Exhibit 10.8
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LEASE AND AGREEMENT
Dated as of July 24, 1996
between
MELLON FINANCIAL SERVICES CORPORATION #4,
as Lessor,
and
GENESIS ELDERCARE PROPERTIES, INC.,
as Lessee
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ALL RIGHT, TITLE AND INTEREST OF LESSOR UNDER THIS LEASE AND AGREEMENT AND THE
PROPERTY SUBJECT HERETO HAVE BEEN ASSIGNED TO AND ARE SUBJECT TO A SECURITY
INTEREST IN FAVOR OF MELLON BANK, N.A., AGENT ("AGENT"), UNDER CERTAIN
MORTGAGES, ASSIGNMENTS OF RENTS AND LEASES, SECURITY AGREEMENTS AND FIXTURE
FILING STATEMENTS (AS SUCH AGREEMENTS AND INSTRUMENTS MAY BE AMENDED AND/OR
SUPPLEMENTED TO THE EXTENT PERMITTED THEREBY), FOR THE BENEFIT OF THE LENDERS
REFERRED TO IN SUCH SECURITY INSTRUMENTS. THIS LEASE AND AGREEMENT HAS BEEN
EXECUTED IN SEVERAL COUNTERPARTS. TO THE EXTENT, IF ANY, THAT THIS LEASE AND
AGREEMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
INTEREST IN THIS LEASE AND AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR
POSSESSION OF ANY COUNTERPART HEREOF OTHER THAN THE "ORIGINAL EXECUTED
COUNTERPART NO. 1", WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE
RECEIPT THEREFOR EXECUTED BY AGENT ON OR FOLLOWING THE SIGNATURE PAGE THEREOF.
SEE SECTION 21.20 FOR THE NATURE OF THIS TRANSACTION AND INTENTION OF THE
PARTIES.
THIS COUNTERPART IS [NOT] THE ORIGINAL EXECUTED COUNTERPART NO. 1.
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TABLE OF CONTENTS
(Lease and Agreement)
Page
ARTICLE I
DEFINITIONS; LESSEE LIABILITY........................................ 1
ARTICLE II
LEASE OF SITES; LEASE TERM.......................................... 2
SECTION 2.1. Acceptance and Lease of Sites. ............................................ 2
SECTION 2.2. Acceptance Procedure........................................................ 2
SECTION 2.3. Lease Term.................................................................. 2
SECTION 2.4. Lease Renewal............................................................... 2
ARTICLE III
OTHER PROPERTY................................................ 3
ARTICLE IV
RENT..................................................... 3
SECTION 4.1. Basic Rent.................................................................. 3
SECTION 4.2. Supplemental Rent........................................................... 3
SECTION 4.3. Method and Amount of Payment................................................ 3
SECTION 4.4. Late Payment................................................................ 4
SECTION 4.5. Net Lease; No Setoff; Etc................................................... 4
ARTICLE V
UTILITY CHARGES............................................... 6
ARTICLE VI
RENEWAL OPTION; SALE, RETURN AND PURCHASE OPTIONS.............................. 6
SECTION 6.1. Renewal Option.............................................................. 6
SECTION 6.2. Purchase Option............................................................. 7
SECTION 6.3. Sale Option................................................................. 7
SECTION 6.4. Conditions for Sale of the Sites............................................ 8
SECTION 6.5. Early Termination........................................................... 11
SECTION 6.6. Exercise of Options; Failure to Elect....................................... 12
SECTION 6.7. Return of Sites............................................................. 12
SECTION 6.8. Intentionally Omitted....................................................... 13
SECTION 6.9. Failure of Lessee to Sell Sites............................................. 13
ARTICLE VII
CONDITION AND USE OF SITES.......................................... 16
SECTION 7.1. Waivers..................................................................... 16
ARTICLE VIII
LIENS; EASEMENTS............................................... 17
SECTION 8.1. Liens....................................................................... 17
SECTION 8.2. No Lessor Consent or Liability.............................................. 17
SECTION 8.3. Easements................................................................... 18
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ARTICLE IX
MAINTENANCE AND REPAIR;
ALTERATIONS AND ADDITIONS................................ 19
SECTION 9.1. Maintenance and Repair; Compliance With
Law......................................................................... 19
SECTION 9.2. Alterations................................................................. 20
SECTION 9.3. Title to Alterations........................................................ 22
SECTION 9.4. Maintenance and Repair Reports.............................................. 23
SECTION 9.5. Permitted Contests.......................................................... 23
ARTICLE X
USE........................................................ 24
ARTICLE XI
INSURANCE..................................................... 24
SECTION 11.1. Required Coverages.......................................................... 24
SECTION 11.2. Delivery of Insurance Certificates.......................................... 26
ARTICLE XII
ASSIGNMENT AND SUBLEASING............................................. 27
SECTION 12.1. Assignment and Subletting................................................... 27
SECTION 12.2. Sublease Subordination...................................................... 29
ARTICLE XIII
LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE..................................... 30
SECTION 13.1. Event of Loss; Condemnation or Casualty..................................... 30
SECTION 13.2. Application of Payments Relating to an
Event of Loss............................................................... 31
SECTION 13.3. Application of Certain Payments Relating
to a Condemnation........................................................... 31
SECTION 13.4. Casualty.................................................................... 31
SECTION 13.5. Other Dispositions.......................................................... 32
SECTION 13.6. Negotiations................................................................ 32
SECTION 13.7. No Rent Abatement........................................................... 33
ARTICLE XIV
NON-INTERFERENCE.................................................. 33
SECTION 14.1. Non-Interference............................................................ 33
SECTION 14.2. Certain Duties and Responsibilities of
Lessor...................................................................... 33
ARTICLE XV
INSPECTION AND REPORTS............................................... 34
SECTION 15.1. Inspection.................................................................. 34
SECTION 15.2. Reports..................................................................... 34
ARTICLE XVI
OWNERSHIP, GRANT OF SECURITY INTEREST
AND FURTHER ASSURANCES............................................... 34
SECTION 16.1. Grant of Security Interest.................................................. 34
SECTION 16.2. Attorney-in-Fact............................................................ 35
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ARTICLE XVII
LEASE EVENTS OF DEFAULT................................. 36
ARTICLE XVIII
ENFORCEMENT....................................... 39
SECTION 18.1. Remedies.................................................................... 39
SECTION 18.2. Proceeds of Sale; Deficiency................................................ 43
SECTION 18.3. Grant and Foreclosure on Lessee's Estate.................................... 43
SECTION 18.4. Remedies Cumulative; No Waiver; Consents.................................... 44
ARTICLE XIX
RIGHT TO PERFORM FOR LESSEE......................................... 44
ARTICLE XX
LESSOR LIENS................................................. 45
ARTICLE XXI
MISCELLANEOUS................................................ 45
SECTION 21.2. Severability................................................................ 45
SECTION 21.3. Notices..................................................................... 46
SECTION 21.4. Amendment; Complete Agreements.............................................. 46
SECTION 21.5. Headings.................................................................... 46
SECTION 21.6. Original Lease.............................................................. 46
SECTION 21.7. GOVERNING LAW............................................................... 46
SECTION 21.8. Discharge of Lessee's Obligations by its
Affiliates.................................................................. 47
SECTION 21.9. Liability of Lessor Limited................................................. 47
SECTION 21.10. Estoppel Certificates....................................................... 47
SECTION 21.11. No Joint Venture............................................................ 48
SECTION 21.12. No Accord and Satisfaction.................................................. 48
SECTION 21.13. No Merger................................................................... 48
SECTION 21.14. Successor Lessor............................................................ 49
SECTION 21.15. Survival.................................................................... 49
SECTION 21.16. Transfer of Sites to Lessee or any other
Person...................................................................... 49
SECTION 21.17. Enforcement of Certain Warranties........................................... 49
SECTION 21.18. Investment of Security Funds................................................ 50
SECTION 21.19. Recording of Lease Supplements.............................................. 50
SECTION 21.20. Nature of Transaction....................................................... 51
SCHEDULE I - Description of Sites Delivered on Document
Closing Date
EXHIBIT A - Form of Lease Supplement and Memorandum of
Lease and Agreement
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Lease Agreement
THIS LEASE AND AGREEMENT dated as of July 24, 1996 (as amended,
supplemented, or otherwise modified from time to time, this "Lease"), is between
MELLON FINANCIAL SERVICES CORPORATION #4, a Pennsylvania corporation, as Lessor
and as mortgagee ("Lessor"), and GENESIS ELDERCARE PROPERTIES, INC., a
Pennsylvania corporation and a wholly-owned subsidiary of Genesis, as Lessee and
as mortgagor ("Lessee").
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, hereby
agree as follows:
ARTICLE I
DEFINITIONS; LESSEE LIABILITY
For all purposes hereof, the capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in Appendix 1 to that
certain Participation Agreement dated as of July 24, 1996, by and among Lessee,
Lessor, the Lenders identified therein, and Mellon Bank, N.A., as Agent (the
"Participation Agreement"). All obligations imposed on the "Lessee" in this
Lease shall be the full recourse liability of Lessee.
