREEMENT, SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
(1 for each of the 11 Leased Properties)
EXHIBIT "C"
CASH MANAGEMENT AGREEMENT
CASH MANAGEMENT AND POOLING AGREEMENT
Dated: as of September 30, 2002
among
PRIME CARE ONE, LLC, and
PRIME CARE TWO, LLC,
collectively, as Lessee
and
CNL RETIREMENT PC1 NAPLES FL, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 VENICE FL, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 NEW JERSEY, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 FRIENDSHIP HEIGHTS MD, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 NORTH CAROLINA, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 STAMFORD CT, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 BUCKHEAD GA, LP
a Delaware limited partnership,
CNL RETIREMENT PC1 BRENTWOOD TN, LP
a Delaware limited partnership,
collectively, as Lessor
and
CNLBANK,
as Agent
and
MARRIOTT SENIOR LIVING SERVICES, INC.,
as Operator
CASH MANAGEMENT AND POOLING AGREEMENT
CASH MANAGEMENT AND POOLING AGREEMENT (this "Agreement"), dated as of
September 30, 2002, by and among PRIME CARE PROPERTIES ONE, LLC and PRIME CARE
TWO, LLC, each an Indiana limited liability company (collectively, as "Lessee"),
CNLBANK, a State chartered bank ("Agent"), CNL RETIREMENT PC1 NAPLES FL, LP, a
Delaware limited partnership, CNL RETIREMENT PC1 VENICE FL, LP, a Delaware
limited partnership, CNL RETIREMENT PC1 NEW JERSEY, LP, a Delaware limited
partnership, CNL RETIREMENT PC1 FRIENDSHIP HEIGHTS MD, LP, a Delaware limited
partnership, CNL RETIREMENT PC1 NORTH CAROLINA, LP, a Delaware limited
partnership, CNL RETIREMENT PC1 STAMFORD CT, LP, a Delaware limited partnership,
CNL RETIREMENT PC1 BUCKHEAD GA, LP, a Delaware limited partnership, CNL
RETIREMENT PC1 BRENTWOOD TN, LP, a Delaware limited partnership (collectively,
the "Lessor"), and MARRIOTT SENIOR LIVING SERVICES, INC., a Delaware corporation
("Operator").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Lease Agreement (the "Lease
Agreement") dated the date hereof between Lessee and Lessor, Lessee has leased
from Lessor the Leased Properties, each of which Leased Properties is improved
as an assisted living nursing facility;
WHEREAS, Lessee and Operator have entered into separate operating
agreements, dated the date hereof, with respect to each of the Leased Properties
(individually, an "Operating Agreement" and collectively, the "Operating
Agreements") pursuant to which Operator has agreed to operate the Leased
Properties; and
WHEREAS, the parties have agreed that the revenues of the Leased
Properties shall be deposited, transferred and disbursed in accordance with this
Agreement and the Clearing Account Agreements.
NOW, THEREFORE, in consideration of the covenants herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
I. DEFINITIONS
Section 1.1 Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Lease Agreement. As used herein, the following terms
shall have the following definitions:
"Accounting Period" shall have the meaning ascribed thereto in the
Lease Agreement and the Operating Agreements.
"Accounting Period Payment Date" shall mean the first (1st) Business
Day of each Accounting Period occurring during the term of the Lease Agreement.
"Accounts" mean, collectively, the Cash Management Account, the Rent
Account, the FF&E Reserve Account, the Restricted Cash Account, the Rent Reserve
Account, the First-Tier Administration Fee Account, the Second-Tier
Administration Fee Account, the Incentive Fee Account, the Cash Trap Account,
the 803 Reimbursement Account and the Pooled Account.
"ACH System" means the automated clearinghouse system.
"Advance Minimum Rent" shall have the meaning ascribed thereto in the
Lease Agreement.
"Agent" CNLBank, as agent under this Agreement, together with its
successors and assigns.
"Agent Accounts" shall mean the Accounts, less the Operator Controlled
Accounts and the Pooled Account.
"Aggregate Differential Amount" shall have the meaning ascribed thereto
in the Lease Agreement.
"Aggregate Gross Revenues" shall mean, for any given period, the sum of
Gross Revenues for all of the Leased Properties for such period.
"Aggregate Local Working Capital Amount" shall mean the aggregate Local
Working Capital Amounts applicable to all of the Leased Properties.
"Aggregate Operating Expenses" shall mean, for any given period, the
sum of Operating Expenses for the Leased Properties for such period.
"Aggregate Operating Profit" shall mean, for any given period, an
amount equal to the excess of Aggregate Gross Revenues over Aggregate Operating
Expenses for such period.
"Aggregate Performance Termination Threshold" shall mean, for any given
period, the sum of each Performance Termination Threshold for all of the Leased
Properties for such period.
"Aggregate Working Capital" shall mean the aggregate Working Capital
applicable to all of the Leased Properties in accordance with the Operating
Agreements.
"Aggregate Working Capital Balance" shall mean an amount equal to the
Aggregate Working Capital, less the less the Aggregate Local Working Capital
Amount.
"Agreement" means this Cash Management and Pooling Agreement, dated as
of September 30, 2002, among Lessee, Operator, Agent and Lessor, as amended,
supplemented or otherwise modified from time to time.
"Annual Operating Projection" shall have the meaning ascribed thereto
in the Operating Agreements.
"Applicable Percentage" shall have the meaning ascribed thereto in the
Operating Agreements.
"Business Day" means Monday through Friday except for New Year's Day,
President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
"Cash Management Account" as defined in Section 2.1(b)(i).
"Cash Trap Account" as defined in Section 2.1(b)(v).
"Cash Trap Period" shall mean any Lessee Cash Trap Period or Operator
Cash Trap Period.
"Clearing Accounts" those certain accounts established pursuant to the
Clearing Account Agreements.
"Clearing Account Agreements" those certain Clearing Account Agreements
dated as of the date hereof, among Lessee, Lessor, Operator and Clearing Account
Banks.
"Clearing Account Banks" shall mean, with respect to each of the Leased
Properties, each of the Clearing Account Banks identified as such in the
Clearing Account Agreements, together with its respective successors and
assigns.
"Code" shall have the meaning ascribed thereto in the Lease Agreement.
"Collateral" as defined in Section 6.1.
"Distributee" as defined in Section 3.5.
"Eligible Account" shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (i) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or (ii)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R.
ss.9.10(b), having in either case a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"Eligible Institution" shall mean a depository institution or trust
company insured by the Federal Deposit Insurance Corporation the short term
unsecured debt obligations or commercial paper of which are rated at least A-1
by S&P, P-1 by ▇▇▇▇▇'▇ and F-1+ by Fitch in the case of accounts in which funds
are held for thirty (30) days or less (or, in the case of accounts in which
funds are held for more than thirty (30) days, the long term unsecured debt
obligations of which are rated at least "AA-" by Fitch and S&P and "Aa2" by
▇▇▇▇▇'▇). The parties hereto confirm that, as of the date hereof, CNLBank is an
Eligible Institution.
"Estimated Payment" as defined in Section 3.3(h).
"Event of Default" shall mean either a Lessee Event of Default or an
Operator Event of Default.
"FF&E Reserve" shall have the meaning ascribed thereto in the Operating
Agreements.
"FF&E Reserve Account" as defined in Section 2.1(a)(ii).
"FF&E Reserve Payment" shall have the meaning ascribed thereto in the
Operating Agreements.
"First-Tier Administration Fee Account" as defined in Section
2.1(b)(vii).
"First-Tier Administration Fee" shall have the meaning ascribed thereto
in the Lease Agreement.
"First-Tier Minimum Rent" shall have the meaning ascribed thereto in
the Lease Agreement.
"First-Tier Performance Threshold" as defined in Section 8.1(a).
"Fiscal Year" shall have the meaning ascribed thereto in the Operating
Agreements.
"Force Majeure" shall have the meaning ascribed thereto in the
Operating Agreements.
"Gross Revenues" shall have the meaning ascribed thereto in the
Operating Agreements.
"Incentive Fee" shall mean, in the aggregate, the Incentive Management
Fees payable to Operator in accordance with the Operating Agreements.
"Incentive Fee Account" as defined in Section 2.1(b)(vi).
"Impositions" shall have the meanings ascribed thereto in the Lease
Agreement and the Operating Agreements.
"Lease Agreement" shall have the meaning ascribed thereto in the
recitals.
"Lease Basis" shall have the meaning ascribed thereto in the Lease
Agreement.
"Leased Property" or "Leased Properties" shall have the meaning
ascribed thereto in the Lease Agreement.
"Lessee" shall mean, collectively, Prime Care One, LLC, an Indiana
limited liability company, together with its successors and permitted assigns,
and Prime Care Two, LLC, an Indiana limited liability company, together with its
successors and permitted assigns.
"Lessee Cash Trap Period" shall mean any period (i) commencing on the
date that a Lessee Event of Default shall exist, and (ii) ending on the next
Business Day after such Lessee Event of Default shall have been cured by Lessee
in accordance with the Lease Agreement, the Operating Agreements or the
Operative Documents, as applicable.
"Lessee Event of Default" shall mean the occurrence of an "Event of
Default" as provided under the Lease Agreement, as well as the occurrence of a
default (other than a default of Lessor or Operator) under any of the Operative
Documents (beyond any applicable cure periods).
"Lessor" shall mean collectively, CNL RETIREMENT PC1 NAPLES FL, LP, a
Delaware limited partnership, CNL RETIREMENT PC1 VENICE FL, LP, a Delaware
limited partnership, CNL RETIREMENT PC1 NEW JERSEY, LP, a Delaware limited
partnership, CNL RETIREMENT PC1 FRIENDSHIP HEIGHTS MD, LP, a Delaware limited
partnership, CNL RETIREMENT PC1 NORTH CAROLINA, LP, a Delaware limited
partnership, CNL RETIREMENT PC1 STAMFORD CT, LP, a Delaware limited partnership,
CNL RETIREMENT PC1 BUCKHEAD GA, LP, a Delaware limited partnership, CNL
RETIREMENT PC1 BRENTWOOD TN, LP, a Delaware limited partnership, together with
their successors and permitted assigns.
"Lien" shall have the meaning ascribed thereto in the Lease Agreement.
"Local Working Capital Amount" shall mean, with respect to the Clearing
Account at any particular Leased Property, an amount not to exceed Five Thousand
and No/100 Dollars ($5,000), subject to adjustment by the GDP Deflator (as
defined in the Operating Agreements), to be used by Lessee and Operator as ▇▇▇▇▇
cash in connection with the operation of such Leased Property.
"Minimum Rent" shall have the meaning ascribed thereto in the Lease
Agreement.
"Obligations" as defined in Section 6.1.
"Operating Agreements" shall have the meaning ascribed thereto in the
recitals.
"Operating Expenses" shall have the meaning ascribed thereto in the
Operating Agreements.
"Operating Profits" shall have the meaning ascribed thereto in the
Operating Agreements.
"Operative Documents" shall have the meaning ascribed thereto in the
Lease Agreement.
"Operator" shall mean Marriott Senior Living Services, Inc.
"Operator Base Fee" shall mean, in the aggregate, the Base Management
Fees (as defined in the Operating Agreements) payable to Operator in accordance
with the Operating Agreements "Operator Cash Trap Period" shall mean any period
(i) commencing on the date that an Operator Performance Default shall exist, and
(ii) ending on the next Business Day after such Operator Performance Default
shall have been cured by Operator in accordance with the Operating Agreements or
this Agreement, as applicable.
"Operator Controlled Accounts" shall mean the FF&E Reserve Account
(except during a Operator Cash Trap Period) and the Clearing Accounts.
"Operator Event of Default" shall mean the occurrence of any "Event of
Default" under the Operating Agreements (including without limitation, any
Operator Performance Default), as well as the occurrence of a default (other
than a default of Lessor or Lessee) under any of the Operative Documents (beyond
any applicable cure periods).
"Operator Performance Default" shall mean either (i) the occurrence of
an "Event of Default" under Sections 16.01.A., 16.01.B., 16.01.C. or 16.01.D. of
the Operating Agreements, or (ii) the election by Operator to not make a
Shortfall Payment in accordance with Section 8.3 of this Agreement, which
election shall be deemed to occur thirty (30) days from the date upon which
Lessee delivers notice to Operator of its exercise of the option to terminate in
accordance with Section 8.2.
"Officer's Certificate" shall mean a certificate delivered to Lessor by
Lessee or Operator which is signed by an authorized senior officer of Lessee or
Operator.
