SIXTH AMENDMENT TO CONSOLIDATED AMENDED AND RESTATED MASTER LEASE
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
This
Sixth Amendment to Consolidated Amended and Restated Master Lease (this “Amendment”) is
executed and delivered as of March 14th, 2008 by and between STERLING
ACQUISITION CORP., a Kentucky corporation (“Lessor”), the address
of which is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and DIVERSICARE
LEASING CORP., a Tennessee corporation, the address of which is ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
RECITALS:
A. Lessee
has executed and delivered to Lessor a Consolidated Amended and Restated Master
Lease dated as of November 8, 2000, but effective as of October 1, 2000, as
amended by a First Amendment to Consolidated Amended and Restated Master Lease
dated as of September 30, 2001, a Second Amendment to Consolidated Amended and
Restated Master Lease dated as of June 15, 2005 (the “Second Amendment”), a
Third Amendment to Consolidated Amended and Restated Master Lease dated as of
October 20, 2006 (the “Third Amendment”), a
Fourth Amendment to Consolidated Amended and Restated Master Lease dated as of
April 1, 2007, and a Fifth Amendment to Consolidated Amended and Restated Master
Lease dated as of August 10, 2007 (the “Existing Master
Lease”) pursuant to which Lessee leased from Lessor certain healthcare
facilities.
B. Pursuant
to that certain Unimproved Property Contract (the “Paris Purchase
Agreement”) dated as of September 4, 2007 between ▇▇▇▇▇▇, ▇▇▇▇▇▇ and
▇▇▇▇▇, a general partnership, and Omega Healthcare Investors, Inc., a Maryland
corporation (“Omega”), Omega has
the right to acquire that certain parcel of unimproved land described on
attached Exhibit A and located in Paris, Texas (the “Paris
Land”).
C. Omega
is the parent corporation of Lessor and intends to assign its right to purchase
the Paris Land to Lessor.
▇. ▇▇▇▇▇▇
and Lessee desire to have a skilled nursing facility constructed on the Paris
Land (the “Paris
Facility”) and for Lessee to lease the Paris Facility from Lessor
pursuant to the Existing Master Lease.
E. Lessee
and Lessor desire to amend the Existing Master Lease to add the Paris Facility
to the Existing Master Lease on the terms and conditions of this
Amendment.
NOW
THEREFORE, the parties agree as follows:
1. Definitions.
(a) Any
capitalized term used but not defined in this Amendment will have the meaning
assigned to such term in the Master Lease. From and after the date of
this Amendment, each reference in the Existing Master Leases or the other
Transaction Documents to the “Lease” or “Master Lease” means, as applicable, the
Existing Master Lease or Existing Master Leases as modified by this
Amendment.
(b) In
addition to the other definitions contained herein, when used in this Amendment
the following terms shall have the following meanings:
“Acquisition Date”
means the date that the Land described in Exhibit A to this
Amendment is acquired by Lessor or its Affiliates.
“Actual Funded Amount”
means (i) the amount actually expended for the acquisition of the Paris Land by
Lessor and the amount actually advanced and disbursed by Lessor for completion
of the Paris Facility in accordance with this Amendment, as of a given date,
plus (ii) the allocated bed costs set forth in the Construction
Budget.
“Closing Date” means
the date that Lessor acquires the Paris Facility.
“Construction Budgets”
means the detailed budget for the construction of the Paris Facility attached as
Schedule 1,
which sets forth Lessee’s good faith estimate of the Project Costs on an
itemized basis and designates each item by amount, whether such item constitutes
an item of Hard Costs or Soft Costs and the amount of proceeds, if any, of the
Maximum Funded Amount allocable to each item of Hard Costs and Soft
Costs.
“Developer’s Fees”
means the fees and commissions, including Developer’s Overhead, payable to
Lessee or any Affiliate of Lessee for services rendered in connection with the
development, construction management or leasing of the Paris Facility, as set
forth on the Construction Budget.
“Developer’s Overhead”
means costs incurred by Lessee and set forth on the Construction Budget for
developer’s overhead and profit.
“Event of Force
Majeure” is any event or condition of Force Majeure, not existing as of
the Closing Date, not reasonably foreseeable as of such date and not reasonably
within the control of Lessee, that prevents in whole or in material part the
performance by Lessee of its obligations under this Amendment or that renders
the performance of such obligations so difficult as to make such performance
commercially unreasonable.
“Funded Amount” means
(i) the amount actually expended for the acquisition of the Paris Land and
completion of the Paris Facility as of a given date, plus (ii) the allocated bed
costs set forth in the Construction Budget.
“Hard Costs” means
costs paid to renovate and complete the Paris Facility, including without
limitation, demolition costs, site preparation costs, contractor’s fees, and
costs of labor and material paid or necessarily incurred by Lessee in connection
with the construction of the Paris Facility, but excluding Developer’s Fees,
Developer’s Overhead and Contractor’s Overhead, and the contingency reserve, if
any, set forth on the Construction Budget.
“Initial Paris Base
Rent” means an annual amount equal to (i) the Actual Funded Amount as of
the first day of the applicable month during the applicable Lease Year multiplied by (ii) ten and
one quarter percent (10.25%).
“In Service Date”
shall be the date of completion of construction and licensing of the Paris
Facility for its intended use as a skilled nursing facility.
“Joinder Agreement”
means the Joinder Agreement and Amendment to Texas Collateral Documents from the
Paris Sublessee, the Texas Sublessees, and Lessor dated as of the date of this
Amendment.
“Maximum Funded
Amount” means Seven Million Dollars ($7,000,000).
“Plans and
Specifications” means the written plans and specification for the
construction of the Paris Facility submitted by Lessee and approved by Lessor,
as such plans and specifications may be amended as set forth in this
Amendment.
“Paris Base Rent Commencement
Date” shall be the earlier of (i) the 15th day of
the calendar month following the In Service Date or (ii) August 15,
2009.
“Paris Base Rent”
shall be:
(a) During
the first Renewal Term, the Paris Base Rent shall be:
(1) Prior
to the Paris Base Rent Commencement Date, no Paris Base Rent shall be due and
owing;
(2) During
the twelve month period commencing on the Paris Base Rent Commencement Date, the
Initial Paris Base Rent;
(3) Subject
to sub-sections (a)(4) of this defined term, during each subsequent twelve month
period commencing on the anniversary of the Paris Base Rent Commencement Date
(the “Adjustment
Date”), until the end of the Term (including any Renewal Terms), the
Paris Base Rent for the previous Lease Year, increased by the product of (i) the
Paris Base Rent during the immediately preceding Lease Year and (ii) the lesser of one (1) times the
increase, if any, in the CPI (expressed as a percentage) from the Paris Base
Rent Commencement Date to the applicable Adjustment Date and two and one-half
percent (2.5%).
Under no
circumstances will the Paris Base Rent in any twelve month period be less than
the Paris Base Rent during the preceding twelve month.
(4) If,
after the Paris Rent Reset Date, the Paris Formula Rent is greater than the
Paris Scheduled Rent, then
(A) for
the twelve month period after the Paris Rent Reset Date, the Paris
Base Rent shall be equal to the Paris Formula Rent; and
(B) during
each subsequent twelve month period commencing on the anniversary of the Paris
Rent Reset Date (the “Adjustment Date”), until the end of the Term (including
any Renewal Terms), Paris Base Rent for the previous Lease Year, increased by
the product of (i) the Paris Base Rent during the immediately preceding Lease
Year and (ii) the lesser of one (1) times the increase, if any, in the CPI
(expressed as a percentage) from the Paris Rent Reset Date to the applicable
Adjustment Date and two and one-half percent (2.5%).
Under no
circumstances will the Paris Base Rent in any Lease Year be less than the Paris
Base Rent during the preceding Lease Year.
Under no
circumstances will the Paris Base Rent in any Lease Year during the Renewal Term
be less than the Paris Base Rent during the preceding Lease Year.