This Lease refunds, refinances and replaces that certain Acquisition
Credit Agreement, dated as of September 29, 1995, as amended, among Genesis
Health Ventures, Inc. ("Genesis"), certain of its subsidiaries, Mellon Bank,
N.A., ("Mellon") as Agent, Citibank, N.A. ("Citibank") as Co-Agent and the
lenders named therein, which agreement supplemented that certain Amended and
Restated Credit Agreement, dated as of September 29, 1995, as amended, among
Genesis, certain of its subsidiaries, Mellon as Issuer of Letters of Credit,
Mellon as agent and Citibank as co-Agent, which agreement refunded, refinanced
and replaced that certain Credit Agreement, dated as of November 22, 1993, among
Genesis, certain of its subsidiaries, Mellon as agent and the lenders named
therein. The obligations hereunder are secured and superior in right of payment
to the obligations under those certain Debentures issued pursuant to the 1993
Indenture (as hereinafter defined). This Lease (including all amendments and
supplements hereto including, without limitation, any amendments which may
increase the amount of this facility) is a "Credit Facility" within the meaning
of that certain Indenture, dated as of June 15, 1995, between Genesis and
Delaware Trust Company as Trustee (the "1995 Indenture") and constitutes "Senior
Indebtedness" within the meaning of that certain Indenture, dated
Lease Agreement
as of November 30, 1993, between Genesis and First Fidelity Bank, N.A.,
Pennsylvania as Trustee (the "1993 Indenture").
ARTICLE II
LEASE OF SITES; LEASE TERM
SECTION 2.1. Acceptance and Lease of Sites. On the Document Closing
Date, Lessor, subject to the satisfaction or waiver of the conditions set forth
in Appendix 2 of the Participation Agreement, hereby agrees to accept delivery
on the Document Closing Date of the Sites pursuant to the terms of the
Participation Agreement and simultaneously to lease the Sites to Lessee
hereunder, and Lessee, subject to the satisfaction or waiver of the conditions
set forth in Appendix 2 of the Participation Agreement, hereby agrees, expressly
for the direct benefit of Lessor, to lease commencing on such Document Closing
Date from Lessor for the Lease Term, such Sites.
SECTION 2.2. Acceptance Procedure. Lessor hereby authorizes one or more
employees of Lessee, to be designated by Lessee, as the authorized
representative or representatives of Lessor to accept delivery of the Sites.
Lessee hereby agrees that such acceptance of delivery by such authorized
representative or representatives and the execution and delivery by Lessee as of
the Document Closing Date, of a Lease Supplement in the form of Exhibit A hereto
or in such other form as may be reasonably acceptable to the Agent and Lessor
(in each case, appropriately completed) shall, without further act, constitute
the irrevocable acceptance by Lessee of the Sites which are the subject thereof
for all purposes of this Lease and the other Operative Documents on the terms
set forth therein and herein.
SECTION 2.3. Lease Term. Unless earlier terminated, the term of this
Lease shall consist of the Basic Term, commencing on and including the Document
Closing Date and ending on the date (the "Basic Term Expiration Date") which is
five years after the Document Closing Date and the Renewal Term, if exercised
and effective (collectively, the "Lease Term").
SECTION 2.4. Lease Renewal. Subject to the consent of Lessor and the
Lenders pursuant to Section 2.10 of the Participation Agreement, Lessee may
elect to renew this Lease for one five-year renewal term (the "Renewal Term")
commencing upon the expiration of the Basic Term (the "Renewal Term Commencement
Date") and ending on the date which is five years after the Renewal Term
Commencement Date, as provided in Article VI and in the applicable Lease
Supplement.
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Lease Agreement
ARTICLE III
OTHER PROPERTY
Lessee may from time to time own or hold under lease from Persons other
than Lessor, furniture, trade fixtures and equipment located on or about the
Sites that is not subject to this Lease. Lessor shall from time to time, upon
the reasonable request, and at the cost and expense of Lessee, which request
shall be accompanied by such supporting information and documents as Lessor may
reasonably require, promptly acknowledge in writing to Lessee or other Persons
that the particular items of furniture, trade fixtures and equipment in question
are not part of the related Site and that, subject to the rights of Lessor under
any other Operative Documents, Lessor does not own or have any other right or
interest in or to such furniture, trade fixtures and equipment.
ARTICLE IV
RENT
SECTION 4.1. Basic Rent. Lessee shall pay to Agent, for the benefit of
Lessor and the Lenders, the amounts of Basic Rent during the Basic Term and, if
applicable, the Renewal Term, determined in accordance with the definition of
"Basic Rent" on each Payment Date.
SECTION 4.2. Supplemental Rent. Lessee shall pay to Agent, for the
benefit of Lessor, or to whomever shall be entitled thereto as expressly
provided herein or in any other Operative Document (and Lessor hereby directs
Lessee, on behalf of Lessor, to so pay such Agent or other Person), any and all
Supplemental Rent promptly as the same shall become due and payable and, in the
event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor
shall have all rights, powers and remedies provided for herein or by law or in
equity or otherwise in the case of nonpayment of Basic Rent. Lessee hereby
reaffirms its obligation to pay as Supplemental Rent (i) any and all Additional
Costs, and (ii) any Transaction Costs not paid on the Document Closing Date, as
further described in Section 9.9 of the Participation Agreement.
SECTION 4.3. Method and Amount of Payment. As long as any obligations
remain outstanding under the Loan Agreement, Basic Rent and Supplemental Rent
shall be paid to Agent (or, in the case of Supplemental Rent, to such Person as
may be entitled thereto) on the due date therefor at such place as Agent shall
specify in writing to Lessee at least two (2) Business Days prior
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Lease Agreement
to the due date therefor. Agent, on behalf of Lessor, shall notify Lessee of the
applicable LIBO Rate or Prime Rate, as applicable, promptly upon the
determination thereof. Each payment of Rent shall be made by Lessee prior to
12:00 noon Philadelphia time (and payments made after such time shall be deemed
to have been made on the next day) at the place of payment in funds consisting
of lawful currency of the United States of America which (in the case of any
amount payable to Lessor, Agent or any Lender) shall be immediately available on
the scheduled date when such payment shall be due, unless the scheduled date
shall not be a Business Day, in which case such payment shall be made on the
next succeeding Business Day (unless the result of such extension would be to
carry such payment into the next calendar month, in which event such payment
shall be made on the next preceding Business Day). The provisions of the
foregoing sentence of this Section 4.3 shall be applicable only to Basic Rent
and to Supplemental Rent payable to, or on behalf of or for the account of,
Lessor, any Lender, Agent and any other Indemnitee. Any amounts payable by
Lessee to Lessor hereunder shall be payable in accordance with Section 9.16 of
the Participation Agreement.
SECTION 4.4. Late Payment. If any Basic Rent shall not be paid when due
(not taking into account any applicable grace period), Lessee shall pay to Agent
on behalf of Lessor and the Lenders, or if any Supplemental Rent payable to or
on behalf or for the account of Lessor, any Lender, Agent or other Indemnitee is
not paid when due (not taking into account any applicable grace period), Lessee
shall pay to whomever shall be entitled thereto, in each case as Supplemental
Rent, interest at the Overdue Rate (to the maximum extent permitted by law) on
such overdue amount from and including the initial due date thereof (not taking
into account any applicable grace period) to but excluding the Business Day of
payment thereof at the Overdue Rate.
