EXHIBIT 10.50
MASTER LEASE AGREEMENT
Between
LTC PROPERTIES, INC.,
TEXAS-LTC LIMITED PARTNERSHIP,
and
NORTH CAROLINA REAL ESTATE INVESTMENTS, LLC,
as Lessor
and
ALTERRA HEALTHCARE CORPORATION,
as Lessee
Dated: December 15, 2002
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT (this "LEASE") is made effective as of
December 15, 2002, by and between LTC PROPERTIES, INC., a Maryland corporation,
TEXAS-LTC LIMITED PARTNERSHIP, a Texas limited partnership, and NORTH CAROLINA
REAL ESTATE INVESTMENTS, LLC, a North Carolina limited liability company
(collectively, "LESSOR"), and ALTERRA HEALTHCARE CORPORATION, a Delaware
corporation ("LESSEE"), subject to the terms, conditions and contingencies set
forth below.
RECITALS
WHEREAS Lessor owns certain real property and improvements (as more
particularly defined below, the "FACILITIES"), and desires to lease them to
Lessee pursuant to the terms and conditions of this Lease; and
WHEREAS it the parties' intention to set forth their respective covenants
and obligations in a single agreement, not merely as matter of convenience, but
because the leasing of the twenty one (21) Facilities as an inseparable unit is
a special and essential inducement to Lessor to enter into this transaction, and
but for the leasing of the twenty one (21) Facilities together as an inseparable
whole, Lessor would not have entered into this Lease; and
WHEREAS the parties agree and acknowledge that the amount set forth as
Minimum Rent (defined below) is calculated on the basis of leasing of the twenty
one (21) Facilities together as a single, inseparable group and is non-allocable
among the twenty one (21) Facilities, and that it would be impossible to
allocate to any one or more of the Facilities a divisible portion of the Minimum
Rent.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt,
sufficiency and mutuality of which are hereby acknowledged, it is agreed as
follows:
ARTICLE I
1.1. Leased Property. Upon and subject to the terms and conditions
hereinafter set forth, Lessor leases to Lessee, and Lessee rents or hires from
Lessor all of the following (the "LEASED PROPERTY"):
(a) The real property particularly described in EXHIBIT "A-1"
through EXHIBIT "A-21" (the "LAND");
(b) All of its right, title and interest in and to the
buildings, structures, Fixtures (as hereinafter defined) and other improvements
of every kind including, but not limited to, alleyways and connecting tunnels,
sidewalks, utility pipes, conduits and lines (on-site and offsite), parking
areas and roadways appurtenant to such buildings and structures presently
situated upon the Land, including without limitation the Facilities (as defined
below) (collectively, the "LEASED IMPROVEMENTS");
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(c) All of its right, title and interest in and to the
easements, rights and appurtenances relating to the Land and the Leased
Improvements;
(d) All of its right, title and interest in and to the
permanently affixed equipment, machinery, fixtures, and other items of real
and/or personal property, including all components thereof, now and hereafter
located in, on or used in connection with, or permanently affixed to or
incorporated into the Leased Improvements, including, without limitation, all
furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution control, waste
disposal, air cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, all of which to the greatest
extent permitted by 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 as defined in ARTICLE II below
(collectively the "FIXTURES"); and
(e) All of its right, title and interest in and to personal
tangible and intangible property including all components thereof, owned by
Lessor and now and hereafter located in, on or used in connection with the
Leased Improvements.
Except with respect to the representations and warranties of Lessor set
forth herein, the Leased Property is demised subject to all covenants,
conditions, restrictions, easements and all other matters affecting title,
whether or not of record, the conditions and limitations expressly set forth
herein, and any and all matters created by or known to Lessee. Lessor represents
and warrants for the benefit of Lessee that as of the date of this Lease, (i)
Lessor is the fee simple title holder of the Land and the Leased Improvements as
of the Commencement Date and (ii) as of the Commencement Date, there is no
mortgage, deed of trust, ground lease, or other comparable instrument executed
by Lessor in favor of any lender or ground lessor or other obligee of Lessor,
nor any lien, judgment, or other similar encumbrance affecting or encumbering
the Leased Property or any portion thereof and arising by, through or under
Lessor (expressly excluding any such lien, judgment or other encumbrance arising
as a result of Lessee or Lessee's agents, representatives or assigns) except for
the Existing Encumbrances (defined below). Lessee represents and warrants for
the benefit of Lessor (i) as of the date of this Lease, there are no mechanic's
liens or liens of any type recorded against the Leased Property that were
recorded or attached during the period of Lessee's occupancy of the Leased
Property and that arose as a result of Lessee's or Lessee's agents,
representatives or assigns activities thereon that remain unsatisfied of record
as of the Commencement Date, and (ii) there are no Impositions currently
outstanding that have become delinquent.
1.2. Term. The term of this Lease (the "TERM") shall commence on
January 1, 2003. From and after the Commencement Date, the Term shall continue
for a period of eighteen (18) years, expiring (if not sooner terminated) at
midnight (California time) on December 31, 2020.
ARTICLE II
2. Definitions. For all purposes of this Lease, except as otherwise
expressly provided, (i) the terms defined in this ARTICLE II have the meanings
assigned to them in this
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ARTICLE II and include the plural as well as the singular, (ii) all accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles at the time applicable,
and (iii) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Lease as a whole and not to any particular Article,
Section or other subdivision:
Additional Charges. As defined in ARTICLE III.
Affiliate. When used with respect to any corporation, the term "Affiliate"
shall mean any person which, directly or indirectly, controls or is controlled
by or is under common control with such corporation. For the purposes of this
definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such person,
through the ownership of voting securities, partnership interests or other
equity interests. For the purposes of this definition, "person" shall mean any
natural person, trust, partnership, corporation, joint venture or other legal
entity.
Business Day. Each Monday, Tuesday, Wednesday, Thursday and Friday, which
is not a day on which national banks in the City of Los Angeles, California, are
authorized, or obligated, by law or executive order, to close.
Change of Control. As defined in ARTICLE XVIII below.
Code. The Internal Revenue Code of 1986, as amended.
Controlling Entity. As defined in ARTICLE XVIII below.
Encumbrance. As defined in ARTICLE XXXII.
Event of Default. As defined in ARTICLE XVI.
Existing Encumbrances. The mortgages identified on SCHEDULE 1 attached
hereto.
Extended Term. As defined in ARTICLE XXXIV.
Facilities. Those certain assisted living facilities which are part of the
Leased Property, a schedule of which is attached hereto as EXHIBIT "B".
Facility. As the context requires, any one of the Facilities.
Facility Mortgage. As defined in ARTICLE XIII.
Facility Mortgagee. As defined in ARTICLE XIII.
Fiscal Year. The twelve (12) month period from January 1 through December
31 of the same calendar year (as prorated for any partial Fiscal Year during the
Term).
Fixtures. As defined in ARTICLE I.
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Impositions. Collectively, all taxes (including, without limitation, all
ad valorem, sales and use, single business, gross receipts, transaction
privilege, rent or similar taxes as the same relate to or are imposed upon
Lessee or its business conducted upon the Leased Property), assessments
(including, without limitation, all assessments for public improvements or
benefits, whether or not commenced or completed prior to the date hereof and
whether or not to be completed within the Term), water, sewer or other rents and
charges, excises, tax levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees), and all other governmental
or public charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Leased Property or the business conducted thereon by Lessee (including all
interest and penalties thereon due to any failure in payment by Lessee), and all
increases in all the above from any cause whatsoever, including reassessment,
which at any time prior to, during or in respect of the Term may be assessed or
imposed on or in respect of or be a lien upon (a) Lessor's interest in the
Leased Property, (b) the Leased Property or any part thereof, or any rent
therefrom or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Leased Property or the leasing or use of the Leased Property
or any part thereof by Lessee. Provided, however, nothing contained in this
Lease shall be construed to require Lessee to pay (1) any tax based on income
(or any tax based on outstanding corporate shares of Lessor or Lessor's equity
or capitalization, regardless of whether denominated as an income tax, franchise
tax, or capital stock tax or other tax) imposed on Lessor, or (2) any transfer,
or net revenue tax of Lessor, or (3) any sales, income, capital gain, transfer,
documentary, mortgage, intangible or other tax imposed with respect to the sale,
exchange, mortgaging or other disposition or financing by Lessor of any Leased
Property or the proceeds thereof, or (4) any single business, gross receipts
(other than a tax on any rent received by Lessor from Lessee), transaction,
privilege, rent or similar taxes as the same relate to or are imposed upon
Lessor, and are unrelated to the Leased Property, or (5) estate, inheritance,
gift taxes or documentary transfer taxes.
Insurance Requirements. All terms of any insurance policy required by this
Lease and all requirements of the issuer of any such policy.
Land. As defined in ARTICLE I.
Lease. As defined in the Preamble.
Leased Improvements. As defined in ARTICLE I.
Leased Property. As defined in ARTICLE I.
Legal Requirements. All federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting either the Leased Property or the
construction, use or alteration thereof, whether now or hereafter enacted and in
force, including any which may (i) require repairs, modifications or alterations
in or to the Leased Property, or (ii) in any way affect the use and enjoyment
thereof, and all permits, licenses and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments (whether or not of record) or otherwise known to Lessee, at
any time in force affecting the Leased Property; provided,
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however, as it relates to covenants, agreements, restrictions and encumbrances
contained in any Encumbrance, Lessee need comply only with (i) the Existing
Encumbrances, and (ii) any Encumbrances subsequently entered into in accordance
with the provisions of SECTION 32.1 below where Lessee receives the
non-disturbance agreement described in such SECTION 32.1 and where such
Encumbrances do not, without Lessee's consent, materially adversely affect
Lessee's rights hereunder, or materially increase Lessee's duties or obligations
hereunder).
Lessee. As defined in the Preamble.
Lessee's Personal Property. All machinery, equipment, furniture,
furnishings, movable walls or partitions, computers or trade fixtures or other
personal property, and consumable inventory/and supplies, used in Lessee's
business on the Leased Property, including without limitation, all items of
furniture, furnishings, equipment, supplies and inventory, except items (i)
included within the definition of Fixtures; and (ii) personal property described
in SECTION 1.1(e), above.
Lessor. As defined in the Preamble.
Minimum Rent. As defined in SECTION 3.1.
Notice. A notice given pursuant to ARTICLE XXXI hereof.
Other Leases. As defined in SECTION 16.1(j) below.
Overdue Rate. On any date, a rate equal to the Prime Rate (defined below),
plus two percent (2%); provided, however, that it is the intent of Lessor and
Lessee that the Overdue Rate (and all other interest rates provided for
hereunder) be in strict compliance with applicable usury laws of the State of
California, and that in the event the Overdue Rate (or other interest rate
provided for hereunder) shall be deemed to exceed that permitted to be charged
by the laws of the State of California, any and all excess sums collected by
Lessor shall be credited against the Rent payable under this Lease or if there
is no Rent due, promptly refunded to Lessee.
Payment Date. Any due date for the payment of the installments of Minimum
Rent.
Primary Intended Use. As defined in SECTION 7.2.2.
Prime Rate. On any date, a rate equal to the annual rate on such date
announced by Citibank, N.A. to be its prime rate for 90-day unsecured loans to
its corporate borrowers of the highest credit standing or, if not available,
such other rate as may be published by The Wall Street Journal as the prime rate
in its listing of "Money Rates."
Rent. Any monetary obligations of Lessee owing under this Lease,
including, without limitation, Minimum Rent and Additional Charges.
Term. Collectively, the Initial Term plus any Extended Terms.
Unsuitable for its Primary Intended Use. A state or condition of any
Facility such that by reason of damage or destruction, or a partial taking by
Condemnation in the good faith judgment
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of Lessor and Lessee, reasonably exercised, such Facility cannot be operated on
a commercially practicable basis for its Primary Intended Use taking into
account, among other relevant factors, the number of usable beds affected by
such damage or destruction or partial Condemnation.
Unavoidable Delays. Delays due to strikes, lock-outs, inability to procure
materials, power failure, acts of God, governmental restrictions, enemy action,
civil commotion, fire, unavoidable casualty or other causes beyond the control
of the party responsible for performing an obligation hereunder, provided that
lack of funds shall not be deemed a cause beyond the control of either party
hereto.
The above does not include all the definitions to be used in this Lease.
Various definitions are included in the Sections below.
ARTICLE III
3.1. Minimum Rent. Lessee will pay to Lessor in lawful money of the
United States of America which shall be legal tender for the payment of public
and private debts at Lessor's address set forth in ARTICLE XXXI or at such other
place or to such other person, firms or corporations as Lessor from time to time
may designate in a Notice, Minimum Rent (as defined below), during the Term, as
follows:
(a) Initial Term. The initial annual "MINIMUM RENT" payable
hereunder shall be Five Million Six Hundred Seventy Nine Thousand Four Hundred
Twenty Eight and 89/100 Dollars ($5,679,428.89), payable in equal monthly
installments of Four Hundred Seventy Three Thousand Two Hundred Eighty Five and
74/100 Dollars ($473,285.74) on the first (1st) calendar day of each calendar
month of the Term. If necessary, Minimum Rent shall be prorated for any partial
month at the beginning or end of the Term.
(b) Extended Terms. The Minimum Rent during the Extended Terms
shall be as stated in ARTICLE XXXIV.
(c) Annual Escalation of Minimum Rent. Commencing on the
one-year anniversary of the Commencement Date (if the Commencement Date is the
first (1st) day of a calendar month, or, if not, on the first (1st) day of the
first (1st) full month following the Commencement Date), and continuing on each
subsequent one-year anniversary thereof during the Term (including any Extended
Term) (each, an "ADJUSTMENT DATE"), the Minimum Rent (irrespective of any
prorations made pursuant to SECTION 3.1(a) above) shall increase to an amount
equal to the Minimum Rent for the one-year period immediately preceding the
Adjustment Date multiplied by a fraction, the numerator of which shall be the
C.P.I. (defined below) for the month in which the Adjustment Date occurs, and
the denominator of which shall be the C.P.I. for the month that was one year
prior to the Adjustment Date; provided, however, that the product of said
multiplication shall not result in an increase of the Minimum Rent by more than
two percent (2%) per year on a cumulative basis ("ANNUAL MULTIPLIER"). If,
however, the Annual Multiplier is less than two percent (2%) on any Adjustment
Date (a "LESS THAN 2% ADJUSTMENT DATE"), then at such time as the Annual
Multiplier is determined for subsequent Adjustment Dates, the Minimum Rent for
each Less Than 2% Adjustment Date shall be retroactively recalculated such that
subsequent Annual Multipliers (whether less than or greater
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than 2%) shall be first applied to increase the Annual Multiplier for each Less
Than 2% Adjustment Date to an amount up to, but not greater than, 2%, with such
recalculations to be made in chronological order beginning with the earliest
Less Than 2% Adjustment Date and continuing, so long as there is Annual
Multiplier remaining, until recalculations have been made with respect to all
Less Than 2% Adjustment Dates. After each such recalculation has been made, the
shortfall in the Minimum Rent for the newly recalculated Less Than 2% Adjustment
Dates shall be billed to Lessee and Lessee shall pay such shortfall amount to
Lessor together with the next payment of Minimum Rent otherwise coming due
hereunder. Such recalculations and shortfall ▇▇▇▇▇▇▇▇ shall be made on each
Adjustment Date where there remain prior Less Than 2% Adjustment Dates which
have not yet been recalculated to 2%. For purposes of example only, if the
Commencement Date is June 1, 2002 and the initial Minimum Rent equals
$1,020,000, and if (a) the C.P.I. increased 1.5% as of June 1, 2003, the Minimum
Rent as of June 1, 2003 would increase to $1,035,300; (b) the C.P.I. increased
1.5% as of June 1, 2004, the Minimum Rent as of June 1, 2004 would increase to
$1,050,830; (c) the C.P.I. increased 6% as of June 1, 2005, the Minimum Rent as
of June 1, 2005 would increase to $1,082,354, which is the Minimum Rent
increased by 2% per year for three years (i.e. the average annual increases have
been 3% (1.5% + 1.5% + 6% for the three years, respectively) subject to the 2%
annual limitation), and the total shortfall amount to be billed to Lessee would
be $5,100 for the 2003 Adjustment Date and $10,378 for the 2004 Adjustment Date.
The "overage" in the C.P.I. increase (i.e., the remaining 3% increase that could
not be applied towards the increase in Minimum Rent on June 1, 2005 by virtue of
the 2% cap), would be "banked" and would be used to increase Minimum Rent in
subsequent years if the C.P.I. increase in such years were less than 2%. By way
of demonstration, if the C.P.I. as of June 1, 2006 and June 1, 2007 do not
increase at all, then Minimum Rent would nonetheless increase by 2% on June 1,
2006, and 1% on June 1, 2007 (such increases having been "banked" from the
remaining portion of the 6% C.P.I. increase on June 1, 2005). "C.P.I." shall
mean and refer to the Consumer Price Index of the Bureau of Labor Statistics of
the Department of Labor, U.S. Cities Average, All Items (1982-84=100); provided
that if compilation of the C.P.I. is discontinued or transferred to any other
governmental department or bureau, then the index most nearly the same as the
C.P.I. shall be used. If Lessor is unable to determine the C.P.I. by any
Adjustment Date, Lessee shall continue to pay the Minimum Rent at the rate paid
for the period immediately prior to that Adjustment Date, and once the C.P.I.
for that Adjustment Date is published, the new Minimum Rent (as increased by the
Annual Multiplier) shall be effective retroactively as of such Adjustment Date
and the aggregate amount of any additional Minimum Rent shall be paid by Lessee
promptly after written notice thereof from Lessor (but not later than the date
of the next monthly installment of Minimum Rent, unless the next installment
falls due within five (5) days after Lessor's notice, in which case not later
than the date of the second next monthly installment of Minimum Rent). No delay
by Lessor in providing notice of any such increase in Minimum Rent shall be
deemed a waiver of Lessor's right to increase the Minimum Rent as provided
hereunder.
(d) All payments of Minimum Rent shall be delivered to Lessor
by Lessee in a single payment (whether by wire transfer or check).
3.2. Additional Charges. In addition to Minimum Rent, (1) Lessee,
subject to its rights under ARTICLE XII, will also pay and discharge as and when
due and payable all other amounts, liabilities, obligations and Impositions
which Lessee assumes or agrees to pay under this Lease, including but not
limited to those set forth in ARTICLES IX and XIII, below, and (2) in
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the event of any failure on the part of Lessee to pay any of those items
referred to in clause (1) above, Lessee will also promptly pay and discharge
every fine, penalty, interest and cost which may be added for non-payment or
late payment of such items (the items referred to in clauses (1) and (2) above
being referred to herein collectively as the "ADDITIONAL CHARGES"), and Lessor
shall have all legal equitable and contractual rights, powers and remedies
provided either in this Lease or by statute or otherwise in the case of
nonpayment of the Additional Charges. If any elements of Additional Charges are
not be paid within seven (7) Business Days after due (after taking into account
applicable time periods during which Lessee may contest the Additional Charges
under ARTICLE XII) and Lessor pays any such amount (which Lessor shall have the
right, but not the obligation to do), then, in addition to Lessor's other rights
and remedies, Lessee will pay Lessor on demand, as Additional Charges, interest
on such unpaid Additional Charges computed at the Overdue Rate from the due date
of such installment to the date of Lessee's payment thereof. To the extent that
Lessee pays any Additional Charges directly to Lessor (as opposed to the
applicable third party payee) pursuant to any requirement of this Lease, Lessee
shall be relieved of its obligation to pay such Additional Charges to the entity
to which they would otherwise be due, and within than three (3) Business Days
after its receipt, Lessor shall remit such payment(s) to the entity to which
such payment(s) is due .