Paris Cash
Flow: For any period, the sum of (a) Net Income of Lessee
arising solely from the operation of the Paris Facility for the applicable
period, and (b) the amounts deducted in computing Lessee’s Net Income for the
period for (i) the provision for self-insured, professional and general
liability, (ii) depreciation, (iii) amortization, (iv) Paris Base Rent, (v)
interest (including payments in the nature of interest under Capitalized Leases
and interest on any Purchase Money Financing for personal property used in
connection with the Paris Facility), (vi) income taxes (or, if greater, income
tax actually paid during the period attributable to the Paris Facility), and
(vii) management fees payable in connection with the Paris Facility, and less
(c) an imputed management fee equal to six percent (6%) of Gross Revenues for
the Paris Facility, and less (d) the Cash Cost of Self-Insured Professional and
General Liability attributable to the Paris Facility. The Cash Cost
of Self-Insured Professional and General Liability shall mean: For
any period, the average total per bed cash expenditure associated with
professional and general liability related settlements, judgments, legal fees or
administration for skilled nursing facilities in the State of Texas as from time
to time estimated and published by Aon Risk Consultants, or its successors, for
the American Health Care Association, multiplied by the average number of
occupied beds in the Paris Facility.
“Paris Formula Rent”
means the sum of:
(a) the
Paris Scheduled Rent; plus
(b) one
half of (i) the average annual Paris Cash Flow for the twenty four month period
ending prior to the Paris Rent Reset Date, less (ii) the Paris Scheduled Rent
multiplied by
1.2.
“Paris Rent Reset
Date” means the first day of the sixth full Lease Year after the Paris
Base Rent Commencement Date.
“Paris Scheduled Rent”
means the Paris Base Rent as of the Paris Rent Reset Date as calculated pursuant
to subsection (a)(3) of the definition of Paris Base Rent.
“Paris Sublessee”
means Diversicare Paris, LLC, a Delaware limited liability company.
“Project Costs” means
all Hard Costs, Soft Costs, Developer’s Fees, Contractor’s Overhead and other
costs and fees associated with the construction of the Construction
Facilities.
“Soft Costs” means
premiums for title, casualty and other insurance required by Lessor under the
Paris Purchase Agreement or this Lease; the cost of recording and filing the
closing documents under the Paris Purchase Agreement and any tax levied upon
such filing; real estate taxes and other assessments that Lessee is obligated to
pay; fees and disbursements of the Lessor’s attorneys, architects and engineers,
appraisers, environmental engineers and surveyors; architectural design and
monitoring fees; permit fees; all fees and expenses payable under that certain
Development Agreement dated as of October 31, 2007 between OHI Asset (TX) Paris,
LLC, a Delaware limited liability company, and LMG Development, LLC, a Texas
limited liability company; allocated best costs as set forth in the Construction
Budget; and interest (including any reserve for interest set forth on
the Construction Budgets), fees and miscellaneous transaction closing costs and
charges payable by Lessee to Lessor as they become due and payable.
“Survey Requirements”
means the survey requirements set forth in Exhibit B to this
Amendment.
“Target Completion
Date” means July 1, 2009.
“Title Company” means
a title company selected by Lessor and reasonably acceptable to
Lessee.
(c) The
following definitions defined in §2.1 of the Existing Master Lease and §1 of the
Fifth Amendment are hereby amended in their entirety as follows:
(1) §2.1
of the Existing Master Lease:
Base Rent: means the
sum of (i) the Non-Texas Base Rent, (ii) the Texas Base Rent, and (iii) subject
to Section 1(c) of this Amendment, the Paris Base Rent.
Commencement
Date: October 1, 2000 for the Non-Texas Facilities (other than
the Paris Facility), August 11, 2007 for the Texas Facilities, and the Closing
Date for the Paris Facility.
Expiration Date:
means the First Renewal Term Expiration Date, the Second Renewal Term Expiration
Date, the First Texas Renewal Term Expiration Date, or the Second Texas Renewal
Term Expiration Date, as applicable.
Facilit(y)(ies): Each
health care facility on the Land, including the Leased Property associated with
such Facility, and together, all such facilities on the Leased Properties; all
of which Facilities are collectively listed on Exhibit C to this
Amendment.
Land: The
real property described in listed on attached Exhibit A to the
Existing Master Lease, Exhibit A to the
Fifth Amendment and Exhibit A to this
Amendment.
Lease Year: October
1, 2000 through September 30, 2001, and each twelve month period thereafter,
except that for purposes of determining the Texas Base Rent and the Paris Base
Rent, “Lease Year” shall mean (i) with respect to the Texas Base Rent, the
twelve month period commencing on February 1 and ending January 31, and each
twelve month period thereafter, and (ii) with respect to the Paris Base Rent,
the twelve month period commencing on the Paris Base Rent Commencement Date, and
each twelve month period thereafter commencing on the anniversary of the Paris
Base Rent Commencement Date.
Leased
Property: The portion of the Land on which a Facility is
located, the legal description of which is set forth beneath the Facility’s name
on Exhibits A-1
through A-28 to the Existing Master Lease, Exhibit A-1 through
A-7 to the Fifth Amendment, and Exhibit A to this Amendment, the Leased
Improvements on such portion of the Land, the Related Rights with
respect to such portion of the land, and Lessor’s Personal Property with respect
to such Facility.
Permitted
Encumbrances: Encumbrances listed on attached Exhibit B to the
Existing Master Lease, Exhibit C to the
Fifth Amendment, and Exhibit D to this
Amendment.
(2) §1
of the Fifth Amendment:
Pre-Existing Hazardous
Substances: means Hazardous Substances located on, under, about or with
respect to the Treemont Facility prior to February 1, 2003, or the Katy Facility
prior to July 1, 2003, or the Humble Facility prior to July 1, 2003, or the
Paris Facility prior to the Acquisition Date for the Paris
Facility.
Pre-Existing Environmental
Conditions: means any Contamination or other environmental condition on,
under, about or with respect to the Treemont Facility prior to February 1, 2003,
or the Katy Facility prior to July 1, 2003, or the Humble Facility prior to July
1, 2003, or the Paris Facility prior to the Acquisition Date for the Paris
Facility.
Texas Facilities:
means, except as otherwise expressly provided herein with respect to the Paris
Facility, the Facilities located on the real property described in Exhibits A-1 through
A-7 to the
Fifth Amendment and Exhibit A to this
Amendment.
Texas Pledge
Agreements: means the Pledge Agreements dated as of the same date as the
Fifth Amendment, as amended by the Joinder Agreement, from the equity owners of
the Texas Sublessees in favor of Lessor.
Texas Sublessees:
means (i) the Master Texas Sublessee, (ii) Diversicare Ballinger, LLC,
Diversicare Doctors, LLC, Diversicare Estates, LLC, Diversicare Humble, LLC,
Diversicare Katy, LLC, Diversicare Normandy Terrace, LLC, and Diversicare
Treemont, LLC, each a Delaware limited liability company, and (iii) the Paris
Sublessee.
Texas Sublessees
Guaranty: means the Guaranty dated as of the same date as the Fifth
Amendment, as joined in by Paris Sublessee pursuant to the Joinder Agreement, in
favor of Lessor.
Texas Sublessee Security
Agreement: means the Security Agreement dated as of the same date as the
Fifth Amendment, as joined in by Paris Sublessee pursuant to the Joinder
Agreement, in favor of Lessor.
(d) For
purposes of the adjustments to Texas Base Rent provided for in subparagraphs (3)
and (4) of the definition of Texas Base Rent set forth in Section 1 of the Fifth
Amendment, the “change” or “increase” in CPI referred to therein shall be deemed
to mean the “change” or increase” in CPI from the Commencement Date to the
commencement of the twelve month period (being February 1 through January 31)
for which the adjustment in Texas Base Rent, if any, is to be made.
2. Paris Base Rent; Rent Reset;
Termination Option; a “Texas Facility”; Delay.
(a) Paris Base Rent Commencement
Date. Commencing as of the Paris Base Rent Commencement Date,
Lessee shall pay the Paris Base Rent pursuant to the terms and conditions of
Article III of the Master Lease. Notwithstanding anything in this
Amendment to the contrary, Lessor shall have no obligation to make further
advances of the Funded Amount on or after the Paris Base Rent Commencement
Date.