SECTION 4.5. Net Lease; No Setoff; Etc. This Lease shall constitute a
net lease and, notwithstanding any other provision of this Lease, it is intended
that Basic Rent and Supplemental Rent shall be paid without counterclaim,
setoff, deduction or defense of any kind and without abatement, suspension,
deferment, diminution or reduction of any kind, and Lessee's obligation to pay
all such amounts, throughout the Basic Term and the Renewal Term, if applicable,
is absolute and unconditional. The obligations and liabilities of Lessee
hereunder shall in no way be released, discharged or otherwise affected for any
reason, including, without limitation, to the maximum extent permitted by law:
(a) any defect in the condition, merchantability, design, construction, quality
or fitness for use of any portion of the
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Lease Agreement
Sites, or any failure of the Sites to comply with all Applicable Laws and
Regulations, including any inability to occupy or use the Sites by reason of
such non-compliance; (b) any damage to, abandonment, loss, contamination of or
Release from or destruction of or any requisition or taking of the Sites or any
part thereof, including eviction; (c) any restriction, prevention or curtailment
of or interference with any use of the Sites or any part thereof, including
eviction; (d) any defect in title to or rights to the Sites or any Lien on such
title or rights or on the Sites; (e) any change, waiver, extension, indulgence
or other action or omission or breach in respect of any obligation or liability
of or by Lessor, Agent or any Lender; (f) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceedings relating to Lessee, Lessor, Agent, any Lender or any other Person,
or any action taken with respect to this Lease by any trustee or receiver of
Lessee, Lessor, Agent, any Lender or any other Person, or by any court, in any
such proceeding; (g) any claim that Lessee has or might have against any Person,
including, without limitation, Lessor, or any Lender; (h) any failure on the
part of Lessor to perform or comply with any of the terms of this Lease, any
other Operative Document or of any other agreement whether or not related to the
Overall Transaction; (i) any invalidity or unenforceability or disaffirmance
against or by Lessee of this Lease or any provision hereof or any of the other
Operative Documents or any provision of any thereof; (j) the impossibility of
performance by Lessee, Lessor or both; (k) any action by any court,
administrative agency or other Authority; any restriction, prevention or
curtailment of or any interference with the construction on or any use of any
Site or any part thereof; or (m) any other occurrence whatsoever, whether
similar or dissimilar to the foregoing, whether or not Lessee shall have notice
or knowledge of any of the foregoing. Except as specifically set forth in
Section 6.5 or Article XIII of this Lease, this Lease shall be noncancellable by
Lessee for any reason whatsoever, and Lessee, to the extent permitted by
Applicable Laws and Regulations, waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate or surrender this Lease, or to any
diminution, abatement or reduction of Rent payable by Lessee hereunder. If for
any reason whatsoever this Lease shall be terminated in whole or in part by
operation of law or otherwise, except as expressly provided in Section 6.5 or
Article XIII of this Lease, Lessee shall, unless prohibited by Applicable Laws
and Regulations, nonetheless pay to Lessor (or, in the case of Supplemental
Rent, to whomever shall be entitled thereto) an amount equal to each Rent
payment at the time and in the manner that such payment would have become due
and payable under the terms of this Lease if it had not been terminated in whole
or in part, and in such case, so long as such
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Lease Agreement
payments are made and no Lease Event of Default shall have occurred and be
continuing, Lessor will deem this Lease to have remained in effect. Each payment
of Rent made by Lessee hereunder shall be final and, absent manifest error in
the computation of the amount thereof, Lessee shall not seek or have any right
to recover all or any part of such payment from Lessor, Agent or any party to
any agreements related thereto for any reason whatsoever. Lessee assumes the
sole responsibility for the condition, use, operation, maintenance, and
management of the Sites and Lessor shall have no responsibility in respect
thereof and shall have no liability for damage to the property of Lessee or any
subtenant of Lessee on any account or for any reason whatsoever other than by
reason of Lessor's willful misconduct or gross negligence or breach of any of
its obligations under any Operative Document.
ARTICLE V
UTILITY CHARGES
Lessee shall pay or cause to be paid all charges for electricity,
power, gas, oil, water, telephone, sanitary sewer service and all other rents
and utilities used in or on a Site during the Lease Term. Lessee shall be
entitled to receive any credit or refund with respect to any utility charge paid
by Lessee and the amount of any credit or refund received by Lessor on account
of any utility charges paid by Lessee, net of the costs and expenses reasonably
incurred by Lessor in obtaining such credit or refund, shall be promptly paid
over to Lessee. All charges for utilities imposed with respect to a Site for a
billing period during which this Lease expires or terminates (except pursuant to
Section 6.2, in which case Lessee shall be solely responsible for all such
charges) shall be adjusted and prorated on a daily basis between Lessor and
Lessee, and each party shall pay or reimburse the other for each party's pro
rata share thereof.
ARTICLE VI
RENEWAL OPTION; SALE, RETURN AND PURCHASE OPTIONS
SECTION 6.1. Renewal Option. Subject to the consent of Lessor and the
Lenders pursuant to Section 2.10 of the Participation Agreement, Lessee shall
have the right, at its option, to request the Participants to renew all (but not
less than all) of the Lease Supplements for the Renewal Term, commencing
immediately following the expiration of the Basic Term. In order to exercise
such option, Lessee shall give irrevocable written notice thereof to Lessor no
earlier than
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Lease Agreement
fifteen (15) months and no later than twelve (12) months prior to the end of the
Basic Term and no Lease Payment/Bankruptcy Default or Lease Event of Default
shall have occurred and be continuing at the time of exercise and at the
commencement of the Renewal Term. If the Renewal Term is applicable, Lessee
shall continue to pay Rent, including Basic Rent (upon the terms agreed to by
Lessee and the Participants for the Renewal Term), during the Renewal Term on
each Payment Date occurring during the Renewal Term. All of the provisions of
this Lease shall remain in effect during the Renewal Term.
SECTION 6.2. Purchase Option. Lessee will have the right, at its option
and upon ten (10) months prior written notice (which notice shall be
irrevocable) to Lessor prior to expiration of the Lease Term, to purchase all
(but not less than all) of the Sites then subject to the Lease Supplements at a
price equal to the Purchase Option Exercise Amount (the "Purchase Option"). If
Lessee shall have elected to purchase the Sites, Lessor shall, upon discharge of
the Lien of the Mortgages pursuant to the provisions thereof, and the payment in
full of an amount sufficient to retire the Notes and pay in full the Equity
Amount, and the payment of all accrued but unpaid Rent and breakage fees, if
any, plus all other amounts (including, without limitation, all Supplemental
Rent), fees and expenses then due and payable, transfer by quitclaim deed all of
Lessor's right, title and interest in and to the Sites to Lessee or its
designee, without recourse or warranty (except as to the absence of Lessor
Liens), and against payment by Lessee of the Purchase Option Exercise Amount in
immediately available funds. Lessee, at its option, may assign its right to
exercise the Purchase Option by written notice thereof to Agent and Lessor;
provided that (i) Lessee shall be bound by any exercise of the Purchase Option
by the assignee, (ii) such assignee shall be bound by the provisions of this
Article VI applicable to the Purchase Option, and (iii) no such assignment shall
release Lessee from its obligations under this Article VI and, without
limitation, Lessee shall remain primarily liable to Lessor for the payment of
all amounts due under this Article VI in respect of the Purchase Option.
SECTION 6.3. Sale Option. If no Lease Payment/Bankruptcy Default or
Lease Event of Default shall have occurred and be continuing, then Lessee may
cause all (but not less than all) of the Sites subject to the Lease Supplements
to be sold on the last day of the Lease Term for cash to a purchaser or
purchasers not affiliated in any way with Lessee (the "Sale Option"); provided
that each Land Interest and the Facility thereon shall be sold to the same
Person and all Land Interests and all Facilities thereon shall be sold to one or
more Persons in the same transaction; and provided further that in connection
with the sale of each
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Lease Agreement
Facility located on a Non-Acquired Land Interest, Lessee shall be obligated to
sell the related Land Interest as well. In the event Lessee timely elects the
Sale Option, on the last day of the Lease Term, Lessee will pay as Supplemental
Rent to Lessor the amounts determined in accordance with Section 6.4(b) until
the Lease Balance and all other amounts payable under the Operative Documents
have been paid in full.
SECTION 6.4. Conditions for Sale of the Sites.
(a) In the event that the Sale Option is applicable, Lessee
shall cause all (but not less than all) of the Sites to be sold in accordance
with the procedures set forth in this Section 6.4. In order to exercise the Sale
Option, Lessee shall give notice of its election of the Sale Option effective at
the expiration of the Basic Term or Renewal Term, as the case may be, not later
than ten (10) months prior to such expiration, which exercise shall be
irrevocable, and any failure of Lessee to so elect the Sale Option shall be
deemed an election of the Purchase Option pursuant to Section 6.2. Subject to
the preceding sentence, during the period commencing on the date ten (10) months
prior to the scheduled end of the Basic Term or the Renewal Term, as the case
may be, Lessee, on behalf of Lessor, shall use best commercial efforts, as
nonexclusive agent for Lessor, to obtain the highest cash bids for the purchase
of the Sites and, in the event it receives any bid, Lessee shall, within five
(5) Business Days after receipt thereof and at least twenty (20) Business Days
prior to the Lease Termination Date, certify to Lessor and Agent in writing the
amount and terms of such bid, and the name and address of the party or parties
(who shall not be Lessee or any Affiliate of Lessee or any Person with whom
Lessee has an understanding or arrangement regarding the future use of the Sites
by Lessee or such Affiliate, but who may be Lessor or a Lender, any Affiliate
thereof or any Person contacted by a Lender) submitting such bid. Lessee will
keep Agent promptly informed of the material terms of any proposed bid. Lessee
shall bear its own expenses and pay, as Supplemental Rent, the reasonable
expenses of Lessor, Agent and each Lender in connection with any such bidding
and sale process pursuant to this Section 6.4 including any recapture costs
incurred under government-funded healthcare programs, as well as all costs and
expenses incurred by any party (including a buyer or potential buyer) to place
the Sites in the condition required by Section 9.1 and costs of repairs,
Alterations or improvements desired by such buyer.