3.3. Net Lease. Notwithstanding any provisions in this Lease to the
contrary (except with respect to Lessee's rights set forth in ARTICLE V),
Minimum Rent shall be paid absolutely net to Lessor, so that this Lease shall
yield to Lessor the full amount of the installments of Minimum Rent throughout
the Term, all as more fully set forth in ARTICLES IV, IX AND XIII, and other
provisions of this Lease.
3.4. Non-Allocable Minimum Rent. Notwithstanding any language
contained in this Lease to the contrary, the parties agree and acknowledge that
the amount set forth as Minimum Rent is calculated on the basis of leasing of
all twenty one (21) Facilities together as a single, inseparable group and is
non-allocable among the twenty one (21) Facilities. Further notwithstanding any
language contained in this Lease to the contrary, the parties further agree and
acknowledge that it would be impossible to allocate to any one or more of the
Facilities a divisible portion of the Minimum Rent. Further notwithstanding any
language contained in this Lease to the contrary, Lessee agrees and acknowledges
that the leasing of the twenty one (21) Facilities as an inseparable whole was
accepted by Lessor as a special and essential inducement to enter into this
transaction, and but for Lessee's agreement to lease all twenty one (21)
Facilities as an inseparable whole, Lessor would not have entered into this
Lease.
3.5. Late Charge. LESSEE HEREBY ACKNOWLEDGES THAT LATE PAYMENT BY
LESSEE TO LESSOR OF RENT (INCLUDING WITHOUT LIMITATION MINIMUM RENT) WILL CAUSE
LESSOR TO INCUR COSTS NOT CONTEMPLATED BY THIS LEASE, THE EXACT AMOUNT OF WHICH
WILL BE EXTREMELY DIFFICULT TO ASCERTAIN. SUCH COSTS INCLUDE, BUT ARE NOT
LIMITED TO, PROCESSING AND ACCOUNTING CHARGES. ACCORDINGLY, IF ANY INSTALLMENT
OF RENT SHALL NOT BE RECEIVED BY LESSOR WITHIN SEVEN (7) BUSINESS DAYS AFTER
SUCH AMOUNT SHALL BE DUE, THEN WITHOUT ANY REQUIREMENT FOR NOTICE TO LESSEE,
LESSEE SHALL PAY TO LESSOR A LATE CHARGE EQUAL TO FIVE PERCENT (5%) OF SUCH
OVERDUE AMOUNT. THE PARTIES HEREBY AGREE THAT SUCH LATE CHARGE REPRESENTS A FAIR
AND REASONABLE ESTIMATE OF THE
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COSTS LESSOR WILL INCUR BY REASON OF LATE PAYMENT BY LESSEE. ACCEPTANCE OF SUCH
LATE CHARGE BY LESSOR SHALL IN NO EVENT CONSTITUTE A WAIVER OF LESSEE'S DEFAULT
OR BREACH WITH RESPECT TO ANY UNPAID OVERDUE AMOUNTS, NOR PREVENT LESSOR FROM
EXERCISING ANY OF THE OTHER RIGHTS AND REMEDIES GRANTED UNDER THIS LEASE, AT LAW
OR IN EQUITY. NOTWITHSTANDING THE FOREGOING, HOWEVER, THE ABOVE-REFERENCED LATE
CHARGE SHALL NOT BE IMPOSED ON ADDITIONAL PAYMENTS SO LONG AS LESSEE IS
CONTESTING SUCH ADDITIONAL PAYMENTS IN ACCORDANCE WITH ARTICLE XII BELOW.
/s/ WLS /s/ MWO
INITIAL: LESSOR__________________ LESSEE______________
ARTICLE IV
4.1. Payment of Impositions. Subject to ARTICLE XII relating to
permitted contests, during the Term Lessee will pay, or cause to be paid, all
Impositions, before any fine, penalty, interest or cost may be added for
non-payment. Lessee, at its expense, shall, to the extent required or permitted
by Legal Requirements, prepare and file all tax returns and reports in respect
of any Imposition as may be required by governmental authorities. Any refund due
from any taxing authority in respect of any Imposition shall be paid over to or
retained by Lessee provided no Event of Default then exists, but if an Event of
Default has occurred and is continuing, such refund shall be paid over to
Lessor, and Lessee hereby authorizes Lessor to accept any such refunds directly,
and hereby authorizes any such taxing authority to pay such amounts directly to
Lessor upon receipt of written instructions to do so together with a statement
by Lessor that an Event of Default has occurred and is continuing. Any such
funds retained by Lessor due to an Event of Default shall be applied as provided
in ARTICLE XVI. Lessor and Lessee shall, upon request of the other, provide such
data as is maintained by the party to whom the request is made with respect to
the Leased Property as may be necessary to prepare any required returns and
reports. In the event governmental authorities classify any property covered by
this Lease as personal property, Lessee shall file personal property tax returns
in such jurisdictions where required. Lessor, to the extent it possesses the
same, and Lessee, to the extent it possesses the same, will provide the other
party, upon request, with cost and depreciation records necessary for filing
returns for any property so classified as personal property. Where Lessor is
legally required to file personal property tax returns, Lessee will be provided
with copies of assessment notices indicating a value in excess of the reported
value in sufficient time for Lessee to file a protest. Lessee may, upon notice
to Lessor, at Lessee's option and at Lessee's sole cost and expense, protest,
appeal or institute such other proceedings as Lessee may deem appropriate to
effect a reduction of real estate or personal property assessments and Lessor,
at Lessee's expenses as aforesaid, shall reasonably cooperate with Lessee in
such protest, appeal, or other action, provided that Lessee may not withhold
payments pending such challenges except under the conditions set forth in
ARTICLE XII. ▇▇▇▇▇▇▇▇ for reimbursement by Lessee to Lessor of personal property
taxes shall be accompanied by copies of a ▇▇▇▇ therefor and payments thereof
which identify the personal property with respect to which such payments are
made.
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4.2. Notice of Impositions. Upon its receipt of same, Lessor shall
give prompt Notice to Lessee for all Impositions payable by Lessee hereunder of
which Lessor obtains actual knowledge, but Lessor's failure to give any such
Notice shall in no way diminish Lessee's obligations hereunder to pay such
Impositions but such failure shall obviate any default hereunder for a
reasonable time after Lessee receives notice (from any source) of any Imposition
which it is obligated to pay. However, notwithstanding the foregoing, it shall
be Lessee's sole duty to inquire and determine all of the Impositions for which
it is liable as provided herein and shall promptly pay such Impositions when
due, and Lessor shall have no duty of inquiry concerning Impositions.
4.3. Adjustment of Impositions. Impositions imposed in respect of
the tax-fiscal periods during which the Term commences and terminates shall be
adjusted and prorated between Lessor and Lessee, whether or not such Imposition
is imposed before or after such commencement or termination, and Lessee's
obligation to pay its prorated share thereof after termination shall survive
such termination.
4.4. Utility Charges. Lessee will pay or cause to be paid all
charges for electricity, power, gas, oil, water and other utilities used in the
Leased Property and all operating expenses of every kind and nature during the
Term.
4.5. Insurance Premiums. Lessee will pay or cause to be paid all
premiums for the insurance coverages required to be maintained pursuant to
ARTICLE XIII during the Term.
ARTICLE V
5. Facility Mortgage Offset. Should Lessor default under the terms
of any Facility Mortgage, or should Lessor's representations and warranties set
forth in SECTION 1.1 be untrue and Lessee's leasehold estate is jeopardized as a
result thereof, and, provided no Event of Default hereunder exists, Lessee shall
have the right, but not the obligation, to perform Lessor's obligations under
any such Facility Mortgage and offset the amounts expended thereunder against
the payment of Minimum Rent. No other offset against the payment of Minimum Rent
(or any other Rent) of any kind is permitted.
ARTICLE VI
6.1. Ownership of the Leased Property. Lessee acknowledges and
agrees that the Leased Property is the property of Lessor and that Lessee has
only the right to the exclusive possession and use of the Leased Property upon
the terms and conditions of this Lease. Lessee acknowledges and agrees that this
Lease does not grant an option or any other type of right to purchase the Leased
Property from Lessor and that any such purchase by Lessee must be separately
negotiated and documented.
6.2. Lessee's Personal Property. Lessee may (and shall as provided
hereinbelow), at its expense, install, affix or assemble or place on any parcels
of the Land or in any of the Leased Improvements, any items of Lessee's
Personal Property, and Lessee may, subject to the conditions set forth below,
remove the same upon the expiration or any prior termination of the Term. Lessee
shall provide and maintain during the Term all such Lessee's
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Personal Property as shall be necessary in order to operate each Facility in
compliance with all licensure Legal Requirements and Insurance Requirements. All
of Lessee's Personal Property not removed by Lessee within thirty (30) days
following the expiration or earlier termination of this Lease shall be
considered abandoned by Lessee and may be used, appropriated, sold, destroyed or
otherwise disposed of by Lessor without first giving notice thereof to Lessee
and without any payment to Lessee and without any obligation to account
therefor. Lessee shall, at its expense, restore the Leased Property to the
condition required by SECTION 9.1, including repair of all damage to the Leased
Property caused by the removal of Lessee's Personal Property, whether effected
by Lessee or Lessor.
ARTICLE VII
7.1. Condition of Leased Property. Lessee acknowledges receipt and
delivery of possession of the Leased Property and that Lessee has examined and
otherwise has knowledge of the condition of the Leased Property prior to the
execution and delivery of this Lease. Subject to Lessor's representations set
forth in SECTION 1.1, upon which Lessee is relying, Lessee accepts that the
Leased Property as is. To the extent permitted by law, Lessor hereby assigns to
Lessee, all of Lessor's rights to proceed against any predecessor in title (but
not against Lessor except as a result of breaches of representations and
warranties set forth in this Lease) for breaches of warranties or
representations, or for latent defects in the Leased Property. Lessor shall
reasonably cooperate with Lessee in the prosecution of any such claim, in
Lessor's or Lessee's name, all at Lessee's sole cost and expense; provided,
however, that all compensatory damages shall be used by Lessee for repair or
replacement of the items for which compensation was granted.
7.2. Use of the Leased Property.
7.2.1 Lessee covenants that it will proceed with due diligence
and will exercise commercially reasonable efforts to obtain and to maintain all
approvals needed to use and operate the Leased Property and each Facility in
accordance with Legal Requirements.
7.2.2 During the Term, Lessee shall use or cause to be used
the Facilities as assisted living or residential care facilities, and for such
other uses as may be necessary or incidental to such use (the particular such
use to which the Leased Property is put is herein referred to as the "PRIMARY
INTENDED USE"). Lessee shall not use the Leased Property or any portion thereof
for any use other than the Primary Intended Use without the prior written
consent of Lessor, which consent may be withheld in Lessor's sole and absolute
discretion; provided, however, that Lessor may not unreasonably withhold its
consent to any alternate use that is within the long term care industry. No use
shall be made of the Leased Property, and no acts shall be done, which will
cause the cancellation of any insurance policy covering the Leased Property or
any part thereof, nor shall Lessee sell or otherwise provide to residents or
patients therein, or permit to be kept, used or sold in or about the Leased
Property any article which may be prohibited by Insurance Requirements or Legal
Requirements. Lessee shall, at its sole cost, comply with all Insurance
Requirements and Legal Requirements.
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7.2.3 Lessee covenants and agrees that during the Term it will
operate continuously the Leased Property in accordance with its Primary Intended
Use and will maintain its certifications for reimbursement and its licensure.
7.2.4 Lessee shall not commit or suffer to be committed any
waste on the Leased Property, or in any Facility, nor shall Lessee cause or
permit any nuisance thereon. Lessor acknowledges that Lessee's operation of the
Facilities in accordance with the Primary Intended Use will not constitute waste
or nuisance.
7.2.5 Lessee shall neither suffer nor permit the Leased
Property or any portion thereof, including Lessee's Personal Property, to be
used in such a manner as it might reasonably tend to impair Lessor's (or
Lessee's, as the case may be) title thereto or to any portion thereof, or (ii)
may reasonably make possible a claim or claims of adverse usage or adverse
possession by the public, as such, or of implied dedication of the Leased
Property or any portion thereof.
7.3. Lessor to Grant Easements, etc. Lessor will, from time to time
so long as no Event of Default exists, at the request of Lessee and at Lessee's
sole cost and expense (but subject to Lessor's approval), (i) grant easements
and other rights in the nature of easements with respect to the Leased Property
to third parties, (ii) release existing easements or other rights in the nature
of easements which are for the benefit of the Leased Property, (iii) dedicate or
transfer unimproved portions of the Leased Property for road, highway or other
public purposes, (iv) execute petitions to have the Leased Property annexed to
any municipal corporation or utility district, (v) execute amendments to any
covenants and restrictions affecting the Leased Property and (vi) execute and
deliver to any person any instrument appropriate to confirm or effect such
grants, releases, dedications, transfers, petitions and amendments (to the
extent of its interests in the Leased Property), but only upon delivery to
Lessor of a signed affidavit by an executive officer or equivalent person of
authority at Lessee stating that such grant, release, dedication, transfer,
petition or amendment is (a) reasonably required for the continued operation of
the Leased Property in accordance with the Primary Intended Use, (b) not
detrimental to the proper conduct of the business of Lessee on the Leased
Property and (c) does not reduce the value of the Leased Property.
ARTICLE VIII
8.1. Compliance with Legal and Insurance Requirements, Instruments,
etc. Subject to ARTICLE XII relating to permitted contests, Lessee, at its
expense, will, during the Term, (a) comply with all Legal Requirements and
Insurance Requirements in respect of the use, operation, maintenance, repair and
restoration of the Leased Property, whether or not compliance therewith requires
structural changes in any of the Leased Improvements or interfere with the use
and enjoyment of the Leased Property and (b) procure, maintain and comply with
all licenses, certificates of need, provider agreements and other authorizations
required for any use of the Leased Property and/or Lessee's Personal Property
then being made, and for the proper erection, installation, operation and
maintenance of the Leased Property or any part thereof.
8.2. Legal Requirements Covenants. Lessee shall acquire and maintain
all licenses, certificates, permits, provider agreements and other
authorizations and approvals needed
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to operate the Leased Property in its customary manner for the Primary Intended
Use. Lessee further covenants and agrees to perform all maintenance and
alterations necessary to operate the Leased Property in accordance with all
Legal Requirements and Insurance Requirements. Lessee, may, however, contest the
legality or applicability of any such law, ordinance, rule or regulation, or any
licensure or certification decision if Lessee maintains such action in good
faith, with due diligence, without prejudice to Lessee's rights hereunder, and
at Lessee's sole cost and expense. If by the terms of any such law, ordinance,
rule or regulation, compliance therewith pending the prosecution of any such
proceeding may legally be delayed without the occurrence of any fine, charge or
liability of any kind against the Leased Property or Lessee's leasehold interest
therein and without subjecting Lessee or Lessor to any liability, civil or
criminal, for failure so to comply therewith, Lessee may delay compliance
therewith until the final determination of such proceeding. If any lien, charge
or civil or criminal liability would be incurred by reason of any such delay,
Lessee, on the prior written consent of Lessor, may nonetheless contest as
aforesaid and delay as aforesaid provided that such delay would not subject
Lessor to criminal liability and Lessee both (a) furnishes to Lessor security
satisfactory to Lessor (in its sole and absolute discretion) against any loss or
injury by reason of such contest or delay, and (b) prosecutes the contest with
due diligence and in good faith.
ARTICLE IX
9.1. Maintenance and Repair.
9.1.1 Lessee, at its sole expense, will, during the Term, keep
the Leased Property and all private roadways, sidewalks and curbs appurtenant
thereto and which are under Lessee's control (and Lessee's Personal Property) in
good order and repair (whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of the Leased
Property, or any portion thereof), and, except as provided in ARTICLE XIV, with
reasonable promptness, make all necessary and appropriate repairs thereto of
every kind and nature, whether interior or exterior, structural or
non-structural, ordinary or extraordinary, foreseen or unforeseen or arising by
reason of a condition existing prior to or during the Term, provided, however,
that Lessee shall be permitted to prosecute claims against Lessee's predecessors
(but not Lessor except as herein provided) in title for (i) breach of any
representation or warranty, or (ii) any latent defects in the Leased Property.
All repairs shall be at least equivalent in quality to the original work. Lessee
will not take or omit to take any action the taking or omission of which might
materially impair the value or the usefulness of the Leased Property or any part
thereof for its Primary Intended Use.
9.1.2 Lessor shall not under any circumstances be required to
build or rebuild any improvements on the Leased Property, or to make any
repairs, replacements, alterations, restorations or renewals of any nature or
description to the Leased Property, whether ordinary or extraordinary,
structural or non-structural, foreseen/unforeseen, in connection with this
Lease, or to maintain the Leased Property in any way. Lessee hereby waives, to
the extent permitted by law, the right to make repairs at the expense of Lessor
pursuant to any law in effect at the time of the execution of this Lease or
hereafter enacted. Lessor shall have the right to give, record and post, as
appropriate, notices of non-responsibility (or similar notices) under any
mechanics' lien laws now or hereafter existing.
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9.1.3 Lessee shall not make any modifications, alterations or
improvements to the Leased Improvements or any portion thereof, whether by
addition or deletion, without Lessor's prior written consent, which consent may
be given or withheld in Lessor's reasonable discretion; provided, however, that
Lessor's consent shall not be required in connection with any non-structural
modifications, alterations or improvements that do not constitute capital
improvements and that are otherwise made in compliance with this Lease, so long
as the total cost thereof, with respect to any single Facility, does not exceed
$50,000 and the total cost with respect to any single Facility in any twelve
(12) month period does not exceed $100,000. Nothing contained in this Lease and
no action or inaction by Lessor shall be construed as constituting the consent
or request of Lessor, expressed or implied, to any contractor, subcontractor,
laborer, materialman or vendor to or for the performance of any labor or
services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to the Leased
Property or any part thereof, or (ii) giving Lessee any right, power or
permission to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against Lessor in respect thereof or to make any
agreement that may create, or in any way be the basis for any right, title,
interest, lien, claim or other encumbrance upon the estate of Lessor in the
Leased Property, or any portion thereof.
9.1.4 Lessee will, upon the expiration or prior termination of
the Term, vacate and surrender the Leased Property to Lessor in the condition in
which the Leased Property was originally received from Lessor, except as
repaired, rebuilt, restored, altered or added to as permitted or required by the
provisions of this Lease, and except for ordinary wear and tear (subject to the
obligation of Lessee to maintain the Leased Property in good order and repair
during the Term).