"Permitted Investments" shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
payable on demand or having a maturity date not later than the Business Day
immediately prior to the first Accounting Period Payment Date following the date
of acquiring such investment and meeting one of the appropriate standards set
forth below:
(i) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit of
the United States of America including, without limitation, obligations of: the
U.S. Treasury (all direct or fully guaranteed obligations), the Farmers Home
Administration (certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime Administration
(guaranteed Title XI financing), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed transit bonds);
provided, however, that the investments described in this clause (i) must (A)
have a predetermined fixed dollar amount of principal due at maturity that
cannot vary or change, (B) if rated by S&P, not have an "r" highlighter affixed
to their rating, (C) if such investments have a variable rate of interest, have
an interest rate tied to a single interest rate index plus a fixed spread (if
any) and must move proportionately with that index, and (D) not be subject to
liquidation prior to their maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Student Loan Marketing Association (debt obligations), the
Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt
obligations); provided, however, that the investments described in this clause
(iii) must (A) have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change, (B) if rated by S&P, not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, have an interest rate tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with that index, and
(D) not be subject to liquidation prior to their maturity;
(iv) federal funds, unsecured certificates of deposit, time deposits,
bankers' acceptances and repurchase agreements with maturities of not more than
365 days of any bank, the short term obligations of which at all times are rated
in the highest short term rating category by each Rating Agency; provided,
however, that the investments described in this clause (iv) must (A) have a
predetermined fixed dollar amount of principal due at maturity that cannot vary
or change, (B) with respect to its rating by S&P, not have an "r" highlighter
affixed to their rating, (C) if such investments have a variable rate of
interest, have an interest rate tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and (D) not
be subject to liquidation prior to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured demand and time
deposits in, or certificates of deposit of, or bankers' acceptances issued by,
any bank or trust company, savings and loan association or savings bank, the
short term obligations of which at all times are rated in the highest short term
rating category by each Rating Agency; provided, however, that the investments
described in this clause (v) must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) with respect to its
rating by S&P, not have a "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, have an interest rate tied to a
single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) not be subject to liquidation prior to
their maturity;
(vi) debt obligations with maturities of not more than 365 days and at
all times rated by each Rating Agency in its highest long-term unsecured debt
rating category; provided, however, that the investments described in this
clause (vi) must (A) have a predetermined fixed dollar amount of principal due
at maturity that cannot vary or change, (B) with respect to its rating by S&P,
not have an "r" highlighter affixed to their rating, (C) if such investments
have a variable rate of interest, have an interest rate tied to a single
interest rate index plus a fixed spread (if any) and must move proportionately
with that index, and (D) not be subject to liquidation prior to their maturity;
(vii) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than 365 days and that at all times is rated by each Rating Agency
in its highest short-term unsecured debt rating; provided, however, that the
investments described in this clause (vii) must (A) have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change, (B) with
respect to its rating by S&P, not have a "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, have an
interest rate tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) not be subject to
liquidation prior to their maturity; and
(viii) units of taxable money market funds or mutual funds, which funds
are regulated investment companies, seek to maintain a constant net asset value
per share and have the highest rating from each Rating Agency for money market
funds or mutual funds;
provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) earning a passive return in the
nature of interest and no obligation or security shall be a Permitted Investment
if (A) such obligation or security evidences a right to receive only interest
payments or (B) the right to receive principal and interest payments on such
obligation or security are derived from an underlying investment that provides a
yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.
Lessee, Lessor and Agent hereby agree that the term "Permitted
Investments" shall include investments in (i) any money market mutual fund
provided the same shall at all times maintain the highest rating given to money
market mutual funds by each of the Rating Agencies, and (ii) any money market
mutual fund that invests exclusively in the other Permitted Investments listed
above.
"Pooled Account" as defined in Section 2.1(a)(i).
"Rating Agency" or "Rating Agencies" shall mean each of S&P, ▇▇▇▇▇'▇
and Fitch, or any other nationally-recognized statistical rating agency which
has been approved by Lessor.
"Recipient" as defined in Section 3.5.
"Rent" shall have the meaning ascribed thereto in the Lease Agreement.
"Rent Account" as defined in Section 2.1(b)(iv).
"Rent Reserve" shall have the meaning ascribed thereto in the Lease
Agreement.
"Rent Reserve Account" as defined in Section 2.1(b)(iii).
"Restricted Cash" shall have the meaning ascribed thereto in the Lease
Agreement and the Operating Agreements.
"Restricted Cash Account" as defined in Section 2.1(b)(ii).
"Second-Tier Administration Fee Account" as defined in Section
2.1(b)(viii).
"Second-Tier Administration Fee" shall have the meaning ascribed
thereto in the Lease Agreement.
"Second-Tier Minimum Rent" shall have the meaning ascribed thereto in
the Lease Agreement.
"Second-Tier Performance Threshold" as defined in Section 8.1(b).
"Shortfall Payment" as defined in Section 8.3.
"UCC" as defined in Section 6.1(a)(iv).
"Working Capital" shall have the meaning ascribed thereto in the
Operating Agreements.
"803 Reimbursement" shall mean, in the aggregate, the amounts funded by
Operator for 803 Expenditures (as defined in the Operating Agreements) which
were not funded from the FF&E Reserve Account pursuant to the Operating
Agreements.
"803 Reimbursement Account" as defined in Section 2.1(b)(ix).
"803 Reserve Payment" shall have the meaning ascribed thereto in the
Operating Agreements.
II. THE ACCOUNTS
Section 2.1 Establishment of Accounts.
(a) Operator acknowledges and confirms that Operator has established
the following Accounts:
(i) An account maintained by Operator into which the Clearing
Account Banks for each of the Leased Properties shall, provided no Operator Cash
Trap Period then exists, transfer by wire transfer or via the ACH System all
amounts, less the Local Working Capital Amount, on deposit in the Clearing
Accounts for the Leased Properties (the "Pooled Account"), which amounts may be
commingled with other funds not deposited, held or disbursed pursuant to this
Agreement; and
(ii) A single account with Agent into which Operator and Lessee
shall deposit, or cause to be deposited, and pool (provided no Operator Cash
Trap Period then exists) the FF&E Reserve Payments required to be deposited
pursuant to the Operating Agreements (the "FF&E Reserve Account").
(b) Lessee and Lessor acknowledge and confirm that Lessor has
established the following Accounts with Agent:
(i) An account into which Agent and Operator shall deposit, or
cause to be deposited, all amounts constituting Aggregate Operating Profits in
the Pooled Account (the "Cash Management Account");
(ii) An account into which Lessee shall deposit, or cause to be
deposited, the Restricted Cash required to be deposited pursuant to the Lease
Agreement and the Operating Agreements (the "Restricted Cash Account");
(iii) An account into which Agent and Lessor shall deposit, or
cause to be deposited, the sums required to be deposited into the Rent Reserve
pursuant to the Lease Agreement (the "Rent Reserve Account").
(iv) An account into which Agent and Lessor shall deposit, or
cause to be deposited, the amounts required for the payment of Rent under the
Lease Agreement (the "Rent Account");
(v) An account into which funds shall be deposited during a Cash
Trap Period pursuant to Section 3.3(d) and Section 3.3(f) (the "Cash Trap
Account");
(vi) An account into which Agent and Lessor shall deposit, or
cause to be deposited, the sums required for the payment of the Incentive Fee to
the Operator in accordance with the Operating Agreements (the "Incentive Fee
Account");
(vii) An account into which Agent and Lessor shall deposit, or
cause to be deposited, the sums required for the payment of the First-Tier
Administration Fee to the Lessee in accordance with the Lease Agreement (the
"First-Tier Administration Fee Account");
(viii) An account into which Agent and Lessor shall deposit, or
cause to be deposited, the sums required for the payment of the Second-Tier
Administration Fee to the Lessee in accordance with the Lease Agreement (the
"Second-Tier Administration Fee Account"); and
(ix) An account into which Agent and Lessor shall deposit, or
cause to be deposited, the sums required for the payment of the 803
Reimbursement to the Operator in accordance with the Operating Agreements (the
"803 Reimbursement Account");
Agent may maintain the Accounts described in (iii) through (ix) above as
separate accounts or as subaccounts of the Cash Management Account.
Section 2.2 No Other Accounts. Lessee and Operator represent, warrant and
covenant that, except as specifically provided herein, there are no other
accounts maintained by Lessee, Operator or any other party into which revenues
from the ownership and operation of any of the Leased Properties are deposited.
During the Term of the Lease Agreement, neither Lessee, Operator nor any other
party shall open any other such account for the deposit of revenues from any of
the Leased Properties.
Section 2.3 Account Name. The Agent Accounts shall each be in the name of
Lessor; provided, however, that in the event Lessor transfers or assigns the
Lease Agreement, Agent, at Lessor's request, shall change the name of each Agent
Account to the name of the transferee or assignee.
Section 2.4 Eligible Accounts/Characterization of Accounts. Lessee, Operator and
Agent shall maintain each Account (other than the Pooled Account) as an Eligible
Account or a sub-account of an Eligible Account. Each Account (other than the
Pooled Account) is and shall be treated as a "securities account" as such term
is defined in Section 8.501(a) of the UCC. Agent hereby agrees that each item of
property (whether investment property, financial asset, securities, instrument,
cash or other property) credited to each Account (other than the Pooled Account)
shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the UCC. Agent shall, subject to the terms of this Agreement,
treat Lessor as entitled to exercise the rights that comprise any financial
asset credited to each Agent Account. All securities or other property
underlying any financial assets credited to each Agent Account shall be
registered in the name of Agent, endorsed to Agent or in blank or credited to
another securities account maintained in the name of Agent and in no case will
any financial asset credited to any Agent Account be registered in the name of
Lessee, payable to the order of Lessee or specially endorsed to Lessee.
Section 2.5 Permitted Investments. Sums on deposit in the Accounts (other than
the Pooled Account) shall not be invested except in Permitted Investments.
Except during the existence of any Event of Default, Lessee shall have the right
to direct Agent to invest sums on deposit in the Agent Accounts in Permitted
Investments; provided, however, in no event shall Lessee direct Agent to make a
Permitted Investment if the maturity date of that Permitted Investment is later
than the date on which the invested sums are required for payment of an
obligation for which the Account was created. Lessee hereby irrevocably
authorizes and directs Agent to apply any income earned from Permitted
Investments to the respective Agent Accounts. The amount of actual losses
sustained on a liquidation of a Permitted Investment shall be deposited into the
Cash Management Account by Lessee no later than one (1) Business Day following
such liquidation. Lessee shall be responsible for payment of any federal, state
or local income or other tax applicable to income earned from Permitted
Investments. The Agent Accounts shall be assigned the federal tax identification
number of Lessee, which number is ▇▇-▇▇▇▇▇▇▇.
III. CASH MANAGEMENT
Section 3.1 Initial Deposits.
(a) Lessee shall deposit in the Rent Account on October 18, 2002, the amount
of the Advance Minimum Rent.
(b) Lessee shall deposit in the FF&E Reserve Account on the date hereof the
amount of the Applicable Percentage for the first Accounting Period,
$_______________.
(c) Lessee shall deposit in the Restricted Cash Account on the date hereof
the amount of $2,000,000.
(d) Lessee shall deposit in the Pooled Account on the date hereof the amount
of $1,240,000, as the initial funding of the Aggregate Working Capital.
Section 3.2 Intentionally Omitted.
Section 3.3 Operation of Accounts.
(a) Lessee and Operator shall cause all Gross Revenues of the Leased
Properties, including all credit card receipts, to be deposited directly into
the Clearing Accounts. If, notwithstanding the provisions of this Section
3.3(a), Lessee or Operator receives any Gross Revenues from the Leased
Properties then (i) such amounts shall be deemed to be Collateral and shall be
held for the benefit of Lessor, and (ii) Lessee or Operator shall deposit such
amounts in the Clearing Account within one (1) Business Day of receipt.
Commencing with the first billing statement delivered after the date hereof and
for each subsequent statement delivered, Lessee and Operator shall instruct all
parties that maintain open accounts with Lessee or Operator or with whom Lessee
or Operator does business on an "accounts receivable" basis with respect to the
Leased Properties to deliver all payments due under such accounts to the
Clearing Accounts.
(b) Provided no Operator Cash Trap Period then exists, Operator shall cause
all Gross Revenues deposited into the Clearing Accounts, less and except the
Local Working Capital Amount, to be transferred to the Pooled Account on every
Business Day of each Accounting Period. Provided no Operator Cash Trap Period
then exists, Operator shall disburse funds in the Pooled Account in the
following order of priority:
(i) First, Operator shall disburse the Operator Base Fee payable
to Operator for the current Accounting Period, in accordance with the Operating
Agreements;
(ii) Second, Operator shall pay all Operating Expenses of the
Leased Properties for the current Accounting Period, in accordance with the
Operating Agreements; and
(iii) Third, Operator shall deposit the FF&E Reserve Payment into
the FF&E Reserve Account in accordance with the Operating Agreements.
On the 14th day of each Accounting Period (or the next Business Day if said 14th
day is not a Business Day) Operator shall disburse one-half (1/2) of the
estimated Aggregate Operating Profits for such Accounting Period, as estimated
in Operator's reasonable discretion, into the Cash Management Account, based
upon the most recent combined Interim Reports (as defined in the Operating
Agreements) for the Leased Properties. On the 20th day following the last
Business Day of each Accounting Period, Operator shall disburse the remainder of
the Aggregate Operating Profits for such Accounting Period into the Cash
Management Account.