(b) Paris Base Rent
Reset. As soon as reasonably possible after the fifth
anniversary of the Paris Base Rent Commencement Date, Lessor and Lessee shall
calculate the Paris Formula Rent. If the Paris Formula Rent is
greater than the Paris Scheduled Rent, then the Paris Base Rent shall be reset
to the Paris Formula Rent effective as of the Paris Rent Reset
Date.
(c) Paris Termination
Option. Pursuant to written notice delivered to Lessor not
more than thirty (30) days prior to, nor later than, the fifth anniversary of
the Paris Base Rent Commencement Date (“Paris Termination
Notice”), Lessee may elect to terminate the Master Lease as to the Paris
Facility only. After delivery of the Paris Termination Notice, this
Lease shall be terminated as to the Paris Facility only effective on the earlier
of (i) a date set by written notice given by Lessor at least thirty (30) days
prior to the effective date, and (ii) the first day of the sixth month after
fifth anniversary of the Paris Base Rent Commencement Date (the “Paris Termination
Date”). If the Paris Termination Notice is delivered, then
Lessee shall have no further obligation to pay Paris Base Rent for periods from
and after the Paris Termination Date.
(d) For all
purposes under this Lease other than the calculation of Base Rent, the Paris
Facility shall constitute a Texas Facility.
(e) In the
event that Lessee is unable to obtain completion of the Paris Facility as
described in Section 6(a) below by the Target Completion Date due to an Event of
Force Majeure or Lessor Delay, then the Target Completion Date and the Paris
Base Rent Commencement Date shall each be extended by one (1) day for each one
(1) day of delay in the completion of the Paris Facility caused by such Event of
Force Majeure or Lessor Delay. For purposes of this Amendment, the
term “Lessor Delay” shall mean any delay in achieving completion of the Paris
Facility as described in Section 6(a) below arising solely and directly as a
result of:
(i) Lessor’s
failure to furnish any information or documents in accordance with this
Amendment and the continuation of such failure after the receipt of written
notice from Lessee to Lessor, to the extent such failure causes a delay in
completion;
(ii) Lessor’s
failure or delay in giving approval or consent (or comments or corrections)
where Lessor’s approval or consent (or comments or corrections), as applicable,
is required herein and has been requested in writing by Lessee, to the extent
such failure or delay causes a delay in completion; and
(iii) Lessor’s
failure to perform or comply with its obligations under this Amendment and the
continuation of such failure after the receipt of written notice from Lessee to
Lessor, to the extent such failure causes a delay.
3. Accrual of Financing
Costs. During the period from the Closing Date until the Base
Rent Commencement Date, financing costs on the Actual Funded Amount shall accrue
monthly at the rate of ten and one-quarter percent (10.25%) per
annum. In the month such financing costs accrues, such financing
costs shall be deemed to have been advanced as part of the Actual Funded Amount
for all purposes under this Amendment.
4. Sublease;
Management. Lessee may sublease the Paris Facility to the
Master Texas Sublessee and the Master Texas Sublessee may sublease the Facility
to the Paris Sublessee. The Paris Sublessee shall guaranty this Lease
and provide the same collateral to secure this Lease as are provided by all
other Sublessees under this Lease. The form of sublease between
Lessee and the Paris Sublessee (the “Paris Sublease”)
shall be subject to Lessor’s reasonable approval. All equity owners
of the Paris Sublessee shall (i) pledge their interests in the Sublessee to
secure the Lease and the other Transaction Documents, and (ii) subordinate any
management, consulting or other agreements between the Paris Sublessee and such
equity owners (or any of their affiliates) to the Paris Sublease, this Lease and
the other Transaction Documents. Pursuant to Section 8.4 of the
Existing Master Lease, Lessor hereby consents to the management of the Paris
Facility by Diversicare Management Services Co., an Affiliate of Lessee, under
its current form of Management Agreement with the Lessee or Sublessee, as the
case may be, of the other Facilities covered by the Existing Master
Lease.
5. Regulatory
Approvals. Lessee will be required to, or to cause Paris
Sublessee to, apply for, and to diligently pursue at its own expense, all
licenses and regulatory approvals to operate the Paris Facility as a skilled
nursing facility (the “Licenses”). Lessee represents and warrants
that it knows of no facts or circumstances that would make it unlikely that the
Licenses will be issued. Lessor covenants and agrees that it will
cooperate in good faith with Lessee and use commercially reasonable efforts,
where necessary or required from Lessor as owner of the Paris Land, to enable
and assist Lessee to obtain the Licenses.
6. Construction of the Paris
Facility.
(a) Commencement and Completion
of Construction. Lessee shall commence substantial on-site
construction of the Paris Facility within sixty (60) days of the Closing Date
and, subject to a temporary suspension of performance pursuant to Section 16
below, or Lessor Delay, will continue diligently to complete the Paris Facility
on or before the Target Completion Date (or as soon thereafter as reasonably
possible) and will supply such moneys and perform such duties as may be
necessary in connection therewith. The Paris Facility will be
complete for purposes of this Section only at such time as (i) all improvements
to the Paris Facility called for in the Plans and Specifications have been
installed or completed in a manner satisfactory to Lessor and (ii) the local
public authority has issued a final certificate of occupancy for the Paris
Facility subject only to such conditions as may be acceptable to
Lessor.
(b) Lessor’s Architect; Approval
of Plans. Lessor may retain the services of architects and
engineers, including architects and engineers employed by Lessor (the “Lessor’s
Architect”), to act as Lessor’s agent in reviewing the Plans and Specifications
and the progress of construction and in making such certifications and
performing such other tasks and duties as Lessor deems
appropriate. Lessee will pay all reasonable fees, costs and expenses
of the Lessor’s Architect within ten (10) days after demand by Lessor,
accompanied by a reasonably detailed invoice or statement of the amount due from
Lessor’s Architect. Lessee, at Lessee’s option, may utilize and
retain the services of Lessor’s Architect or may retain the services of its own
architects and engineers (the “Lessee’s Architect”)
to develop and prepare the Plans and Specifications for construction of the
Paris Facility. Whether Lessee utilizes Lessor’s Architect or
Lessee’s Architect as the “Project Architect” to develop and prepare the Plans
and Specifications, Lessee shall be responsible for payment of the fees, costs
and expenses of the Project Architect in developing and preparing the Plans and
Specifications. Lessor and Lessee shall cooperate with each other in
developing the Plans and Specifications. Lessee shall cause the
Project Architect to deliver to Lessor the Plans and Specifications for review
and approval by Lessor. The Plans and Specifications shall be subject
to Lessor’s approval within ten (10) Business Days of receipt by Lessor of a
complete set of the Plans and Specifications. Lessor’s approval shall
not be unreasonably withheld, delayed or conditioned. If Lessor does
not approve the same, Lessor shall advise Lessee in writing specifically of the
changes required in the Plans and Specifications so that they will meet with
Lessor’s approval. If Lessor provides Lessee comments as to the Plans
and Specifications, Lessee shall provide revised Plans and Specifications to
Lessor within ten (10) Business Days and Lessor shall review such revised Plans
and Specifications and within ten (10) Business Days of receipt give its
approval or provide the changes required for approval to be
given. This process shall continue in accordance with these time
frames until such time as Lessor and Lessee have finally approved the Plans and
Specifications. The review by Lessor of the Plans and Specifications
is for Lessor’s benefit only, and Lessor’s approval of any such Plans and
Specifications shall impose no liability on Lessor, express or implied,
including without limitation any representation or warranty that such Plans and
Specifications are complete or accurate, or that such Plans and Specifications
comply with zoning or other land use laws, local building department
requirements, or any applicable public or private covenants, conditions or
restrictions, and shall not in any way relieve Lessee of its obligation to
perform its work in accordance with this Amendment and all applicable laws and
requirements.