9.2. Expenditures to Comply with Law. Without limiting Lessee's
obligations as set forth elsewhere in this Lease, during the Term, Lessee will,
at its sole cost and expense, make whatever expenditures (including but not
limited to capital and non-capital expenditures) that are required to conform
the Leased Property to such standards as may from time to time be required by
Legal Requirements, or capital improvements required by any governmental agency
having jurisdiction over the Leased Property as a condition of the continued
operation of the Leased Property for its Primary Intended Use, pursuant to
present or future Legal Requirements.
9.3. Encroachments, Restrictions. If any of the Leased Improvements
shall, at any time during the Term encroach upon any property, street or
right-of-way adjacent to the Leased Property, or shall violate the agreements or
conditions contained in any lawful restrictive covenant or other agreement
affecting the Leased Property, or any part thereof, or shall impair the rights
of others under any easement or right-of-way to which the Leased Property is
subject, then promptly upon the request of Lessor or at the behest of any person
affected by any such encroachment, violation or impairment, Lessee shall, at its
sole cost and expense, (and after Lessor's prior approval) subject to Lessee's
right to ▇▇▇ ▇▇▇▇▇▇'▇ predecessor in title (but not Lessor) with respect thereto
or contest the existence of any encroachment, violation or impairment and in
such case, in the event of an adverse final determination, either (i) obtain
valid and effective waivers or settlements of all claims, liabilities and
damages resulting from each such encroachment, violation or impairment, whether
the same shall affect Lessor or the Leased Property or (ii) make such changes in
the Leased Improvements, and take such other actions, as
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Lessee in the good faith exercise of its judgment deems reasonably practicable
and necessary, to remove such encroachment, and to end such violation or
impairment, including, if necessary, the alteration of any of the Leased
Improvements, and in any event take all such actions as may be necessary in
order to be able to continue the operation of the Leased Improvements for the
Primary Intended Use substantially in the manner and to the extent the Leased
Improvements were operated prior to the assertion of such violation, impairment
or encroachment. Any such alteration shall be made in conformity with the
applicable requirements of ARTICLE IX. Lessee's obligations under this SECTION
9.3 shall be in addition to and shall in no way discharge or diminish any
obligation of any insurer under any policy of title or other insurance.
ARTICLE X
10.1. Lessee's Obligations for Hazardous Materials. Lessee shall,
during the Term, at its sole cost and expense, take all actions as required to
cause the Leased Property including, but not limited to, the Land and all Leased
Improvements, to be free and clear of the presence of all Hazardous Materials
(defined below); provided, however, that Lessee shall be entitled to use and
maintain de minimus amounts of Hazardous Materials on the Leased Property in
connection with Lessee's business and in compliance with all applicable laws.
Lessee shall, upon its discovery, belief or suspicion of the presence of
Hazardous Materials on, in or under any part of the Leased Property, including,
but not limited to, the Land and all Leased Improvements, immediately notify
Lessor and, at its sole cost and expense cause any such Hazardous Materials to
be removed immediately, in compliance with all applicable laws and in a manner
causing the least disruption of or interference with the operation of Lessee's
business. Lessee shall fully indemnify, protect, defend and hold harmless Lessor
from any costs, damages, claims, liability or loss of any kind or nature arising
out of or in any way in connection with the presence, suspected presence,
removal or remediation of Hazardous Materials in, on, or about the Leased
Property, or any part thereof. Without limiting Lessee's other obligations under
this Lease, Lessee agrees, at Lessee's sole cost, to fully comply with all
recommendations set forth in any environmental report(s) that may be obtained by
or provided to Lessor or Lessee. Lessee's obligations hereunder shall apply to
all Hazardous Materials, irrespective of whether the existence of such Hazardous
Materials is known by Lessor and no matter when they arose or were discovered
and therefore will include any Hazardous Materials that existed prior to, at, or
after the Commencement Date and during the Term.
10.2. Definition of Hazardous Materials. For purposes of this Lease,
Hazardous Materials shall mean any biologically or chemically active or other
toxic or hazardous wastes, pollutants or substances, including, without
limitation, asbestos, PCBs, petroleum products and by-products, substances
defined or listed as "hazardous substances" or "toxic substances" or similarly
identified in or pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., as amended, and
as hazardous wastes under the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6010, et seq., any chemical substance or mixture regulated under the
Toxic Substance Control Act of 1976, as amended, 15 U.S.C.; 2601 et seq., any
"toxic pollutant" under the Clean Water Act, 33 U.S.C. Section 466 et seq., as
amended, any hazardous air pollutant under the Clean Air Act, 42 U.S.C. Section
7401 et seq., hazardous materials identified in or pursuant to the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1802, et seq., and any hazardous
or toxic substances or pollutant regulated under any other Legal Requirements.
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ARTICLE XI
11. Liens. Subject to the provisions of ARTICLE XII relating to permitted
contests, Lessee will not directly or indirectly create or allow to remain and
will promptly discharge at its expense any lien, encumbrance, attachment, title
retention agreement or claim upon any part of the Leased Property or any
attachment, levy, claim or encumbrance in respect of the Rent, not including,
however, (a) this Lease, (b) restrictions, liens and other encumbrances which
are consented to in writing by Lessor or any easements granted pursuant to the
provisions of SECTION 7.3 of this Lease, (c) liens for those taxes of Lessor
which Lessee is not required to pay hereunder, (d) subleases permitted by
ARTICLE XXII, (e) liens for Impositions or for sums resulting from noncompliance
with any Legal Requirements so long as (1) the same are not yet payable or are
payable without the addition of any fine or penalty or (2) such liens are in the
process of being contested as permitted by ARTICLE XII, (f) liens of mechanics,
laborers, materialmen, suppliers or vendors for sums either disputed or not yet
due, provided that any such liens are in the process of being contested as
permitted by ARTICLE XII, or (g) any lien, encumbrance, attachment, title
retention agreement or claim upon any part of the Leased Property or any
attachment, levy, claim or encumbrance in respect of the Rent arising by,
through or under Lessor.
ARTICLE XII
12. Permitted Contests. Lessee shall have the right to contest the amount
or validity of any Imposition or any Legal Requirement or Insurance Requirement
or any attachment, levy, encumbrance, charge or claim ("CLAIMS") not otherwise
permitted by ARTICLE XI, by appropriate legal proceedings in good faith and with
due diligence (but this shall not be deemed or construed in any way as
relieving, modifying or extending Lessee's covenants to pay or its covenants to
cause to be paid any such charges at the time and in the manner as in this Lease
provided), on condition, however, that such legal proceedings cannot result in
the sale of the Leased Property, or any part thereof, to satisfy the same or
cause Lessor or Lessee to be in default under any mortgage or deed of trust
encumbering any portion of the Leased Property or any interest therein. Upon the
reasonable request of Lessor, Lessee shall provide to Lessor reasonable security
satisfactory to Lessor to assure the payment of all Claims which may be assessed
against the Leased Property together with interest and penalties, if any,
thereon. Lessor agrees to join in any such proceedings (at Lessee's sole cost
and expense) if the same be required to legally prosecute such contest of the
validity of such Claims; provided, however, that Lessor shall not thereby be
subjected to any liability for the payment of any costs or expenses in
connection with any proceedings brought by Lessee; and Lessee shall indemnify
and save harmless Lessor from any such costs or expenses, including reasonable
attorneys' fees and costs incurred by Lessor. In the event that Lessee fails to
pay any Claims when due or, upon Lessor's request, to provide the security
therefor as provided in this ARTICLE XII and to diligently prosecute any contest
of the same, Lessor may, upon thirty (30) days advance written Notice to Lessee,
pay such charges together with any interest and penalties and the same shall be
repayable to Lessee to Lessor at the next Payment Date provided for in this
Lease. Provided, however, that should Lessor reasonably determine that the
giving of such Notice would risk loss to the Leased Property or impair the value
of the Leased Property or in any way cause damage to Lessor, then Lessor shall
give such written Notice as is practical under the circumstances. Lessee shall
be entitled to any refund of
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any Claims and such charges and penalties or interest thereon which have been
paid by Lessee or paid by Lessor and for which Lessor has been fully reimbursed.
ARTICLE XIII
13.1. General Insurance Requirements. Subject to the provisions of
SECTION 13.8, during the Term, Lessee shall at all times keep the Leased
Property, and all property located in or on the Leased Property, including
Lessee's Personal Property, insured with the kinds and amounts of insurance
described below and any additional insurance reasonably required by Lessor to
protect its interest in the Leased Property. This insurance shall be written by
companies authorized to do insurance business in the States in which the Leased
Property is located. The policies must name Lessor as an additional insured
and/or loss payee, as applicable. Losses shall be payable to Lessor or Lessee as
provided in ARTICLE XIV. In addition, upon Lessor's written request, the
policies shall name as an additional insured and/or loss payee, as applicable,
the holder ("FACILITY MORTGAGEE") of any mortgage, deed of trust or other
security agreement and any other Encumbrance placed on the Leased Property in
accordance with the provisions of ARTICLE XXXII and expressly including, without
limitation, the Existing Encumbrances (a "FACILITY MORTGAGE") by way of a
standard form of mortgagee's loss payable endorsement. Any loss adjustment shall
require the written consent of Lessor, Lessee, and each Facility Mortgagee.
Evidence of insurance shall be deposited with Lessor and, if requested, with any
Facility Mortgagee. If any provision of any Facility Mortgage requires deposits
of premiums for insurance to be made with such Facility Mortgagee, Lessee shall
either pay to Lessor monthly the amounts required and Lessor shall transfer such
amounts to each Facility Mortgagee, or, pursuant to written direction by Lessor,
Lessee shall make such deposits directly with such Facility Mortgagee. The
policies on the Leased Property, including the Leased Improvements, Fixtures and
Lessee's Personal Property, shall insure against the following risks:
13.1.1 Insurance against loss or damage by fire, casualty and
other hazards as now are or subsequently may be covered by an "all risk" policy
or a policy covering "special" causes of loss, with such endorsements as Lessor
(or a Facility Mortgagee) may from time to time reasonably require and which are
customarily required by institutional lenders of similar properties similarly
situated, including, without limitation, building ordinance law, lightning,
windstorm, civil commotion, hail, riot, strike, water damage, sprinkler leakage,
collapse, malicious mischief, explosion, smoke, aircraft, vehicles, vandalism,
falling objects and weight of snow, ice or sleet, and covering the Leased
Property in an amount equal to 100% of the full insurable replacement value of
the Leased Property (exclusive of footings and foundations below the lowest
basement floor) without deduction for depreciation. The determination of the
replacement cost amount shall be adjusted annually to comply with the
requirements of the insurer issuing the coverage or, at Lessor's (or a Facility
Mortgagee's) election, by reference to such indexes, appraisals or information
as Lessor's (or a Facility Mortgagee's) determines in its reasonable discretion,
and, unless the insurance required by this paragraph shall be effected by
blanket and/or umbrella policies in accordance with the requirements of this
Lease, the policy shall include inflation guard coverage that ensures that the
policy limits will be increased over time to reflect the effect of inflation.
Each policy shall, subject to Lessor's (or a Facility Mortgagee's) approval,
contain (i) a replacement cost endorsement, without deduction for depreciation,
(ii) either an agreed amount endorsement or a waiver of any co-insurance
provisions, and (iii) an ordinance or law coverage or enforcement endorsement if
the
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Improvements or the use of the Property constitutes any legal nonconforming
structures or uses, and shall provide for deductibles in such amounts as Lessor
(or a Facility Mortgagee) may permit in its sole discretion.;
13.1.2 If the Leased Property contains steam boilers, steam
pipes, steam engines, steam turbines or other high pressure vessels, insurance
covering the major components of the central heating, air conditioning and
ventilating systems, boilers, other pressure vessels, high pressure piping and
machinery, elevators and escalators, if any, and other similar equipment
installed in the Leased Improvements, in an amount equal to one hundred percent
(100%) of the full replacement cost of the Leased Improvements, which policies
shall insure against physical damage to and loss of occupancy and use of the
Leased Improvements arising out of an accident or breakdown covered thereunder;
13.1.3 Business and rental interruption insurance (i) covering
the same perils of loss as are required to be covered by the property insurance
required under SECTION 13.1.1 AND 13.1.2 above, (ii) in an amount equal to the
projected annual net income from the Leased Property plus carrying costs and
extraordinary expenses of the Leased Property for a period of twelve (12)
months, based upon Lessee's reasonable estimate thereof as approved by Lessor
(or a Facility Mortgagee), (iii) including either an agreed amount endorsement
or a waiver of any co-insurance provisions, so as to prevent Lessee, Lessor and
any other insured thereunder from being a co-insurer, and (iv) providing that
any covered loss thereunder shall be payable to Lessor;
13.1.4 Commercial general liability insurance under a policy
containing "Comprehensive General Liability Form" of coverage (or a comparably
worded form of coverage) and the "Broad Form CGL" endorsement (or a policy which
otherwise incorporates the language of such endorsement), which policy shall
include, without limitation, coverage against claims for personal injury, bodily
injury, death and property damage liability without respect to the Leased
Property and the operations related thereto, whether on or off the Leased
Property, and the following coverages: Employee as Additional Insured, Product
Liability/Completed Operations; Broad Form Contractual Liability, Independent
Contractor, Personal Injury and Advertising Injury Protection, Medical Payment
(with a minimum limit of $5,000 per person), Broad Form Cross Suits Liability
Endorsement, where applicable, hired and non-owned automobile coverage
(including rented and leased vehicles), and, if any alcoholic beverages shall be
sold, manufactured or distributed in the Leased Property, liquor liability
coverage, all of which shall be in such amounts as Lessor may from time to time
reasonably require, but not less than One Million Dollars ($1,000,000) per
occurrence, and Five Million Dollars ($5,000,000) in the aggregate. If such
policy shall cover more than one Facility, such limits shall apply on a "per
location" basis. If any swimming pool is located at any Facility in the future,
umbrella coverage shall be provided in the amount of Ten Million Dollars
($10,000,000). Such liability policy shall delete the contractual exclusion
under the personal injury coverage, if possible, and if available, shall include
the following endorsements: Notice of Accident, Knowledge of Occurrence, and
Unintentional Error and Omission;
13.1.5 Professional liability insurance coverage in an amount
equal to not less than One Million Dollars ($1,000,000) per occurrence and Five
Million Dollars ($5,000,000) in the aggregate;
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13.1.6 Flood insurance in an amount equal to the full
insurable value of the Leased Property or the maximum amount available,
whichever is less, if the Leased Property is located in an area designated by
the Secretary of Housing and Urban Development or the Federal Emergency
Management Agency as having special flood hazards; and
13.1.7 Workers' compensation insurance and/or other similar
insurance which may be required by governmental authorities or applicable legal
requirements in an amount at least equal to the minimum required by law, and
employer's liability insurance with a limit of One Hundred Thousand Dollars
($100,000) per accident and per disease per employee, and Five Hundred Thousand
Dollars ($500,000) in the aggregate for disease arising in connection with the
operation of the Leased Property; and
13.1.8 During the period of any new construction on the Leased
Property, a so-called "Builder's All-Risk Completed Value" or "Course of
Construction" insurance policy in non-reporting form for any improvements under
construction, including, without limitation, for demolition and increased cost
of construction or renovation, in an amount equal to 100% of the estimated
replacement cost value on the date of completion, including "soft cost"
coverage, and Workers' Compensation Insurance covering all persons engaged in
such construction, in an amount at least equal to the minimum required by law.
In addition, each contractor and subcontractor shall be required to provide
Facility Mortgagee with a certificate of insurance for (i) workers' compensation
insurance covering all persons engaged by such contractor or subcontractor in
such construction in an amount at least equal to the minimum required by law,
and (ii) general liability insurance showing minimum limits of at least
$5,000,000, including coverage for products and completed operations. Each
contractor and subcontractor also shall cover Lessee and Lessor (and any
Facility Mortgagee) as an additional insured under such liability policy and
shall indemnify and hold Lessee and Lessor (and any Facility Mortgagee) harmless
from and against any and all claims, damages, liabilities, costs and expenses
arising out of, relating to or otherwise in connection with its performance of
such construction.
13.2. Replacement Cost. The term "full replacement cost" as used
herein, shall mean the actual replacement cost of the Leased Property requiring
replacement from time to time including an increased cost of construction
endorsement, less exclusions provided in the standard form of fire insurance
policy. In the event either party believes that full replacement cost (the then
replacement cost less such exclusions) has increased or decreased at any time
during the Term, it shall have the right to have such full replacement cost
redetermined.
13.3. Additional Insurance. In addition to the insurance described
above, Lessee shall maintain such additional insurance as may be reasonably
required from time to time by Lessor or any Facility Mortgagee and shall further
at all times maintain, to the extent required by applicable law, worker's
compensation insurance coverage (including self-insurance) for all persons
employed by Lessee (or its agent or operator) on the Leased Property.
13.4. Waiver of Subrogation. All insurance policies carried by
either party covering any part of the Leased Property, the Fixtures, the
Facilities, or Lessee's Personal Property including without limitation,
contents, fire and casualty insurance, shall expressly waive any right of
subrogation on the part of the insurer against the other party. The parties
hereto agree that their policies will include such waiver clause or endorsement
so long as the same are
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obtainable without extra cost, and in the event of such an extra charge the
other party, at its election, may pay the same, but shall not be obligated to do
so.
13.5. Form Satisfactory, etc. All of the policies of insurance
referred to in this ARTICLE XIII shall be written in a form reasonably
satisfactory to Lessor and by insurance companies reasonably satisfactory to
Lessor (and, as applicable, any Facility Mortgagee). Subject to the foregoing,
Lessor agrees that it will not unreasonably withhold or delay its approval as to
the form of the policies of insurance or as to the insurance companies selected
by Lessee. Lessee shall pay all of the premiums therefor, and deliver such
policies or certificates thereof to Lessor prior to their effective date (and,
with respect to any renewal policy, prior to the expiration of the existing
policy), and in the event of the failure of Lessee either to effect such
insurance as herein called for or to pay the premiums therefor, or to deliver
such policies or certificates thereof to Lessor at the times required, Lessor
shall be entitled, but shall have no obligation, to effect such insurance and
pay the premiums therefor, which premiums shall be repayable by Lessee to Lessor
upon written demand therefor, and failure to repay the same shall constitute an
Event of Default within the meaning of SECTION 16.1. Each insurer mentioned in
this ARTICLE XIII shall agree, by endorsement on the policy or policies issued
by it, or by independent instrument furnished to Lessor, that it will give to
Lessor (and to any Facility Mortgagee, if required by the same) thirty (30)
days' written notice before the policy or policies in questions shall be
altered, allowed to expire or canceled.