(b) In the event that Lessee contemplates accepting any bid
which, upon payment of all amounts under Section 6.4(b), shall result in any
portion of the Lease Balance or any other
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Lease Agreement
amount due under the Operative Documents remaining outstanding (a "Loss Bid"),
Lessee shall notify Agent and Lessor in writing (a "Loss Bid Notice") of such
fact and the calculation thereof prior to accepting any such bid; and in the
event of such bid, any Participant may submit a bid to Lessee not later than
thirty (30) days after the date of such notice from Lessee. On or before the
Lease Termination Date, so long as no Lease Event of Default or Lease
Payment/Bankruptcy Default shall have occurred and be continuing, and subject to
the release of the security interest with respect to the Sites under the
Mortgages: (i) Lessee shall transfer all of Lessee's right, title and interest
in the Sites, or cause the Sites to be transferred, to the bidder(s), if any,
which shall have submitted the highest bid therefor at least twenty (20) (or, in
the case of a Participant, any Affiliate thereof or Person contacted by a
Participant, five (5)) Business Days prior to such Lease Termination Date, in
the same manner and in the same condition and otherwise in accordance with all
the terms of this Lease; (ii) subject to prior or concurrent payment by Lessee
of all amounts due under clause (iii) of this sentence, Lessor shall exercise
such rights as it has to cause the Sites to be released from the Lien of the
Mortgages and shall, without recourse or warranty (except as to the absence of
Lessor Liens), transfer by quitclaim deed Lessor's right, title and interest in
and to the Sites for cash to such bidder(s); and (iii) Lessee shall
simultaneously pay or cause to be paid to Lessor in immediately available funds
an amount equal to the sum of (p) all unpaid Basic Rent due on or prior to the
Lease Termination Date, and all Supplemental Rent due on or prior to such date
and any other amounts due and payable by Lessee to Lessor, Agent and each Lender
plus (q) the gross sale proceeds of the Sites sold by Lessor (the "Proceeds");
plus (r) the Applicable Percentage Amount. To the extent the sum of the Proceeds
plus the Applicable Percentage Amount shall exceed the Lease Balance, upon
receipt of the amounts described in clause (p) of the preceding sentence, Lessor
shall apply the amount of Proceeds equal to such excess to the amount payable by
Lessee under clause (r); provided, that to the extent that the Proceeds alone
shall exceed the Lease Balance, upon receipt of the amounts described in clause
(p) of the preceding sentence, Lessor shall pay the amount of such excess to
Lessee. For purposes of clause (q), with respect to the gross sales proceeds
relating to the sale of the Non-Acquired Land Interests and the related
Facilities, such gross proceeds shall be allocated between Lessee's interest in
such Non-Acquired Land Interest (as the owner thereof) and Lessor's interest in
such Non-Acquired Land Interest (as the ground lessee thereof) and in the
Facility thereon based upon the respective Fair Market Sales Values of Lessee's
interest in such Non-Acquired Land Interest and Lessor's interest in such Non-
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Acquired Land Interest and the Facility thereon as determined by an appraisal
conducted, at Lessee's expense, by an appraiser of nationally recognized
standing, selected and engaged by the Required Participants; provided, that the
maximum portion of the gross sales proceeds allocated to any Non-Acquired Land
Interest shall be Lessee's cost for such Non-Acquired Land Interest as set forth
in the applicable Lease Supplement. The "Applicable Percentage Amount" shall be
based upon the Applicable Percentage for the Lease Supplement applicable to such
Site, and shall be determined in accordance with the definition thereof in
Appendix 1 to the Participation Agreement. The "Applicable Percentage" for each
Lease Supplement shall be determined on or about the Document Closing Date and
shall be set forth in the Lease Supplement provided that the maximum "Applicable
Percentage Amount" will be assumed without causing the present value at the
beginning of the Lease Term of the minimum lease payments, as determined in
accordance with generally accepted accounting principles, to equal or exceed
ninety percent (90%) of the Fair Market Sales Value, at the beginning of this
Lease, of the applicable Site. The Applicable Percentage for any Lease
Supplement shall in no event be less than eighty percent (80%).
(c) If Lessee exercises the Sale Option and a Loss Bid Notice
is to be provided pursuant to Section 6.4(b), then as a condition to Lessee's
right to consummate the Sale Option pursuant to Sections 6.3 and 6.4, Lessee
shall cause to be delivered to Lessor not later than five (5) Business Days
prior to the Lease Termination Date, at Lessee's sole cost and expense, a report
in form and substance reasonably satisfactory to the Agent and Lessor from an
Appraiser selected by Lessee and reasonably acceptable to the Agent and Lessor
(the "End of Term Report") to establish the reason for any impairment to the
value of any of the Sites which are being sold for less than the Allocated
Amount applicable to such Site. Without limiting the indemnities provided in the
Operative Documents, on the Lease Termination Date, Lessee shall pay to Agent,
on behalf of Lessor and the Lenders, an amount equal to the Shortfall Amount
that the End of Term Report demonstrates was the result of any impairment to the
value in any of the Sites due to:
(i) the existence of any Hazardous Materials, Environmental
Concern Materials or violations of Environmental Laws with
respect to a Site occurring or discovered after the date
such Site becomes subject to the Lease (regardless of the
Person so discovering any of the foregoing), or
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(ii) any restoration or rebuilding carried out by Lessee
or any failure of Lessee to complete any Alterations,
restoration or rebuilding, or
(iii) any easements or other actions described in
clauses (i) through (viii) of Section 8.3, or
(iv) the failure of Lessor to have good and marketable title to
any Site free and clear of all Liens (including Permitted
Liens (other than Lessor Liens)) and exceptions to title
caused by the acts or omissions of Lessee or any Affiliate
or Subtenant.
As used herein, the term "Shortfall Amount" means the excess, if any, of (i) the
Lease Balance over (ii) the sum of the Proceeds plus the Applicable Percentage
Amount.
SECTION 6.5. Early Termination.
(a) Commencing two years after the Document Closing Date and
provided that no Lease Payment/Bankruptcy Default or Lease Event of Default
shall have occurred and be continuing (or any such defaults are cured
contemporaneously with the consummation of the purchase option under this
Section 6.5(a)), Lessee shall have the option to purchase all (but not less than
all) of the Sites on the next scheduled Payment Date for an amount equal to,
without penalty, the Lease Balance plus all other amounts then due under the
Lease and the other Operative Documents, including, without limitation, accrued
but unpaid Rent and breakage fees, if any, plus all other amounts, fees and
expenses then due and payable.
(b) On any scheduled Payment Date prior to the first year
anniversary of the Document Closing Date, Lessee may, at its option, by giving
at least ninety (90) days' advance written notice to Lessor, purchase all (but
not less than all) of the Sites for an amount equal to the Lease Balance,
accrued but unpaid Rent and breakage fees, if any, all other amounts, fees and
expenses then due and payable plus a prepayment fee equal to 50 basis points of
the Lease Balance. On any scheduled Payment Date after the first year
anniversary of the Document Closing Date, but prior to the second year
anniversary of the Document Closing Date, Lessee may, at its option, by giving
at least ninety (90) days' advance written notice to Lessor, purchase all (but
not less than all) of the Sites for an amount equal to the Lease Balance,
accrued but unpaid Rent and breakage fees, if any, all other amounts, fees and
expenses then due and payable, plus a prepayment fee equal to 25 basis points of
the Lease Balance.
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SECTION 6.6. Exercise of Options; Failure to Elect. In order to
exercise any of its purchase or sale options under this Lease (other than under
Section 6.5), Lessee shall give irrevocable written notice to Lessor not less
than twelve (12) months prior to the end of the Basic Term, that Lessee intends
to exercise one of the options provided in this Article VI and specifying such
option. If Lessee shall fail to deliver such written notice in the time
required, Lessee shall be deemed to have elected to exercise the Purchase Option
pursuant to Section 6.2. Lessee's election (or deemed election) of the Purchase
Option will be irrevocable at the time it is made (or deemed made). If Lessee
has elected the option to sell the Sites under Section 6.3, such option shall be
automatically revoked and such election shall be deemed of no effect if, on or
after the date Lessee elects such option, there exists or occurs a Lease Event
of Default or Lease Payment/Bankruptcy Default or Lessee shall fail in any
manner fully to comply with this Article VI, in which case Lessee shall be
automatically deemed to have elected the Purchase Option pursuant to Section
6.2.
SECTION 6.7. Return of Sites. Unless the Sites shall have been
transferred to Lessee pursuant to Section 6.2 or 6.5, Lessee shall, on the Lease
Termination Date, and at its own expense, transfer the Sites (together with the
reports described in Section 9.4 relating thereto) to the independent purchaser
thereof pursuant to Section 6.3, free and clear of all Liens other than
Permitted Exceptions and Lessor Liens, in as good condition as they were on the
Document Closing Date, ordinary wear and tear excepted, and in compliance with
all Applicable Laws and Regulations and the other requirements of Article IX
(and in any event without (x) any asbestos installed or maintained in any part
of the Site, (y) any polychlorinated byphenyls (PCBs) in, on or used, stored or
located at the Site, and (z) any other Hazardous Materials). Lessee shall
cooperate with the independent purchaser of the Site in order to facilitate the
ownership and operation by such purchaser of the Site after the Lease
Termination Date, including providing all books, reports and records regarding
the maintenance, repair and ownership of the Site and all data and technical
information relating to the physical operation and maintenance of the Site,
granting or assigning (to the extent permitted by law) all licenses necessary
for the operation and maintenance of the Site and cooperating in seeking and
obtaining all necessary Governmental Action. Lessee shall have also paid the
total cost for the completion of all Alterations commenced prior to the Lease
Termination Date. The obligation of Lessee under this Article VI regarding the
Purchase Option shall survive the expiration or termination of this Lease,
except if Lessee duly
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and timely exercises the Sale Option and performs its obligations under Sections
6.3 and 6.4, or Lessee duly and timely exercises its rights under Section 6.5
and performs its obligations thereunder. Unless Lessee shall have exercised or
been deemed to have exercised its option to purchase the Sites, then after the
date which is twelve (12) months prior to the Lease Termination Date, Lessor
shall at Lessee's expense be entitled to perform such investigation, including
obtaining reports of engineers and other experts as to the condition and state
of repair and maintenance required by this Section 6.7 and as to the compliance
with Environmental Laws of the Site, as it deems appropriate. Lessee, at its
sole cost and expense, shall cause the repair or other remediation of any
discrepancies between the actual condition of the Site and the condition
required under the Lease, such repair or remediation to be completed not later
than the expiration of this Lease.