(c) Plans and
Specifications. Lessee will deliver to Lessor accurate and
complete copies of the approved Plans and Specifications and all other contract
documents requested by Lessor, including all modifications
thereof. Lessee represents and warrants that the Plans and
Specifications and construction of the Paris Facility pursuant to thereto comply
and will comply with all applicable governmental laws and regulations and
requirements, zoning and subdivision ordinances, and standards and regulations
of all governmental bodies exercising jurisdiction over the Paris Facility,
including health care licensing. Lessee agrees to provide to Lessor a
certification of the Project Architect to such effect as well as the approvals
of any governmental body or agency exercising jurisdiction of the Paris
Facility. Except as provided below, Lessee will not make, or cause or
permit to be made, any change to the Plans and Specifications unless a request
for the change has been submitted in writing to Lessor and approved in writing
by the construction manager or general contractor, as the case may be, any
tenants whose approval is required, Lessor and such other parties as Lessor may
require. Lessor’s approval may be subject to such terms and
conditions as Lessor reasonably may prescribe. Under no circumstances
will any failure by Lessor to respond to a request for approval of a change in
the Plans and Specifications be deemed to constitute approval of the
request. Lessee will deliver promptly to Lessor copies of all
bulletins, addenda, change orders and modifications to the Plans and
Specifications. Lessor has the right at all times to require strict
compliance with the original Plans and Specifications, but Lessee may effect
changes in the Plans and Specifications from time to time, without first
obtaining Lessor’s approval, if (i) the changes do not impair the structural
integrity, design concept or architectural appearance of the Paris Facility or
change the useable area of the Paris Facility in any way, (ii) the changes will
not result in a default in any other obligation to any other party or authority
and (iii) the changes will not result in a net increase or decrease in the total
Project Costs of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) or more in the
aggregate for all changes. Notwithstanding the foregoing, to the
extent that the cost to complete the Paris Facility exceeds the Maximum Funded
Amount (whether or not as a result of any such changes in the Plans and
Specifications), Lessee will be responsible for payment of the
excess.
(d) Character of
Construction. All construction will be in accordance with the
Plans and Specifications, of sound materials, in good and workmanlike manner,
free and clear of all liens, claims and encumbrances (other than the liens and
security interests securing the obligations of the Lessee under this Lease), and
in compliance with all laws, ordinances, regulations and restrictions affecting
the Paris Facility and all requirements of all governmental authorities having
jurisdiction over the Paris Facility and of the appropriate board of fire
underwriters or other similar body, if any, and any applicable health care
authority related to the Licenses. Lessee will furnish Lessor with
evidence of such compliance as Lessor requires from time to time.
(e) Construction Contract and
Architectural/Engineering Agreement.
(i) The
identity of the construction manager(s) or general contractor(s), as the case
may be, and the Project Architect, and the contracts under which each is
retained in connection with the Paris Facility must be approved by Lessor in
writing prior to the commencement of construction, which approval shall not be
unreasonably withheld. Any change to the construction manager(s) or
general contractor(s), as the case may be, and the Project Architect in
connection with the Paris Facility must be approved by Lessor in
writing. Lessee will execute the construction management agreement or
general contract(s) between Lessee and the construction manager or general
contractor(s) covering all work to be done in connection with the Paris
Facility. Upon request of Lessor, Lessee will promptly furnish to
Lessor executed copies of the construction management, general contracts, and
all subcontracts between the construction manager or general contractor(s) and
all of their subcontractors and suppliers. Upon request of Lessor,
Lessee will promptly furnish to Lessor any amendments or modifications
(including change orders) to any of the foregoing. Lessee will not
modify or amend or permit to be modified or amended (including by way of change
order) any construction management agreement, construction contract or
construction subcontract without Lessor’s prior written approval; provided,
however, that Lessor’s prior approval need not be obtained with respect to any
change order that results from a change in the Plans and Specifications with
respect to which Lessor’s consent is not required pursuant to Section 1(g)
above. Upon request of Lessor, Lessee will also furnish to Lessor an
executed copy of the architectural and/or engineering agreement between Lessee
and the Project Architect with respect to the Paris Facility.
(ii) Lessee
will perform its obligations under the contracts described in subparagraph (i)
above, and will use reasonable best efforts to cause each other party to such
contracts to perform its obligations under such contracts.
(iii) Lessee
will enforce or cause to be enforced the prompt performance of the contracts
described in subparagraph (i) above and will allow Lessor to take advantage of
all rights and benefits of such contracts. In addition, effective
upon the expiration or termination of this Lease as to the Paris Facility,
Lessee hereby assigns to Lessor all warranties given to Lessee under the
contracts described in subparagraph (i) above. Lessee shall deliver
such further documents and agreements as may be reasonably requested by Lessor
in connection with the assignment of warranties provided for in this
Section.
(f) Records and
Reports. Lessee will keep accurate and complete books and
records relating to the construction of the Paris Facility, and Lessor will have
access thereto during usual business hours upon 24 hours advance
notice. Lessee will furnish or cause to be furnished to Lessor from
time to time, promptly upon request, (i) copies and lists of all paid and unpaid
bills for labor and materials with respect to the Paris Facility, (ii)
Construction Budgets and revisions thereof showing the estimated cost of the
Paris Facility and the source of the funds required at any given time to
complete and pay for the same, (iii) receipted bills or other evidence of
payment with respect to the cost of the Paris Facility, and (iv) such reports as
to other matters relating to the Paris Facility as Lessor may
request. This paragraph will supplement any similar provision in this
Lease.
(g) Access. Notwithstanding
anything to the contrary contained in this Lease, Lessee will, and will cause
the Paris Sublessee to, permit Lessor’s representatives to have access to the
Paris Facility at all reasonable times and to conduct such investigations and
inspections thereof as Lessor shall determine necessary, including without
limitation in connection with inspecting the Paris Facility and all work done,
labor performed and materials furnished in connection with the construction
thereof. Lessee will, and will cause the Paris Sublessee to,
cooperate and cause the construction manager or general contractor, as the case
may be, to cooperate with Lessor and its representatives and agents during such
inspections. Notwithstanding the foregoing, Lessee will, and will
cause the Paris Sublessee to, be responsible for making inspections as to the
Paris Facility during the course of construction and will determine to their own
satisfaction that the work done or materials supplied by the contractors and
subcontractors has been properly supplied or done in accordance with applicable
contracts. All inspections that may be performed by Lessor and its
agents will be exclusively for the benefit of Lessor and will impose no
obligation whatever upon Lessor for the benefit of any person. Lessee
will, and will cause the Paris Sublessee to, hold Lessor harmless from, and
Lessor will have no liability or obligation of any kind to Lessee, the Paris
Sublessee or creditors of any of them in connection with, any defective,
improper or inadequate workmanship or materials brought in or related to the
Paris Facility, or any construction lien arising as a result of such workmanship
or materials. No inspection by Lessor will create any obligation on
Lessor or relieve Lessee or the Paris Sublessee of any obligation.
(h) Damage by Fire or Other
Casualty. If the Paris Facility is partially or totally
damaged or destroyed by fire or other casualty or taken under the power of
eminent domain, proceeds of such event will be applied as provided in this
Lease.
(i) Payment of
Costs. Lessee will pay when due all obligations incurred by
Lessee, or the Paris Sublessee for the Paris Facility, including any cost for
restoration.
7. Disbursements of Funded
Amount. Upon satisfaction of the conditions set forth in
subparagraphs (a) and (b) below, Lessor will disburse from time to time (but no
more frequently than once per month) to Lessee advances of the Funded Amount,
subject to the limitations set forth in Section 7 below.