13.6. Increase in Limits. In the event that a Facility Mortgagee
shall at any time reasonably determine the limits of the personal injury or
property damage, or public liability insurance then carried to be insufficient,
Lessee shall thereafter carry the insurance with increased limits until further
change pursuant to the provisions of this Section; provided that if Lessor
desires to increase the limits of insurance, and such is not pursuant to the
request of a Facility Mortgagee, then Lessor may not demand an increase in
limits above the limits generally consistent with the requirements of owners of
long term care properties in the state in which the applicable Facility is
located.
13.7. Blanket Policy. Notwithstanding anything to the contrary
contained in this ARTICLE XIII, Lessee's obligations to carry the insurance
provided for herein may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Lessee; provided,
however, that the coverage afforded Lessor will not be reduced or diminished or
otherwise be different from that which would exist under a separate policy
meeting all other requirements of this Lease by reason of the use of such
blanket policy of insurance, and provided further that the requirements of this
ARTICLE XIII shall be met in any such blanket policy.
13.8. No Separate Insurance. Lessee shall not on Lessee's own
initiative or pursuant to the request or requirement of any third party take out
separate insurance concurrent in form or contributing in the event of loss with
that required in this Article, to be furnished or which may reasonably be
required to be furnished, by Lessee or increase the amount of any then existing
insurance by securing any additional policy or additional policies, unless all
parties having an insurable interest in the subject matter of the insurance,
including in all cases Lessor and all Facility Mortgagees are included therein
as additional insureds, and the loss is payable under said insurance in the same
manner as losses are payable under the Lease. Lessee shall
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immediately notify Lessor of the taking out of any such separate insurance or of
the increasing of any of the amount of the then existing insurance.
13.9. Continuous Coverage. Prior to the Commencement Date, Lessee
was the tenant and operator of the Leased Property, and prior to that, Lessee
was the owner and operator of the Leased Property. Therefore, Lessee already has
in place insurance with respect to the Leased Property. Lessee shall assure that
there is no gap in the insurance coverage provided in connection with the Leased
Property at or after the Commencement Date, and therefore, the insurance
provided by Lessee shall be continuous, with the types and amounts of coverage,
described herein to be applicable on the Commencement Date. To the extent there
is not full, complete and continuous coverage for all issues, no matter when
arising, claimed or occurring, Lessee shall, at its sole cost, obtain such
insurance.
ARTICLE XIV
14.1. Insurance Proceeds. Subject to the rights of any Facility
Mortgagee, all proceeds payable by reason of any loss of or damage to the Leased
Property, or any portion thereof, which is insured under any policy of insurance
required by ARTICLE XIII of the Lease, where the total proceeds paid by the
insurer are less than $150,000.00, shall be paid to Lessee and applied to the
reconstruction or repair, as the case may be, of any damage to or destruction of
the Leased Property, or any portion thereof. All proceeds payable by reason of
any loss of or damage to the Leased Property, or any portion thereof, which is
insured under any policy of insurance required by ARTICLE XIII of this Lease
where the total proceeds paid by the insurer are equal to or in excess of
$150,000.00 shall be paid to Lessor and held by Lessor in trust and shall be
made available for reconstruction or repair, as the case may be, of any damage
to or destruction of the Leased Property, or any portion thereof, and shall be
paid out by Lessor from time-to-time for the reasonable costs of such
reconstruction or repair. Any excess proceeds of insurance remaining after the
completion of the restoration or reconstruction of the Leased Property shall go
to Lessee, provided the Lease is in force and there exists no uncured Event of
Default; otherwise such excess shall be paid to Lessor for application as set
forth in ARTICLE XVI hereof. All insurance proceeds that are awarded and not
applied to the restoration or repair of the Leased Property shall be retained by
Lessor. All salvage resulting from any risk covered by insurance shall belong to
Lessor except that any salvage relating to Lessee's Personal Property shall
belong to Lessee.
14.2. Reconstruction in the Event Damage of Destruction Covered by
Insurance Proceeds.
14.2.1 If during the Term, the Leased Property is totally or
partially destroyed by a risk covered by the insurance described in ARTICLE XIII
and whether or not any Facility thereby is rendered Unsuitable for its Primary
Intended Use, Lessee shall restore the Leased Property to substantially the same
condition as existed immediately before the damage or destruction. Lessee shall
be entitled to the insurance proceeds for the purpose of such repair and
restoration. Lessor shall apply or make available to Lessee insurance proceeds
received by it towards the costs of such repair and restoration.
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14.2.2 If the cost of the repair or restoration exceeds the
amount of proceeds received by Lessee or Lessor from the insurance required
under ARTICLE XIII as provided in SECTION 14.1, above, Lessee shall be
obligated, prior to commencing the repair and restoration, to contribute any
excess amount needed to restore the Leased Property or to provide Lessor with
satisfactory evidence that such funds are, and throughout the entire period of
reconstruction will be, available. If Lessee contributes such excess in cash,
such excess shall be paid by Lessee to Lessor to be held in trust, together with
any insurance proceeds, for application to the cost of repair and restoration.
14.3. Reconstruction in the Event of Damage of Destruction Not
Covered by Insurance. If during the Term, the Leased Property is damaged or
destroyed irrespective of the extent of the damage from a risk not covered by
the insurance described in ARTICLE XIII, whether or not such damage renders any
portion of the Leased Property Unsuitable for Its Primary Intended Use, Lessee
shall restore the damaged Leased Property to substantially the same condition it
was in immediately before such damage or destruction and such damage or
destruction shall not terminate this Lease nor result in any reduction in Rent
(including without limitation Minimum Rent).
14.4. Lessee's Property. All insurance proceeds payable by reason of
any loss of or damage to any of Lessee's Personal Property shall be paid to
Lessee, and Lessee shall hold such insurance proceeds in trust to pay the cost
of repairing or replacing damaged Lessee's Personal Property.
14.5. Restoration of Lessee's Property. Without limiting Lessee's
obligation to restore the Leased Property as provided in SECTIONS 14.2 and 14.3,
Lessee shall also restore all alterations and improvements made by Lessee,
including Lessee's Personal Property but only to the extent that Lessee's
Personal Property is necessary to the operation of the Leased Property for its
Primary Intended Use in accordance with applicable Legal Requirements.
14.6. No Abatement of Rent. This Lease shall remain in full force
and effect and Lessee's obligation to make rental payments and to pay all other
charges required by this Lease shall not be abated during the pendency of repair
or restoration.
14.7. Substitution of Leased Property. Notwithstanding anything to
the contrary contained in this Lease, in the event of the total destruction of
any single Facility, Lessor shall make available to Lessee and add to the Leased
Property a facility of equal or approximate value to the destroyed Facility. If
necessary, Lessor shall apply insurance proceeds received by it towards the
replacement of the destroyed Facility. Lessor may elect to satisfy the foregoing
obligation either by purchasing an already existing facility, by constructing a
new facility, or otherwise.
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ARTICLE XV
15. Condemnation.
15.1. Definitions.
15.1.1 "CONDEMNATION" means (a) the exercise of any
governmental power, whether by legal proceedings or otherwise, by a Condemnor,
(b) a voluntary sale or transfer by Lessor to any Condemnor, either under threat
of Condemnation or while legal proceedings for Condemnation are pending.
15.1.2 "DATE OF TAKING" means the date the Condemnor has the
right to possession of the property being condemned.
15.1.3 "AWARD" means all compensation, sums or anything of
value awarded, paid or received on a total or partial Condemnation.
15.1.4 "CONDEMNOR" means any public or quasi-public authority,
or private corporation or individual, having the power of Condemnation.
15.2. Parties' Rights and Obligations. If during the Term there is
any taking of all or any part of the Leased Property or any interest in this
Lease by Condemnation, the rights and obligations of the parties shall be
determined by this ARTICLE XV.
15.3. Total Condemnation. If title to the fee of the whole of the
Leased Property shall be taken or condemned by any Condemnor, this Lease shall
cease and terminate as of the Date of Condemnation by said Condemnor. Upon the
termination of the Lease following a total Condemnation, all Rent (including,
without limitation, Minimum Rent, Additional Rent and Additional Charges) paid
or payable by Lessee hereunder shall be apportioned as of the date of
termination. Notwithstanding anything to the contrary contained in this Lease,
in the event of the total condemnation of any single Facility, Lessor shall make
available to Lessee and add to the Leased Property a facility of equal or
approximate value to the condemned Facility. If necessary, Lessor shall apply
any Award received by it towards the replacement of the condemned Facility.
Lessor may elect to satisfy the foregoing obligation either by purchasing an
already existing facility, by constructing a new facility, or otherwise.
15.4. Allocation of Portion of Award. Any Award made with respect to
all or any portion of the Leased Property or for loss of rent, or for loss of
business, whether or not beyond the Term of this Lease, or for the loss of value
of the leasehold (including the bonus value of the Lease) shall be solely the
property of and payable to Lessor. Lessee shall be entitled to make a separate
claim for the taking of Lessee's Personal Property (as long as such claim will
not diminish Lessor's Award), for the removal or relocation expenses of Lessee
(as long as such claim will not diminish Lessor's Award), or for any other loss
that can be awarded to Lessee separately from Lessor's claim and which will not
in any respect whatsoever diminish or threaten to diminish the total amounts to
be awarded to Lessor as set forth above or otherwise for Lessee's full fee
simple interest in the Leased Property. In any Condemnation proceedings, each of
the Lessor and Lessee shall each seek its own claim in conformity herewith, at
its own expense.
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Lessor's obligation to contribute part of its Award for restoration is set forth
in SECTION 15.5, below.
15.5. Partial Taking. If title to the fee of less than the whole of
the Leased Property shall be so taken or condemned, this Lease shall continue in
full force and effect, there shall be no reduction in Rent (including, without
limitation, Minimum Rent and Additional Charges).
15.6. Temporary Taking. Lessee agrees that if, at any time after the
date hereof, the whole or any part of the Leased Property or of Lessee's
interest under this Lease, shall be Condemned by any Condemnor for its temporary
use or occupancy, this Lease shall not terminate by reason thereof, and Lessee
shall continue to pay, in the manner and at the times herein specified, the full
amounts of Rent (including Minimum Rent, Additional Charges and Additional
Rent). Except only to the extent that Lessee may be prevented from doing so
pursuant to the terms of the order of the Condemnor, Lessee shall also continue
to perform and observe all of the other terms, covenants, conditions and
obligations hereof, on the part of the Lessee to be performed and observed, as
though such Condemnation had not occurred. In the event of any such Condemnation
as in this SECTION 15.6 described, the entire amount of any such Award made for
such temporary use, whether paid by way of damages, rent or otherwise, shall be
paid to Lessee, Lessee covenants that upon the termination of any such period of
temporary use of occupancy as set forth in this SECTION 15.6, it will, at its
sole cost and expense, restore the Leased Property as nearly as may be
reasonably possible, to the condition in which the same was immediately prior to
the Condemnation, unless such period of temporary use or occupancy shall extend
beyond the expiration of the Term, in which case Lessee shall not be required to
make such restoration, and in such case, Lessee shall contribute to the cost of
such restoration that portion of its entire Award which is specifically
allocated to such restoration in the judgment or order of the court, if any.
ARTICLE XVI
16.1. Events of Default. Any one or more of the following events
shall be an "EVENT OF DEFAULT":
(a) if Lessee fails to make payment of the Rent payable by
Lessee under this Lease when the same becomes due and payable and such failure
is not cured by Lessee within a period of three (3) Business Days after Notice
thereof from Lessor; or
(b) if Lessee fails to observe or perform any other term,
covenant or condition of this Lease and such failure is not cured by Lessee
within a period of thirty (30) days after Notice thereof from Lessor, unless
such failure cannot with due diligence be cured within a period of thirty (30)
days, in which case such failure shall not be deemed an Event of Default if
Lessee proceeds promptly and with due diligence to cure the failure and
diligently completes the curing thereof within ninety days of receipt of
Lessor's Notice. No Event of Default shall be deemed to exist under this clause
(b) during any time the curing thereof is prevented by an Unavoidable Delay,
provided that upon the cessation of such Unavoidable Delay, Lessee shall remedy
such default without further delay;
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(c) if Lessee commits an "Event of Default" under any of the
Other Leases (defined below). Without limiting the foregoing, if Lessee commits
an "Event of Default" under this Lease, Lessee shall thereby be in default (and
shall therefore have committed an "Event of Default") under each and all of the
Other Leases; or
(d) if Lessee does any of the following: (i) admit in writing
its inability to pay its debts generally as they become due; (ii) file a
petition in bankruptcy or a petition to take advantage of any federal or state
insolvency law; (iii) make a general assignment for the benefit of its
creditors; (iv) consent to the appointment of a receiver of itself or of the
whole or any substantial part of its property; or (v) file a petition or answer
seeking reorganization or arrangement under the Federal bankruptcy laws or any
other applicable law or statute of the United States of America or any state
thereof, or
(e) if Lessee, on a petition in bankruptcy filed against it,
is adjudicated a bankrupt or an order for relief thereunder is entered against
it or a court of competent jurisdiction shall enter an order or decree
appointing, without the consent of Lessee, a receiver for Lessee or of the whole
or substantially all of its property, or approving a petition filed against
Lessee seeking reorganization or arrangement of Lessee under the federal
bankruptcy laws or any other applicable law or statute of the United States of
America or any state thereof and such judgment, order or decree shall not be
vacated or set aside or stayed within ninety (90) days from the date of the
entry thereof; or
(f) if Lessee shall be liquidated or dissolved, or shall begin
proceedings toward such liquidation or dissolution, or shall, in any manner,
permit the sale or divestiture of substantially all of its assets; or
(g) if the estate or interest of Lessee in the Leased Property
or any part thereof be levied upon or attached in a proceeding and the same
shall not be vacated or discharged within the later of ninety (90) days after
commencement thereof or thirty (30) days after Notice thereof from Lessor,
(unless Lessee shall be contesting such lien or attachment in good faith in
accordance with ARTICLE XII hereof); or
(h) if Lessee voluntarily ceases operations on the Leased
Property for a period in excess of two (2) days; or
(i) if any of Lessee's representations or warranties set forth
in this Lease proves to be untrue when made in any material respect which
materially and adversely affects Lessor; or
(j) if Lessee (or any of its Affiliates) commits an "Event of
Default" under any other lease or sublease now or hereafter entered into between
Lessor (or any of its Affiliates) and Lessee (or any of its Affiliates) (the
"OTHER LEASES"). Without limiting the foregoing, if Lessee commits an "Event of
Default" under this Lease, Lessee (or any of its Affiliates) shall thereby have
committed an "Event of Default" under the Other Leases); or
(k) if Lessee attempts to assign or sublease, in violation of
the provisions of this Lease; or
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(l) subject to the provisions of ARTICLE XII hereof, if Lessee
ceases to maintain in effect any license, permit, certificate or approval
necessary or otherwise required to operate any Facility in accordance with its
Primary Intended Use; or
(m) any Change in Control (as defined below) of Lessee
following the Commencement Date of this Lease. As used in this SECTION 16.1(m),
the term "CHANGE OF CONTROL" shall mean any change (voluntary or involuntary, by
operation of law or otherwise) in the Person or Persons (as defined below) which
ultimately exert effective control over the management of the affairs of Lessee
(a "CONTROLLING ENTITY") as of the date hereof. A Change of Control shall
specifically include, but not be limited to, any of the occurrences described in
subparagraphs (i) through (iii) below in this SECTION 16.1(m).
Notwithstanding anything to the contrary set forth in this SECTION
16.1(m), any Change of Control which either (a) has been previously agreed to in
writing by Lessor, or (b) constitutes a Permitted Transaction (as defined
below), shall not constitute an Event of Default under this Lease. For the
purpose of this SECTION 16.1(m), the term "PERMITTED TRANSACTION" shall mean any
transaction, whether by operation of law or otherwise, resulting in a Change in
Control in which, immediately following such Change in Control, the Person or
Persons which ultimately exert effective control over the management of the
affairs of Lessee and/or Lessee's Controlling Entity (such Person or Persons,
the "SUCCESSOR PERSON") meet both of the following tests: (A) such Successor
Person or Persons has or have an audited consolidated tangible net worth,
determined in accordance with generally accepted accounting principles
consistently applied ("GAAP"), equal to or greater than One Hundred Fifty
Million and No/100 Dollars ($150,000,000.00), and (B) such Successor Person or
Persons then has or have issued and outstanding securities which are publicly
traded on the New York Stock Exchange ("NYSE"), the American Stock Exchange
("AMEX"), or the NASDAQ-National Markets System ("NASDAQ"). From and after the
occurrence of a Permitted Transaction, the failure by the Successor Person or
Persons to (AA) maintain an audited consolidated tangible net worth, determined
in accordance with GAAP, equal to or greater than One Hundred Fifty Million and
No/100 Dollars ($150,000,000.00), and (BB) continue to have issued and
outstanding securities which are publicly traded on the NYSE, the AMEX, or the
NASDAQ, shall constitute an Event of Default.
For purposes of this SECTION 16.1(m), a Change of Control shall include,
but not be limited to, any of the following occurrences:
(i) any Person (defined below) is or becomes the Beneficial Owner
(defined below), directly or indirectly, of securities of Lessee and/or Lessee's
Controlling Entity, whether by operation of law or otherwise, representing
thirty percent (30%) or more of the combined voting power of the then
outstanding securities of Lessee and/or its Controlling Entity (whereupon such
Person shall be deemed a Successor Person hereunder); or
(ii) the stockholders of Lessee or its Controlling Entity approve a
merger or consolidation of Lessee or its Controlling Entity (as applicable) with
any other corporation (or other entity), other than a merger or consolidation
which would result in the voting securities of Lessee or its Controlling Entity
(as applicable) which are outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
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securities of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of Lessee or its Controlling
Entity or such surviving entity immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to implement a
recapitalization of Lessee or its Controlling Entity (or similar transaction) in
which no Person acquires more than thirty percent (30%) of the combined voting
power of the then outstanding securities of Lessee and/or its Controlling Entity
shall not constitute a Change in Control; or
(iii) the stockholders of Lessee or its Controlling Entity approve a
plan of complete liquidation of Lessee or its Controlling Entity (as applicable)
or an agreement for the sale or disposition by Lessee or its Controlling Entity
of all or substantially all of the assets of Lessee or its Controlling Entity.
For purposes of this SECTION 16.1(m), the term "PERSON" shall have the
meaning ascribed thereto in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), and the term "BENEFICIAL OWNER"
shall have the meaning ascribed thereto in Rule 13d-3 of the Exchange Act.
Upon the occurrence of an Event of Default, in addition to all of Lessor's
other remedies, Lessor may terminate this Lease by giving Lessee not less than
ten (10) Business Days' Notice of such termination and upon the expiration of
the time fixed in such Notice, the Term shall terminate and all rights of Lessee
under this Lease shall cease.
In the event litigation is commenced with respect to any alleged default
under this Lease, the prevailing party in such litigation shall receive, in
addition to its damages incurred, such sum as the court shall determine as its
reasonable attorneys' fees, and all costs and expenses incurred in connection
therewith. Lessor's fees, costs and expenses, including those related to any
insolvency proceedings filed by Lessee, shall constitute Additional Charges
hereunder.