(c) Provided no Cash Trap Period then exists, Agent shall withdraw all
available funds on deposit in the Cash Management Account on every Business Day
of each Accounting Period; provided, however, that the first withdrawal from the
Cash Management Account in any Accounting Period need not be made until a
sufficient amount has accumulated in the Cash Management Account so that the
deposits required pursuant to clauses (i) through (vi) below can be made. Agent
shall disburse such funds in the following amounts and order of priority:
(i) First, funds necessary to pay the First-Tier Administration
Fee for the current Accounting Period shall be deposited into the First-Tier
Administration Fee Account for disbursement to Lessee in accordance with the
Lease Agreement;
(ii) Second, funds necessary to pay First-Tier Minimum Rent to the
Lessor for the current Accounting Period shall be deposited into the Rent
Account for disbursement to Lessor in accordance with the Lease Agreement;
(iii) Third, funds necessary to fund the 803 Reserve Payment, if
any, shall be deposited into the FF&E Reserve Account in accordance with the
Operating Agreements;
(iv) Fourth, funds necessary to pay to the Lessor that portion of
Second-Tier Minimum Rent equal to 10.5% of the Lease Basis, less the First-Tier
Minimum Rent, for the current Accounting Period, shall be deposited into the
Rent Account for disbursement to Lessor in accordance with the Lease Agreement;
(v) Fifth, funds necessary to pay to Operator the 803
Reimbursement due for the current Accounting Period, if any, shall be deposited
into the 803 Reimbursement Account for disbursement to Operator in accordance
with the Operating Agreements;
(vi) Sixth, funds necessary to pay to the Lessor the remainder of
the Second-Tier Minimum Rent after payment of the amounts described in Section
3.3(c)(iv) hereinabove, for the current Accounting Period, shall be deposited
into the Rent Account for disbursement to Lessor in accordance with the Lease
Agreement;
(vii) Seventh, funds sufficient to pay any Incentive Fee due
Operator for the current Accounting Period shall be deposited into the Incentive
Fee Account for disbursement to Operator in accordance with the Operating
Agreements;
(viii) Eighth, funds necessary to pay to Lessor the Aggregate
Differential Amount due as of the current Accounting Period shall be deposited
into the Rent Account;
(ix) Ninth, funds sufficient to pay the Second-Tier Administration
Fee for the current Accounting Period shall be deposited into the Second-Tier
Administration Fee Account for disbursement to Lessee in accordance with the
Lease Agreement;
(x) Tenth, funds sufficient to pay Lessor Additional Rent due for
the current Accounting Period shall be deposited into the Rent Account for
disbursement to Lessor in accordance with the Lease Agreement;
(xi) Eleventh, funds required to be funded into the Rent Reserve
for the current Fiscal Year shall be deposited into the Rent Reserve Account in
accordance with the Lease Agreement;
(xii) Twelfth, all amounts remaining in the Cash Management
Account after deposits for items (i) through (xi) shall be disbursed to Lessee.
(d) If an Operator Cash Trap Period then exists, Lessee and Operator shall
cause all amounts in the Clearing Accounts, less and except the Local Working
Capital Amount, to be transferred directly to the Cash Management Account. If an
Operator Cash Trap Period then exists, Agent shall, during the Term of the Lease
Agreement, withdraw all available funds on deposit in the Cash Management
Account on every Business Day of each Accounting Period; provided, however, that
the first withdrawal from the Cash Management Account in any Accounting Period
during an Operator Cash Trap Period (after the deposits required pursuant to
clauses (i) through (iii) have been made) need not be made until a sufficient
amount has accumulated in the Cash Management Account so that the deposits
required pursuant to clauses (iv) through (ix) below can be made. During an
Operator Cash Trap Period, Agent shall disburse such funds in the following
amounts and order of priority:
(i) First, funds sufficient to pay the Operator Base Fee for the
current Accounting Period shall be deposited into the Cash Trap Account;
(ii) Second, funds sufficient to pay the Operating Expenses (to
the extent such Operating Expenses are not otherwise specifically addressed in
this Section 3.3(d)) for the current Accounting Period shall be paid as directed
by Operator;
(iii) Third, funds necessary to fund the FF&E Reserve Payment for
the next Accounting Period shall be deposited into the Cash Trap Account;
(iv) Fourth, funds necessary to pay the First-Tier Administration
Fee for the current Accounting Period shall be deposited into the First-Tier
Administration Fee Account for disbursement to Lessee in accordance with the
Lease Agreement;
(v) Fifth, funds necessary to pay First-Tier Minimum Rent to the
Lessor for the current Accounting Period shall be deposited into the Rent
Account for disbursement to Lessor in accordance with the Lease Agreement;
(vi) Sixth, funds necessary to fund the 803 Reserve Payment, if
any, shall be deposited into the Cash Trap Account;
(vii) Seventh, funds necessary to pay to the Lessor that portion
of Second-Tier Minimum Rent equal to 10.5% of the Lease Basis, less the
First-Tier Minimum Rent, for the current Accounting Period, shall be deposited
into the Rent Account for disbursement to Lessor in accordance with the Lease
Agreement;
(viii) Eighth, funds necessary to pay to Operator the 803
Reimbursement due for the current Accounting Period, if any, shall be deposited
into Cash Trap Account;
(ix) Ninth, funds necessary to pay to the Lessor the remainder of
the Second-Tier Minimum Rent after payment of the amounts described in Section
3.3(d)(vii) hereinabove, for the current Accounting Period, shall be deposited
into the Rent Account for disbursement to Lessor in accordance with the Lease
Agreement;
(x) Tenth, funds sufficient to pay any Incentive Fees due Operator
for the current Accounting Period shall be deposited into the Cash Trap Account;
(xi) Eleventh, funds necessary to pay to Lessor the Aggregate
Differential Amount due as of the current Accounting Period shall be deposited
into the Rent Account;
(xii) Twelfth, funds sufficient to pay the Second-Tier
Administration Fee for the current Accounting Period shall be deposited into the
Second-Tier Administration Fee Account for disbursement to Lessee in accordance
with the Lease Agreement;
(xiii) Thirteenth, funds sufficient to pay Lessor Additional Rent
due for the current Accounting Period shall be deposited into the Rent Account
for disbursement to Lessor in accordance with the Lease Agreement;
(xiv) Fourteenth, funds required to be funded into the Rent
Reserve for the current Fiscal Year shall be deposited into the Rent Reserve
Account in accordance with the Lease Agreement;
(xv) Fifteenth, all amounts remaining in the Cash Management
Account after deposits for items (i) through (xiv) shall be disbursed to Lessee.
(e) During the existence of an Operator Cash Trap Period, all funds on
deposit in the FF&E Reserve Account shall be disbursed in accordance with
Section 5.2 of this Agreement. Upon the expiration of a Operator Cash Trap
Period, (i) any funds deposited and held in the Cash Trap Account allocable to
the FF&E Reserve which have not been disbursed in accordance with Section 5.2 of
this Agreement shall be deposited into the FF&E Reserve Account for disbursement
in accordance with the Operating Agreements and this Agreement; (ii) any funds
remaining in the Cash Trap Account allocable to the payment of the Operator Base
Fee shall be deposited into the Pooled Account for disbursement in accordance
with the Operating Agreements and this Agreement; (iii) any funds remaining in
the Cash Trap Account allocable to the payment of the Incentive Fee shall be
deposited into the Incentive Fee Account for disbursement in accordance with the
Operating Agreements and this Agreement; and (iv) any funds remaining in the
Cash Trap Account allocable to the payment of the 803 Reimbursement shall be
deposited into the 803 Reimbursement Account for disbursement in accordance with
the Operating Agreements and this Agreement.
(f) If a Lessee Cash Trap Period then exists, Operator shall continue to
control and disburse funds in the Pooled Account in accordance with the terms of
Section 3.3(b) hereinabove. Agent shall, during a Lessee Cash Trap Period,
withdraw all available funds on deposit in the Cash Management Account on every
Business Day of each Accounting Period; provided, however, that the first
withdrawal from the Cash Management Account in any Accounting Period during a
Lessee Cash Trap Period need not be made until a sufficient amount has
accumulated in the Cash Management Account so that the deposits required
pursuant to clauses (i) through (vi) below can be made. During a Lessee Cash
Trap Period, Agent shall disburse such funds in the following amounts and order
of priority:
(i) First, funds necessary to pay the First-Tier Administration
Fee for the current Accounting Period shall be deposited into the First-Tier
Administration Fee Account for disbursement to Lessee in accordance with the
Lease Agreement;
(ii) Second, funds necessary to pay First-Tier Minimum Rent to the
Lessor for the current Accounting Period shall be deposited into the Rent
Account for disbursement to Lessor in accordance with the Lease Agreement;
(iii) Third, funds necessary to fund the 803 Reserve Payment, if
any, shall be deposited into the FF&E Reserve Account in accordance with the
Operating Agreements;
(iv) Fourth, funds necessary to pay to the Lessor that portion of
Second-Tier Minimum Rent equal to 10.5% of the Lease Basis, less the First-Tier
Minimum Rent, for the current Accounting Period, shall be deposited into the
Rent Account for disbursement to Lessor in accordance with the Lease Agreement;
(v) Fifth, funds necessary to pay to Operator the 803
Reimbursement due for the current Accounting Period, if any, shall be deposited
into the 803 Reimbursement Account for disbursement to Operator in accordance
with the Operating Agreements;
(vi) Sixth, funds necessary to pay to the Lessor the remainder of
the Second-Tier Minimum Rent after payment of the amounts described in Section
3.3(f)(iv) hereinabove, for the current Accounting Period, shall be deposited
into the Rent Account for disbursement to Lessor in accordance with the Lease
Agreement;
(vii) Seventh, funds sufficient to pay any Incentive Fee due
Operator for the current Accounting Period shall be deposited into the Incentive
Fee Account for disbursement to Operator in accordance with the Operating
Agreements;
(viii) Eighth, funds necessary to pay to Lessor the Aggregate
Differential Amount due as of the current Accounting Period shall be deposited
into the Rent Account;
(ix) Ninth, funds sufficient to pay Lessor Additional Rent due for
the current Accounting Period shall be deposited into the Rent Account for
disbursement to Lessor in accordance with the Lease Agreement;
(x) Tenth, funds required to be funded into the Rent Reserve for
the current Fiscal Year shall be deposited into the Rent Reserve Account in
accordance with the Lease Agreement;
(xi) Eleventh, funds sufficient to pay the Second-Tier
Administration Fee for the current Accounting Period shall be deposited into the
Cash Trap Account;
(xii) Twelfth, all amounts remaining in the Cash Management
Account after deposits for items (i) through (xi) shall be deposited into the
Cash Trap Account.
(g) Upon the expiration of a Lessee Cash Trap Period, (i) any funds
remaining in the Cash Trap Account allocable to the payment of the First-Tier
Administration Fee and the Second-Tier Administration Fee shall be deposited
into the First-Tier Administration Fee Account and the Second-Tier
Administration Fee Account, respectively, for disbursement in accordance with
the Lease Agreement and this Agreement; and (ii) any funds remaining in the Cash
Trap Account payable to the Lessee shall be disbursed to Lessee in accordance
with the Lease Agreement and this Agreement.
(h) Any amounts to be paid, retained, deposited or disbursed in accordance
with this Article III on a Fiscal Year basis (as opposed to an Accounting Period
basis) requiring estimation or pro-ration (an "Estimated Payment") shall be
reasonably determined by Operator (with respect to the Operator Controlled
Accounts and the Pooled Account) or by Lessor (with respect to the Agent
Accounts). In each Accounting Period after the first Accounting Period of a
Fiscal Year, inclusive (and, if necessary, from one Fiscal Year to the next) the
Estimated Payments shall be adjusted and reconciled, as reasonably necessary,
with respect to the Estimated Payments for prior Accounting Periods during the
then current Fiscal Year. All such adjustments and reconciliations shall be made
in the order of priority as set forth in this Section 3.3.
Section 3.4 Pooling of Funds.
(a) All FF&E Reserve Payments required to be made in accordance with
the Operating Agreements shall be pooled and commingled in the FF&E Reserve
Account. The FF&E Reserve shall be available to all Leased Properties in
accordance with the Operating Agreements and this Agreement, regardless of the
amount of funds that would otherwise be held for a particular Leased Property if
an FF&E Reserve was separately maintained for each Leased Property. Upon the
expiration or termination of the Operating Agreements, the Operator shall
release and transfer the remaining FF&E Reserve in accordance with the Operating
Agreements.
(b) The Aggregate Working Capital shall be commingled in the Pooled
Account and managed by Operator in accordance with the Operating Agreements. The
parties acknowledge that the Pooled Account is not a segregated Operator account
and that Operator shall be permitted to commingle funds in the Pooled Account
with other funds of Operator not relating to the Leased Properties.
Section 3.5 Funds Held in Trust. To the extent that funds on deposit in
the Accounts are applied other than as required by this Agreement, the parties
hereto shall cooperate to promptly redirect such funds so that they are applied
in accordance with the terms of this Agreement. If such funds cannot be so
redirected during the then current Accounting Period, the parties agree to cause
such redirection during the succeeding Accounting Periods, as necessary. Should
any payment or distribution under Section 3.3 be received by a party hereto not
entitled to such payment or distribution (the "Recipient"), Recipient shall
deliver the same to the party to whom such payment or distribution is owed (the
"Distributee") in precisely the form received (except for the Recipient's
endorsement or assignment where necessary). Until so delivered, the Recipient
shall hold the same in trust as property of the Distributee.
IV. WITHDRAWALS
Section 4.1 Withdrawals From Rent Account. Lessor shall have the right to
withdraw amounts from the Rent Account to pay Rent on the date that any Rent is
due and payable under the Lease Agreement.
Section 4.2 Requests for Withdrawals from the FF&E Reserve Account. During the
pendency of any Operator Cash Trap Period, Agent shall only disburse funds on
deposit in the FF&E Reserve Account and/or the Cash Trap Account (to the extent
funds deposited into the Cash Trap Account are allocable to the FF&E Reserve) in
accordance with the written request of Lessee and Operator approved in writing
by Lessor. Lessor shall so approve provided all the procedures and requirements
set forth in the Lease Agreement and the Operating Agreements for such
disbursements have been complied with and all of the procedures and requirements
set forth in Section 5.2 of this Agreement have been complied with.