(a) Lessor
has received:
(i) a request
for disbursement, in the form of AIA 706 (the “Request”), executed
by an executive officer of Lessee and setting forth, among other things, the
portion of the Funded Amount that Lessee then is requesting be disbursed, the
amount that Lessee in good faith believes to be the cost to complete
construction (after disbursement of the portion of the Funded Amount then being
requested), a detailed breakdown of the costs and expenses incurred in the
construction of the Paris Facility to the date of Request, a detailed cost
breakdown of the percentage of completion of the construction of the Paris
Facility (including both Hard Costs and Soft Costs) to the date of the Request,
the amounts then due and unpaid with respect to such construction, such other
information or documentation as may be required by the Title Company and the
date upon which the disbursement is desired, provided that the date of the
payment must not be less than seven (7) Business Days after the date upon which
the Lessor receives the Request and the other items set forth in clauses (ii)
through (vi) below;
(ii) A
certification from Lessee that, as of the date of the Request, no Event of
Default exists under this Amendment or any of the Transaction Documents, all
representations and warranties set forth in this Amendment and all of the other
Transaction Documents are accurate and complete, and there are no actions, suits
or proceedings pending, or to the knowledge of the person making the
certification, threatened or involving (or that could involve) Lessee, the Paris
Sublessee or all or any part of the Facilities and that could impair the
Facilities or the ability of Lessee and the Paris Sublessee to perform under
this Amendment or any of the other Transaction Documents;
(iii) Certificates
of the Project Architect, Lessor’s Architect (if not the Project Architect) and
Lessee, certified to Lessor and Lessee and certifying that (a) the Request is
correct and, to the best of its knowledge, all work on the Paris Facility up to
the date thereof has been done in substantial compliance with the Plans and
Specifications therefor; (b) to the date thereof, there has been no material
deviation from the budgeted cost of the Paris Facility or construction progress
schedule, except as authorized by Lessee and approved by Lessor; and (c) the
undisbursed portion of the Funded Amount will be sufficient to meet all known
costs to complete the work covered by the Plans and Specifications, after giving
effect to all amounts previously disbursed, plus the amount then requested;
and
(iv) Evidence
that Lessee have delivered the items described in (i) – (iii) above to
Lessor.
(b) Upon the
request of Lessor, the Title Company is prepared, without condition, to issue to
Lessor a date-down endorsement, dated as of the date of the disbursement,
insuring Lessor’s title to the Paris Facility subject to no other exceptions
than are set forth on the Title Policies delivered to Lessor at
closing.
8. Limitation on
Disbursements. In no event will Lessor pay amounts in excess
of the lesser of: (i)
the amounts actually paid in acquiring the Paris Land and for labor, services or
materials incorporated into the Paris Facility; and (ii) the Maximum Funded
Amount.
9. Sufficiency of Funded
Amount. Lessor shall be entitled to not make a disbursement,
or to make a disbursement in an amount less than the amount requested, if Lessor
is not satisfied in its sole discretion that following the requested
disbursement the undisbursed proceeds of the Funded Amount budgeted for the
construction of the Paris Facility will be at least equal to the sum of 100% of
the estimated Project Costs to complete the Paris Facility in accordance with
the Plans and Specifications (including all costs incurred in connection with
changes in the Plans and Specifications). If at any time it appears
to Lessor that the undisbursed balance of the Funded Amount is less than the
amount required by this Section, Lessor may give written notice to Lessee
specifying the amount of the deficiency and Lessee immediately will deposit with
Lessor the amount of the deficiency, which will be expended first in the same
manner as the Funded Amount before any further payment of the Funded Amount will
be made by Lessor. Lessor may reasonably determine the cost of
construction of the Paris Facility and Lessee will be obligated to pay any sums
so determined in excess of the Funded Amount prior to any payment under this
Amendment.
10. Payments to Contractor,
Subcontractors and Suppliers. In order to induce the Title
Company to insure Lessor’s title to the Paris Facility without exception for the
construction or mechanics’ liens, Lessor may make payments either through the
Title Company or directly to any contractor, subcontractor or supplier
furnishing labor or materials to the Paris Facility.
11. Lessor’s Right to
Cure. If Lessee fails to perform any of Lessee’s undertakings
set forth in this Amendment or in any other Transaction Document and fails to
cure the same within any grace or cure period applicable thereto, upon such
Notice as may be expressly required herein or therein (or, if Lessor reasonably
determines that the giving of such Notice would risk loss to the Paris Facility
or cause damage to Lessor, upon such Notice as is practical under the
circumstances), and without waiving or releasing any obligation of Lessee,
Lessor may, but will not be required to, perform the same, and Lessee will
reimburse Lessor any amounts expended by Lessor in so doing.
12. Application of
Advances. Lessee will apply each payment of Funded Amount
against amounts due and payable for construction of the Paris Facility or
obligations in connection therewith as set forth in each
Request. Nothing contained in this Amendment will impose upon Lessor
any obligation to see to the proper application of the advances by Lessee or any
other party.
13. Construction or Other
Liens. In the event any construction or other lien or
encumbrance is filed or attached against the Paris Facility or any part thereof
without the prior written consent of Lessor, and the same is not being contested
by Lessee in accordance with Article XII of the Existing Master Lease, Lessor
may, at its option and without regard to the priority of such construction or
other lien or encumbrance, and without regard to any defenses that Lessee may
have with respect to the lien or encumbrance, pay the same, and Lessee will
reimburse all amounts expended by Lessor for such purpose within ten (10) days
of written notice thereof.
14. Conditions to Final
Payment. Lessor shall be entitled to withhold the final
payment of the Funded Amount unless and until all of the following conditions
have been fulfilled to Lessor’s satisfaction:
(a) All
conditions for all previous disbursements have been, and, as of the date of the
final disbursement continue to be, fulfilled.
(b) Lessor
have received, at least seven (7) Business Days prior to the final payment, the
following items, all of which Lessee agree to obtain and submit to Lessor at
Lessee’ sole expense:
(i) A final
“as built” survey prepared and certified in accordance with the Survey
Requirements;
(ii) Certificates
of the Project Architect, Lessor’s Architect (if not the Project Architect), and
Lessee certified to both Lessor and Lessee and certifying that (a) to the best
of its knowledge, the Paris Facility are complete in accordance with the Plans
and Specifications therefor; (b) to the date thereof, there has been no material
deviation from the budgeted cost of the Paris Facility or construction progress
schedule, except as authorized by Lessee and approved by Lessor; and (c) the
amount of the final payment will be sufficient to meet all known costs to
complete the work covered by the Plans and Specifications; and
(iii) A final,
unconditional certificate of occupancy for the Paris Facility.
15. Guaranty of
Completion. Subject to a temporary suspension of performance
pursuant to Section 16 or Lessor Delay, but regardless of whether the cost
thereof exceeds the amount of the Maximum Funded Amount, Lessee will diligently
and continuously carry out or cause to be carried out the construction of the
Paris Facility so as to insure the completion of construction of the Paris
Facility, the opening of the Paris Facility and the acquisition of all Licenses
for the Paris Facility, all by the applicable Target Completion
Date. Regardless of whether the cost thereof exceeds the amount of
the Funded Amount, Lessee will be responsible for payment of all costs of
completing, opening and licensing the Paris Facility, including the payment of
all costs in excess of the Construction Budgets. Promptly following
receipt of written notice from Lessor specifying the defect or departure, Lessee
will correct any structural defects in the Paris Facility or any departure from
the Plans and Specifications not previously approved by Lessor. The
approval or absence of disapproval by Lessor of any payment of Funded Amount
shall not constitute a waiver of Lessor’s right to require compliance with this
Section.
16. Force
Majeure. Upon the occurrence and during the continuance of an
Event of Force Majeure and the giving of written notice thereof to Lessor,
Lessee shall be temporarily released without any liability on its part from the
performance of its obligations to construct the Paris Facility under this
Amendment, except for the obligation to pay any amounts due and owing
thereunder, but only to the extent and only for the period that its performance
of each such obligation is prevented by the Event of Force
Majeure. Such notice shall include a description of the nature of the
Event of Force Majeure, and its cause and possible
consequences. Lessee shall promptly notify Lessor of the termination
of such event. Upon the request of Lessor, Lessee shall provide
confirmation of the existence of the circumstances constituting an Event of
Force Majeure. Such evidence may consist of a statement of an
appropriate governmental department or agency where available, or a statement
describing in detail the facts claimed to constitute an Event of Force
Majeure. During the period that the performance by Lessee has been
suspended by reason of an Event of Force Majeure, Lessor may likewise suspend
the performance of all or part of its obligations under this Amendment to the
extent that such suspension is commercially reasonable and, notwithstanding
anything in this Amendment to the contrary, Lessor shall have no obligation to
make disbursements of the Funded Amount.