Notwithstanding the foregoing, Lessor acknowledges and agrees that the
following shall not constitute Events of Default hereunder: (i) the occurrence
of any default by Lessee under SECTIONS 16(d) AND (e) prior to January 31, 2003,
(ii) the occurrence of any default by Lessee under SECTIONS 16(d) AND (e) after
January 31, 2003 but only during the pendency of a bankruptcy proceeding in
which Lessee is a debtor, which proceeding was filed prior to January 31, 2003,
(iii) the occurrence of any default by Lessee under SECTION 16(m) prior to
January 31, 2003 or after January 31, 2003 but only during the pendency of or
the confirmation plan issued pursuant to a bankruptcy proceeding in which Lessee
is a debtor which proceeding was filed prior to January 31, 2003, or (iv) the
occurrence of any default by Lessee under SECTION 16(c) or 16(j) resulting from
any of the actions described in (i) - (iii) hereof prior to January 31, 2003 or
during the pendency or the confirmation plan issued pursuant to a bankruptcy
proceeding in which Lessee is a debtor which proceeding was filed prior to
January 31, 2003.
Lessee further agrees that if any of the events described in SECTIONS
16(d) AND (e) should occur at anytime during the Term, Lessee shall affirm this
Lease and all of its obligations as set forth hereunder.
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16.2. Certain Remedies. In addition to all of its rights under this
Lease, Lessor shall have all remedies and rights provided in law and equity as a
result of an Event of Default or Lessee's other breach under this Lease. Without
limiting the foregoing, if an Event of Default occurs (and the event giving rise
to such Event of Default has not been cured within the curative period relating
thereto as set forth in SECTION 16.1 above) whether or not this Lease has been
terminated pursuant to SECTION 16.1, Lessee shall, to the extent permitted by
law, if required by Lessor so to do, immediately surrender to Lessor the Leased
Property pursuant to the provisions of SECTION 16.1 and quit the same and Lessor
may enter upon and repossess the Leased Property by reasonable force, summary
proceedings, ejectment or otherwise, and may remove Lessee and all other persons
and any and all personal property from the Leased Property subject to rights of
any residents or patients and to Legal Requirements.
16.3. Damages. Neither (a) the termination of this Lease pursuant to
SECTION 16.1, (b) the repossession of the Leased Property, nor (c) the failure
of Lessor, notwithstanding reasonable good faith efforts, to relet the Leased
Property, shall relieve Lessee of its liability and obligations hereunder, all
of which shall survive any such termination, repossession or reletting. In the
event of any such termination, Lessee shall forthwith pay to Lessor all Rent due
and payable through and including the date of such termination.
Lessor shall not be deemed to have terminated this Lease unless Lessor
delivers Notice to Lessee of such election. If Lessee voluntarily elects to
terminate this Lease, then in addition to all remedies available to Lessor,
Lessor may recover the sum of: (i) the worth at the time of award of the unpaid
Rent which had been earned at the time of termination; (ii) the worth at the
time of award of the amount by which the unpaid Rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Lessee proves could have been reasonably avoided; (iii) the
worth at the time of award of the amount by which the unpaid Rent for the
balance of the Term after the time of award exceeds the amount of such rental
loss that Lessee proves could be reasonably avoided, and (iv) any other amount
necessary to compensate Lessor for all the detriment proximately caused by
Lessee's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, including
reasonable attorney fees, court costs and reasonable out-of-pocket expenses in
the enforcement of Lessor's rights hereunder.
The "worth at the time of award" of the amounts referred to in
subparagraphs (i) and (ii) above is computed by allowing interest at the maximum
legal rate of interest permitted in accordance with the laws of the State of
California. The worth at the time of award of the amount referred to in
subparagraph (iii) is computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).
Without limiting Lessor's other remedies provided herein and provided by
law, Lessor may continue the Lease in effect after Lessee's breach and
abandonment and recover Rent as it becomes due, provided that, in such event,
Lessee has the right to sublet or assign subject only to reasonable conditions
imposed by Lessor. Accordingly, without termination of Lessee's right to
possession of the Leased Property, Lessor may demand and recover each
installment of Rent and other sums payable by Lessee to Lessor under this Lease
as the same becomes due and payable, which Rent and other sums shall bear
interest at the maximum interest rate permitted in
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accordance with the laws of the State of California, from the date when due
until paid, and Lessor may enforce, by action or otherwise, any other term or
covenant of this Lease.
16.4. Application of Funds. Any payments received by Lessor under
any of the provisions of this Lease during the existence or continuance of any
Event of Default shall be applied to Lessee's obligations in the order which
Lessor may determine or as may be prescribed by the laws of the State of
California.
16.5. Executory Contract. Should Lessee file any proceeding under
federal bankruptcy or other comparable federal or state insolvency laws, it
shall, in addition to any other requirement under 11 U.S.C., Section 365 or
other applicable provisions, be required to cure any and all obligations
hereunder prior to being allowed to assume this Lease.
ARTICLE XVII
17. Lessor's Right to Cure Lessee's Default. If Lessee fails to make any
payment or to perform any act required to be made or performed under this Lease,
and to cure the same within the relevant time periods provided in SECTION 16.1,
Lessor, after thirty (30) days Notice to and demand upon Lessee, and without
waiving or releasing any obligation of Lessee or default, may (but shall be
under no obligation to) at any time thereafter make such payment or perform such
act for the account and at the expense of Lessee, and may, to the extent
permitted by law, enter upon the Leased Property for such purpose and take all
such action thereon as, in Lessor's opinion, may be necessary or appropriate
therefor. Provided, however, that should Lessor reasonably determine that the
giving of such Notice would risk loss to the Leased Property or cause damage to
Lessor, then Lessor shall give such written Notice as is practical under the
circumstances. No such entry shall be deemed an eviction of Lessee. In
exercising any remedy under this ARTICLE XVII, Lessor shall use its good faith
efforts not to violate any rights of residents of the applicable Facility. All
sums so paid by Lessor and all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses, in each case) so incurred,
together with a late charge thereon (to the extent permitted by law) at the rate
set forth in SECTION 3.5 above from the date on which such sums or expenses are
paid or incurred by Lessor, shall be paid by Lessee to Lessor on demand. The
obligations of Lessee and rights of Lessee contained in this Article shall
survive the expiration or earlier termination of this Lease.
ARTICLE XVIII
18. Intentionally omitted.
ARTICLE XIX
19. Holding Over. If Lessee shall for any reason remain in
possession of the Leased Property after the expiration of the Term or earlier
termination of the Term hereof, such possession shall be as a month-to-month
tenant during which time Lessee shall pay as rental each month, the aggregate of
(i) 150% multiplied by the Minimum Rent payable with respect to the last month
of the Term, (ii) all Additional Charges accruing during such month and (iii)
all other sums payable by Lessee pursuant to the provisions of this Lease.
During such period of month-to-month tenancy, Lessee shall be obligated to
perform and observe all of the terms, covenants
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and conditions of this Lease, but shall have no rights hereunder other than the
right, to the extent given by law to month-to-month tenancies, to continue its
occupancy and use of the Leased Property. Nothing contained herein shall
constitute the consent, express or implied, of Lessor to the holding over of
Lessee after the expiration or earlier termination of this Lease.
ARTICLE XX
20. Risk of Loss. During the Term of this Lease, the risk of loss or of
decrease in the enjoyment and beneficial use of the Leased Property in
consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures
(except to the extent caused by or through Lessor), attachments, levies or
executions (other than those caused by or through Lessor) is assumed by Lessee,
and in the absence of gross negligence or willful misconduct by Lessor, Lessor
shall in no event be answerable or accountable therefor, nor shall any of the
events mentioned in this Section entitle Lessee to any abatement or offset of
Rent, or any right to terminate this Lease. Without limiting the foregoing,
Lessor shall not be liable for injury or damage to the person or goods, wares,
merchandise or other property of Lessee, Lessee's employees, contractors,
invitees, customers, or any other person in or about the Leased Property,
whether such damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, or from the breakage, leakage, obstruction or
other defects of pipes, fire sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, or from any other cause, whether the said
injury or damage results from conditions arising upon the Leased Property, or
any part thereof, or from other sources or places, and regardless of whether the
cause of such damage or injury or the means of repairing the same is accessible
or not, unless such damage or injury is a result of the gross negligence or
willful misconduct of Lessor. Lessor shall not be liable for any damages arising
from any act or omission of Lessee, or any other party named above.
ARTICLE XXI
21. Indemnification. Notwithstanding the existence of any insurance
provided for in ARTICLE XIII, and without regard to the policy limits of any
such insurance, Lessee will protect, indemnify, save harmless and defend Lessor
from and against all liabilities, obligations, claims, damages, awards,
penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses), to the extent permitted by law,
imposed upon or incurred by or asserted against Lessor by reason of: (a) any
accident, injury to or death of persons or loss of or damage to property
occurring on or about the Leased Property or adjoining sidewalks, including
without limitation any claims of malpractice, (b) any occupancy, use, misuse,
non-use, condition, including any environmental conditions caused by Lessee,
maintenance or repair by Lessee of the Leased Property, (c) any Impositions
(which are the obligations of Lessee to pay pursuant to the applicable
provisions of this Lease), (d) any failure on the part of Lessee to in any way
perform or comply with any of the terms of this Lease, and (e) the
non-performance of any of the terms and provisions of any and all existing and
future subleases of the Leased Property (to the extent permitted) to be
performed by the Lessee thereunder. Any amounts which become payable by Lessee
under this Section shall be paid within ten (10) Business Days of receipt by
Lessee of Lessor's written demand for such sums, and if not timely paid, shall
bear a late charge (to the extent permitted by law), at the rate set forth in
SECTION 3.5 above, from the date of such determination to the date of payment.
Lessee, at
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its sole cost and expense, shall contest, resist and defend any such claim,
action or proceeding asserted or instituted against Lessor, or may compromise or
otherwise dispose of the same as Lessee sees fit, all at Lessee's sole cost and
expense. Nothing herein shall be construed as indemnifying Lessor against its
own grossly negligent, reckless or willful misconduct or against the acts or
omissions of any subsequent lessee of the Leased Property in the event of the
termination by Lessor of Lessee's right to possession of the Leased Property
without termination of the Lease. Lessee's liability for a breach of the
provisions of this Article arising during the Term hereof shall survive any
termination of this Lease.
ARTICLE XXII
22. Subletting and Assignment. Lessee may not assign, sublease or sublet,
encumber, appropriate, pledge or otherwise transfer, the Lease or the leasehold
or other interest in the Leased Property without Lessor's consent, which consent
shall not be unreasonably withheld. Upon Lessor's consent, (a) in the case of a
subletting, the sublessee shall comply with the provisions of SECTION 22.2, (b)
in the case of an assignment, the assignee shall assume in writing and agree to
keep and perform all of the terms of this Lease on the part of Lessee to be kept
and performed and shall be, and become, jointly and severally liable with Lessee
for the performance thereof, (c) an original counterpart of each such sublease
and assignment and assumption, duly executed by Lessee and such sublessee or
assignee, as the case may be, in a form and substance satisfactory to Lessor,
shall be delivered promptly to Lessor, and (d) in case of either an assignment
or subletting, Lessee shall remain primarily liable, as principal rather than as
surety, for the prompt payment of the Rent and for the performance and
observance of all of the covenants and conditions to be performed by Lessee
hereunder. Nothing hereunder shall preclude Lessor from selling the Leased
Property or assigning or transferring its interest hereunder, provided the new
owner or assignee expressly assumes Lessor's obligations under this Lease.
22.1. Attornment. Lessee shall insert in a sublease permitted under
SECTION 22.1 provisions to the effect that (a) such sublease is subject and
subordinate to all of the terms and provisions of this Lease and to the rights
of Lessor hereunder, (b) in the event this Lease shall terminate before the
expiration of such sublease, the sublessee thereunder at Lessor's option, attorn
to Lessor and waive any right the sublessee may have to terminate the sublease
or to surrender possession thereunder, as a result of the termination of this
Lease, and (c) in the event the sublessee receives a written Notice from Lessor
or Lessees assignees, if any, stating that Lessee is in default under this
Lease, the sublessee shall thereafter be obligated to pay all rentals accruing
under said sublease directly to the party giving such Notice, or as such party
may direct. All rents received from the sublessee by Lessor or Lessor's
assignees, if any, as the case may be, shall be credited against the amounts
owing by Lessee under this Lease.
22.2. Sublease Limitation. Anything contained in this Lease to the
contrary notwithstanding, Lessee shall not sublet the Leased Property on any
basis, such that the rental to be paid by the sublessee thereunder would be
based, in whole or in part, on either (i) the income or profits derived by the
business activities of the sublessee, or (ii) any other formula such that any
portion of the sublease rental received by Lessor would fail to qualify as
"rents from real property" within the meaning of Section 856(d) of the Code, or
any similar or successor provision thereto.
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ARTICLE XXIII
23. Compliance with Mortgage. Subject to applicable requirements set forth
elsewhere in this Lease, Lessee shall comply with all applicable provisions of
any Facility Mortgage, and shall comply with any reasonable request for
information (including, without limitation, any financial information that may
not be expressly required in this Lease) from any Facility Mortgagee.
ARTICLE XXIV
24. Lessor's Right to Inspect; Officer's Certificates; Books and Records.
24.1. Lessor's Right to Inspect. Lessee shall permit Lessor and its
authorized representatives to inspect the Leased Property as well as Lessee's
books and records on reasonable notice (twenty-four (24) hours prior notice
shall be deemed reasonable) during usual business hours subject to any security,
health, safety or confidentiality requirements of Lessee or any Legal
Requirements or Insurance Requirements.
24.2. Officer's Certificates. At any time from time-to-time upon not
less than ten (10) days Notice by Lessor, Lessee will furnish to Lessor a
certified written certificate from a duly authorized officer of Lessee
certifying that this Lease is unmodified and in full force and effect (or that
this Lease is in full force and effect as modified and setting forth the
modifications), the date to which Rent has been paid and such other information
concerning this Lease as may be reasonably requested by Lessor and/or any
Facility Mortgagee. Any such certificate furnished, whether pursuant to this
SECTION 24.2 or some other provision in this Lease, may be relied upon by
Lessor, any prospective purchaser of the Leased Property and Facility Mortgagee.
24.3. Books and Records. In addition to all other obligations to
provide financial information contained elsewhere in this Lease, Lessee will
furnish the following to Lessor:
(a) Lessee shall keep adequate books and records of account
with respect to the Leased Property and each Facility in accordance with GAAP
(but omitting footnotes), or in accordance with other methods elected by Lessee
from time to time and reasonably acceptable to Lessor (such as the tax basis
method of accounting, consistently applied) and Lessee shall furnish to Lessor:
(i) quarterly operating statements of each Facility (the "PERIODIC OPERATING
STATEMENTS") detailing the revenues received, the expenses incurred and the net
operating income for that quarter and containing appropriate year to date
information, the Periodic Operating Statements to be provided within forty-five
(45) days after the end of each of the first three fiscal quarters of each
fiscal year and within ninety (90) days after the end of the fourth fiscal
quarter of each fiscal year; and (ii) an annual operating statement of each
Facility (the "ANNUAL OPERATING STATEMENT") detailing the total revenues
received, total expenses incurred, and total net operating income, the Annual
Operating Statement to be provided within ninety (90) days after the close of
each fiscal year of the Lessee.
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(b) In addition to the financial reports specified in the
preceding paragraph, Lessee also shall deliver occupancy reports listing the
number of units, the percentage of occupancy, and the gross revenue from
residents (the "OCCUPANCY INFORMATION"), prepared and certified by Lessee to
Lessor (and upon request any Facility Mortgagee) as true and correct, such
Occupancy Information to be provided on a quarterly basis, within forty-five
(45) days after the end of each of the first three fiscal quarters of each
fiscal year and within ninety (90) days after the end of the fourth fiscal
quarter of each fiscal year.
(c) Notwithstanding the foregoing, Lessor shall have the
option, which may be exercised by Notice to Lessee, to require Lessee to furnish
the Periodic Operating Statements and the Occupancy Information on a monthly
basis (within thirty (30) days after the end of each calendar month) for a
period of twelve successive calendar months, commencing with the first full
calendar month following the date of such notice.
(d) To the extent that Lessee, or any Controlling Entity of
Lessee, is required by any regulatory agency to file financial statements or
reports, within ten (10) calendar days of such filing, Lessee shall deliver to
Lessor a copy of any such filing(s) and report(s). To the extent prepared,
Lessee shall also provide to Lessor on an annual basis, copies of such financial
statements and/or reports and/or filings (whether audited or unaudited,
depending on the practice of such entities) prepared by any Controlling Entity.
(e) Lessee shall provide to Lessor (i) quarterly operating
statements (unaudited) of Lessee, detailing the revenues received, the expenses
incurred and the net operating income for that quarter and containing
appropriate year to date information, to be provided within forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year and
within ninety (90) days after the end of the fourth fiscal quarter of each
fiscal year; and (ii) an annual operating statement (audited) of Lessee,
detailing the total revenues received, total expenses incurred, and total net
operating income, to be provided within ninety (90) days after the close of each
fiscal year of the Lessee.
Whether or not expressly stated elsewhere above in this SECTION 24.3, all
information, reports, filings, etc. provided by Lessee to Lessor under this
SECTION 24.3 shall be (i) prepared in accordance with GAAP (but omitting
footnotes), and (ii) accompanied with a written certificate from a duly
authorized officer of Lessee certifying that to the best knowledge of the
officer executing such certificate, all accompanying information is true and
complete. In addition to all of the items expressly identified and required
elsewhere in this SECTION 24.3 (or elsewhere in this Lease), Lessee shall
promptly comply with any request by Lessor or any Facility Mortgagee for the
production of additional financial information (whether relating to Lessee, or a
Controlling Entity of Lessee) as may deemed relevant or prudent by Lessor and/or
any Facility Mortgagee.
ARTICLE XXV
25. No Waiver. The waiver by Lessor or Lessee of any term, covenant or
condition in this Lease shall not be deemed to be a waiver of any other term,
covenant or condition or any subsequent waiver of the same or any other term,
covenant or condition contained in this Lease. The subsequent acceptance of Rent
hereunder by Lessor or any payment by Lessee shall not be deemed to be a waiver
of any preceding default of any term, covenant or condition of this Lease,
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other than the failure to pay the particular amount so received and accepted,
regardless of the knowledge of any preceding default at the time of the receipt
or acceptance.
ARTICLE XXVI
26. Remedies Cumulative. To the extent permitted by law, each legal,
equitable or contractual right, power and remedy of Lessor now or hereafter
provided either in this Lease or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power and remedy and
the exercise or beginning of the exercise by Lessor of any one or more of such
rights, powers and remedies shall not preclude the simultaneous or subsequent
exercise by Lessor of any or all of such other rights, powers and remedies.
ARTICLE XXVII
27. Acceptance of Surrender. No surrender to Lessor of this Lease or of
the Leased Property or any part thereof, or of any interest therein, shall be
valid or effective unless agreed to and accepted in writing by Lessor and no act
by Lessor or any representative or agent of Lessor, other than such a written
acceptance by Lessor, shall constitute an acceptance of any such surrender.