Section 4.3 Operating Expense Amounts. During the pendency of any Operator Cash
Trap Period, with respect to any Operating Expenses to be paid by funds on
deposit in the Accounts, Operator, if requested by Lessor, shall provide (i) a
detailed explanation of any variances of ten percent (10%) or more between
budgeted (as set forth in the Annual Operating Projection) and actual amounts in
the aggregate and on a line-item basis and (ii) with respect to any items that
cost $50,000 or more (except payroll, Impositions and utility expenses), all
invoices or other backup requested by Lessor to substantiate the amount
disbursed to Lessee or Operator, or disbursed at the direction of Lessee or
Operator. As and when available (but the same shall be deemed available no later
than sixty (60) days after any such disbursement), at the request of Lessor,
Lessee or Operator shall deliver evidence of payment reasonably acceptable to
Lessor of the amounts for which disbursements hereunder have been made.
Section 4.4 Sole Dominion and Control. Lessee and Operator acknowledge and agree
that the Agent Accounts are subject to the sole dominion, control and discretion
of Lessor, its authorized agents or designees, including Agent, subject to the
terms hereof. Neither Lessee nor Operator shall have the right of withdrawal
with respect to any Agent Account except with the prior written consent of
Lessor. Agent shall have the right and agrees to comply with the instructions of
Lessor with respect to the Agent Accounts without the further consent of Lessee
or Operator. Agent shall comply with all "entitlement orders" (as defined in
Section 8-102(a)(8) of the UCC) and instructions originated by Lessor without
further consent by Lessee or any other party.
V. FF&E ACCOUNTS
Section 5.1 Certifications by Operator. Within twenty (20) Days after the close
of each Accounting Period, Operator shall submit to Lessor, Lessee and Agent an
Officer's Certificate covering such Accounting Period and the Fiscal Year to
date, setting forth: (a) Aggregate Gross Revenues, Aggregate Operating Expenses,
Aggregate Operating Profit, and applications and distributions thereof for each
of the Properties, and (b) a statement in reasonable detail summarizing any and
all contributions to, and expenditures from the Operator Controlled Accounts and
the Pooled Account.
Section 5.2 Withdrawals from Cash Trap Account for FF&E Reserve Payments. During
the pendency of any Operator Cash Trap Period, Operator will be permitted to
request a single disbursement of funds from the FF&E Reserve Account and/or the
Cash Trap Account (to the extent funds deposited into the Cash Trap Account are
allocable to the FF&E Reserve) once each week (or at any time permitted under
the Operating Agreements in the case of an emergency expenditure), based on its
reasonable estimate of upcoming, near-term FF&E expenditures as set forth in the
applicable Annual Operating Projection. Each request for a withdrawal of funds
from the FF&E Reserve Account and/or the Cash Trap Account (to the extent funds
deposited into the Cash Trap Account are allocable to the FF&E Reserve) shall be
accompanied by an Officer's Certificate of the Operator verifying that (i) the
amounts requested will be applied to the payment or reimbursement of FF&E
expenditures included in the applicable Annual Operating Projection or for other
FF&E expenditures for which Operator is permitted to make withdrawals from the
FF&E Reserve Account in accordance with the terms and conditions of the
Operating Agreements, (ii) all funds that Operator previously has withdrawn for
FF&E Reserve Payments (other than amounts being retained for reasonably
estimated future costs included in the applicable Annual Operating Projection)
have been applied to the payment or reimbursement of FF&E expenditures in
accordance with the terms and conditions of the Operating Agreements, and (iii)
that, to the knowledge of Operator, there are no accounts payable in connection
with the applicable Annual Operating Projection with an unpaid balance, either
singly or in the aggregate, of more than $50,000 or that are more than sixty
(60) days past due (unless payment is being contested in good faith in
accordance with Article 8 of the Operating Agreements). Moreover, Operator will
provide a detailed written accounting of expenditures for the applicable Annual
Operating Projection, in a form customarily maintained by Operator in the
ordinary course of business, together with copies of paid invoices for items
that have been paid from prior withdrawals from the FF&E Reserve Account or the
Cash Trap Account, as applicable.
Section 5.3 Disbursements to Operator During Operator Cash Trap Period. Upon
Lessor's approval of a request from the Operator for a disbursement from the
FF&E Reserve Account and/or the Cash Trap Account (to the extent funds deposited
into the Cash Trap Account are allocable to the FF&E Reserve) and satisfaction
of the conditions set forth in Section 5.2 of this Agreement, Lessor shall
direct Agent to disburse the requested and approved amount up to the amount in
the FF&E Reserve Account or the Cash Trap Account, as applicable, to the
Operator or at Operator's direction by automated clearing house funds or by
Federal wire on the next Business Day for requests made no later than 11:00
a.m., EST, on the preceding Business Day, to be held in the name of the Operator
for payment of costs included in the applicable Annual Operating Projection.
Such disbursements shall be made to Operator.
Section 5.4 True-Up Procedures. Within seventy-five (75) days after the end of
each Fiscal Year, FF&E Reserve Payments deposited into the FF&E Reserve Account
or the Cash Trap Account, as applicable, during such Fiscal Year shall be
adjusted to ensure that the aggregate amount of all deposits made into the FF&E
Reserve Account or the Cash Trap Account, as applicable, during such Fiscal Year
is equal to the amount required to have been deposited therein in accordance
with the FF&E Reserve requirements of the Operating Agreements and this
Agreement. Any shortfall in the FF&E Reserve Account or the Cash Trap Account,
as applicable, on the date such adjustment is computed, to the extent not
otherwise funded by Lessee, shall be funded into the FF&E Reserve Account from
amounts that otherwise would be distributed to Lessee from the Cash Management
Account immediately following the end of the Accounting Period in which such
adjustment is computed, and any overages shall be paid to or as directed by
Lessee from the FF&E Reserve Account on such date.
Section 5.5 Inspection of Work. Lessee and Operator shall permit Lessor and
Lessor's agents and representatives (including, without limitation, Lessor's
engineer, architect, or inspector) or third parties to enter onto each Leased
Property during normal business hours to inspect the progress of all work funded
pursuant to this Article V and all materials being used in connection therewith
and to examine all plans and shop drawings relating thereto. Lessee shall pay
all costs and expenses in connection with any such inspection.
VI. PLEDGE OF ACCOUNTS
Section 6.1 Security for Obligations.
(a) To secure the full and punctual payment and performance of all
obligations of Lessee now or hereafter existing with respect to the Lease
Agreement, whether for payment of Rent or otherwise, and all obligations of
Lessee or Operator now or hereafter existing under this Agreement, the Clearing
Account Agreements, the Operative Documents and all other documents delivered by
Lessee or Operator in connection with the Lease Agreement (all such obligations,
collectively, the "Obligations"), Lessee and Operator hereby grant to Lessor a
first priority continuing security interest in and to the following property,
whether now owned or existing or hereafter acquired or arising and regardless of
where located (all of the same, collectively, the "Collateral"):
(i) the Accounts (other than the Pooled Account) and all cash, checks,
drafts, certificates and instruments, if any, from time to time deposited or
held in the Accounts (other than the Pooled Account), including, without
limitation, all deposits or wire transfers made to the Accounts (other than the
Pooled Account);
(ii) any and all amounts invested in Permitted Investments;
(iii) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise payable in respect of, or in
exchange for, any or all of the foregoing; and
(iv) to the extent not covered by clauses (i), (ii) or (iii) above, all
"proceeds" (as defined under the Uniform Commercial Code as in effect in the
State of Florida (the "UCC")) of any or all of the foregoing;
provided, however, Collateral shall not be deemed to include any amounts paid to
Operator in accordance with the Lease Agreement or the Operating Agreements.
(b) Lessor and Agent, as agent for Lessor, shall have with respect to the
Collateral, in addition to the rights and remedies herein set forth, all of the
rights and remedies available to a secured party under the UCC, as if such
rights and remedies were fully set forth herein.
Section 6.2 Rights on Default.
(a) Upon the occurrence of a Lessee Event of Default, Lessor shall
promptly notify Agent of such Lessee Event of Default and, during the pendency
on a Lessee Cash Trap Period, without notice from Agent or Lessor, (i) Lessee
shall have no further right in respect of (including, without limitation, the
right to instruct Lessor or Agent to transfer from) the Accounts, (ii) Lessor
may direct Agent to liquidate and transfer any amounts in the Agent Accounts
then invested in Permitted Investments or reinvest such amounts in other
Permitted Investments as Lessor may reasonably determine is necessary to perfect
or protect any security interest granted or purported to be granted hereby or to
enable Agent, as agent for Lessor, or Lessor to exercise and enforce Lessor's
rights and remedies hereunder with respect to any Collateral, (iii) Lessor may
at any time or from time to time, charge, set-off and otherwise apply all or any
part of the Collateral (other than Collateral pledged by the Operator) against
the Obligations of Lessee or any part thereof in such order of priority as
Lessor may determine, (iv) Lessor may in its sole discretion, at any time and
from time to time, exercise any and all rights and remedies available to it
under this Agreement, and/or as a secured party under the UCC and/or under any
other applicable law; and (v) Lessor may demand, collect, take possession of,
receive, settle, compromise, adjust, ▇▇▇ for, foreclose or realize upon the
Collateral (or any portion thereof, other than Collateral pledged by the
Operator) as Lessor may determine in its sole discretion.
(b) Upon the occurrence of an Operator Event of Default, Lessor shall
promptly notify Agent of such Operator Event of Default and, during the pendency
on an Operator Cash Trap Period, without notice from Agent or Lessor, (i)
Operator shall have no further right in respect of the Operator Controlled
Accounts except as specifically provided herein, (ii) Lessor may direct Agent to
liquidate and transfer any amounts allocable to the Operator Controlled Accounts
then invested in Permitted Investments to the Operator Controlled Accounts or
reinvest such amounts in other Permitted Investments as Lessor may reasonably
determine is necessary to perfect or protect any security interest granted or
purported to be granted hereby or to enable Agent, as agent for Lessor, (iii)
Lessor may at any time or from time to time, charge, set-off and otherwise apply
all or any part of the Collateral (other than Collateral pledged by the Lessee)
against the Obligations of Operator or any part thereof, (iv) Lessor may, in its
sole discretion, at any time and from time to time, exercise any and all rights
and remedies available to it under this Agreement, and/or as a secured party
under the UCC and/or under any other applicable law; and (v) Lessor may demand,
collect, take possession of, receive, settle, compromise, adjust, ▇▇▇ for,
foreclose or realize upon the Collateral (or any portion thereof, other than
Collateral pledged by the Lessee) as Lessor may determine in its sole
discretion.
Section 6.3 Financing Statement; Further Assurances. Simultaneously herewith,
Lessee and Operator shall execute and deliver to Lessor for filing a financing
statement or statements in connection with the Collateral in the form required
by Lessor to properly perfect Lessor's security interest therein. Lessee and
Operator agree that at any time and from time to time, at their own expense,
Lessee and Operator will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Agent or Lessor may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby (including,
without limitation, any security interest in and to any Permitted Investments)
or to enable Agent or Lessor to exercise and enforce its rights and remedies
hereunder with respect to any Collateral.
Section 6.4 Termination of Agreement. This Agreement shall create a continuing
security interest in the Collateral and shall remain in full force and effect
until the later of (i) the expiration or earlier termination of the Lease
Agreement and the Operative Documents, (ii) the expiration or earlier
termination of the Operating Agreements, or (iii) payment in full of the
Obligations. At such time, this Agreement shall terminate and Lessee or
Operator, as applicable, shall be entitled to the return, upon its request and
at its expense, of such of the Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof, and Agent and/or Lessor shall
execute such instruments and documents as may be reasonably requested by Lessee
to evidence such termination and the release of the lien hereof.
Section 6.5 Waiver. Lessee and Operator hereby expressly waive, to the fullest
extent permitted by law, presentment, demand, protest or any notice of any kind
in connection with this Article VI or the Collateral. Lessee and Operator
acknowledge and agree that ten (10) days' prior written notice of the time and
place of any public sale of the Collateral or any other intended disposition
thereof shall be reasonable and sufficient notice to Lessee within the meaning
of the UCC. Any and all of Agent's and/or Lessor's rights with respect to the
lien and security interest granted hereunder shall continue unimpaired, and
Lessee shall be and remain obligated in accordance with the terms hereof,
notwithstanding (a) any proceeding of Lessee under the Federal Bankruptcy Code
or any bankruptcy, insolvency or reorganization laws or statutes of any state,
(b) the release or substitution of Collateral at any time, or of any rights or
interests therein or (c) any delay, extension of time, renewal, compromise or
other indulgence granted by the Agent and/or Lessor in the event of any default,
with respect to the Collateral or otherwise hereunder. No delay or extension of
time by Agent and/or Lessor in exercising any power of sale, option or other
right or remedy under this Article VI, and no notice or demand which may be
given to or made upon Lessee or Operator by Agent and/or Lessor, shall
constitute a waiver thereof, or limit, impair or prejudice Agent's and/or
Lessor's right, without notice or demand, to take any action against Lessee or
to exercise any other power of sale, option or any other right or remedy under
this Article VI.
VII. RIGHTS AND DUTIES OF LESSOR AND AGENT
Section 7.1 Reasonable Care. Beyond the exercise of reasonable care in the
custody thereof or as otherwise expressly provided herein, neither Agent nor
Lessor shall have any duty as to any Collateral in its possession or control as
agent therefor or bailee thereof or any income thereon or the preservation of
rights against any party or otherwise with respect thereto. Agent and Lessor
each shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which Agent or Lessor accords its own
property, it being understood that Lessor shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution in value
thereof, by reason of the act or omission of Agent or Lessor, its Affiliates,
agents, employees or bailees, except to the extent that such loss or damage
results from Agent's or Lessor's gross negligence or willful misconduct,
provided that nothing in this Article VII shall be deemed to relieve Agent from
the duties and standard of care which, as a commercial bank, it generally owes
to depositors. Neither Lessor nor Agent shall have any liability for any loss
resulting from the investment of funds in Permitted Investments in accordance
with the terms and conditions of this Agreement.