17. Expenses of
Lessor. All costs incurred by Lessor in connection with the
acquisition and construction of the Paris Facility and this Amendment,
including, but not limited to, Lessor’s legal counsel and due diligence costs,
title insurance, survey, appraisal, UCC searches and filing fees, environmental
and building assessments, consulting fees and brokers’ fees, if any, shall be
added to the Funded Amount; provided, however, to the extent the Maximum Funded
Amount has been funded by Lessor, such costs shall be paid (or reimbursed) to
Lessor by Lessee.
18. Amendments to Certain
Provisions of Existing Master Lease. Section 8.3 of the
Existing Master Lease is hereby amended to add the following new Section 8.3.3
as follows:
8.3.3 Paris Facility Capital
Expenditures. Notwithstanding the provisions of Section 8.3.2
and as an exception thereto, Lessee shall not be required to expend any Minimum
Qualified Capital Expenditures during the first three (3) Lease Years, following
the Paris Base Rent Commencement Date. During such period, the number
of licensed beds in the Paris Facility shall be excluded from and not used in
the calculations for determining the Minimum Qualified Capital Expenditures
under Section 8.3.2. During the fourth Lease Year following the Paris
Base Rent Commencement Date, Lessee shall expend with respect to the Paris
Facility at least One Hundred Fifty Dollars ($150.00) per-licensed-bed as
Minimum Qualified Capital Expenditures to improve the Paris
Facility. During the fifth Lease Year following the Paris Base Rent
Commencement Date, Lessee shall expend with respect to the Paris Facility at
least Two Hundred Dollars ($200.00) per-licensed bed as Minimum Qualified
Capital Expenditure to improve the Paris Facility. Beginning with the
sixth Lease Year following the Paris Base Rent Commencement Date and continuing
for the remainder of the Term, Lessee shall expend with respect to the Paris
Facility at least the amount of Minimum Qualified Capital Expenditures
per-licensed-bed to improve the Paris Facility as may be required from time to
time under Section 8.3.2, above.
19. Single, indivisible
Lease. The Master Lease constitutes one indivisible lease of
the Leased Properties, and not separate leases governed by similar
terms. The Leased Properties constitute one economic unit, and the
Base Rent and all other provisions have been negotiated and agreed to based on a
demise of all of the Leased Properties as a single, composite, inseparable
transaction and would have been substantially different had separate leases or a
divisible lease been intended. Except as expressly provided herein
for specific, isolated purposes (and then only to the extent expressly otherwise
stated), all provisions of this Lease apply equally and uniformly to all the
Leased Properties as one unit. An Event of Default with respect to
any Leased Property is an Event of Default as to all of the Leased
Properties. The parties intend that the provisions of this Lease
shall at all times be construed, interpreted and applied so as to carry out
their mutual objective to create an indivisible lease of all the Leased
Properties and, in particular but without limitation, that for purposes of any
assumption, rejection or assignment of this Lease under 11 U.S.C. 365, this is
one indivisible and non-severable lease and executory contract dealing with one
legal and economic unit which must be assumed, rejected or assigned as a whole
with respect to all (and only all) the Leased Properties covered
hereby.
20. Conditions to Commencement
of Construction and Obligations of Lessor and Lessee under this
Amendment. Lessee shall not commence construction unless and
until the the Acquisition Date has occurred (the “Commencement
Conditions”). If the Commencement Conditions have not occurred
on or before June 30, 2008, as such date may be extended by mutual agreement of
Lessor and Lessee, then either Lessor or Lessee may terminate their obligations
under this Amendment by written notice to other and this Amendment shall be of
no further force or effect. If the Commencement Conditions have not
been satisfied on or before April 15, 2008, then the Target Completion Date and
the Rent Commencement Date shall each be extended one day for each day after
April 15, 2008 that the Commencement Conditions have not been
satisfied.
21. Representations and
Warranties of Lessee. Lessee hereby represents and warrants to
Lessor that (i) it has the right and power and is duly authorized to enter into
this Amendment; and (ii) the execution of this Amendment does not and will not
constitute a breach of any provision contained in any agreement or instrument to
which Lessee is or may become a party or by which Lessee is or may be bound or
affected.
22. Execution and
Counterparts. This Amendment may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but when taken together shall constitute one and the same
Amendment.
23. Headings. Section
headings used in this Amendment are for reference only and shall not affect the
construction of the Amendment.
24. Enforceability. Except
as expressly and specifically set forth herein, the Existing Master Lease
remains unmodified and in full force and effect. In the event of any
discrepancy between the Existing Master Lease and this Amendment, the terms and
conditions of this Amendment will control and the Existing Master Lease is
deemed amended to conform hereto.
[SIGNATURE
PAGES AND ACKNOWLEDGEMENTS FOLLOW]
Signature
Page to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
LESSOR:
STERLING
ACQUISITION CORP.,
a
Kentucky corporation
By: /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Chief Executive Officer
STATE OF
MARYLAND )
COUNTY OF
BALTIMORE )
This
instrument was acknowledged before me on the 14th
day of March , 2008,
by ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ,
the
CEO
of STERLING ACQUISITION CORP., a Kentucky corporation, on behalf of said
company.
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Notary Public,
Baltimore
County, MD
My commission expires: May 1,
2008
Signature
Page 1 of 2
Signature
Page to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
LESSEE:
DIVERSICARE
LEASING CORP.,
a
Tennessee corporation
By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
Title:
EVP & CFO
STATE
OF Tennessee )
COUNTY
OF ▇▇▇▇▇▇▇▇▇▇ )
This
instrument was acknowledged before me on the 14th day
of March
, 2008, by ▇▇▇▇▇
▇▇▇▇▇▇
, the EVP &
CFO of
DIVERSICARE LEASING CORP., a Tennessee corporation, on behalf of said
company
▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇
Notary Public, ▇▇▇▇▇▇▇▇▇▇ County,
TENN
My commission expires: January 24,
2010
Signature Page 2 of 2
Acknowledgment
to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
The
undersigned hereby consent to the transactions contemplated by this Sixth
Amendment to Consolidated Amended and Restated Master Lease (the “Sixth Amendment”),
ratify and affirm their respective Guaranties, Pledge Agreements, Security
Agreements, Subordination Agreements and other Transaction Documents, and
acknowledge and agree that the performance of the Master Lease and
obligations described therein are secured by their Guaranties, Pledge
Agreements, Security Agreement, Subordination Agreement and other Transaction
Documents on the same terms and conditions in effect prior to this
Amendment.
ADVOCAT,
INC. a Delaware corporation
By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
Title:
EVP & CFO
STATE
OF Tennessee )
COUNTY
OF ▇▇▇▇▇▇▇▇▇▇ )
This
instrument was acknowledged before me on the 14th day
of March
, 2008, by ▇▇▇▇▇
▇▇▇▇▇▇
, the EVP &
CFO of ADVOCAT,
INC. a Delaware corporation, on behalf of the corporation, who acknowledged the
same to be his or her fee act and deed and the free act and deed of the
corporation.
▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇
Notary Public, ▇▇▇▇▇▇▇▇▇▇ County,
TENN
My commission expires: January 24,
2010
Acknowledgment
Page 1 of 5
Acknowledgment
to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
DIVERSICARE
MANAGEMENT SERVICES CO.,
a
Tennessee corporation
By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
Title:
EVP & CFO
STATE
OF Tennessee )
COUNTY
OF ▇▇▇▇▇▇▇▇▇▇ )
This
instrument was acknowledged before me on the 14th day
of March
, 2008, by ▇▇▇▇▇
▇▇▇▇▇▇
, the EVP &
CFO of
DIVERSICARE MANAGEMENT SERVICES CO., a Tennessee corporation, on behalf of the
corporation, who acknowledged the same to be his or her free act and deed and
the free act and deed of the corporation.
▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇
Notary Public, ▇▇▇▇▇▇▇▇▇▇ County,
TENN
My commission expires: January 24,
2010
Acknowledgment
Page 2 of 5
Acknowledgment
to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
ADVOCAT
FINANCE INC.,
a
Delaware corporation
By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
Title:
EVP & CFO
STATE
OF Tennessee )
COUNTY
OF ▇▇▇▇▇▇▇▇▇▇ )
This
instrument was acknowledged before me on the 14th day
of March
, 2008, by ▇▇▇▇▇
▇▇▇▇▇▇
, the EVP &
CFO of
ADVOCAT FINANCE INC., a Delaware corporation, on behalf of the corporation, who
acknowledged the same to be his or her free act and deed and the free act and
deed of the corporation.
▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇
Notary Public, ▇▇▇▇▇▇▇▇▇▇ County,
TENN
My commission expires: January 24,
2010
Acknowledgment
Page 3 of 5
Acknowledgment
to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
STERLING
HEALTH CARE
MANAGEMENT,
INC., a Kentucky corporation
By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
Title:
EVP & CFO
STATE
OF Tennessee )
COUNTY
OF ▇▇▇▇▇▇▇▇▇▇ )
This
instrument was acknowledged before me on the 14th day
of March
, 2008, by ▇▇▇▇▇
▇▇▇▇▇▇
, the EVP &
CFO of STERLING
HEALTH CARE MANAGEMENT, INC., a Kentucky corporation, on behalf of said
corporation, who acknowledged the same to be his or her free act and deed and
the free act and deed of the corporation.
▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇
Notary
Public, ▇▇▇▇▇▇▇▇▇▇ County,
TENN
My commission expires: January 24,
2010
Acknowledgment
Page 4 of 5
Acknowledgment
to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
DIVERSICARE
TEXAS I, LLC
By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
Title:
EVP & CFO
DIVERSICARE
▇▇▇▇▇▇▇▇▇, LLC
DIVERSICARE
DOCTORS, LLC
DIVERSICARE
ESTATES, LLC
DIVERSICARE
HUMBLE, LLC
DIVERSICARE
KATY, LLC
DIVERSICARE
NORMANDY TERRACE, LLC
DIVERSICARE
TREEMONT, LLC
BY: DIVERSICARE
TEXAS I, LLC,
its sole
member
By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: EVP
&CFO
STATE
OF Tennessee )
COUNTY
OF ▇▇▇▇▇▇▇▇▇▇ )
This
foregoing instrument was acknowledged before me on the 14th day
of March
, 2008, by ▇▇▇▇▇
▇▇▇▇▇▇
, who is EVP
&
CFO
of
DIVERSICARE TEXAS I, LLC, on behalf of itself and as the sole member of each of
DIVERSICARE ▇▇▇▇▇▇▇▇▇, LLC, DIVERSICARE DOCTORS, LLC, DIVERSICARE ESTATES, LLC,
DIVERSICARE HUMBLE, LLC, DIVERSICARE KATY, LLC, DIVERSICARE NORMANDY TERRACE,
LLC, and DIVERSICARE TREEMONT, LLC, each a Delaware limited liability company,
on behalf of the limited liability companies, who acknowledged the same to be
his or her free act and deed and the free act and deed of the limited liability
companies.
▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇
Notary Public, ▇▇▇▇▇▇▇▇▇▇ County,
TENN
My commission expires: January 24,
2010
Acknowledgment
Page 5 of 5
List
of Exhibits and Schedules to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
Exhibit
A Legal
Description of Paris Facility
Exhibit
B Survey
Requirements
Exhibit
C List
of Facilities and Facility Trade Names
Exhibit
D Permitted
Encumbrances for Paris Facility
Schedule
1 Construction
Budget
Exhibit
and Schedules to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
EXHIBIT
A
Situated within the Limits of the City
of Paris, County of ▇▇▇▇▇, and State of Texas, part of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Survey
#786, and being part of a called and being a part of a called 172.5 acre tract
of land conveyed to May ▇▇▇▇▇ ▇▇▇▇▇▇▇ by deed recorded in Vol. 208, Page 316, of
the Deed Records of said County and State.
Beginning at a ½” iron pin (f) for
corner at the Easterly Northeast corner of a called 31.61 acre tract of land
conveyed to North ▇▇▇▇▇ Independent School District by deed recording in Vol.
714, Page 748, of said Deed Records, said North ▇▇▇▇▇ ISD 31.61 acre tract
originally being a part of said ▇▇▇▇▇▇▇ 172.5 acre tract.
Thence North 26.57’07” West a distance
of 798.43 feet to a ½” capped (▇▇▇▇▇▇ SURVEYING) iron pin (f) for corner at the
Northerly Northeast corner of said North ▇▇▇▇▇ ISD 31.61 acre
tract;
Thence South 86.45’33” East a distance
of 505.04 feet to a ½” capped (▇▇▇▇▇▇ SURVEYING) iron pin (s) for
corner;
Thence South 35.43’12” East a distance
of 448.76 feet to a ½” capped (▇▇▇▇▇▇ SURVEYING) iron pin (s) for
corner;
Thence along the Northwesterly Boundary
Line of said ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as follows: South
54.43’04” West a distance of 43.45 feet to a ½” capped (▇▇▇▇▇▇ SURVEYING) iron
pin (f); South 55.2’33” West a distance of 162.05 feet to a ½” capped (▇▇▇▇▇▇
SURVEYING) iron pin (f); South 51.44’20” West a distance of 98.92 feet to a ½”
capped (▇▇▇▇▇▇ SURVEYING) iron pin (f); South 45.17’45” West a distance of
105.04 feet to a ½” capped (▇▇▇▇▇▇ SURVEYING) iron pin (f); South 48.54’59” West
a distance of 106.10 feet to the place of beginning and containing 286,225.28
square feet, or 6.5708 acres of land.
Note: Legal
description will be revised as appropriate to match legal description of deed
delivered to Lessor on the Acquisition Date.
Exhibit A
– Page 1 of 1
Exhibit
and Schedules to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
Exhibit
B
SURVEY
REQUIREMENTS
A staked,
boundary survey of the property (including a legally adequate property
description and a statement of acreage). The survey shall be prepared
by a surveyor or engineer duly licensed to practice as such in the State of
_______________, acceptable to the Lessor and the title company, shall be
certified to the lender and the title company, and shall be a [specify either
“Urban”, “Suburban”, “Rural” or “Mountain”] “ALTA/ACSM LAND TITLE SURVEY”
meeting the currently effective Accuracy Standards adopted by ALTA and
ACSM. The survey shall also incorporate items 1, 2, 3, 4, 6, 7, 8, 9,
10, 11, 13, 14, 16, 17 and 18 listed in Table A of the Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys, jointly established and adopted
by ALTA and ACSM in 2005.
SURVEY
CERTIFICATION
_______________________
certify to (name of lessor) and (name of title company) that this map or plat
and the survey on which it is based were made (i) in accordance with the
“Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys” jointly
established and adopted by ALTA and ACSM in 2005, and incorporates items 1, 2,
3, 4, 6, 7, 8, 9, 10, 11, 13, 14, 16, 17 and 18 listed in Table A thereof, (ii)
pursuant to the Accuracy Standards adopted by ALTA and ACSM and in effect on the
date of this certification for a(n) [insert either “Urban”, “Suburban”, “Rural”,
or “Mountain”] Survey, and (iii) after a review of (name of title company)
Commitment No. _____, effective date ___________, 200_ and the instruments
referred to therein as exceptions to title.
Date:
_______________________________
(signature
of surveyor)
Exhibit B
– Page 1 of 1
Exhibit
and Schedules to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
EXHIBIT
C
|
Name
|
Street
Address
|
City
|
County
|
State
|
Zip
|
|
|
1.
|
Arbor
Oaks Health & Rehab Center (Stillmeadow)
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ 2, Highway ▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇▇
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
2.
|
Ash
Flat Nursing & Rehab Center
|
▇▇
▇▇▇▇▇▇ ▇▇▇▇
|
▇▇▇
▇▇▇▇
|
▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
3.
|
Best
Care, Inc.