ARTICLE XXVIII
28. No Merger of Title. There shall be no merger of this Lease or of the
leasehold estate created hereby by reason of the fact that the same person,
firm, corporation or other entity may acquire, own or hold, directly or
indirectly, (a) this Lease or the leasehold estate created hereby or pay
interest in this Lease or such leasehold estate and (b) the fee estate in the
Leased Property.
ARTICLE XXIX
29. Conveyance by Lessor. If Lessor or any successor Lessor of the Leased
Property shall convey the Leased Property or assign its interest herein in
accordance with the terms hereof other than as security for a debt Lessor or
such successor Lessor, as the case may be, shall thereupon be released from all
future liabilities and obligations of Lessor under this Lease arising or
accruing from and after the date of such conveyance or other transfer as to the
Leased Property and all such future liabilities and obligations shall thereupon
be binding upon the new Lessor, provided the new Lessor has agreed in writing
for the benefit of Lessee to be bound by all of the terms and conditions hereof.
ARTICLE XXX
30. Quiet Enjoyment. So long as Lessee shall pay all Rent as the same
becomes due and shall comply with all of the terms of this Lease and perform its
obligations hereunder, and except for any claims, actions, liens or encumbrances
(i) arising from the acts or omissions of Lessee or (ii) otherwise from events
occurring prior to the Commencement Date hereunder (expressly excluding events
arising by, through or under Lessor), Lessee shall peaceably and quietly have,
hold and enjoy the Leased Property for the Term hereof, free of any claim or
other
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action by Lessor or anyone claiming by, through or under Lessor, but subject to
(i) all Encumbrances for which Lessor has delivered non-disturbance agreements
under SECTION 32.1 and (ii) all other encumbrances of record as of the date
hereof and not arising by, through or under Lessor or hereafter consented to by
Lessee. Except as otherwise provided in this Lease, no failure by Lessor to
comply with the foregoing covenant or any covenant of this Lease shall give
Lessee any right to cancel or terminate this Lease or ▇▇▇▇▇, reduce or make a
deduction from or offset against the Rent or any other sum payable under this
Lease, or to fail to perform any other obligation of Lessee hereunder.
ARTICLE XXXI
31. Notices. All notices, demands, requests, consents, approvals and other
communications ("Notice" or "NOTICES") hereunder shall be in writing and served
upon the party being served either by (i) personal delivery, (ii) registered or
certified mail, return receipt requested and postage prepaid, or (iii) overnight
delivery service, addressed to the respective parties, as follows:
If to Lessor: c/o LTC Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: c/o LTC Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lessee: Alterra Healthcare Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ and ▇▇▇▇▇▇
2700 International Tower,Peachtree Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or person as either party may hereafter designate by a
Notice pursuant to this Section. In all instances, Notice shall be deemed
effective upon proof of receipt.
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ARTICLE XXXII
32.1. Lessor May Grant Liens. Without the consent of Lessee, but
subject to the terms and conditions set forth below in this SECTION 32.1, Lessor
may, from time-to-time, directly or indirectly, create or otherwise cause to
exist any lien or encumbrance or any other change of title ("ENCUMBRANCE") upon
the Leased Property, or any portion thereof or interest therein, whether to
secure any borrowing or other means of financing or refinancing or otherwise.
Provided that Lessee receives the non-disturbance agreement described below,
this Lease is and at all times shall be subject and subordinate to any such
Encumbrance which may now or hereafter affect the Leased Property and to all
renewals, modifications, consolidations, replacements and extensions thereof.
This clause shall be self-operative and no further instruments of subordination
shall be required; provided, however that, at any time from time to time, within
ten (10) days after the request by Lessor or any holder of any Encumbrance,
Lessee shall execute an agreement to the effect that this Lease shall be subject
and subordinate to the lien of any such new Encumbrance on the Leased Property,
and that in the event of any default or foreclosure under such Encumbrance,
Lessee shall attorn to the holder of such lien, and as otherwise requested by
Lessor; provided further, however, that the subjection and subordination of this
Lease and Lessee's leasehold interest hereunder to any Encumbrance now in effect
or hereafter imposed by Lessor shall be conditioned upon the execution by the
holder of such Encumbrance and delivery to Lessee of a commercially reasonable
non-disturbance agreement specifying, among other things, that (a) so long as
Lessee has not committed an Event of Default, in the event of any foreclosure,
judicial sale or deed in lieu of foreclosure, Lessee's rights and leasehold
estate hereunder shall not be disturbed by the holder of such Encumbrance, its
successors or assigns or any successful bidder; and (b) notwithstanding such
subordination, so long as Lessee has not committed an Event of Default and no
event has occurred which with the passage of time or the giving of notice or
both would constitute an Event of Default under this Lease, the holder of such
Encumbrance will recognize the rights of the parties under the terms of this
Lease with respect to the disposition of insurance payments and condemnation
proceeds in the event of any casualty or condemnation.
32.2. Attornment. If Lessor's interest in the Leased Property is
sold or conveyed upon the exercise of any remedy provided for in any
Encumbrance, or otherwise by operation of law: (i) at the new owner's option,
Lessee shall attorn to and recognize the new owner as Lessee's lessor under this
Lease, in which case this Lease shall automatically become a new lease between
Lessee and the new owner upon all of the terms and conditions hereof, or enter
into a new lease in the exact form and substance of this Lease with the new
owner, and Lessee shall take such actions to confirm the foregoing within ten
(10) Business Days after request; and (ii) the new owner (other than any new
owner or other entity which is an Affiliate of Lessor) shall not be (a) liable
for any act or omission of Lessor under this Lease occurring prior to such sale
or conveyance, or (b) subject to any offset, abatement or reduction of rent
because of any default of Lessor under this Lease occurring prior to such sale
or conveyance.
32.3. Lessee's Right to Cure. Subject to the provisions of SECTION
32.4, if Lessor breaches any covenant to be performed by it under this Lease,
Lessee, after Notice to and demand upon Lessor, without waiving or releasing any
obligation hereunder, and in addition to any other remedies available to Lessee,
may (but shall be under no obligation at any time thereafter to) make such
payment or perform such act for the account and at the expense of
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Lessor. All sums so paid by Lessee and all costs and expenses (including,
without limitation, reasonable attorneys' fees) so incurred, together with
interest thereon from the date on which such sums or expenses are paid or
incurred by Lessee, shall be paid by Lessor to Lessee on demand, but may not be
offset by Lessee against payments of Rent hereunder.
32.4. Breach by Lessor It shall be a breach of this Lease if Lessor
fails to observe or perform any term, covenant or condition of this Lease on its
part to be performed, and such failure shall continue for a period of thirty
(30) days, after written Notice thereof from Lessee, unless such failure cannot
with due diligence be cured within a period of thirty (30) days, in which case
such failure shall not be deemed to continue if Lessor, within said thirty (30)
day period, proceeds promptly and with due diligence to cure the failure and
diligently completes the curing thereof. The time within which Lessor shall be
obligated to cure any such failure shall also be subject to extension of time
due to the occurrence of any Unavoidable Delay.
ARTICLE XXXIII
33. Miscellaneous.
33.1. Survival of Obligations. Anything contained in this Lease to
the contrary notwithstanding, all claims against, and liabilities of, Lessee or
Lessor arising prior to any date of termination of this Lease shall survive such
termination.
33.2. Late Charges; Interest. If any interest rate provided for in
any provision of this Lease is based upon a rate in excess of the maximum rate
permitted by applicable law, the parties agree that such charges shall be fixed
at the maximum permissible rate.
33.3. Transfer of Obligations. At Lessor's request, and subject to
applicable laws, upon the expiration or earlier termination of the Term, Lessee
shall use its best efforts to transfer to Lessor or Lessor's nominee (or to
cooperate with Lessor or Lessor's nominee in connection with the processing by
Lessor or Lessor's nominee of any applications for) all licenses, operating
permits and other governmental authorizations and all contracts, including
contracts with governmental or quasi-governmental entities which may be
necessary for the operation of each Facility; provided that the costs and
expenses of any such transfer or the processing of any such application shall be
paid by Lessor or Lessor's nominee; and provided further that Lessor agrees
within forty-five (45) days after the termination of the Lease to change the
name of the Facility so that it will not include the word "Alterra", or any
variation thereof.
33.4. Addendum, Amendments and Exhibits. All addenda, amendments and
exhibits attached to this Lease are hereby incorporated in this Lease and made a
part of this Lease.
33.5. Headings. The headings and paragraph titles in this Lease are
not a part of this Lease and shall have no effect upon the construction or
interpretation of any part of this Lease.
33.6. Time. Time is of the essence of this Lease and each and all of
its provisions.
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33.7. Applicable Law. This Lease shall be governed by and construed
in accordance with the laws of the State of California, but not including its
conflicts of laws rules; thus the law that will apply is the law applicable to a
transaction solely within the State of California.
33.8. Successors and Assigns. The covenants and conditions contained
in this Lease shall, subject to the provisions regarding conveyance by Lessor
(ARTICLE XXIX), apply to and bind the heirs, successor, executor, administrators
and assigns of Lessor and Lessee.
33.9. Limits of Lessor's Liability. Lessee specifically agrees to
look solely to Lessor's assets for recovery of any judgment against Lessor
relating to this Lease, it being specifically agreed that no constituent
shareholder, officer or director of Lessor shall ever be personally liable for
any such judgment or the payment of any monetary obligation to Lessee. The
provision contained in the foregoing sentence is not intended to, and shall not,
limit any right that Lessee might otherwise have to obtain injunctive relief
against Lessor or Lessor's successors in interest, or any action not involving
the personal liability of Lessor (original or successor). Additionally, Lessor
shall be exonerated from any further liability under this Lease upon Lessor's
transfer or other divestiture of its ownership of the Leased Property, provided
that the assignee or grantee shall expressly assume in writing the obligations
of Lessor hereunder. Furthermore, in no event shall Lessor (original or
successor) ever be liable to Lessee for any indirect or consequential damages
suffered by Lessee from whatever cause.
33.10. Prior and Future Agreements. This Lease contains the entire
agreement of Lessor and Lessee with respect to the subject matter covered or
mentioned in this Lease, and no prior or contemporaneous agreements or
understanding pertaining to any such matters shall be effective for any purpose.
No provision of this Lease may be amended or supplemented except by an agreement
in writing signed by both Lessor and Lessee or their respective successor in
interest. This Lease shall not be effective or binding on any party until fully
executed by both Lessor and Lessee.
33.11. Partial Invalidity. Any provision of this Lease which shall
be held by a court of competent jurisdiction to be invalid, void or illegal
shall in no way affect, impair or invalidate any other provision or term of this
Lease, and such other provision or terms shall remain in full force and effect.
33.12. Attorneys Fees. In the event of any action or proceeding
brought by one party against the other under this Lease, the prevailing party
shall be entitled to recover its reasonable attorneys' fees and costs in such
action or proceeding from the other party, including all attorneys, fees
incurred in connection with any appeals, and any post-judgment attorneys' fees
incurred in efforts to collect on any judgment.
33.13. Authority of Lessor and Lessee. Lessor and Lessee each hereby
represent and warrant that the individuals signing on its behalf are duly
authorized to execute and deliver this Lease in their respective capacities, and
that this Lease is binding upon the entity for which it has been executed.
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33.14. Relationship of the Parties. Nothing contained in this Lease
shall be deemed or construed by Lessor or Lessee, nor by any third party, as
creating the relationship of principal and agent or a partnership, or a joint
venture by Lessor or Lessee, it being understood and agreed that no provision
contained in this Lease nor any acts of Lessor and Lessee shall be deemed to
create any relationship other than the relationship of landlord and tenant.
33.15. Counterparts; Signatures by Facsimile. This Lease may be
executed in one or more separate counterparts, each of which, once they are
executed, shall be deemed to be an original. Such counterparts shall be and
constitute one and the same instrument. The parties may accept and rely upon
signatures delivered via facsimile.
33.16. Brokers. Lessor and Lessee each warrants that it has had no
dealings with any real estate broker or agent in connection with the negotiation
of this Lease and it knows of no real estate broker or agent who is entitled to
a commission in connection with this Lease. Lessor and Lessee hereby agree to
indemnify the other and to hold the other harmless from and against any and all
costs, expenses, claims, damages, suits, including attorneys' fees, in any way
resulting from claims or demands for commissions or other compensation from any
real estate brokers claiming through such party with respect to this Lease.
33.17. Condition on Termination. Upon any termination of the Lease
or any abandonment for whatever reason by Lessee of the Leased Property, Lessee
shall deliver up to Lessor the Leased Property in substantially the same or
better condition than it was at the commencement of the Lease, reasonable wear
and tear only excepted, and in a clean and sanitary state.
33.18. Intentionally Omitted.
33.19. Joint and Several. If either Lessor or Lessee is comprised of
more than one person or entity, then all such persons and/or entities comprising
Lessor or Lessee, respectively, shall be jointly and severably liable hereunder.
33.20. Lessor Estoppel Certificates; Lessee's Obligations
Independent. Upon reasonable request (and in connection with Lessee's efforts to
obtain financing), Lessor shall deliver to Lessee a certificate in form and
substance to be determined solely by Lessor (but containing fundamentally the
same information as is required of Lessee pursuant to SECTION 24.2 above). Any
breach, or alleged breach, by Lessor of the foregoing covenant (or any other
covenant to be performed by Lessor under this Lease) shall not entitle Lessee to
any right of offset or provide an excuse for non-performance by Lessee of its
obligations under this Lease, all of which shall continue and survive
irrespective and independent of any such breach or alleged breach by Lessor. To
the extent permitted by law, Lessee hereby waives any and all rights of offset
and other "self-help" remedies available at law or in equity.
ARTICLE XXXIV
34.1. Options to Extend. Provided there exists no uncured defaults
under this Lease at the time Lessee exercises any option to extend (in
accordance with this ARTICLE XXXIV), Lessee will have the right to extend this
Lease for two (2) periods of ten (10)
-39-
years each (each such additional term shall be referred to herein as an
"EXTENDED TERM"), commencing immediately following the end of the Initial Term
or the immediately preceding Extended Term, as the case may be. The Lease during
any Extended Term shall be on the same terms and conditions as during the
Initial Term, except that the Minimum Rent shall be determined as set forth in
SECTION 34.2 below. In the event Lessee desires to exercise any option to extend
granted in this ARTICLE XXXIV, Lessee shall give Lessor written notice ("NOTICE
TO EXTEND") not more than three hundred sixty (360) days prior and not less than
one hundred eighty (180) days prior to the expiration of the Initial Term or the
immediately preceding Extended Term, as the case may be. If Lessee fails to give
Lessor any such notice, then such option to extend and all future options to
extend granted in this ARTICLE XXXIV shall be null and void and of no further
force or effect.
34.2. Minimum Rent During Extended Terms. The Minimum Rent at the
commencement of the first Extended Term shall be the higher of: (i) the previous
year's Minimum Rent amount increased by two percent (2%); or (ii) the Minimum
Rent during the first lease year of the Initial Term (i.e., June 1, 2002 through
May 31, 2003) multiplied by a fraction the numerator of which is the C.P.I. as
of the commencement date of the first Extended Term and the denominator of which
is the C.P.I. as of the Commencement Date. Provided, however, in no event shall
the Minimum Rent for the first year of the first Extended Term exceed by fifteen
percent (15%) or more the amount of Minimum Rent at the end of the Initial Term.
The initial Minimum Rent payable during the second Extended Term, shall be the
higher of (i) the Minimum Rent payable during the last twelve (12) months of the
previous Extended Term increased by two percent (2%), or (ii) the Fair Market
Rent, as determined in SECTION 34.3 below, or (iii) the Minimum Rent during the
first lease year of the first Extended Term multiplied by a fraction the
numerator of which is the C.P.I. as of the commencement date of the second
Extended Term and the denominator of which is the C.P.I. as of the commencement
date of the first Extended Term Minimum Rent during the Extended Term shall be
subject to annual adjustments as provided in SECTION 3.1. Provided, however, in
no event shall the Minimum Rent for the first year of the Second Extended Term
exceed by fifteen percent (15%) or more the amount of Minimum Rent at the end of
the first Extended Term.
34.3. Determination of Fair Market Rent.
(i) If Lessor and Lessee cannot agree on the Fair Market Rent
within thirty (30) days after the date of any Notice to Extend with respect to
the first or second Extended Term, each party shall, by notice to the other,
appoint a disinterested and licensed M.A.I. Real Estate Appraiser of national
reputation and renown with at least five years of experience in appraising
assisted living facilities throughout the United States with the same types of
operating licenses then being in effect at each respective Facility to determine
the Fair Market Rent. If any party should fail to appoint an appraiser within
ten (10) days after notice, the appraiser selected by the other party shall
determine the Fair Market Rent. In determining the Fair Market Rent, each
appraiser shall give appropriate consideration to, among other things, generally
applicable minimum rent for tenancies of property comparable to the Leased
Property in the area in which the Leased Property is located.
(ii) If the two appraisers selected pursuant to SECTION
34.3(i) above, cannot agree upon the Fair Market Rent within forty-five (45)
days, they shall immediately give
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written notice of such inability ("NOTICE OF DISAGREEMENT") to both Lessor and
Lessee setting forth the Fair Market Rent determinations of each of the
appraisers. If the determinations of each of the two appraisers of the Fair
Market Rent at the commencement of such Extended Term differ by less than ten
percent (10%) of the lower determination, the Fair Market Rent shall be fixed at
an amount equal to the average of the two determinations.
(iii) If the determinations of each of the two appraisers
selected pursuant to SECTION 34.3(i), above, differ by ten percent (10%) or more
of the lower determination with respect to the Fair Market Rent to be paid at
the commencement of such Extended Term, then within thirty (30) days after the
giving of the Notice of Disagreement, the two appraisers shall appoint a third
disinterested and licensed M.A.I. Real Estate Appraiser of national reputation
and renown with at least five (5) years of experience appraising assisted living
facilities throughout the United States with the same types of operating
licenses then being in effect at each respective Facility. If the parties cannot
then agree on the Fair Market Rent, the third appraiser shall determine the Fair
Market Rent, and in so doing, shall give appropriate consideration to those
items described in SECTION 34.3(i). The third appraiser shall not select a Fair
Market Rent either (i) higher than the highest of the two appraisals made
pursuant to SECTION 34.3(i); or (ii) lower than the lowest of the two appraisals
made pursuant to SECTION 34.3(i), above. If the first two appraisers cannot
agree on the selection of a third appraiser within such thirty (30) days, or if
the first two appraisers fail to provide a Notice of Disagreement (as stated
above in SECTION 34.3(ii), above, then the Fair Market Rent shall be determined
by a third appraiser selected by the American Arbitration Association upon
application by Lessor.