Section 7.2 Indemnity. Agent, in its capacity as agent hereunder, shall be
responsible for the performance only of such duties as are specifically set
forth herein, and no duty shall be implied from any provision hereof. Agent
shall not be under any obligation or duty to perform any act which would involve
it in expense or liability or to institute or defend any suit in respect hereof,
or to advance any of its own monies. Lessee shall indemnify and hold Agent,
Lessor and their respective employees and officers harmless from and against any
loss, cost or damage (including, without limitation, reasonable attorneys' fees
and disbursements) incurred by Agent or Lessor in connection with the
transactions contemplated hereby, except to the extent that such loss or damage
results from Agent's or Lessor's gross negligence or willful misconduct.
Section 7.3 Reliance. Agent shall be protected in acting upon any notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
paper, document or signature believed by it to be genuine, and it may be assumed
that any party purporting to act on behalf of any party giving any of the
foregoing in connection with the provisions hereof has been duly authorized to
do so. Agent may consult with legal counsel, and the opinion of such counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered by it hereunder and in good faith in accordance therewith.
Agent shall not be liable for any act or omission done or omitted to be done by
Agent in reliance upon any instruction, direction or certification received by
Agent and without gross negligence or willful or reckless misconduct.
Section 7.4 Resignation of Agent.
(a) Agent shall have the right to resign as Agent hereunder upon thirty (30)
days' prior written notice to Operator, Lessee and Lessor, and in the event of
such resignation, Lessee shall appoint a successor Agent which must be an
Eligible Institution. No such resignation by Agent shall become effective until
a successor Agent shall have accepted such appointment and executed an
instrument by which it shall have assumed all of the rights and obligations of
Agent hereunder. If no such successor Agent is appointed within sixty (60) days
after receipt of the resigning Agent's notice of resignation, the resigning
Agent may petition a court for the appointment of a successor Agent.
(b) In connection with any resignation by Agent, (i) the resigning Agent
shall, at the sole cost of Lessee, (A) duly assign, transfer and deliver to the
successor Agent this Agreement and all cash and Permitted Investments held by it
hereunder, (B) execute such financing statements and other instruments as may be
necessary to assign to the successor Agent the security interest in the
Collateral existing in favor of the retiring Agent hereunder and to otherwise
give effect to such succession and (C) take such other actions as may be
reasonably required by Lessor or the successor Agent in connection with the
foregoing and (ii) the successor Agent shall establish in its name, as secured
party, cash collateral accounts, which shall become the Agent Accounts for
purposes of this Agreement upon the succession of such Agent.
(c) Lessor at its sole discretion shall have the right, upon thirty (30)
days notice to Agent, to replace Agent with a successor Agent that satisfies the
requirements of an Eligible Institution or to have one or more of the Agent
Accounts held by another Eligible Institution, provided that such successor
Agent shall perform the duties of Agent pursuant to the terms of this Agreement.
Section 7.5 Lessor Appointed Attorney-In-Fact. Lessee hereby irrevocably
constitutes and appoints Lessor as Lessee's true and lawful attorney-in-fact,
with full power of substitution, during any Lessee Cash Trap Period, to execute,
acknowledge and deliver any instruments and to exercise and enforce every right,
power, remedy, option and privilege of Lessee with respect to the Collateral,
and do in the name, place and stead of Lessee, all such acts, things and deeds
for and on behalf of and in the name of Lessee, which Lessee could or might do
or which Agent or Lessor may deem necessary or desirable to more fully vest in
Lessor the rights and remedies provided for herein and to accomplish the
purposes of this Agreement. The foregoing powers of attorney are irrevocable and
coupled with an interest. If Lessee fails to perform any agreement herein
contained and such failure shall continue for five (5) Business Days after
notice of such failure is given to Lessee, Lessor may perform or cause
performance of any such agreement, and any reasonable expenses of Lessor and
Agent in connection therewith shall be paid by Lessee.
Section 7.6 Acknowledgment of Lien/Offset Rights. Agent hereby acknowledges and
agrees that (a) the Agent Accounts shall be held by Agent in the name of Lessor,
(b) Lessee and Operator have granted to Lessor a first priority security
interest in the Collateral, (c) Agent shall not disburse any funds from the
Accounts except as provided herein, and (d) Agent shall invest and reinvest any
balance of the Agent Accounts in Permitted Investments. Agent hereby waives any
right of offset, banker's lien or similar rights against, or any assignment,
security interest or other interest in, the Collateral.
Section 7.7 Reporting Procedures. Agent shall provide Lessee and Lessor with a
record of all checks any other items deposited to the Cash Management Account or
processed for collection. Agent shall send a monthly report to Lessee and
Operator, which monthly report shall specify the credits and charges to the
Agent Accounts for the previous Accounting Period. Agent shall, at the request
of Lessor, establish Lessor and its designated servicer as users of Agent's
electronic data transfer system in accordance with Agent's standard procedures.
Upon request of Lessor or its designated servicer, (i) Agent shall send to
Lessor or its designated servicer, as applicable, either (x) copies of the daily
credit advices and any other advices or reports furnished by Agent to Lessee
and/or Operator hereunder or (y) information on Account balances, to the extent
said balances in the Agent Accounts have changed from the previous report, the
aggregate amount of withdrawals from the Agent Accounts and other similar
information via the electronic data transfer system or facsimile transmission on
a daily basis, and (ii) Agent shall advise Lessor or its designated servicer, as
applicable, of the amount of available funds in the Agent Accounts and shall
deliver to Lessor or its designated servicer copies of all statements and other
information concerning the Agent Accounts, to the extent that the balances
therein have changed from the previous report, as Lessor or its designated
servicer shall reasonably request. In the event Agent shall resign as Agent
hereunder, Agent shall provide Lessee and Operator with a final accounting with
respect to the Agent Accounts.
VIII. PERFORMANCE TERMINATION
Section 8.1 Lessee shall have the option to terminate all of the Operating
Agreements (as a complete group with respect to all of the Leased Properties),
subject to this Article VIII, if:
(a) With respect to any full Fiscal Year commencing after the date of
this Agreement, the Aggregate Operating Profit is less than the First-Tier
Minimum Rent due for such Fiscal Year (the "First-Tier Performance Threshold");
(b) Aggregate Operating Profit for any two consecutive, full Fiscal
Years is less than an amount equal to the following percentage applied to
Lessee's Investment Basis (as defined in the Operating Agreements), together
with the Lessee's Additional Investment (as defined in the Operating
Agreements): (i) 8.0% with respect to Fiscal Years 2003 and 2004, (i) 8.5% with
respect to Fiscal Years 2005 through 2007, (i) 9.0% with respect to Fiscal Years
2008 and following (the "Second-Tier Performance Threshold");
provided, however, Lessee shall not have the option to terminate the Operating
Agreements, if the First-Tier Performance Threshold or the Second-Tier
Performance Threshold is not satisfied as a result of (i) Force Majeure
affecting one or more of the Leased Properties; or (ii) major renovation to any
Leased Property(ies) that materially and adversely affects the operation of such
Leased Property(ies); or (iii) any default by Lessee under this Agreement, the
Operating Agreements or any of the Operative Documents. Provided, further, that
Lessee shall not have the option to terminate the Operating Agreements following
Fiscal Years 2004 and 2005, in the event that the Second-Tier Performance
Threshold would be satisfied by excluding that portion of the Aggregate
Operating Profit, Lessee's Investment Basis (as defined in the Operating
Agreements), and Lessee's Additional Investment (as defined in the Operating
Agreements) allocable to the Brighton Gardens of Naples, Florida Leased Property
and the Brighton Gardens of Venice, Florida Leased Property.
Section 8.2 Lessee shall have the right to exercise its option under Section
8.1 by giving Operator notice of such exercise within ninety (90) days of
Lessee's receipt of the Annual Financial Report (as defined in the Operating
Agreements) for the Fiscal Year(s) in question. Lessee's failure to exercise its
option under Section 8.1 with respect to any two (2) consecutive Fiscal Years in
which the Second-Tier Performance Threshold is not satisfied shall not be deemed
an estoppel or waiver of Lessee's right to exercise its option under Section 8.1
for the Second-Tier Performance Threshold with respect to the second of such two
(2) Fiscal Years and the immediately following Fiscal Year.
Section 8.3 Upon receipt of a notice of exercise sent by Lessee to Operator
pursuant to Section 8.2, Operator may avoid termination of the Operating
Agreements by delivering to Lessee the Shortfall Payment within thirty (30) days
after receiving such notice. For purposes of this Agreement, the "Shortfall
Payment" shall mean: (i) with respect to any failure to satisfy the First-Tier
Performance Threshold, an amount by which Aggregate Operating Profit for the
applicable Fiscal Year is less than the First-Tier Performance Threshold for
such Fiscal Year, or (ii) with respect to any failure to satisfy the Second-Tier
Performance Threshold, an amount by which Aggregate Operating Profit for the
applicable two (2) Fiscal Years is less than the Second-Tier Performance
Threshold for such two (2) Fiscal Years. Under no circumstances shall Lessee be
obligated to repay or reimburse Operator for any Shortfall Payment, and the
Shortfall Payment shall not be characterized as a loan. In the event Operator
delivers the Shortfall Payment, then any exercise by Lessee of an option to
terminate pursuant to Section 8.1 shall be canceled and of no force or effect
with respect to the Fiscal Year(s) in question and the Operating Agreements
shall not terminate; provided, however, Lessee's option to terminate the
Operating Agreements under Section 8.1 shall remain in effect as to subsequent
Fiscal Years. In the event Operator makes a Shortfall Payment pursuant to this
Section 8.3, the Fiscal Year(s) with respect to which such Shortfall Payment are
made shall thereafter not be treated as Fiscal Year(s) in which the First-Tier
Performance Threshold or the Second-Tier Performance Threshold is not satisfied.
Operator shall have the right to make a Shortfall Payment (i) on unlimited
occasions with respect to the First-Tier Performance Threshold, (ii) on only two
(2) occasions during the Initial Term of the Operating Agreements (as defined
therein) with respect to the Second-Tier Performance Threshold, and (iii) only
one (i) occasion during each of the Extended Terms, if any, under the Operating
Agreements (as defined therein) with respect to the Second-Tier Performance
Threshold.
Section 8.4 If Operator does not elect to make the Shortfall Payment, all of
the Operating Agreements shall terminate as of the last day of the fourth (4th)
full Accounting Period following the date on which Operator receives Lessee's
notice of exercise of the option provided in Section 8.1.
IX. MISCELLANEOUS
Section 9.1 Transfers and Other Liens. Lessee and Operator agree that it will
not (i) sell or otherwise dispose of any of the Collateral or (ii) create or
permit to exist any Lien upon or with respect to all or any of the Collateral,
except for the Lien granted under this Agreement.
Section 9.2 Lessor's Right to Perform Obligations of Lessee or Operator; No
Liability of Lessor. If Lessee or Operator fail to perform any of the covenants
or obligations contained herein, and such failure shall continue for a period
five (5) Business Days after receipt of written notice thereof from Lessor,
Lessor may itself perform, or cause performance of, such covenants or
obligations, and the reasonable expenses of Lessor incurred in connection
therewith shall be payable by Lessee or Operator, as applicable, to Lessor.
Notwithstanding Lessor's right to perform certain obligations of Lessee or
Operator, it is acknowledged and agreed that Lessee retains control of the
Leased Properties and operation thereof (subject to the rights of Operator in
accordance with the Operating Agreements and the Operative Documents) and
notwithstanding anything contained herein or Agent's or Lessor's exercise of any
of its rights or remedies hereunder, under the Operative Documents or otherwise
at law or in equity, neither Agent nor Lessor shall be deemed to be a
mortgagee-in-possession nor shall Lessor be subject to any liability with
respect to of the Leased Properties or otherwise based upon any claim of lender
liability.
Section 9.3 No Waiver. The rights and remedies provided in this Agreement and
the other Operative Documents are cumulative and may be exercised independently
or concurrently, and are not exclusive of any other right or remedy provided at
law or in equity. No failure to exercise or delay by any party hereto in
exercising any right or remedy hereunder or under the Operative Documents shall
impair or prohibit the exercise of any such rights or remedies in the future or
be deemed to constitute a waiver or limitation of any such right or remedy or
acquiescence therein. Every right and remedy granted to Agent and/or Lessor
hereunder or by law may be exercised by Agent and/or Lessor at any time and from
time to time, and as often as Agent and/or Lessor may deem it expedient.
Section 9.4 Expenses.
(a) The Collateral pledged by Lessee shall secure, and Lessee shall pay to
Agent and Lessor and/or Agent's and Lessor's counsel on demand, from time to
time, all costs and expenses (including, but not limited to, reasonable
attorneys' fees and disbursements, and transfer, recording and filing fees,
taxes and other charges) of, or incidental to, the creation or perfection of any
lien or security interest granted or intended to be granted hereby, the custody,
care, sale, transfer, administration, collection of or realization on the
Collateral pledged by Lessee. Standard and customary fees and charges associated
with the Agent Accounts shall be included on a monthly consolidated account
analysis statement which Agent shall submit to Lessee for Lessee's payment. This
statement shall set forth the fees and charges payable for such month,
including, but not limited to reasonable fees and reasonable expenses incurred
in connection with this Agreement and be accompanied by reasonably detailed
supporting documentation. Agent shall be entitled to charge the Agent Accounts
for such fees and expenses as indicated by the analysis statement. The
Collateral pledged by Lessee shall secure, and Lessee shall pay to Agent and
Lessor and/or Agent's and Lessor's counsel on demand, from time to time, amounts
arising from or relating to a Lessee Event of Default and the enforcement,
protection or preservation of the rights or remedies of Agent and/or Lessor
under this Agreement, the Lease Agreement or the other Operative Documents with
respect to such Lessee Event of Default.