SECTION 6.8. Intentionally Omitted.
SECTION 6.9. Failure of Lessee to Sell Sites. If Lessee shall exercise
the Sale Option and shall fail to arrange for the sale of all of the Sites on or
before the Lease Termination Date in accordance with and subject to the
provisions of Sections 6.4 and 6.6, then Lessee and Lessor hereby agree as
follows:
(a) On the Lease Termination Date, Lessee shall (i) pay to
Agent (on behalf of the Participants) the Applicable Percentage Amount
and (ii) Lessee will do both of the following:
(1) at the option of Agent (on behalf of the
Participants), either (x) cancel the sale of the Sites for
which Lessee has arranged a sale (in which case, all Sites
will constitute "unsold Sites" under this Section 6.9) or (y)
sell the Sites for which Lessee has arranged a sale pursuant
to the provisions of Sections 6.4 and 6.6; and
(2) at the option of Agent (on behalf of the
Participants), either (x) tender to Lessor possession of the
unsold Sites or (y) continue to lease the unsold Sites during
a holdover period (the "Holdover Period") and in the case of
such holdover, Lessee shall continue to market, on a
non-exclusive basis, the Sites for sale on behalf of Lessor in
accordance with the provisions of the Lease. For each such
Site, such Holdover Period shall expire on the earlier of (x)
the sale of such Site and (y) the reduction of the Lease
Balance to zero
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and the payment by Lessee of all Basic Rent, Supplemental Rent
and all other amounts then due and payable under the Operative
Documents, and (z) written notice by Agent, as Agent for the
Lenders, of a date specified for the termination of such
Holdover Period with respect to such Site. The Basic Rent
payable by Lessee for the Sites during any Holdover Period
shall be applied first to payment of the portion of Basic Rent
set forth in clauses (i) and (ii) of the definition thereof,
with any excess being applied to reduce such Lease Balance.
Any proceeds from the sale of any Sites during the Holdover
Period will be applied to reduce the Lease Balance, with such
application being allocated first to the Lenders in respect of
the remaining amount of the Notes, and second to the Equity
Amount. If and when the Lease Balance shall be reduced to
zero, (i) any further proceeds from the sale of any remaining
Sites shall be remitted to Lessee for its own account, (ii) at
the request of either Lessor (or Agent on Lessor's behalf) or
Lessee, Lessor will transfer to Lessee or its designee, and
Lessee will accept or cause its designee to accept the
transfer of, all remaining Sites by quitclaim deed, and Lessee
shall pay or cause to be paid all costs and expenses
(including, without limitation, reasonable attorneys' fees and
expenses of counsel to the Participants) in connection with
such transfer.
(b) On or after the Lease Termination Date, Agent, on behalf
of Lessor and the Lenders, shall have the right, but not the
obligation, to sell the Sites for such purchase price and upon such
terms as Agent shall determine in its sole discretion. In the event
that Agent shall so elect to sell the Sites, Agent shall notify each of
Lessor, Lessee and the Lenders thereof, and each shall have the right
to submit a bid and/or to cause any other Person to submit a bid to
Agent not later than twenty (20) Business Days prior to the date Agent
desires to sell the Sites (as set forth in the aforementioned notice
thereof); provided, however, that Agent, on behalf of Lessor and the
Lenders, shall have the right, in its sole discretion, from time to
time, to defer such proposed sale date, in which event, the rights of
Lessee, Lessor and each Lender to submit a bid and/or to cause any
other Person to submit a bid to Agent shall be extended to the date
that is twenty (20) Business Days prior to the revised proposed sale
date. At no time shall Agent be obligated to accept any bid for the
sale of the Sites
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(whether such bid was obtained by Lessee, Lessor, any Lender or
otherwise) or to consummate any proposed sale.
(c) At any time and from time to time on or after the Lease
Termination Date, Agent, on behalf of Lessor and the Lenders, shall
have the right to withdraw from the Sale Deposit (other than the
portion thereof constituting the Applicable Percentage Amount) amounts
to pay, or reimburse itself for the payment of, expenses of Lessor,
Agent and each Participant in connection with any bidding and sale (or
proposed sale, whether or not consummated) described in clause (b). In
the event that there are insufficient funds remaining from the Sale
Deposit to pay such expenses, Lessee shall pay such expenses from time
to time upon demand.
(d) Contemporaneously with the consummation of any sale of the
Sites by Lessee or Agent pursuant to this Section 6.9, (i) Lessee will
transfer all of Lessee's right, title and interest in the Sites to be
transferred to the purchaser, (ii) subject to prior or concurrent
payment by Lessee of all amounts due under clause (iii) of this
sentence and receipt by Lessor of Proceeds from such sale, Lessor shall
exercise such rights as it has to cause the Sites to be released from
the Lien of the Mortgages and shall, without recourse or warranty
(except as to the absence of Lessor Liens), transfer by quitclaim deed
Lessor's right, title and interest in and to the Sites for cash to such
purchaser; and (iii) Lessee shall simultaneously pay or cause to be
paid to Agent, on behalf of Lessor and the Lenders, in immediately
available funds an amount equal to all unpaid Basic Rent and all
Supplement Rent due on or prior thereto and any other amounts due and
payable by Lessee to Lessor, Agent and each Lender. Any Proceeds in
excess of the sum of (x) the Lease Balance, plus (y) all unpaid Basic
Rent and all Supplemental Rent due on or prior thereto and any other
amounts due and payable by Lessee to Lessor, Agent and each Lender,
shall be remitted to Lessee promptly after receipt.
(e) Until a sale of the Sites by Lessee or Agent pursuant to
this Section 6.9, Lessee shall be bound by all of the obligations and
duties of Lessee under this Lease, notwithstanding the occurrence of
the Lease Termination Date.
(f) Lessor reserves all rights under this Lease and the other
Operative Documents arising out of Lessee's breach of any provisions of
this Lease (including Article VI),
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whether occurring prior to, on or after the Lease Termination Date,
including Lessee's breach of any of its obligations under Sections 6.3
and 6.4, including the right to sue Lessee for damages.
(g) To the greatest extent permitted by law, Lessee hereby
unconditionally and irrevocably waives, and releases Lessor and Agent
from, any right to require Lessor or Agent to sell the Sites at all or
for any minimum purchase price or on any particular terms and
conditions, Lessee hereby agreeing that if Lessee shall elect the Sale
Option, its ability to sell the Sites on or prior to the Lease
Termination Date and its right thereafter to submit a bid or to cause
any other Person to submit a bid to Agent pursuant to Section 6.9(b) in
the event Agent shall elect to sell the Sites, shall constitute full
and complete protection of Lessee's interest hereunder.
ARTICLE VII
CONDITION AND USE OF SITES
SECTION 7.1. Waivers. The Sites are let by Lessor "AS IS" in their
present or then condition, as the case may be, subject to (a) any rights of any
parties in possession thereof, (b) the state of the title thereto existing at
the time Lessor acquired its interest in the Site, (c) any state of facts which
an accurate survey or physical inspection might show (including any survey
delivered on the Document Closing Date), (d) all Applicable Laws and
Regulations, and (e) any violations of Applicable Laws and Regulations which may
exist at the commencement of the Lease Term. Lessee has examined the Site and
(insofar as Lessor is concerned) has found the same to be satisfactory. NEITHER
LESSOR, AGENT NOR ANY LENDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO HAVE ANY
LIABILITY WHATSOEVER AS TO THE TITLE TO THE SITES OR TO THE VALUE,
MERCHANTABILITY, HABITABILITY, CONDITION, OR FITNESS FOR USE OF THE SITES, OR
ANY PART THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE SITES, OR ANY PART THEREOF, AND NEITHER LESSOR,
AGENT NOR ANY LENDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT
THEREIN OR THE FAILURE OF THE SITES, OR ANY PART THEREOF, TO COMPLY WITH ANY
APPLICABLE LAWS AND REGULATIONS, except that Lessor hereby represents and
warrants that the Site is and shall be free of Lessor Liens. Lessee has been
afforded full opportunity to inspect the Sites, is satisfied with the results of
its inspections and is entering into this Lease solely on the basis of the
results of its own inspections, and all risks
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incident to the matters discussed in the preceding sentence (other than Lessor
Liens), as between Lessor, Agent and the Lenders, on the one hand, and Lessee,
on the other, are to be borne by Lessee. The provisions of this Article VII have
been negotiated, and, except to the extent otherwise expressly stated, the
foregoing provisions are intended to be a complete exclusion and negation of any
representations or warranties by any of Lessor, Agent or the Lenders, express or
implied, with respect to the Sites (or any interest therein), that may arise
pursuant to any law now or hereafter in effect or otherwise.