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
4.
|
▇▇▇▇▇
Health Care Center, Inc.
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
5.
|
▇▇▇▇
Nursing and Rehab Center
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
6.
|
Canterbury
Health Center
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇
▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
7.
|
▇▇▇▇▇▇
Nursing & Rehab Center
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
8.
|
Conway
Health & Rehab Center (▇▇▇▇▇▇▇▇)
|
▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
9.
|
Des
Arc Nursing & Rehab Center
|
2216
West Main, P.O. box ▇▇▇▇
|
▇▇▇
▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
10.
|
▇▇▇▇▇▇▇
Nursing & Rehab Center
|
▇▇▇▇▇▇
Creek Road, P.O. Box 694, Route 32 East
|
▇▇▇▇▇
Hook
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
11.
|
Garland
Nursing & Rehab Center and Apts.
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
|
▇▇▇
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
12.
|
▇▇▇▇▇▇
Manor Care Center
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
13.
|
▇▇▇▇▇▇
▇▇▇▇▇ Health Center
|
902
▇▇▇▇▇▇▇▇ Road, ▇.▇. ▇▇▇ ▇▇▇
|
▇▇▇
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
14.
|
Laurel
Nursing & Rehab Center
|
HC
75, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
15.
|
Lynwood
Nursing Home
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
16.
|
Manor
House of Dover
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
|
▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
17.
|
▇▇▇▇▇▇▇▇
Rehab and Special Care Center
|
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
18.
|
Northside
Health Care
|
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
19.
|
Ouachita
Nursing /Pine Manor Apts.
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
20.
|
Pocahontas
Nursing & Rehab Center
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
21.
|
Rich
Mountain Nursing & Rehab Center
|
▇▇▇
▇▇▇▇▇▇▇▇
|
▇▇▇▇
|
▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
22.
|
Sheridan
Nursing & Rehab Center
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
23.
|
South
Shore Nursing & Rehab Center
|
▇▇▇▇▇
▇▇▇▇▇▇ Drive, P.O. box ▇▇▇
|
▇▇▇▇▇
▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
24.
|
The
Pines Nursing & Rehab Center
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
|
▇▇▇
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
25.
|
Walnut
Ridge Nursing & Rehab Center
|
▇▇▇▇
▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇
▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
26.
|
West
Liberty Nursing & Rehab Center
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
27.
|
Westside
Health Care Center
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
28.
|
Wurtland
Nursing & Rehab Center
|
100
Wurtland Avenue, P.O. Box 677
|
Wurtland
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
29.
|
Doctors
Healthcare
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
30.
|
Estates
at Ft. Worth
|
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
31.
|
Heritage
Oaks Estates
|
▇▇▇▇
▇. ▇▇▇ ▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
32.
|
Humble
|
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
33.
|
IHS
of Dallas at Treemont
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
34.
|
Katy
|
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇
|
▇▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
35.
|
Normandy
Terrace
|
▇▇▇
▇▇▇▇ ▇▇▇▇
|
▇▇▇
▇▇▇▇▇▇▇
|
▇▇▇▇▇
|
▇▇
|
▇▇▇▇▇
|
|
36.
|
Paris
Facility
|
### Stillhouse
Road
|
▇▇▇▇▇
|
▇▇▇▇▇
|
TX
|
Exhibit C
– Page 1 of 1
Exhibit
and Schedules to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
EXHIBIT
D
Permitted
Exceptions
|
1.
|
Easement
to Texas Power & Light Co. dated 07/08/52 and recorded
in Book 327, Page 397, ▇▇▇▇▇ County Deed
Records.
|
|
2.
|
Easement
to Texas Power & Light Co., dated 05/09/56 and recorded
in Book 349, Page 456, ▇▇▇▇▇ County Deed
Records.
|
|
3.
|
Easement
to Texas Power & Light Co., dated 05/12/66 and recorded
in Book 443, Page 175, ▇▇▇▇▇ County Deed
Records.
|
|
4.
|
Easement
to Texas Power & Light Co, dated 03/21/68 and recorded
in Book 469, Page 237, ▇▇▇▇▇ County Deed
Records.
|
|
5.
|
Right
of Way Easement to ▇▇▇▇▇ County Water Supply dated 02/09/83, and recorded
in Book 655, Page 112, ▇▇▇▇▇ County Deed
Records.
|
|
6.
|
Easement
and Right of Way to Texas Power & Light Co., dated 05/17/49, and recorded
in Book 308, Page 600, ▇▇▇▇▇ County Deed
Records.
|
Exhibit D
– Page 1 of 1
Exhibit
and Schedules to
SIXTH
AMENDMENT TO CONSOLIDATED
AMENDED
AND RESTATED MASTER LEASE
SCHEDULE
1
Construction
Budget
|
Omega/Paris
|
||||||||||||
|
Estimated
Project Cost
|
||||||||||||
|
FACILITY
DESCRIPTION
|
||||||||||||
|
Size
in Square Feet
|
45,000 | |||||||||||
|
Stories
|
1 | |||||||||||
|
Units
|
70 | |||||||||||
|
Beds
|
120 | |||||||||||
|
Medicaid
Beds
|
||||||||||||
|
Double
Occupancy (Units)
|
50 | |||||||||||
|
Approximate
Land Size (Acres)
|
6.489 | |||||||||||
|
Approximate
Land Size (SF)
|
282,661 | |||||||||||
|
Units
per Acre
|
11 | |||||||||||
|
Beds
per Acre
|
18 | |||||||||||
|
DEVELOPMENT
COST ANALYSIS
|
||||||||||||
|
Total
Development Cost
|
6,841,902 | |||||||||||
|
Total
Development Cost per Sq. Ft.
|
152.04 | |||||||||||
|
Total
Development Cost per Unit
|
97,741 | |||||||||||
|
Total
Development Cost per Bed
|
57,016 | |||||||||||
|
Land
Cost [1]
|
175,203 | |||||||||||
|
Land
Cost per Sq. Ft.
|
0.62 | |||||||||||
|
Land
Cost per Acre
|
27,000 | |||||||||||
|
Land
Cost per Unit
|
2,503 | |||||||||||
|
Land
Cost per Bed
|
1,460 | |||||||||||
|
Building
Cost
|
4,000,635 | |||||||||||
|
Building
Cost per Sq. Ft.
|
88.90 | |||||||||||
|
Building
Cost per Unit
|
57,152 | |||||||||||
|
Building
Cost per Bed
|
33,339 | |||||||||||
|
FF&
E
|
552,500 | |||||||||||
|
FF&
E per Sq. Ft.
|
12.28 | |||||||||||
|
FF&
E per Unit
|
7,893 | |||||||||||
|
FF&
E per Bed
|
4,604 | |||||||||||
|
Ach.
& Eng. Fees
|
184,500 | |||||||||||
|
Site
Work
|
602,000 | |||||||||||
|
Interest
Expense [2]
|
315,000 | |||||||||||
|
Contingency
[3]
|
2.90 | % | 10.0 | % | 400,064 | |||||||
|
Medicaid
Bed Contract [4]
|
$ | 4,167 | $ | 4,000 | 408,000 | |||||||
|
Title
|
35,000 | |||||||||||
|
Misc.
Administrative Project Exp.
|
7,500 | |||||||||||
|
Closing
Fee
|
5,000 | |||||||||||
|
Property
Tax
|
25,000 | |||||||||||
|
Developer's
Fee
|
80,000 | |||||||||||
|
Points
[5]
|
1.15 | % | 0.00 | % | 0 | |||||||
|
Appraisal
|
4,500 | |||||||||||
|
Insurance
Premium
|
12,000 | |||||||||||
|
Legal
(Transaction Specific)
|
35,000 | |||||||||||
|
TOTAL
CONSTRUCTION COSTS
|
6,841,902 | |||||||||||
|
Cost
per Bed
|
140 | 48,871 | ||||||||||
|
Cost
per Bed
|
120 | 57,016 | ||||||||||
|
Resulting
Annual Rent at 10.25%
|
701,294.90 | |||||||||||