(b) The Collateral pledged by Operator shall secure, and Operator shall pay
to Agent and Lessor and/or Agent's and Lessor's counsel on demand, from time to
time, all costs and expenses (including, but not limited to, reasonable
attorneys' fees and disbursements, and transfer, recording and filing fees,
taxes and other charges) of, or incidental to, the creation or perfection of any
lien or security interest granted or intended to be granted hereby, the custody,
care, sale, transfer, administration, collection of or realization on the
Collateral pledged by Lessee (with such costs and expenses being deemed
Operating Expenses under the Operating Agreements). The Collateral pledged by
Operator shall secure, and Operator shall pay to Agent and Lessor and/or Agent's
and Lessor's counsel on demand, from time to time, amounts arising from or
relating to an Operator Event of Default and the enforcement, protection or
preservation of the rights or remedies of Agent and/or Lessor under this
Agreement, the Lease Agreement or the other Operative Documents with respect to
such Operator Event of Default.
Section 9.5 Entire Agreement. This Agreement constitutes the entire and final
agreement between the parties with respect to the subject matter hereof and may
not be changed, terminated or otherwise varied, except by a writing duly
executed by the parties.
Section 9.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their respective successors and
assigns.
Section 9.7 Notices. All notices, demands, requests, consents, approvals and
other communications (any of the foregoing, a "Notice") required, permitted, or
desired to be given hereunder shall be in writing sent by telefax or by
registered or certified mail, postage prepaid, return receipt requested or
delivered by hand or reputable overnight courier addressed to the party to be so
notified at its address hereinafter set forth, or to such other address as such
party may hereafter specify in accordance with the provisions of this Section
9.7. Any such Notice shall be deemed to have been received three (3) days after
the date such Notice is mailed or on the date of sending by telefax or delivery
by hand or the next day if sent by an overnight commercial courier addressed to
the parties as follows:
If to Lessor, c/o:
CNL Retirement Properties, Inc.
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or
Chief Operating Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇ Traurig, P.A.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇ Traurig, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Marriott Senior Living Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lessee to:
c/o Prime Care Properties, LLC
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇, President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bose, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Prime Care Properties, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Marriott Senior Living Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
CNL Retirement Properties, Inc.
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or
Chief Operating Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
If to Operator to:
Marriott Senior Living Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇ ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
CNL Retirement Properties, Inc.
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or
Chief Operating Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent to:
CNLBank
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as is from time to time designated by the party
receiving the Notice. Any such Notice that is mailed in accordance herewith
shall be deemed received when delivery is received or refused, as the case may
be.
Section 9.8 Captions. All captions in this Agreement are included herein for
convenience of reference only and shall not constitute part of this Agreement
for any other purpose.
Section 9.9 Governing Law. This Agreement shall be governed by and construed and
enforced in all respects in accordance with the laws of the State of Florida
without regard to conflicts of law principles of such State. Agent and Lessor
agree that Florida law shall be the "Lessor's Jurisdiction" for purposes of the
Uniform Commercial Code. Each Account (other than the Pooled Account and the
Operator Controlled Accounts not sitused in the State of Florida) shall be
governed by the law of the State of Florida.
Section 9.10 Lessor's Discretion. Whenever pursuant to this Agreement Lessor
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Lessor, the decision of Lessor to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the reasonable discretion of Lessor.
Section 9.11 GAAP. All calculations made pursuant to this Agreement shall,
unless the context requires otherwise, be made in accordance with GAAP, except
to the extent that the Operator's customary methods of accounting may differ.
Section 9.12 Counterparts. This Agreement may be executed in any number of
counterparts.
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
LESSOR:
CNL RETIREMENT PC1 NAPLES FL, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
CNL RETIREMENT PC1 VENICE FL, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
CNL RETIREMENT PC1 NEW JERSEY, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
CNL RETIREMENT PC1 FRIENDSHIP HEIGHTS MD, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
CNL RETIREMENT PC1 NORTH CAROLINA, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
CNL RETIREMENT PC1 STAMFORD CT, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
CNL RETIREMENT PC1 BUCKHEAD GA, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
CNL RETIREMENT PC1 BRENTWOOD TN, LP,
a Delaware limited partnership
By: CNL Retirement PC1, LP
a Delaware limited partnership
By: CNL Retirement PC1 GP, LLC,
a Delaware limited liability company,
as sole general partner
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
LESSEE:
PRIME CARE ONE, LLC,
an Indiana limited liability company
By:
----------------------------------------------
Name:
----------------------------------------------
Title:
----------------------------------------------
PRIME CARE TWO, LLC,
an Indiana limited liability company
By:
----------------------------------------------
Name:
----------------------------------------------
Title:
----------------------------------------------
OPERATOR:
MARRIOTT SENIOR LIVING SERVICES, INC.,
a Delaware corporation
By:
----------------------------------------------
Name:
----------------------------------------------
Title:
----------------------------------------------
AGENT:
CNLBANK
a Florida corporation
By:
----------------------------------------------
Name:
----------------------------------------------
Title:
----------------------------------------------
EXHIBIT "D"
COLLECTIVE LEASED PROPERTIES
Allocated
Properties Lease Basis Leased By
---------- ----------- ---------
1. Brighton Gardens of Venice, FL $6,800,826. 1
2. Brighton Gardens of Mountainside, NJ $13,966,909. 1
3. Brighton Gardens of Friendship Heights, MD $20,630,446. 1
4. Brighton Gardens of Charlotte, NC $3,355,074. 1
5. Brighton Gardens of Winston-Salem, NC $7,344,893. 2
6. Brighton Gardens of Raleigh, NC $10,065,223. 2
7. Brighton Gardens of Brentwood, TN $6,619,471. 2
8. Brighton Gardens of Stamford, CT $14,145,719. 2
9. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ $12,969,455. 2
10. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ $7,979,636. 2
11. Brighton Gardens of Naples, FL $5,842,347. 2
Total $109,720,000.
Prime Care One, LLC = "1"
Prime Care Two, LLC = "2"
EXHIBIT "E"
PROPERTY EXPENSES
"Property Expense(s)" means any or all, as the context requires, of the
following:
1. All costs of operating the Retirement Community incurred in
accordance with the Operating Agreement, including, without limitation, all
salaries, wages, fringe benefits, payroll taxes and other costs related to
Retirement Community employees, Employee Claims (as defined in the Operating
Agreement except to the extent specifically set forth to the contrary in the
Operating Agreement), all departmental expenses, administrative and general
expenses, computer services/support, the cost of advertising, marketing and
business promotion for the Retirement Community, heat, light, power,
electricity, gas, telephone, cable and other utilities, and routine repairs,
maintenance and minor alterations treated as Property Expenses under Section
5.1.1 of this Agreement;
2. The cost of Inventories and FAS consumed in the operation of the
Retirement Community;
3. A reasonable reserve for uncollectible accounts receivable as
determined by the Operator under the Operating Agreement;
4. All reasonable costs and fees of audit, legal, technical and other
independent professionals or other third parties who are retained by Operator or
Lessee to perform services required or permitted hereunder; provided Lessee, or
Operator at the direction of Lessee will notify Lessor at least thirty (30) days
in advance of any proposed expenditure under this paragraph 4 which is in excess
of Twenty-Five Thousand Dollars ($25,000.00) in any Fiscal Year (to be adjusted
by the GDP Deflator) and which was not specifically identified in the Annual
Operating Projection; and Operator shall consider in good faith any comments
which Lessor may have with respect to such proposed expenditure; and provided,
further, that if such expenditure involves immediately-needed repair work to the
Retirement Community or if immediate action is otherwise required, the
above-described requirement regarding thirty (30) days prior Notice shall be
modified to require whatever notice period is reasonable under the
circumstances;
5. The reasonable cost and expense of technical consultants and
operational experts who are employees of Operator or one of its Affiliates, and
who perform specialized services in connection with Retirement Community work;
provided, however, that the costs and expenses so incurred shall only be
Property Expenses to the extent such costs and expenses are reasonable and
competitively priced, as compared to similar work done by outside consultants or
experts; and provided, further, that Operator will notify Lessee and Lessor at
least thirty (30) days in advance of any proposed expenditure under this
paragraph 5 which is in excess of Twenty-Five Thousand Dollars ($25,000.00) in
any Fiscal Year (to be adjusted by GDP Deflator) and which is not specifically
identified in the Annual Operating Projection, and Operator shall consider in
good faith any comments which Lessee and Lessor may have with respect to such
proposed expenditure; and provided, further, that if such expenditure involves
immediately-needed repair work to the Retirement Community or if immediate
action is otherwise required, the above-described requirement regarding thirty
(30) days prior Notice shall be modified to require whatever notice period is
reasonable under the circumstances;
6. Costs and expenses for preparation of Medicare and Medicaid cost
reports and billing submissions if applicable;
7. The Base Management Fee and Central Administrative Services Fee
payable under the Operating Agreement;
8. Insurance costs and expenses as provided in Article 12 of the
Operating Agreement;
9. All Additional Charges;
10. Payments (other than the lump-sum contribution provided for in
Section 8.02.F.2) into the FF&E Reserve pursuant to Section 8.02 of the
Operating Agreement;
11. Such other non-capital costs and expenses incurred by Operator as
are specifically provided for elsewhere in the Operating Agreement or are
otherwise reasonably necessary for the proper and efficient operation of the
Retirement Community in accordance with the Operator Standards; all as
determined in accordance with GAAP; and
12. Lease payments for any equipment lease to the extent set forth in
Section 8.02.D of the Operating Agreement.
13. All reasonable costs and expenses of the Central Administrative
Services pursuant to Section 11.03 of the Operating Agreement, allocated on a
reasonable and equitable basis to the Retirement Community and identified in the
then applicable Annual Operating Projection under the Operating Agreement,
associated with work done by Operator's employees at off-site locations but
which work relates directly to the operations of the Retirement Community and,
if not performed by such off-site employees, would have to be performed by
additional employees located at the Retirement Community.
14. Costs and expenses incurred by the Expert in performing its duties
under Section 19.11 of the Operating Agreement.
It is understood that the term "Property Expenses" shall not include:
(i) debt service payments pursuant to any Facility Mortgage or any other loans
or borrowings of Lessor or Lessee; nor (ii) except as set forth above, payments
pursuant to equipment leases or other forms of financing obtained for the FF&E
located in or connected with the Retirement Community (such payments shall be
paid out of the FF&E Reserve in accordance with Section 5.1.3), nor (iii) rental
payments pursuant to this Lease Agreement, nor (iv) any other payments which are
designated as the Lessee's responsibility as "Lessee" under the Operating
Agreement, all of which shall be paid by Lessee from its own funds, and not from
Gross Revenues nor from the FF&E Reserve. Unless otherwise specifically set
forth in this Agreement, all the costs and expenses of the Retirement Community
shall be Property Expenses.