(iv) During the time before the determination of the Fair
Market Rent, Lessee shall pay Minimum Rent at the rate paid immediately
preceding such Extended Term, increased by two percent (2%); provided, however,
that, if the Fair Market Rent is determined to be higher than such amount, the
Minimum Rent owed by Lessee at the Fair Market Rent shall be effective
retroactively as of the first day of such Extended Term. If, after the Minimum
Rent for an Extended Term is adjusted and applied retroactively as of the first
day of such Extended Term, it is determined that additional Minimum Rent is due
Lessor, the aggregate amount of any such additional Minimum Rent shall be paid
to Lessor within thirty (30) days of the determination of the Fair Market Rent
for such Extended Term.
34.4. Appraisal Fee. Each of the parties shall pay the fees of the
appraiser that it selects pursuant to SECTION 34.3(i), above, and shall equally
share the cost of the third appraiser, if necessary, and shall equally share the
cost of arbitration (excluding attorneys' fees), if necessary.
-41-
WHEREFORE, each of the parties has accepted and agreed by affixing their
respective authorized signatures below as of the date first above written.
"LESSOR" LTC PROPERTIES, INC.,
a Maryland corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice Chairman and Chief Financial Officer
TEXAS-LTC LIMITED PARTNERSHIP,
a Texas limited partnership
BY: L-TEX GP, INC.
ITS GENERAL PARTNER
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice Chairman and Chief Financial Officer
NORTH CAROLINA REAL ESTATE
INVESTMENTS, LLC,
a North Carolina limited liability company
BY: LTC-▇▇▇▇▇▇▇▇▇, INC. AND LTC-RICHMOND, INC.
ITS GENERAL PARTNERS
LTC-▇▇▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice Chairman and Chief Financial Officer
LTC-RICHMOND, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice Chairman and Chief Financial Officer
ALTERRA HEALTHCARE CORPORATION,
"LESSEE" a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
-42-
LIST OF EXHIBITS AND SCHEDULES
Schedule "1" Existing Encumbrances
Exhibit "A-1"
through
Exhibit "A-21" Land
Exhibit "B" List of Facilities by Name and Address
-43-
SCHEDULE "1"
EXISTING ENCUMBRANCES
COLORADO
1. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded on
February 9, 1002 as Instrument Number 2824958 in the Official
Records of Weld County (Sterling House of Greeley).
2. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded on
February 12, 2002 as Instrument Number 2001009874 in the Official
Records of Larimer County (Clare Bridge).
3. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded on
July 6, 2001 as Instrument Number 2001054796 in the Official Records
of Larimer County (Sterling House of Fort ▇▇▇▇▇▇▇).
FLORIDA
4. Mortgage, Security Agreement, Assignment of Rents and Leases and
Fixture Filing executed by LTC Properties, Inc. and recorded on
August 8, 2001 in Volume 1445, Page 113 in the Official Records of
Hernando County (Sterling House of Spring Hill).
5. Mortgage, Security Agreement, Assignment of Rents and Leases and
Fixture Filing executed by LTC Properties, Inc. and recorded on
August 8, 2001 in Volume 2309, Page 2058 in the Official Records of
Okaloosa County (Sterling House of Bluewater Bay).
NORTH CAROLINA
6. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded on
February 16, 2001 in Book 1825, Page 117 in the Official Records of
▇▇▇▇▇ County (Sterling House - Goldsboro).
7. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded
October 5, 2001 in Book 1309, Page 1967 in the Official Records of
Cleveland County (Sterling House of Shelby).
8. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded on
or about October 5, 2001 in Book 1206, Page 565 in the Official
Records of Pitt County (Sterling House of Greenville).
-44-
9. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded on
October 5, 2001 in Book 1814, Page 652 in the Official Records of
▇▇▇▇ County (Sterling House of Rocky Mount).
10. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded on
October 5, 2001 as No. 2001-00032075 in Book 1854, Page 863 in the
Official Records of ▇▇▇▇▇▇ County (Sterling House of New Bern).
OKLAHOMA
11. Mortgage, Assignment of Leases, Rents, Issues, and Profits, Security
Agreement and Fixture Filing executed by LTC Properties, Inc. and
recorded on December 16, 2002 in Book 1016, Pages 452-478 in the
Official Records of ▇▇▇▇▇ County (Sterling House of ▇▇▇▇▇▇).
OHIO
12. Open-End Mortgage, Security Agreement, Assignment of Rents and
Leases and Fixture Filing executed by LTC Properties, Inc. and
recorded on August 3, 2001 as Instrument Number 200100020591 in the
Official Records of ▇▇▇▇▇ County (Sterling House of Springfield).
SOUTH CAROLINA
13. Mortgage, Security Agreement, Assignment of Rents and Leases and
Fixture Filing executed by LTC Properties, Inc. and recorded on
February 13, 2001 as Instrument Number 010010096 in the Official
Records of ▇▇▇▇▇▇▇ County (Sterling House - Clemson).
14. Mortgage, Security Agreement, Assignment of Rents and Leases and
Fixture Filing executed by LTC Properties, Inc. and recorded on
February 13, 2001 in Volume 1103, Page 1 in the Official Records of
Greenwood County (Sterling House - Greenwood).
15. Mortgage, Security Agreement, Assignment of Rents and Leases and
Fixture Filing executed by LTC Properties, Inc. and recorded on
September 19, 2001 in Volume 816, Page 1504 in the Official Records
of Sumter County (Sterling House of Sumter).
TEXAS
16. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by Texas-LTC Limited Partnership and
recorded on February 12, 2001 in Volume 2230, Page 568 in the
Official Records of Wichita County (Sterling House of Wichita
Falls).
17. Deed of Trust, Security Agreement, Assignment of Rents and Leases
and Fixture Filing executed by LTC Properties, Inc. and recorded on
July 3, 2001 as Instrument Number 2001020675 in the Official Records
of McLennan County (Sterling House of Waco).
-45-
EXHIBIT "A-1"
LEGAL DESCRIPTION
GOLDSBORO, NORTH CAROLINA
That certain tract or parcel of land lying and being in Stoney Creek Township,
▇▇▇▇▇ County, North Carolina being bound on the north by U.S. Highway 13 North
(Berkeley Boulevard), on the east by Maplewood Drive, on the south by Maplewood
Subdivision, and on the west by Northwood Subdivision and the property of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and wife ▇▇▇▇ ▇. ▇▇▇▇▇▇ and being more particularly described
as follows:
BEGINNING at an iron pipe located at the intersection of the southern right of
way line of U.S. Highway 13 North (Berkeley Boulevard) and the western right of
way line of Maplewood Drive, said U.S. Highway 13 North (Berkeley Boulevard)
having a right of way width of 70 feet and Maplewood Drive having a right of way
width that varies from 60 feet to 70 feet; thence from said POINT OF BEGINNING
and with the western right of way line of Maplewood Drive S 33 degrees 18'00" E
250.05 feet to a point of curve in the western right of way line of Maplewood
Drive; thence with said right of way line along a curve in a counterclockwise
direction, said curve having a radius of 2091.339 feet, a chord bearing of S 33
degrees 17"58" E and a chord distance of 80.39 feet to an iron pipe in said
right of way line, the northeast corner of Lot 31, Maplewood Subdivision
recorded in Plat Cabinet H, Slide 217 of the ▇▇▇▇▇ County Registry; thence
leaving the western right of way line of Maplewood Drive and with the northern
line of Maplewood Subdivision S 55 degrees 35'57" W 121.97 feet to an iron pipe,
the northwest corner of Lot 31, Maplewood Subdivision; thence continuing with
the northern line of Maplewood Subdivision S 43 degrees 34'57" W 255.71 feet to
an iron pipe, a common corner between Lots 33 and 34, Maplewood Subdivision;
thence continuing with the northern line of Maplewood Subdivision S 43 degrees
43'12" W 93.17 feet to an iron pipe in the eastern line of Lot 16, Northwood
Subdivision recorded in Map Book 8, Page 2, ▇▇▇▇▇ County Registry, said point
being a corner in Lot 34, Maplewood Subdivision; thence leaving the northern
line of Maplewood Subdivision and with the eastern line of Northwood Subdivision
N 02 degrees 19'50" W 266.14 feet to an iron pipe at the northeast corner of Lot
18, Northwood Subdivision, said point being a corner in the property of ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ and wife ▇▇▇▇ ▇. ▇▇▇▇▇▇ recorded in Deed Book 1495, Page 634 of the
▇▇▇▇▇ County Registry; thence with the Dawley line N 02 degrees 35'15" W 54.95
feet to an iron pipe; thence N 57 degrees 38'07" E 38.34 feet to an iron pipe;
thence N 32 degrees 11'45" W 136.87 feet to an iron pipe; thence continuing N 32
degrees 11'45" W 5.00 feet to an iron pipe in the southern right of way line of
U.S. Highway 13 North (Berkeley Boulevard), said point being the northeast
corner of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and wife ▇▇▇▇ ▇. ▇▇▇▇▇▇ property; thence with
the southern right of way line of U.S. Highway 13 North (Berkeley Boulevard) N
57 degrees 48'06" E 255.74 feet to the POINT OF BEGINNING containing 2.68 acres
as shown on a plat of survey entitled "ALTA/ACSM Land Title Survey for Sterling
House Corporation" dated June 27th, 1997 and last revised July 28th, 1997
prepared by Rivers and Associates, Inc. and having drawing number W-2131-A.
EXHIBIT "A-2"
LEGAL DESCRIPTION
Shelby, North Carolina
Located in Cleveland County, North Carolina. Commencing on N.C.G.S. monument
"Cleveland" whose North Carolina Grid Coordinates are North 569682.206 feet and
East 1255445.183 feet; thence North 52-48-00 West for a distance of 1223.80 feet
to a new iron pin set in the Northern right of way of East ▇▇▇▇▇▇ Street the
beginning corner of the 2.173 acre tract herein described; thence a new line
through the ▇▇▇▇▇▇▇ property North 17-49-48 East for a distance of 257.17 feet
to a new iron pin set inside the Proposed 50 foot right of way of ▇▇▇▇▇▇▇▇▇
Avenue; thence continuing inside the right of way of ▇▇▇▇▇▇▇▇▇ Avenue with a
curve to the right having a radius of 1298.71 feet and an arc length of 25.23
feet, being subtended by a chord of North 65-33-50 West for a distance of 224.95
feet to an existing iron pin; thence North 60-22-30 West for a distance of
100.34 feet to a bent pipe located inside the proposed right of way of ▇▇▇▇▇▇▇▇▇
Avenue; thence leaving ▇▇▇▇▇▇▇▇▇ Avenue and running with a common line between
the ▇▇▇▇▇▇▇ ▇. London property as described in Deed Book 975 at Page 598 and the
▇▇▇▇▇▇▇ property South 18-16-35 West for a distance of 146.26 feet to an
existing rebar; thence continuing with the common line of London and ▇▇▇▇▇▇▇
North 69-32-59 West for a distance of 24.56 feet to an existing pipe a common
corner between London, ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ property as recorded in
Deed Book 13-V at Page 226; thence with the common line between ▇▇▇▇▇ and
▇▇▇▇▇▇▇ South 17-50-38 West for a distance of 174.23 feet to an existing pipe
located inside the right of way of East ▇▇▇▇▇▇ Street; thence continuing inside
the right of way of ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇ for a distance of
124.97 feet to an existing iron pin located inside the right of way; thence
North 17-54-41 East for a distance of 13.68 feet to an existing iron pin located
in the Northern edge of the right of way of East ▇▇▇▇▇▇ Street; thence running
along with the Northern edge of the right of way of ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇-▇▇ ▇▇▇▇ for a distance of 222.42 feet to the BEGINNING.
EXHIBIT "A-3"
LEGAL DESCRIPTION
Greenville, North Carolina
Being all ▇▇▇ ▇▇.▇ ▇▇ ▇▇▇▇▇ "▇" ▇▇ ▇▇▇▇ ▇▇▇▇▇ Subdivision as shown on the plat
recorded in Map Book 48, Page 127, of the pitt County Register of Deeds Office.
EXHIBIT "A-4"
LEGAL DESCRIPTION
Rocky Mount, North Carolina
Located in ▇▇▇▇ County, North Carolina. BEGINNING at the point where the western
right of way line of N.C. Highway 48 (Gold Rock Road), if extended, would
intersect the southern right of way line of Beaver Pond Drive, if extended,
thence from said point of beginning and with the western right of way line of
N.C. Highway 48 (Gold Rock Road) along a curve in a clockwise direction, said
curve having a radius of 2,574.354 feet, a chord bearing of S. 00-56-07 E. and a
chord distance of 171.71 feet to a point of tangency in said right of way line;
thence continuing with the western right of way line of N.C. ▇▇▇▇▇▇▇ ▇▇ (▇▇▇▇
▇▇▇▇ ▇▇▇▇), ▇. 00-58-34 W. 43.98 feet to a point of curvature in said right of
way line; thence along a curve in a clockwise direction, said curve having a
radius of 2,834.89 feet, a chord bearing of S. 01-19-22 W. and a chord distance
of 34.31 feet to an iron pipe in said right of way line, the true point of
beginning; thence from said point of beginning and with the western right of way
line of N.C. Highway 48 (Gold Rock Road) along a curve in a clockwise direction,
said curve having a radius of 2,834.789 feet, a chord bearing of S. 02-21-22 W.
and a chord distance of 67.94 feet to a point of compound curvature in the
western right of way line of N.C. ▇▇▇▇▇▇▇ ▇▇ (▇▇▇▇ ▇▇▇▇ ▇▇▇▇); thence continuing
with said right of way line along a curve in a clockwise direction, said curve
having a radius of 17,317.755 feet, a chord bearing of S. 03-24-14 W. and a
chord distance of 218.31 feet to an iron pipe in the western right of way line
of N.C. ▇▇▇▇▇▇▇ ▇▇ (▇▇▇▇ ▇▇▇▇ ▇▇▇▇); thence leaving said right of way line N.
86-50-42 W. 350.00 feet to an iron pipe; thence N. 03-09-18 E. 286.25 feet to an
iron pipe; thence S. 86-50-42 E. 350.00 feet to the true point of beginning, and
being ▇▇▇ ▇, ▇▇▇▇▇ ▇, as shown on "Minor ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇ ▇, ▇▇▇▇▇ ▇
Property of ▇▇▇▇▇▇, G. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇., Stony Creek Township, ▇▇▇▇ County, North Carolina, Drawing
Number FP-464", and recorded in Map Book 25, Page 87, ▇▇▇▇ County Registry.
EXHIBIT "A-5"
LEGAL DESCRIPTION
New Bern, North Carolina
Located in ▇▇▇▇▇▇ County, North Carolina and being all of Lot 1 of the Sterling
Park Subdivision, as shown on the plat recorded in Plat Cabinet G, Slide 33-B,
aforesaid County Registry.
EXHIBIT "A-6"
LEGAL DESCRIPTION
Greeley, Colorado
A tract of land located in the SW 1/4 of the SE 1/4 of Section 11, Township 5
North, Range 66 West of the 6th p.m., City of ▇▇▇▇▇▇, Weld County, Colorado,
which is more particularly described as follows:
Commencing at the SE Corner of said Section 11, and considering the South line
of said Section 11 to bear North 90 degrees 00'00" West and with all other
bearings contained herein being relative thereto;
Thence North 90 degrees 00'00" West, 1767.99 feet to the True Point of
Beginning;
Thence North 01 degrees 44'06" West, 457.65 feet;
Thence South 79 degrees 35'13" West, 437.10 feet;
Thence South 01 degrees 52'00" East, 378.65 feet;
Thence North 90 degrees 00'00" East, 431.41 feet to the True Point of Beginning;
EXCEPTING THEREFROM THE FOLLOWING DESCRIBED TRACTS OF LAND:
1) That portion conveyed to the City of ▇▇▇▇▇▇ by instrument recorded March
18, 1983 in Book 991 as Reception No. 1920725;
2) That portion dedicated as 38th Avenue by Map recorded May 19, 1970 in
Book 626 as Reception No. 1547624; and
3) That portion dedicated as 38th Avenue by Map recorded July 19, 1984 in
Book 1037 as Reception No. 1974489.
EXHIBIT "A-7"
LEGAL DESCRIPTION
Fort ▇▇▇▇▇▇▇, Colorado
FORT ▇▇▇▇▇▇▇ - ▇▇▇▇▇ BRIDGE COTTAGE, COLORADO
▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ Of Colorado.
EXHIBIT "A-8"
LEGAL DESCRIPTION
Fort ▇▇▇▇▇▇▇, Colorado
FORT ▇▇▇▇▇▇▇, COLORADO PROPERTY
▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.▇. according to the Plat recorded June 26, 1997 at
Reception ▇▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ of Colorado.
EXHIBIT "A-9"
LEGAL DESCRIPTION
Niceville, Florida
A parcel of land lying in Section ▇▇, ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇ 22 West, Okaloosa
County, Florida and lying southwesterly of Merchants Way; being more
particularly described as follows:
Commencing at the C.L.O. monument marking the northeast corner of the northwest
1/4 of aforesaid Section 23, thence run N 89 degrees 04'00" W (reference
bearing) along the north line thereof for 294.17 feet; thence departing said
north line run S 01 degrees 22'01" W for 310.00 feet to the south right-of-way
line of aforementioned Merchants Way (35' R/W); thence run S 89 degrees 04'00" E
for 131.17 feet to the point of curvature of a curve concave southwesterly and
having a radius of 1097.44 feet; thence run along said curve in a southeasterly
direction through a central angle of 16 degrees 57'37", an arc distance of
324.86 feet (chord = 323.67 feet, chord bearing = S 80 degrees 35'14" E) to the
POINT OF BEGINNING; thence continue along said curve and right-of-way line
through a central angle of 09 degrees 40'00", an arc distance of 185.15 feet
(chord = 184.93 feet, chord bearing = S 67 degrees 16'30" E) to the point of
tangency of said curve; thence run S 62 degrees 26'30" E for 184.04 feet to the
point of curvature of a curve concave northeasterly and having a radius of
553.74 feet; thence run along said curve in a southeasterly direction through a
central angle of 11 degrees 27'29", an arc distance of 110.74 feet (chord =
110.55 feet, chord bearing = S 68 degrees 10'14" E); thence departing said curve
and right-of-way line, run S 39 degrees 59'50" W for 271.13 feet; thence N 50
degrees 00'10" W for 408.25 feet to the point of curvature of a curve concave
northeasterly and having a radius of 30.00 feet; thence run along said curve in
a northwesterly direction through a central angle of 65 degrees 50'20", an arc
distance of 34.47 feet (chord = 32.61 feet, chord bearing = N 17 degrees 05'00"
W) to the point of tangency of said curve; thence run N 15 degrees 50'10" E for
79.38 feet to the point of curvature of a curve concave southeasterly and having
a radius of 50.00 feet; thence run along said curve in a northeasterly direction
through a central angle of 63 degrees 12'59", an arc distance of 55.17 feet
(chord = 52.41 feet, chord bearing = N 47 degrees 26'40" E) to its intersection
with the aforesaid southerly right-of-way line of Merchants Way and the POINT OF
BEGINNING.