ARTICLE VIII
LIENS; EASEMENTS
SECTION 8.1. Liens. Lessee shall not directly or indirectly create,
incur, assume or suffer to exist any Lien, defect, attachment, levy, title
retention agreement or claim upon any Site or Alteration, or with respect to the
Sites, any Basic Rent or Supplemental Rent, the title thereto, or any interest
therein, including all Liens which arise out of the possession, use or occupancy
of the Sites or by reason of labor or materials furnished or claimed to have
been furnished to Lessee, or any of its contractors or agents or by reason of
the financing of any Alterations constructed by or for the benefit of Lessee and
not financed by Lessor, except in all cases Permitted Liens. With respect to all
Liens other than Permitted Liens, Lessee shall promptly, but not later than
thirty (30) days (or, in the case of non-consensual Liens, sixty (60) days)
after the filing thereof, at its own expense, take such action as may be
necessary duly to discharge or eliminate or bond in a manner reasonably
satisfactory to Lessor any such Lien if the same shall arise at any time.
SECTION 8.2. No Lessor Consent or Liability. Nothing contained in this
Lease shall be construed as constituting the consent or request of the Lessor,
expressed or implied, to or for the performance by any contractor, mechanic,
laborer, materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition, repair
or demolition of or to any Site or any part thereof. NOTICE IS HEREBY GIVEN THAT
NEITHER LESSOR NOR ANY LENDER OR AGENT IS OR SHALL BE LIABLE FOR ANY LABOR,
SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE
HOLDING A SITE OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND THAT NO
MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFECT THE INTEREST OF LESSOR, AGENT OR ANY LENDER IN AND TO ANY SITE.
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SECTION 8.3. Easements. Notwithstanding the foregoing paragraph, at the
request of Lessee, Lessor shall, from time to time during the Lease Term and
upon at least thirty (30) days' prior written notice from Lessee, and receipt of
the materials specified in the next succeeding sentence, consent to and join in
any (i) grant of easements, licenses, rights of way, party wall rights and other
rights in the nature of easements, with or without consideration, (ii) release
or termination of easements, licenses, rights of way, party wall rights or other
rights in the nature of easements which are for the benefit of a Site or any
portion thereof, with or without consideration, (iii) dedication or transfer of
portions of a Site, not improved with a building, for road, highway or other
public purposes, with or without consideration, (iv) execution of petitions to
have a Site or any portion thereof annexed to any municipal corporation or
utility district, (v) execution of agreements for the use and maintenance of
common areas, for reciprocal rights of parking, ingress and egress and
amendments to any covenants and restrictions affecting a Site or any portion
thereof, with or without consideration, (vi) request to any Authority for
platting or subdivision or replatting or resubdivision approval with respect to
a Site or any portion thereof or any parcel of land of which a Site or any
portion thereof forms a part or a request for any variance from zoning, (vii)
creation of a governmental special benefit district for public improvements and
collection of special assessments in connection therewith, in lump sum or
installments, and (viii) execution and delivery of any instrument appropriate to
confirm or effect such grant, release, dedication, transfer request or such
other matter, document or proceeding. Lessor's obligations pursuant to the
preceding sentence shall be subject to the requirements that:
(a) any such action shall be at the sole cost and expense of
Lessee, and Lessee shall pay all reasonable out-of-pocket costs of Lessor, Agent
and the Lenders in connection therewith (including, without limitation, the
reasonable fees of attorneys (including allocated costs of internal counsel of
Agent;
(b) Lessee shall have delivered to Lessor a certificate of a
Responsible Officer of Lessee stating that:
(1) such action will not cause the Site or any
portion thereof to fail to comply in any respect with the provisions of
the Lease or any other Operative Documents and in any material respect
with all Applicable Laws and Regulations (including, without
limitation, all applicable zoning, planning, building and subdivision
ordinances, all
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applicable restrictive covenants and all applicable
architectural approval requirements);
(2) all governmental consents or approvals required
prior to such action have been obtained, and all filings required prior
to such action have been made;
(3) such action will not result in any material
down-zoning of the Site or any portion thereof or a material reduction
in the maximum density or development rights available to the Site
under all Applicable Laws and Regulations;
(4) this Lease and Lessee's obligations hereunder
shall continue in full force and effect, without abatement, suspension,
deferment, diminution, reduction, counterclaim, setoff, defense or
deduction;
(5) such action will not materially reduce the Fair
Market Sales Value, utility, remaining economic useful life or residual
value of the Site or Lessor's interest therein; and
(6) such action will not impose or create any
liability or obligation on Lessor;
(c) all consideration received in connection with such
action shall be paid to Lessee; and
(d) no Lease Event of Default shall have occurred and
be continuing.
ARTICLE IX
MAINTENANCE AND REPAIR;
ALTERATIONS AND ADDITIONS
SECTION 9.1. Maintenance and Repair; Compliance With Law. Lessee, at
its own expense, shall at all times (a) maintain the Sites in good repair and
condition, subject to ordinary wear and tear, and in safe repair and condition
(all whether involving interior or exterior, structural or nonstructural,
ordinary or extraordinary, and foreseen or unforeseen circumstances); (b) except
to the extent Section 9.5 shall apply, maintain, manage and monitor the Sites in
accordance with all Applicable Laws and Regulations, whether or not such
maintenance requires structural modifications, noncompliance with which (i)
would have a material adverse effect on Lessee's right to use the Sites or
Lessee's
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business or financial condition, (ii) would cause any of the results enumerated
in Section 9.5 hereof, (iii) would materially adversely affect the Fair Market
Sales Value, utility, remaining economic useful life or residual value of the
Sites, or (iv) would materially adversely affect Lessor's interest in the Sites;
(c) comply with the standards imposed by any insurance policies required to be
maintained hereunder which are in effect at any time with respect to the Sites
or any part thereof; (d) maintain, manage and monitor the Sites in accordance
with all applicable contracts, including service contracts and insurance
contracts; (e) conduct maintenance and repair under the same programs and
subject to the same standards as Lessee or its Affiliates shall maintain and
repair other healthcare facilities owned, leased or operated by Lessee or its
Affiliates; (f) cause the Sites to continue to have at all times the capacity
and functional ability to be used for, on a continuing basis (subject to normal
interruption in the ordinary course of business for maintenance, inspection and
repair) and in commercial operation, the purposes for which it was specifically
designed; (g) maintain appropriate and customary written environmental
operations and maintenance plans (including, where appropriate for
asbestos-containing materials) for the Sites; and (h) procure, maintain and
comply in all material respects with all material licenses, permits, orders,
approvals, consents and other authorizations required for the construction, use,
maintenance and operation of the Sites and for the use, operation, maintenance,
repair and restoration of the Facilities. Lessee waives any right that it may
now have or hereafter acquire to (x) require Lessor to maintain, repair,
replace, alter, remove or rebuild all or any part of the Sites or (y) make
repairs at the expense of Lessor pursuant to any Applicable Laws and Regulations
or other agreements.
SECTION 9.2. Alterations.
(a) At Lessee's own cost and expense, (i) Lessee shall make
alterations, renovations, improvements and additions to any Site(s) or any part
thereof and substitutions and replacements therefor (collectively,
"Alterations") so long as such Alterations are (A) made to repair or maintain
the Site(s) in the condition required by Section 9.1; (B) necessary in order for
the Site(s) to be in compliance with Applicable Laws and Regulations; or (C)
necessary or advisable to restore the Site(s) to their condition existing prior
to a Casualty or Condemnation; and (ii) so long as no Lease Event of Default or
Lease Payment/Bankruptcy Default has occurred and is continuing, Lessee may
undertake Alterations on one or more Sites so long as such Alterations comply
with Applicable Laws and Regulations and with Section 9.1 and subsection (b) of
this Section 9.2.
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(b) The making of any Alterations must be in compliance with
the following requirements; provided that in the case of any Alteration required
by an emergency or by Applicable Laws and Regulations, Lessee shall (x) promptly
notify Agent thereof, (y) not be bound by the provisions of clause (1) below and
(z) effect such Alteration in a manner to avoid (or minimize if it is not
possible to avoid) any violation of clause (5) below:
(1) No such Alterations with a cost exceeding $500,000 (or, in
the case of related Alterations at any one Site, with an aggregate cost
exceeding $500,000) shall be made or undertaken except upon not less
than thirty days' prior written approval of Agent, which approval shall
not be unreasonably withheld. For any Alterations which are subject to
this clause (1), if Agent, in its good faith judgment, believes that
such Alterations may violate the provisions of clause (5) below, Agent
(on behalf of the Participants) may engage an appraiser of nationally
recognized standing, at Lessee's expense, to determine (by appraisal
methods satisfactory to Agent) the projected Fair Market Sales Value of
any Facility following the completion of Alterations relating thereto
and may delay its approval until receipt of such appraisal.