COMPOSITE
EXHIBIT "F"
DESCRIPTION OF LAND
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
ALL THAT TRACT OF PARCEL OF LAND LYING AND BEING in Land ▇▇▇ ▇▇, ▇▇▇▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇ of Atlanta, ▇▇▇▇▇▇ County, Georgia, being Lots 49, 50,51, & 52, of Indian
Creek Acres Subdivision, as plat recorded in Plat Book 20, Page 71 & 72, in the
Office of the Clerk of the Superior Court of ▇▇▇▇▇▇ County, and being the same
property shown on that Plat of survey by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇., a Georgia
Registered Land Surveyor #2109, and being identified as "BOUNDARY SURVEY FOR
German American Capital Corporation, Prime Care Two, LLC, PC2, LLC, Marriott
Senior Living Services, Inc., Marriott International, Inc., Chicago Title
Insurance Company, and ▇▇▇▇▇▇ & Wakkins" dated December 29,1997, and being more
particularly described as follows:
TO FIND THE TRUE POINT OF BEGINNING, commence at the intersection of the
westerly right-of-way line of Lenox Road (50 ft R/W) with the northwesterly
right-of-way line of ▇▇▇▇▇ Road (50 ft R/W);
THENCE, following the westerly right-of-way line of Lenox Road (50 ft R/W),
NORTH 13(0)26'52" WEST for a distance of 762.79 feet to a point;
THENCE, following the westerly right-of-way line of Lenox Road (50 ft R/W),
along a curve to the right having a radius of 831.44' and an arc length of
206.59 feet, being subtended by a chord of NORTH 06(0)20'36" WEST for a distance
of 206.06 feet to a point;
THENCE, following the westerly right-of-way line of Lenox Road (50 ft R/W),
NORTH 00(0)47'19" EAST for a distance of 609.74 feet to an angle iron, said
angle iron being the POINT OF BEGINNING;
THENCE, leaving the westerly right-of-way line of Lenox Road (50 ft R/W), NORTH
89(0)13'19" WEST for a distance of 213.49 feet to a 1/2" re-bar, marking the
easterly right-of-way of Georgia Highway 400 Extension (R/W varies);
THENCE, following the easterly right-of-way of Georgia Highway 400 Extension
(R/W varies), NORTH 13(0)42'47" WEST for a distance of 153.72 feet to a 1/2"
re-bar marking the easterly right-of-way of Georgia Highway 400 Extension (R/W
varies);
THENCE, following the easterly right-of-way of Georgia Highway 400 Extension
(R/W varies), NORTH 13(0)43'36" WEST for a distance of 154.54 feet to a concrete
monument marking the easterly right-of-way of Georgia Highway 400 Extension (R/W
varies);
THENCE, following the easterly right-of-way of Georgia Highway 400 Extension
(R/W varies), NORTH 17(0)23'15" WEST for a distance of 157.66 feet to a concrete
monument marking the easterly right-of-way of Georgia Highway 400 Extension (R/W
varies);
THENCE, following the easterly right-of-way of Georgia Highway 400 Extension
(R/W varies), NORTH 28(0)23'06" WEST for a distance of 171.26 feet to a concrete
monument marking the easterly right-of-way of Georgia Highway 400 Extension (R/W
varies);
THENCE, leaving the easterly right-of-way of Georgia Highway 400 Extension (R/W
varies), SOUTH 89(0)28'30" EAST for a distance of 424.68 feet to a 1/2" re-bar
on the westerly right-of-way of Lenox Road (50 ft R/W);
THENCE, following the westerly right-of-way of Lenox Road (50 ft R/W), SOUTH
00(0)58'16" WEST for a distance of 149.82 feet to a 1" solid bar on the westerly
right-of-way of Lenox Road (50 ft R/W);
THENCE, following the westerly right-of-way of Lenox Road (50 ft R/W), SOUTH
00(0)36'22" WEST for a distance of 149.82 feet to a iron pin set on the westerly
right-of-way of Lenox Road (50 ft R/W);
THENCE, following the westerly right-of-way of Lenox Road (50 ft R/W), SOUTH
01(0)25'30" WEST for a distance of 150.03 feet to a iron pin set on the westerly
right-of-way of Lenox Road (50 ft R/W);
THENCE, following the westerly right-of-way of Lenox Road (50 ft R/W), SOUTH
00(0)38'49" WEST for a distance of 150.02 feet to an angle iron on the westerly
right-of-way of Lenox Road (50 ft R/W), and said angle iron being the POINT OF
BEGINNING;
The above described property is the same property shown on that plat of a,
"BOUNDARY SURVEY FOR German American Capital Corporation, Prime Care Two, LLC,
PC2, LLC, Marriott Senior Living Services, Inc., Marriott International, Inc.,
Chicago Title Insurance Company, and ▇▇▇▇▇▇ & Wakkins" dated December 29, 1997,
by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇., Registered Land Surveyor, said Plat is incorporated
herein and made a part hereof by specific reference for a more complete and
accurate description, said survey is identified as Job #9712327, said tract or
parcel contains 4.14 acres or 180,298 square feet.
END.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
The South 1/2 of the Southeast 1/4 of the Northeast 1/4 of the Northeast 1/4
of Section ▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, less
and excepting the East 100 feet thereof previously deeded to the State of
Florida.
END.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ALL that certain plot, piece or parcel of land, situate, lying and being in the
County of WAKE, State of NORTH CAROLINA, bounded and described as follows:
BEGINNING at an existing right-of-way monument on the western right-of-way of
Duraleigh Road (S.R. 1664), said point being the northern line of lands now or
formerly owned by Worthy Investments, Inc. as recorded in Deed Book 4595, Page
791 of the Wake County Registry; thence along the common line of Worthy
Investments, Inc. the following ten (10) calls:
North 88(0)14'27" West 439.96 feet to a point;
thence North 69(0)51'42" West 33.78 feet to an existing iron pipe;
thence North 59(0)43'31" West 78.72 feet to an existing iron pipe;
thence North 61(0)35'08"West 79.22 feet to an existing iron pipe;
thence South 88(0)12'06" West 53.94 feet to an existing iron pipe;
thence North 83(0)57'28" West 20.96 feet to an existing iron pipe;
thence South 89(0)31'18" West 51.86 feet to an existing iron pipe;
thence South 82(0)21'17" West 49.45 feet to an existing iron pipe;
thence South 89(0)36'14" West 14.32 feet to an existing iron pipe;
thence North 77(0)34'31" West 7.50 feet to a point on the eastern right-of-way
of ▇▇▇▇▇▇▇ Mill Road; thence along and with said right-of-way North 43(0)36'04"
East 360.38 feet to an existing iron pipe; thence along a simple curve to the
left having a radius of 2672.85 feet, an arc length of 200.55 feet, and a chord
bearing and distance of North 41(0)27'06" East 200.50 feet to a point; thence
South 76(0)35'19" East 13.61 feet to a point; thence North 43(0)22'49" East
11.37 feet to a point; thence along a simple curve to the right having a radius
of 20.00 feet, an arc length of 33.34 feet, and a chord bearing and distance of
South 88(0)51'29" East 29.61 feet to a point on the western right-of-way of
Duraleigh Road (S.R. 1664); thence along and with said right-of-way along a
simple curve to the right having a radius of 4509.56 feet, an arc length of
183.60 feet, and a chord bearing and distance of South 39(0)55'49" East 183.59
feet to a point; thence South 38(0)45'50" East 56.10 feet to a point; thence
along a simple curve to the right having a radius of 2432.84 feet, an arc length
of 361.77 feet and a chord bearing and distance of South 34(0)20'00" East 361.44
feet to a point; thence South 30(0)14'38" East 35.08 feet to the true POINT AND
PLACE OF BEGINNING, containing 4.84 acres more or less.
END.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
The Southerly 395.70 feet of the following described parcel (as measured
along the Westerly right-of-way line of Pinebrook Road. 80 feet wide
right-of-way);
The East 625.00 feet of the South 1016.40 feet of the North One-Half of
Section 8, Township 39 South, Range 19 East.
LESS THEREFROM the Easterly 40.00 feet thereof for road right-of-way of
Pinebrook Road (80 feet wide right-of-way)
ALSO LESS THEREFROM the most Southerly 25.00 feet thereof for road
right-of-way (▇▇▇▇▇▇ Street, 50 feet right-of-way)
All lying and being in Section ▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 19 East, Sarasota
County, Florida.
END.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ALL that certain plot, piece or parcel of land, situate, lying and being in the
County of FORSYTH, State of NORTH CAROLINA, bounded and described as follows:
BEGINNING at a point on the Northern right-of-way of Polo Road (State Road
1370), thence along and with said right-of-way South 78(0)48'49" West 48.63 feet
to a point; thence South 69(0)12'14" West 429.79 feet to a point; thence along a
simple curve to the right having a radius of 20.00 feet, an arc length of 27.03
feet, and a chord bearing and distance of North 72(0)04'12" West 25.02 feet to a
point on the eastern right-of-way of Reynolda Road (N.C. Highway 67); thence
along and with said right-of-way North 33(0)20'38" West 158.82 feet to a point;
thence leaving said right-of way along a simple curve to the right having a
radius of 10.00 feet, an arc length of 15.70 feet, and a chord bearing and
distance of North 11(0)38'03" East 14.14 feet to a point on the Southern line of
Wachovia Bank of North Carolina Trustees; thence with said line North
56(0)36'45" East 11.25 feet to a point; thence along a simple curve to the left
having a radius of 85.00 feet, an arc length of 56.68 feet, and a chord bearing
and distance of North 37(0)30'23" East 55.64 feet to a point; thence North
18(0)24'01" East 48.88 feet to a point; thence along a simple curve to the right
having a radius of 88.00 feet, an arc length of 24.78 feet, and a chord bearing
and distance of North 26(0)27'58" East 24.69 feet to a point; thence North
34(0)31'55" East 418.47 feet to an existing iron pipe; thence South 31(0)38'54"
East 386.00 feet to a point; thence South 20(0)47'46" East 136.02 feet to THE
POINT AND PLACE OF BEGINNING, containing 4.09 acres more or less.
END.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Lying and being situate in Mecklenburg County, North Carolina, and more
particularly described as follows:
BEGINNING at an existing iron pipe located on the northern right-of-way of Park
South Drive at the southeastern corner of the lands of the City of Charlotte,
Deed Book 3762, page 270, thence along and with said right-of-way South 24-55-35
West 280.92 feet to an existing iron pipe, thence continuing with said
right-of-way South 24-50-46 West 114.02 feet to an existing iron pipe, said pipe
being the common corner with (now or formerly) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Deed Book 2657,
page 49, thence with ▇▇▇▇▇▇ line North 61-02-34 West 276.20 feet to an iron pipe
set, thence North 28-05-58 East 2.90 feet to an existing iron pipe, thence North
28-05-58 East 96.84 feet to an existing iron pipe, thence North 60-35-05 West
108.87 feet to an existing iron pipe, thence North 15-57-46 East 205.38 feet to
an existing iron pipe, thence South 74-00-38 East 415.41 feet to the POINT AND
PLACE OF BEGINNING containing 2.89 acres more or less.
Being the same property conveyed to Marriott Senior Living Services, Inc.,
Grantee, by ▇▇▇▇ ▇. ▇▇▇▇, Grantor, by quitclaim deed dated November 7, 1995,
recorded November 8, 1995 in Book 8358, page 67, Mecklenburg County Records.
END.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
All that certain piece parcel or tract of land situated in the City of Stamford,
County of Fairfield, and State of Connecticut, bounded and described as follows:
NORTHERLY: 506.18 feet by land of the City of Stamford;
NORTHEASTERLY: 41.72 feet by a curve on the land of the City of Stamford;
EASTERLY: 461.14 feet, then
SOUTHERLY: 10 feet, and again
EASTERLY: 150.14 feet by Long Ridge Road;
SOUTHERLY: 190.16 feet and again
EASTERLY: 357.23 feet by land of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and again
SOUTHERLY: 804.50 feet by Roxbury Road; and
WESTERLY: 284.19 feet by land now or formerly of ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
246.40 feet by land of the City of Stamford, each in part.
Said premises are further shown and delineated on a certain map entitled "Map of
Property in Stamford, Conn., Prepared for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇", dated May 29,
1964, which map is on file in the office of the Town Clerk of Stamford and
numbered 7854, reference being hereby had.
EXCEPTING THEREFROM, so much of said property as is more particularly described
in a Certificate of Taking, dated December 21, 1972, by the City of Stamford,
which premises are bounded and described as follows:
NORTHERLY: 196.80 feet by a certain right of way as shown on the
hereinafter described map;
EASTERLY: 733.802 feet by land hereinbefore described;
SOUTHWESTERLY: 253.221 feet by Roxbury Road; and
WESTERLY: 530.59 feet in part by land now or formerly of the Estate of
▇▇▇▇ ▇. ▇▇▇▇▇▇ and in part by land of the City of Stamford.
Said premises are known and designated as "Parcel A to be conveyed to the City
of Stamford: as shown on a certain map entitled "Map Showing Exchange of
Properties between St. Leo's Roman Catholic Church Corp. and the City of
Stamford, Conn.", which map is dated October 28, 1969.
Together with an easement of way in common with others, for all lawful purposes
in, over and upon a strip of land sixty (60) feet in width running westerly from
Long Ridge Road along the northerly boundary line of the premises hereinbefore
described.
END.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Land in ▇▇▇▇▇▇▇▇▇▇ County, Tennessee, being Lot No. 1 on the Plan of Section 70
- Lot 1, Maryland Farms, more particularly described in plat of record in Plat
Book 23, page 83, in the Register's Office for ▇▇▇▇▇▇▇▇▇▇ County, Tennessee,
together with 40 foot by 100 foot non-exclusive joint access easement more
particularly described in plat of record in Book 21, page 103, said Register's
Office.
Being the same property conveyed to Prime Care Two, LLC, an Indiana limited
liability company, by Special Warranty Deed from Marriott Senior Living
Services, Inc., a Delaware corporation, of record in Book 1602, page 103,
Register's Office for ▇▇▇▇▇▇▇▇▇▇ County, Tennessee.
INCLUDED in the above described tract of land, but specifically EXCLUDED
therefrom is the following described tract of and land conveyed to Metropolitan
Government of Nashville and Davidson County, Tennessee by Warranty Deed of
record in Book 2521, page 378, Register's Office for ▇▇▇▇▇▇▇▇▇▇ County,
Tennessee:
Beginning at the point of intersection of the existing east margin of Granny
White Pike and the south boundary of the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, etux property, said
point of intersection being 30.00 feet right of Granny White Pike proposed
centerline station 30+406.205; thence with said south boundary south 80 degrees
55 minutes 08 seconds east 14.96 feet to a point, said point being 44.957 feet
right of Granny White Pike proposed centerline station 30+406.090; thence with
the proposed east margin of said road (1) south 09 degrees 36 minutes 49 seconds
west 216.96 feet (2) south 10 degrees 50 minutes 28 seconds west 133.69 feet to
a point, said point being 30.00 feet right of Granny White Pike proposed
centerline station 30+299.315; thence with said existing margin northerly 350
feet, more or less to the point of beginning, containing 2,933 square feet.
END.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chevy Chase, ▇▇▇▇▇▇▇▇▇▇ County, Maryland
All of that certain lot or parcel of land situated, lying and being in
▇▇▇▇▇▇▇▇▇▇ County, Maryland, and being more particularly described as follows:
BEING KNOWN AND DESIGNATED as ▇▇▇ ▇▇. ▇▇, ▇▇▇▇▇ ▇ on the plat entitled, "Plat of
Resubdivision ▇▇▇ ▇▇ ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇", which plat is recorded among
the Land Records of ▇▇▇▇▇▇▇▇▇▇ County in Plat Book 177 Plat No. 19868.
Tax I.D. No. ▇-▇▇-▇▇▇▇▇▇▇
END.