Together with a nonexclusive easement over Merchants Way for ingress/egress and
utilities, as well as nonexclusive easement rights to utilize the water and
sewer mains referenced in the Joint Use and Reservations of Easement Agreement
dated November 21, 1996, and recorded in Official Records Book 2036, Page 1774,
Public Records of Okaloosa County, Florida.
EXHIBIT "▇-▇▇"
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
PARCEL I:
A parcel of land lying in and being a part of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇ 18 East, Hernando County, Florida and being more particularly described as
follows: Commence at the Northeast corner of ▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ONE, as recorded in Plat Book 23, pages 13 and 14, public records
of Hernando County, Florida; thence South 66 degrees 20'25" East, along the
Southerly right-of-way of ▇▇▇▇▇▇▇▇ ▇▇▇▇, 174.95 feet to the Point of Beginning;
thence continue South 66 degrees 20'25" East, along said right-of-way line,
410.05 feet to the Westerly right-of-way line of Mariner Boulevard; thence South
23 degrees 39'35" West, along said right-of-way line, 274.92 feet; thence North
66 degrees 20'25" West 527.60 feet to the Easterly boundary of that certain
parcel of land recorded in O.R. Book 713, pages 399 through 408, public records
of Hernando County, Florida; thence North 46 degrees 48'36" East, along said
Easterly boundary, 299.00 feet to the Point of Beginning. Subject to easements
and rights-of-way of record.
PARCEL II:
Together with 20 foot wide drainage easement described as follows:
A parcel of land lying in and being a part of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇ 18 East, Hernando County, Florida, and being more particularly described
as follows: Commence at the Northeast corner of ▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ One as recorded in Plat Book 23, pages 13 and 14, public records of
Hernando County, Florida; thence South 66 degrees 20'25" East along the
Southerly right-of-way line of ▇▇▇▇▇▇▇▇ ▇▇▇▇, 174.95 feet; thence South 46
degrees 48'36" West along the Easterly boundary of that certain parcel of land
described in O.R. Book 713, pages 399 through 408, public records of Hernando
County, Florida, 299.00 feet to the Point of Beginning; thence South 66 degrees
20'25" East, 21.75 feet; thence South 46 degrees 48'36" West, 520.72 feet;
thence North 48 degrees 18'39" West, 20.08 feet to the Easterly boundary of said
certain parcel of land; thence North 46 degrees 48'36" East along said Easterly
boundary, 513.96 feet to the Point of Beginning.
ALSO together with drainage retention area easement described as follows:
A parcel of land lying in and being a part of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇ 18 East, Hernando County, Florida and being more particularly described as
follows: Commence at the Northeast corner of ▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ One as recorded in Plat Book 23, pages 13 and 14, public records of
Hernando County, Florida; thence South 66 degrees 20'25" East along the
Southerly right-of-way line of ▇▇▇▇▇▇▇▇ ▇▇▇▇, 174.95 feet; thence South 46
degrees 48'36" West along the Easterly boundary of that certain parcel of land
described in O.R. Book 713, pages 399 through 408, public records of Hernando
County, Florida, 550.70 feet to the Point of Beginning; thence continue South 46
degrees 48'36" West along said Easterly boundary, 262.26 feet; thence North 48
degrees 18'39" West, 82.83 feet; thence North 06 degrees 53'25" East, 71.65
feet; thence North 36 degrees 53'01 East, 66.81 feet; thence North 59 degrees
16'43" East, 107.01 feet; thence North 85 degrees 47'31" East, 75.30 feet;
thence South 31 degrees 42'04" East, 70.94 feet to the Point of Beginning.
Said easements as recorded on October 2, 1997 in O.R. Book 1150, page(s) 142,
public records of Hernando County, Florida.
EXHIBIT "A-11"
LEGAL DESCRIPTION
Fort ▇▇▇▇▇▇, Florida
A parcel of land lying in Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 24 East; ▇▇▇
County, Florida, being more particularly described as follows:
Commencing at the Southeast corner of said Section 27; thence North
88 degrees 54'09" West along the South line of said Section 27, a distance of
960.00 feet to a line lying parallel to and 960.00 feet West of, as measured at
right angles to the East line of said Section 27; thence North 00 degrees 17'36"
West along said parallel line, a distance of 1879.99 feet to the South line of
lands recorded in Official Records Book 1739, Pages 768 through 770, of the
Public records of ▇▇▇ County, Florida (Said lands also known as Lakewood Drive);
thence South 89 degrees 29'58" East along said South line, a distance of 257.90
feet to the Point of Beginning of this description;
Thence continue South 89 degrees 29'58" East along said South line, a distance
of 352.00 feet to a line lying parallel to and 349.88 feet West of, as measured
at right angles to, said East line of Section 27; thence South 00 degrees 17'36"
East along said parallel line, a distance of 225.00 feet; thence South 38
degrees 40'32" West, a distance of 146.27 feet to a line lying parallel to and
340.00 feet South of as measured at right angles to said south line of Official
Records Book 1739, Pages 768 through 770; thence North 89 degrees 29'58" West
along said parallel line, a distance of 260.00 feet to a line lying parallel to
and 701.84 feet West of as measured at right angles to said East line of Section
27; thence North 00 degrees 17'36" West along said parallel line, a distance of
340.00 feet to the Point of Beginning.
EXHIBIT "A-12"
LEGAL DESCRIPTION
Ada, Oklahoma
A part of ▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇ 6 East, Pontotoc County,
Oklahoma, more particularly described as follows, to-wit:
BEGINNING at the Northeast corner of said Lot 3; Thence ▇▇▇ ▇▇▇▇ 282.56 feet;
Thence due South 330 feet; Thence East 282.56 feet; Thence due North 330 feet to
the point of beginning.
EXHIBIT "A-13"
LEGAL DESCRIPTION
Durant, Oklahoma
The North 335 feet of the W/2 SE/4 SW/4 NE/4 of Section 30, Township 6 South,
Range 9 East of the Indian Base and Meridian, in ▇▇▇▇▇ County, Oklahoma
according to the Government Survey thereof.
EXHIBIT "A-14"
LEGAL DESCRIPTION
Weatherford, Oklahoma
All of Block 4, Ridge Crest Addition to the City of ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ County,
Oklahoma according to the recorded plat thereof.
EXHIBIT "A-15"
LEGAL DESCRIPTION
Central, South Carolina
CLEMSON (CENTRAL), SOUTH CAROLINA
All that certain piece, parcel or tract of land, with the
improvements thereon, if any, situate, lying and being in the County of ▇▇▇▇▇▇▇,
State of South Carolina being described as follows:
BEGINNING AT A NAIL AND CAP(o) at the intersection near the
approximate centerline of ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ Drive; thence running N35
degrees 43'50" along ▇▇▇▇▇▇▇ Drive for a distance of 276.39 feet to a nail(o);
thence turning and running along a portion of Tract C (property of Now or
Formerly ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇) N40 degrees 58'02"E for a distance
of 300.80 feet to a 1/2" rod(o); thence and turning and running S57 degrees
45'39"E along property Now or Formerly ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇ for a
distance of 120.41 feet to a 1/2" rod(o); thence turning and running S54 degrees
33'30"E along property of Now or Formerly ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇ for
a distance of 81.00 feet to a 1/2" rod(o); thence turning and running S51
degrees 56'19"E along property of Now or Formerly ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇.
▇▇▇▇▇▇▇ for a distance of 229.32 feet to a 1/2" rebar(o); thence turning and
running S48 degrees 07'12"W along ▇▇▇▇▇▇▇ ▇▇▇▇ for a distance 184.86 feet to a
nail and cap(o); thence turning and running S72 degrees 58'26"W along ▇▇▇▇▇▇▇
▇▇▇▇ for a distance of 257.87 feet to a nail and cap(o), the POINT OF BEGINNING
(P.O.B.)
EXHIBIT "A-16"
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
All that certain piece, parcel or tract of land situate, lying and being in the
City of Greenwood, Greenwood County, South Carolina, containing 2.60 acres, more
or less, and being shown and delineated on a plat prepared for Sterling House
Corporation by ▇▇▇ and ▇▇▇▇▇▇▇, Inc., dated February 6, 1998 and recorded in the
Office of the Clerk of Court for Greenwood County in Plat Book 106 at page 112;
and according to said plat having the following metes and bounds:
Beginning at a 5/8" rebar (o) at the intersection of the western right-of-way of
Parkway (private road) and the northern right-of-way of ▇▇▇▇▇▇ Avenue
(S-24-168), Point of Beginning; thence running N81 degrees 19'57"W along the
northern right-of-way of ▇▇▇▇▇▇ Avenue (S-24-168) for a distance of 391.79 feet
to a 5/8" rebar(o); thence turning and running N08 degrees 39'35"E along
property now or formerly PTA Enterprises for a distance of 204.06 feet to a PK
nail(o); thence turning and running N47 degrees 00'05"E along property now or
formerly Piedmont Physicians for Women, PA for a distance of 87.03 feet to a
5/8" rebar(o); thence turning and running S43 degrees 27'56"E along the
southwestern right-of-way of Katie Court (private road) for a distance of 50.06
feet to a 1/2" rebar(o); thence turning and running N46 degrees 59'58"E along
the southeastern right-of-way of Katie Court (private road) for a distance of
213.65 feet to a 5/8" rebar (o); thence turning and running S76 degrees 56'44"E
along the right-of-way of Katie Court (private road) and right-of-way of Parkway
(private road) for a distance of 8.34 feet to a 5/8" rebar(o); thence turning
and running S22 degrees 22'33"E along the southwestern right-of-way of Parkway
(private road) for a distance of 305.60 feet to an "X" on concrete (n); thence
turning and running S08 degrees 42'29"W along the western right-of-way of
Parkway (private road) for a distance of 146.72 feet to a 5/8" rebar (o), POINT
OF BEGINNING.
EXHIBIT "A-17"
LEGAL DESCRIPTION
Sumter, South Carolina
All that certain piece, parcel or tract of land, with the improvements
thereon, if any, situate, lying and being in the County of Sumter, State of
South Carolina being shown and designated as 2.840 acres, on a plat prepared for
Sterling House Corporation by ▇▇▇ and ▇▇▇▇▇▇▇, Inc., dated May 27, 1998, and
recorded in the Office of the R.M.C. for Sumter County in Plat Book _______,
page ____; and according to said plat having the following, metes, bounds,
courses and distances to wit:
Beginning at a point at the intersection of the northern right-of-way of
▇▇▇▇▇▇ Road (S-467) and the western right-of-way of ▇▇▇▇▇▇ ▇▇▇▇ Road (S692),
thence continuing in a northeasterly direction for a distance of approximately
210 feet along the western right-of-way of ▇▇▇▇▇▇ ▇▇▇▇ Road (S-692) to a 1/2"
rebar (o), the POINT OF BEGINNING; thence turning and running N58 degrees
24'09"W along property of now or formerly ▇▇▇▇▇ ▇., ▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ for a distance of 400.10 feet to a 1/2" rebar (o); thence turning and
running along property of now or formerly ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ for the following
distances N30 degrees 54'30"E - 40.01 feet, N30 degrees 56'20"E - 41.83 feet,
N30 degrees 55'34"E - 38.14 feet, N30 degrees 51'03"E - 38.90 feet, N30 degrees
55'54"E - 98.00 feet, N30 degrees 57'42"E - 49.97 feet to a nail in tree (o);
thence turning and running S59 degrees 05'37"E along property now or formerly
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Funeral Home, Inc., for a distance of 400.08 feet to a 1/2"
rebar (o) on the western right-of-way of ▇▇▇▇▇▇ ▇▇▇▇ Road (S-692); thence
turning and running along the western right-of-way of ▇▇▇▇▇▇ ▇▇▇▇ Road (S-692)
for the following distances; S30 degrees 59'59"W - 49.89 feet, S30 degrees
55'42"W - 98.06 feet, S30 degrees 51'10"W - 43.72 feet, S30 degrees 54'43"W -
33.23 feet, S30 degrees 56'35"W - 46.80 feet, S30 degrees 53'41"W - 39.99 feet
to a 1/2" rebar (o), the POINT OF BEGINNING. Be all measurements a little more
or less.
EXHIBIT "A-18"
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
Legal description of the land:
All of Lot 2-A, County Farm Addition to the City of Wichita Falls, Wichita
County, Texas, according to plat of record in the Plat Records of Wichita
County, Texas, and more fully described as follows:
A tract of land out of Block 8, ▇▇▇▇ & ▇▇▇▇▇ Subdivision of the Cherokee County
School Land, Wichita County, Texas, and being a part of Lot 2 County Farm
Addition to the City of Wichita Falls, Texas, as recorded in Volume 26, Page
768, Wichita County Plat Records, and being more specifically described by metes
and bounds as follows:
BEGINNING at a Texas Electric Service Company monument in the intersection of
the North right-of-way line of Midwestern Parkway and the East right-of-way line
of Reddy Drive, said monument being the Southwest corner of said Lot 2 and of
this description;
THENCE along the East right-of-way line of Reddy Drive North 01 degrees 02' 57"
East a distance of 330.65 feet to a 1/2 inch iron rod for the Northwest corner
of this description;
THENCE South 88 degrees 57' 03" East a distance of 250.00 feet to a 1/2 inch
iron rod for the Northeast corner of this description;
THENCE South 01 degrees 02' 57" West a distance of 330.00 feet to a 1/2 inch
iron rod lying in the North right-of-way line of Midwestern Parkway for the
Southeast corner of this description;
THENCE along the North right-of-way line of Midwestern Parkway North 89 degrees
06' 02" West a distance of 250.00 feet to the PLACE OF BEGINNING and containing
1.90 acres, more or less.
EXHIBIT "A-19"
LEGAL DESCRIPTION
Watauga, Texas
▇▇▇ ▇-▇, ▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an addition to the City of Watauga,
Tarrant County, Texas, according to the plat thereof recorded in Cabinet A,
Slide 3237, Plat Records, Tarrant County, Texas.
EXHIBIT "A-20"
LEGAL DESCRIPTION
Waco, Texas
BEING all of a 3.987 acre tract of land located in the ▇▇▇▇ ▇▇▇▇▇▇ SURVEY
Abstract No. 41 McLennan County, Texas, as described by deed to Sterling House
Corporation as recorded in Volume 68, page 627 of the Official Public Records of
McLennan County, Texas, and more particularly described by metes and bounds, as
follows:
BEGINNING at a 1/2-inch iron rod found at the Northeast corner of said 3.987
acre tract, lying in the South right-of-way line of Lake Shore Drive (a 135 foot
wide right-of-way). Said point of beginning also being the Northwest corner of
▇▇▇ ▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ADDITION, Part Three, an addition to the City of
Waco, McLennan County, Texas,
THENCE S 10 degrees 51' 10" E, 442.57 feet along the East boundary line of said
3.987 acre tract and the West boundary line of said Lot 3, to a 5/8" iron rod
found at the Southeast corner of said 3.987 acre Tract being the more Northerly
Northeast corner of ▇▇▇ ▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ADDITION to the
City of Waco, McLennan County, Texas according to the plat recorded in Volume
1680, Page 271 of the Deed Records of McLennan County, Texas,
THENCE S 65 degrees 37' 15" W, 299.91 feet along the Southeast boundary line of
said 3.987 acre Tract and the Northwest boundary line of said ▇▇▇ ▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ADDITION to a 1/2" iron rod found,
THENCE N 25 degrees 23' 19" W, 531.13 feet to a 1/2" iron rod found in the
North boundary line of said 3.47 acre Tract, and the South right-of-way line of
aforesaid Lake Shore Drive,
THENCE N 79 degrees 20' 17" E, 424.90 feet, along North boundary line of said
3.987 acre Tract, and the South right-of-way line of said Lake Shore Drive to
THE PLACE OF BEGINNING, containing 3.987 acres (173,657 square feet) of land.
EXHIBIT "A-21"
LEGAL DESCRIPTION
Springfield, Ohio
Situated in the City of Springfield, County of ▇▇▇▇▇, State of Ohio, and within
the corporate limits of the City of Springfield, and being part of the Southeast
Quarter of Section 20, Town 5, Range 10, between the Miami Rivers Survey, and
being described as follows: Commence at a stone (found) at the South quarter
corner of Section 20, Town 5, Range 10, BMRS, the same being the intersection of
the centerline of Middle Urbana Road with the centerline of Villa Road; thence
measure with the centerline of Middle Urbana Road, North 5 degrees 02 minutes 50
seconds East, 1380.60 feet; thence measure South 84 degrees 57 minutes 10
seconds East, 50.00 feet to a 5/8 inch re-bar with metal cap (found) at the
northwesterly corner of a 0.808 acre tract described in deed to Midvill Realty,
Ltd., recorded Volume 868, Page 270 of the Deed Records of ▇▇▇▇▇ County, Ohio,
the true point of the beginning herein; thence parallel with and 50 feet distant
from the centerline of Middle Urbana Road, North 5 degrees 02 minutes 50 seconds
East, 245.48 feet to a one-inch iron pipe with plastic cap (set) on the South
line of a future 60 foot right-of-way; thence with the South line of said future
right-of-way, South 84 degrees 57 minutes 10 seconds East, 330.00 feet to a
one-inch iron pipe with plastic cap (set) at a point of curvature; thence along
a curve to the right having a radius of 15.00 feet and a central angle of 90
degrees 00 minutes 00 seconds, an arc distance of 23.56 feet to a one-inch iron
pipe with plastic cap (set) at a point of tangency; thence with the West line of
a future 50 foot right-of-way, South 5 degrees 02 minutes 50 seconds West,
369.94 feet to a one-inch iron pipe with plastic cap (set) at a point of
curvature, thence along a curve to the right having a radius of 50.00 feet, and
a chord which bears South 19 degrees 35 minutes 35 seconds West at 25.12 feet,
an arc distance of 25.39 feet to a one-inch iron pipe with plastic cap (set)
thence North 84 degrees 57 minutes 10 seconds West, 188.69 feet to a one-inch
iron pipe with plastic cap (set); thence with part of the East line of said
0.808 acre tract, South 5 degrees 02 minutes 50 seconds West, 70.75 feet to a
one-inch iron pipe with plastic cap (set) at the southeast corner thereof;
thence with the south line of said 0.808 acre tract, North 84 degrees 57 minutes
10 seconds West, 150.00 feet to a one-inch iron pipe with plastic cap (set) at
the Southwest corner thereof; thence with the West line of said 0.808 acre
tract, the same being the easterly right-of-way line of Middle Urbana Road and
being parallel with and 50 feet distant from the centerline thereof, North 5
degrees 02 minutes 50 seconds East, 234.52 feet to the point of beginning and
containing 3.483 acres, more or less.
EXHIBIT "B"
List of Facilities by Address and Name
Sterling House of Goldsboro ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Shelby ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Greenville ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Rocky Mount ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of New Bern ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Greeley ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Clare Bridge Cottage ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Fort ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Bluewater Bay ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Spring Hill ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Ft. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Ada ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, ▇▇▇▇▇▇▇▇
Sterling House of ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Legacy Square ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Clemson ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Greenwood ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Sumter ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Wichita Falls ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
Sterling House of North Park Square ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Waco ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Sterling House of Springfield ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