(2) Lessee shall not make any Alterations in violation of the
terms of any restriction, easement, condition or covenant or other
matter affecting title to the Site.
(3) No Alterations shall be undertaken until Lessee shall have
procured and paid for, so far as the same may be required from time to
time, all permits and authorizations relating to such Alterations of
all municipal and other Authorities having jurisdiction over the Site.
Lessor, at Lessee's expense, shall join in the application for any such
permit or authorization and execute and deliver any document in
connection therewith, whenever such joinder is necessary or advisable.
(4) The Alterations shall be expeditiously completed in a good
and workmanlike manner and in compliance with all Applicable Laws and
Regulations then in effect and the standards imposed by any insurance
policies required to be maintained hereunder.
(5) All Alterations shall, when completed, be of such a
character as to not materially adversely affect the Fair Market Sales
Value, utility, remaining economic useful life
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or residual value of the Site from its Fair Market Sales Value,
utility, remaining economic useful life or residual value immediately
prior to the making thereof or, in the case of Alterations being made
by virtue of a Casualty or Condemnation, immediately prior to the
occurrence of such Casualty or Condemnation.
(6) Lessee shall have made adequate arrangements for payment
of the cost of all Alterations when due so that the Site shall at all
times be free of Liens for labor and materials supplied or claimed to
have been supplied to the Site, other than Permitted Liens; provided,
that Lessee shall have the right to contest the amount claimed by any
such supplier of labor or materials in accordance with the applicable
provisions of Section 9.5.
SECTION 9.3. Title to Alterations. Title to Alterations shall without
further act vest in Lessor and shall be deemed to constitute a part of the
related Site and be subject to this Lease in the following cases:
(a) such Alterations shall be in replacement of or in
substitution for a portion of the Facilities and/or the Sites;
(b) such Alterations shall be required to be made
pursuant to the terms of Section 9.1 or 9.2(a)(i) hereof; or
(c) such Alterations shall be Nonseverable.
Lessee, at Lessor's request, shall execute and deliver any
deeds, bills of sale, assignments or other documents of conveyance reasonably
necessary to evidence the vesting of title in and to such Alterations to Lessor.
If such Alterations are not within any of the categories set
forth in clauses (a) through (c) of this Section 9.3, then title to such
Alterations shall vest in Lessee and such Alterations shall not be deemed to be
Alterations which are part of the Site.
All Alterations to which Lessee shall have title may, so long
as removal thereof shall not result in the violation of any Applicable Laws and
Regulations and no Lease Event of Default or Lease Payment/Bankruptcy Default is
continuing, be removed at any time by Lessee. Any such Alterations shall be
removed by Lessee at its expense if Lessor shall so request prior to the return
of the Site to Lessor or sale of the Site in accordance with the provisions of
this Lease, and Lessee shall at its
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expense repair any damage to the Site caused by the removal of such Alterations.
Lessor (or the purchaser of the applicable Site) may purchase from Lessee
Alterations (if not already owned by Lessor) which Lessee notifies Lessor that
Lessee intends to remove from the Site prior to the return of the Site to Lessor
or sale of the Site, which purchase shall be at the Fair Market Sales Value of
such Alterations. Title to any Lessee Alterations shall vest in Lessor (or the
purchaser of the applicable Site) if not removed from the Site by Lessee prior
to the return of the Site to Lessor or sale of the Site.
SECTION 9.4. Maintenance and Repair Reports. Lessee shall keep
maintenance and repair reports in sufficient detail, and as customary for owners
of commercial real estate, to indicate the nature and date of major work done.
Lessee shall prepare and maintain appropriate and customary written operations
and maintenance plans (including, where appropriate for asbestos-containing
materials) for the Sites. Such reports and plans shall be kept on file by Lessee
at its offices during the Lease Term, and shall be made available to Lessor upon
reasonable request. Lessee shall give notice to Lessor and Agent of any
Condemnation or Casualty the cost to repair which is reasonably expected by
Lessee to exceed $250,000, promptly after Lessee has knowledge thereof.
SECTION 9.5. Permitted Contests. If, to the extent and for so long as
(a) a test, challenge, appeal or proceeding for review of any Applicable Laws
and Regulations or any Governmental Action relating to any Site or to the
operation or maintenance of any Facility shall be prosecuted diligently and in
good faith in appropriate proceedings by Lessee or (b) compliance with such
Applicable Laws and Regulations or such Governmental Action shall have been
excused or exempted by a valid nonconforming use permit, waiver, extension or
forbearance, Lessee shall not be required to comply with such Applicable Laws
and Regulations or such Governmental Action but only if and so long as any such
test, challenge, appeal, proceeding or noncompliance shall not, in the
reasonable opinion of Lessor, involve (A) any meaningful risk of (1)
foreclosure, forfeiture or loss of a Site, (2) criminal liability being imposed
on Lessor, Agent, any Lender or the Site or (3) the nonpayment of Rent or (B)
any substantial danger of (1) the sale of, or the creation of any Lien (other
than a Permitted Lien) on, any part of the Site, (2) material civil liability
being imposed on Lessor, Agent, any Lender or the Site, (3) the extension of the
ultimate imposition of such Applicable Laws and Regulations or such Governmental
Action beyond the last day of the Lease Term, or (4) enjoinment of, or
interference with, the use, possession or disposition of the Site
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in any material respect. Lessee shall provide Lessor with notice of any contest
of the type described in clause (a) above in detail sufficient to enable Lessor
to ascertain whether such contest may have an effect of the type described in
clauses (b)(A) and (B) above.
Lessor will not be required to join in any proceedings
pursuant to this Section 9.5 unless a provision of any Applicable Laws and
Regulations requires, or, in the good faith opinion of Lessee, it is helpful to
Lessee that such proceedings be brought by or in the name of Lessor; and in that
event Lessor will join in the proceedings or permit them or any part thereof to
be brought in its name if and so long as no Lease Event of Default or Lease
Payment/Bankruptcy Default is continuing and Lessee pays all related expenses.
ARTICLE X
USE
Lessee may use each Site as a health care facility and for related
ancillary purposes. Lessee shall not use any Site or any part thereof for any
purpose or in any manner that would materially adversely affect the Fair Market
Sales Value, utility, remaining useful life or residual value of the Site or
that would create a materially increased risk of environmental liability or that
would violate or conflict with, or constitute or result in a violation or
default under (a) any Applicable Laws and Regulations whether now existing or
hereafter in effect, foreseen or unforeseen, except to the extent permitted by
Section 9.5, (b) any insurance policies required by Article XI, or (c) any
Operative Document. Lessee shall pay, or cause to be paid, all charges and costs
required in connection with the use of the Sites as contemplated by this Lease.
Lessee shall not commit or permit any waste of the Sites or any part thereof.
ARTICLE XI
INSURANCE
SECTION 11.1. Required Coverages. Lessee will keep insured all property
of a character usually insured by corporations engaged in the same or similar
business similarly situated against loss or damage of the kinds and in the
amounts customarily insured against by such corporations, and carry such other
insurance as is usually carried by such corporations, provided that in any event
Lessee will maintain:
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(a) Commercial General Liability Insurance. Combined single
limit insurance against claims for bodily injury, death or third-party property
damage occurring on, in or about each Site (including adjoining streets and
sidewalks) in an amount at least equal to $5,000,000 per person and $5,000,000
per occurrence (subject to a maximum deductible of $350,000 per occurrence) and
$5,000,000 for property damage per occurrence, with a minimum general annual
limit of $5,000,000 and a minimum of $15,000,000 excess of such coverage.
(b) Property Insurance. Insurance against loss of damage
covering each Site or any portion thereof by reason of any Peril (as defined
below) in an amount (subject to such deductibles and/or self-insurance in such
maximum amounts as is approved by Agent from time to time, such approval not to
be unreasonably withheld) at least equal to such minimum amounts as are carried
by corporations owning and/or operating healthcare facilities comparable to the
Sites; provided, however, that at no time shall the amount of such coverage be
less than replacement cost.
(c) Workers' Compensation Insurance. Lessee shall, in the
operation of the Sites, comply with the applicable Workers' Compensation laws
and protect Lessor, Agent and the Lenders against any liability under such laws.
(d) Builder's Risk Insurance. During the construction of any
Alteration, Lessee shall also maintain, for the benefit of Lessor, all-risk
Builders' Risk Insurance in an amount equal to the greater of the replacement
value of the applicable Facility and Alteration and the then outstanding
Allocated Amount of the applicable Site.