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
ALL THAT CERTAIN TRACT, PARCEL AND LOT OF LAND LYING AND BEING SITUATE IN THE
BOROUGH OF MOUNTAINSIDE, COUNTY OF UNION, STATE OF NEW JERSEY, BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
BEING KNOWN AND DESIGNATED AS LOT 48.01 IN BLOCK 15-I, AS SHOWN ON A CERTAIN
FILED MAP ENTITLED "BRIGHTON GARDENS AT MOUNTAINSIDE NEW JERSEY" DULY FILED IN
THE OFFICE OF THE CLERK/REGISTER OF UNION COUNTY, ON SEPTEMBER 27, 1995 AS MAP
799-B.
BEGINNING AT A POINT ON THE NORTHERLY RIGHT OF WAY LINE OF NEW JERSEY STATE
HIGHWAY ROUTE #22 (FORMERLY ROUTE 29) AS SAME IS PROPOSED TO BE WIDENED, SAID
POINT BEING THE FOLLOWING COURSES AND DISTANCES FROM THE INTERSECTION OF THE
EXISTING RIGHT ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ AND THE EASTERLY RIGHT OF WAY LINE OF
EVERGREEN COURT; THENCE
(A) ALONG THE EXISTING RIGHT ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇, EASTERLY 90 FEET TO A
POINT (WHICH POINT IS THE BEGINNING POINT OF A TRACT OF 12.66 ACRES AS DESCRIBED
IN DEED BOOK 3243 PAGE 857 OF WHICH THIS PARCEL IS NOW OR WAS FORMERLY A PART);
THENCE
(B) STILL ALONG THE EXISTING RIGHT ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇ A CURVE
TO THE RIGHT WITH A RADIUS OF 1727.01 FEET, AN ARC DISTANCE OF 44.74 FEET SAID
CURVE HAS A CHORD BEARING OF NORTH 85 DEGREES 24 MINUTES 14 SECONDS EAST AND A
CHORD DISTANCE OF 44.74 FEET; THENCE
(C) ALONG THE PROPOSED RIGHT ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ AS WIDENED EASTERLY ON A
CURVE TO THE LEFT HAVING A RADIUS OF 2990.00 FEET, AN ARC DISTANCE OF 169.84
FEET, SAID CURVE HAS A CHORD BEARING OF NORTH 75 DEGREES 57 MINUTES 54 SECONDS
EAST AND A CHORD DISTANCE OF 169.81 FEET TO THE POINT OF BEGINNING AND RUNNING
THENCE 1) NORTHERLY ON A CURVE TO THE LEFT HAVING A RADIUS OF 35 FEET, AN ARC
DISTANCE OF 39.99 FEET, SAID CURVE HAS A CHORD BEARING OF NORTH 41 DEGREES 36
MINUTES 23 SECONDS EAST AND A CHORD DISTANCE OF 37.85 FEET; THENCE 2) NORTHERLY
ON A CURVE TO THE LEFT HAVING A RADIUS OF 475.00 FEET, AN ARC DISTANCE OF 235.26
FEET, SAID CURVE HAS A CHORD BEARING OF NORTH 05 DEGREES 18 MINUTES 50 SECONDS
WEST AND A CHORD DISTANCE OF 232.86 FEET; THENCE 3) NORTH 19 DEGREES 30 MINUTES
09 SECONDS WEST, 145.35 FEET; THENCE 4) NORTH 70 DEGREES 23 MINUTES 18 SECONDS
EAST, 534.60 FEET; THENCE 5) SOUTH 41 DEGREES 23 MINUTES 30 SECONDS EAST, 323.65
FEET; THENCE 6) SOUTH 69 DEGREES 55 MINUTES 10 SECONDS WEST, 362.51 FEET TO A
POINT OF CURVATURE; THENCE 7) WESTERLY ON A CURVE TO THE RIGHT HAVING A RADIUS
OF 5060.23 FEET, AN ARC DISTANCE OF 243.86 FEET, SAID CURVE HAS A CHORD BEARING
OF SOUTH 71 DEGREES 18 MINUTES 00 SECONDS WEST AND A CHORD DISTANCE OF 243.84
FEET; THENCE 8) SOUTH 17 DEGREES 19 MINUTES 10 SECONDS EAST, 97.17 FEET TO A
POINT IN THE PROPOSED NORTHERLY RIGHT ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ AS WIDENED, THENCE
9) ALONG THE PROPOSED RIGHT OF WAY LINE OF ROUTE 22, AS WIDENED, WESTERLY ON
CURVE TO THE RIGHT HAVING A RADIUS OF 4990.00 FEET, AN ARC DISTANCE OF 135.67
FEET, SAID CURVE HAS A CHORD BEARING OF SOUTH 73 DEGREES 33 MINUTES 32 SECONDS
EAST AND A CHORD DISTANCE OF 135.66 FEET TO THE POINT AND PLACE OF BEGINNING.
THIS DESCRIPTION IS IN ACCORDANCE WITH A SURVEY MADE BY RBA GROUP,
ENGINEERS-ARCHITECTS-PLANNERS, DATED MARCH 25,1997. THE PREMISES ARE COMMONLY
KNOWN AND DESIGNATED AS ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇. TOGETHER WITH
AND SUBJECT TO THE EASEMENT RIGHTS ESTABLISHED FOR THE PREMISES, AS SET FORTH IN
DEED BOOK 4339, PAGE 131. BEING ALSO KNOWN AS (REPORTED FOR INFORMATIONAL
PURPOSES ONLY): ▇▇▇ ▇▇.▇, ▇▇▇▇▇ ▇▇. I, ON THE OFFICIAL TAX MAP OF THE BOROUGH OF
MOUNTAINSIDE.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
ALL THAT CERTAIN TRACT, PARCEL AND LOT OF LAND LYING AND BEING SITUATE IN THE
TOWNSHIP OF MIDDLETOWN, COUNTY OF MONMOUTH, STATE OF NEW JERSEY, BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE NORTHWESTERLY SIDELINE OF APPLE FARM ROAD (50 FEET
WIDE) SAID POINT BEING AT THE INTERSECTION OF THE DIVIDING LINE BETWEEN ▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ NOW OR FORMERLY DEL PIORE AND ▇▇▇ ▇▇▇.▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ BEING DESCRIBED AND FROM SAID POINT OR PLACE OF BEGINNING RUNNING THENCE:
1. ALONG SAID DIVIDING LINE, NORTH 02 DEGREES 08 MINUTES 03 SECONDS EAST
284.00 FEET TO A POINT; THENCE
2. NORTH 78 DEGREES 00 MINUTES 00 SECONDS EAST 23.00 FEET TO A POINT; THENCE
3. NORTH 22 DEGREES 00 MINUTES 00 SECONDS EAST 31.00 FEET TO A POINT; THENCE
4. NORTH 11 DEGREES 00 MINUTES 00 SECONDS WEST 35.97 FEET TO A POINT; THENCE
5. SOUTH 78 DEGREES 00 MINUTES 00 SECONDS WEST 25.43 FEET TO A POINT; THENCE
6. NORTH 02 DEGREES 08 MINUTES 03 SECONDS EAST 81.00 FEET TO A POINT; THENCE
7. NORTH 41 DEGREES 27 MINUTES 57 SECONDS WEST 347.50 FEET TO A POINT THENCE
8. NORTH 85 DEGREES 04 MINUTES 57 SECONDS WEST 439.64 FEET TO AN IRON BAR
FOUND; THENCE
9. NORTH 11 DEGREES 52 MINUTES 03 SECONDS EAST 157.95 FEET TO A POINT; THENCE
10. ALONG THE PROPOSED DIVIDING LINE BETWEEN LOT 119.02. BLOCK 869 AND
▇▇▇ ▇▇▇.▇▇. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇ DEGREES 32 MINUTES 53 SECONDS EAST 171.78
FEET TO A POINT; THENCE
11. STILL ALONG THE SAME, SOUTH 04 DEGREES 18 MINUTES 00 SECONDS EAST 100.48
FEET TO A POINT; THENCE
12. STILL ALONG THE SAME, SOUTH 85 DEGREES 04 MINUTES 57 SECONDS EAST 190.10
FEET TO A POINT; THENCE
13. STILL ALONG THE SAME, NORTH 67 DEGREES 06 MINUTES 00 SECONDS EAST 485.15
FEET TO A POINT IN ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇.▇.▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇; THENCE
14. ALONG SAID WESTERLY SIDELINE ▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇,
▇▇▇▇▇ ▇▇ DEGREES 54 MINUTES 00 SECONDS EAST 26.00 FEET TO A POINT; THENCE
15. STILL ALONG THE SAME, SOUTH 73 DEGREES 06 MINUTES 00 SECONDS WEST 7.00 FEET
TO A POINT; THENCE
16. STILL ALONG THE SAME, SOUTH 16 DEGREES 54 MINUTES 00 SECONDS EAST 30.40
FEET TO A POINT; THENCE
17. STILL ALONG THE SAME. SOUTH 16 DEGREES 12 MINUTES 00 SECONDS EAST 278.97
FEET TO A POINT OF CURVATURE; THENCE
18. STILL ALONG THE SAME, SOUTHWESTERLY ON A CURVE TO THE RIGHT HAVING A
RADIUS OF 290.00 FEET AND AN ARC DISTANCE OF 225.03 FEET TO A POINT OF
TANGENCY; THENCE
19. STILL ALONG THE SAME, SOUTH 28 DEGREES 15 MINUTES 34 SECONDS WEST 131.97
FEET TO A POINT OF CURVATURE; THENCE
20. STILL ALONG THE SAME, SOUTHERLY ON A CURVE TO THE LEFT HAVING A
RADIUS OF 182.00 FEET AND AN ARC DISTANCE OF 91.27 FEET TO A POINT; THENCE
21. ALONG THE DIVIDING LINE BETWEEN ▇▇▇ ▇▇▇.▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇.▇.▇.▇.▇
▇▇▇▇▇▇ 177D, SOUTH 63 DEGREES 01 MINUTES 15 SECONDS WEST
18.33 FEET TO A POINT; THENCE
22. STILL ALONG THE SAME. SOUTH 16 DEGREES 11 MINUTES 45 SECONDS
EAST 93.63 FEET TO A POINT IN THE AFORESAID NORTHWESTERLY SIDELINE OF
APPLE FARM ROAD; THENCE
23. ALONG SAID NORTHWESTERLY SIDELINE OF APPLE FARM ROAD, SOUTHWESTERLY
ON A CURVE TO THE RIGHT HAVING A RADIUS OF 20.00 FEET AND AN ARC DISTANCE
OF 1.74 FEET TO A POINT OF TANGENCY; THENCE
24. STILL ALONG THE SAME, SOUTH 59 DEGREES 08 MINUTES 10 SECONDS WEST 89.53
FEET TO A POINT; THENCE
25. STILL ALONG THE SAME, SOUTH 63 DEGREES 01 MINUTES 15 SECONDS WEST 120.71
FEET TO THE POINT OR PLACE OF BEGINNING.
THE ABOVE DESCRIPTION IS IN ACCORDANCE WITH A MAP ENTITLED "MINOR SUBDIVISION,
BRIGHTON GARDENS, LOTS 119, 120, ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇", DATED MARCH 13, 1996, REVISED THROUGH OCTOBER 17, 1996 AND
PREPARED BY THE CHESTER, PLOUSSAS, LISOWSKY PARTNERSHIP, ENGINEERS AND
SURVEYORS, ▇▇▇▇▇▇▇▇ HARBOR, NEW JERSEY", TOGETHER WITH RIGHTS IN AND TO COMMON
DRIVEWAY ACCESS AND UTILITY EASEMENT AS SET FORTH IN DEED (OF SUBDIVISION) FROM
ROUTE 35 HOLDING CO. TO ROUTE 35 HOLDING CO. (ABOUT TO BE RECORDED).
THE FOREGOING DESCRIPTION BEING IN ACCORDANCE WITH A SURVEY PREPARED BY CONTROL
POINT ASSOCIATES, INC., DATED DECEMBER 22, 1997.
TOGETHER WITH A RECIPROCAL "COMMON DRIVEWAY ACCESS AND UTILITY EASEMENT" AS SET
FORTH IN DEED BOOK 5557 PAGE 280.
BEING ALSO KNOWN AS (REPORTED FOR INFORMATIONAL PURPOSES ONLY)
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇ ▇/▇ ▇▇▇, ▇▇▇▇▇ 869, ON THE OFFICIAL TAX MAP OF MIDDLETOWN
TOWNSHIP
END.
COMPOSITE
EXHIBIT "G"
TITLE COMMITMENTS
COMPOSITE
EXHIBIT "H"
MEMORANDUM OF LEASE
EXHIBIT "I"
LESSEE ORGANIZATIONAL CHART
Prime Care One, LLC
1% Prime Care Corporation
99% PC 1, LLC
Prime Care Corporation
33% ▇▇▇ ▇. ▇▇▇▇▇
33% ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
33% ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PC 1, LLC
47.6% Prime Care Properties, LLC
52.4% ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Prime Care Properties, LLC
33% ▇▇▇ ▇. ▇▇▇▇▇
33% Laurel Holdings, LLC (managed by Davies)
33% ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Prime Care Two, LLC
1% Prime Care 2 Corp.
99% PC 2, LLC
Prime Care 2 Corp.
33% ▇▇▇ ▇. ▇▇▇▇▇
33% ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
33% ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PC 2, LLC
47.3% Prime Care Properties, LLC
52.7% ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Prime Care Properties, LLC
33% ▇▇▇ ▇. ▇▇▇▇▇
33% Laurel Holdings, LLC (managed by Davies)
33% ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