(e) Flood Insurance. For any Site located in a special flood
hazard area (as defined in National Flood Insurance Reform Act), Lessee shall
maintain flood insurance, for the benefit of Lessor, Agent and the Lenders, in
an amount at least equal to the then outstanding Allocated Amount of the
applicable Site. Prior to the date hereof and from time to time upon Lessor's
request, Lessee shall deliver to Lessor evidence reasonably satisfactory to
Lessor for each Site establishing whether such Site is located in a special
flood hazard area.
(f) Other Insurance. Such other insurance, including worker's
compensation insurance, malpractice or professional liability insurance,
automobile liability (if applicable) and business interruption insurance, in
each case as is generally carried by owners of similar properties in such
amounts and
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against such risks as are then customary for properties similar in use.
Such insurance shall be written by reputable insurance
companies that are financially sound and solvent and otherwise reasonably
appropriate considering the amount and type of insurance being provided by such
companies. Any insurance company selected by Lessee shall be rated in A.M.
Best's Insurance Guide or any successor thereto (or if there be none, an
organization having a similar national reputation) and shall have a general
policyholder rating of "A-" (or comparable rating for a rating by an
organization other than A.M. Best) and a financial rating of at least "X" (or
comparable rating for a rating by an organization other than A.M. Best) or be
otherwise acceptable to the Required Participants. In the case of liability
insurance maintained by Lessee, it shall name Agent, together with Lessor, as
additional insureds and, in the case of property insurance maintained by Lessee,
it shall name Agent, together with Lessor, as mortgagees and loss payees. Each
policy referred to in this Section 11.1 shall provide that: (i) it will not be
cancelled, materially modified or its limits reduced, or allowed to lapse
without renewal, except after not less than 30 days' prior written notice to
Agent; (ii) the interests of Agent and Lessor shall not be invalidated by any
act or negligence of or breach of warranty or representation by Lessee or any
Person having an interest in a Site or the Facility thereon; (iii) such
insurance is primary with respect to any other insurance carried by or available
to Agent and Lessor; (iv) the insurer shall waive any right of subrogation,
setoff, counterclaim, or other deduction, whether by attachment or otherwise,
against Agent or Lessor; and (v) such policy shall contain a cross-liability
clause providing for coverage of Agent and Lessor as if separate policies had
been issued to each of them. Lessee will notify Agent promptly of any policy
cancellation, reduction in policy limits, modification or amendment. The term
"Peril" shall mean, collectively, fire, lightning, flood, windstorm, hail,
explosion, riot and civil commotion, vandalism and malicious mischief, damage
from aircraft, vehicles and smoke and all other perils covered by the "all risk
endorsement" then in use in the Commonwealth of Pennsylvania.
SECTION 11.2. Delivery of Insurance Certificates. On or before the
Document Closing Date, Lessee shall deliver to Agent and Lessor certificates of
insurance satisfactory to Agent and Lessor evidencing the existence of all
insurance required to be maintained hereunder and setting forth the respective
coverages, limits of liability, carrier, policy number and period of coverage.
Thereafter, throughout the Lease Term, at the time each of Lessee's insurance
policies is renewed (but in no event
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less frequently than once each year), Lessee shall deliver to Agent and Lessor
certificates of insurance evidencing that all insurance required by Section 11.1
to be maintained by Lessee with respect to the Sites is in effect.
ARTICLE XII
ASSIGNMENT AND SUBLEASING
SECTION 12.1. Assignment and Subletting.
(a) Lessee may not assign, mortgage or pledge, in whole or in
part, any of its right, title or interest in, to or under this Lease or any
portion of the Sites to any Person (including an Affiliate of Lessee) at any
time, and any such assignment, mortgage or pledge shall be void; provided,
however, that without the consent of Lessor, Lessee may assign this Lease to a
single-purpose, wholly-owned, direct or indirect Subsidiary of Genesis (the
"Permitted Assignee") provided that the following conditions are met:
(i) The Permitted Assignee must be incorporated under the laws
of the State of Delaware or the Commonwealth of Pennsylvania;
(ii) No Lease Event of Default or Lease Payment/Bankruptcy
Default shall have occurred and be continuing;
(iii) The Permitted Assignee shall, prior to or simultaneously
with the assignment, enter into an assumption agreement, which
agreement shall include all of the representations, warranties
and covenants contained in this Lease;
(iv) Genesis and its Material Subsidiaries shall, prior to or
simultaneously with the assignment of the Lease deliver a
reaffirmation of the Guaranties; and
(v) Lessee shall deliver an opinion of counsel for the
Permitted Assignee, reasonably acceptable to Lessor and Agent,
dated as of the date of the assignment, stating that the
Permitted Assignee has the legal capacity to perform and
fulfill all of the obligations and liabilities contained in
the Lease, and containing other matters as reasonably
requested by Lessor and Agent.
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Lease Agreement
Lessee may not sublease, in whole or in part, any of its right, title or
interest in, to or under this Lease or any portion of the Sites to any Person at
any time, and any such sublease shall be void and of no force or effect;
provided, however, that without the consent of Lessor, Lessee may sublease any
Site to a wholly-owned direct or indirect Subsidiary of Genesis (any such
permitted sublease is hereinafter referred to as a "Sublease"). Any such
permitted sublessee under any Sublease described in this Section 12.1(a) shall
hereinafter be referred to as a "Subtenant."
Regardless of Lessor's consent, no subletting shall release
Lessee of Lessee's obligation or alter the primary liability of Lessee to pay
Rent hereunder (including, without limitation, Basic Rent and Supplemental Rent)
and to perform all other obligations to be performed by Lessee hereunder. The
acceptance of Rent by Lessor from any other Person shall not be deemed to be a
waiver by Lessor of any provision hereof. Consent to one subletting of one Site
shall not be deemed consent to any subsequent or further subletting of such Site
or any other Site. Lessor may proceed directly against Lessee without the
necessity of exhausting remedies against said successor.
(b) Lessee hereby assigns to Lessor all of Lessee's right,
title and interest in and to all Subleases entered into by Lessee in accordance
with Section 12.1(a), now or hereafter in effect, including but not limited to
all rents and other sums payable to Lessee under each such Sublease. Lessor
shall have no obligation to perform, and Lessee shall not by reason of such
assignment be relieved of its obligation to perform, any of Lessee's covenants
or agreements under this Lease or covenants or agreements of Lessee, as
sublessor, under any such Sublease; provided that, upon the termination of this
Lease or upon termination of Lessee's right to possess the Site following a
Lease Event of Default (the date of such termination shall be referred to herein
as the "Turnover Date") the following shall apply: (A) if Lessee acquires
ownership of the Site in accordance with the terms of this Lease or if Lessee's
right to possess the Site has been terminated following a Lease Event of Default
then, subject to the provisions of Article XVIII, Lessee shall continue to be
liable for all obligations under the Subleases; or (B) if Lessee does not
acquire ownership of the Site, (i) Lessee shall continue to be liable for any
obligations under the Subleases accruing or arising prior to the Turnover Date
and for any tenant improvement obligations arising or accruing prior to the
later of (x) the Turnover Date and (y) the scheduled termination date of the
Basic Term or the Renewal Term or the Extended Renewal Term, as applicable, and
(ii) with respect to any Subleases not terminated in accordance with
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Section 12.2(b), Lessor (or any successor owner of the Site (the "Designated
Owner")) shall assume and be liable for, subject to the limitations on the
liability of the Designated Owner set forth in Section 12.2 and subject to the
limitations on the liability of Lessee set forth in Article XVIII, Lessee's
obligations under the Subleases other than those referred to in clause (i)
above. Prior to the Turnover Date, Lessee shall have the right to collect and
enjoy all rents and other sums of money payable under any Sublease and Lessee
shall have the right to modify, extend, amend or terminate any or all of the
Subleases (except that Lessee shall not have the right to amend or modify any
Sublease, the effect of which would be to cause a Qualified Subtenant (defined
below) to become a non-Qualified Subtenant, unless the modification also revises
the language required in the Sublease pursuant to Section 12.2(a) hereof to be
consistent with the language required by Section 12.2(c) hereof.
SECTION 12.2. Sublease Subordination.
(a) In the case of any proposed Sublease with a Subtenant, not
less than thirty days prior to the consummation of such Sublease (or in the case
of a Sublease to be entered into within ten days after the Document Closing
Date, not later than the fifth day after the Document Closing Date), Lessee
shall deliver to Lessor each of the following: (i) a certification of Lessee
identifying the proposed Subtenant in question and confirming that such proposed
Subtenant satisfies the requirements of Section 12.1(a) and Section 12.2(b), and
(ii) a copy of the proposed Sublease.
(b) In the case of any Sublease, following the Turnover Date
the Designated Owner shall have the right to terminate such Sublease and the
Subtenant's Sublease and right of possession thereunder or, in the alternative
(at the Designated Owner's option), the Designated Owner may require the
Subtenant under such Sublease to attorn to the Designated Owner; and in the case
of such required attornment, the rights (including, without limitation, the
right of possession) of such Subtenant under such Sublease shall not be
disturbed or affected by the Designated Owner so long as no default by such
Subtenant exists under the terms of such Sublease as would enable Lessee (as
sublessor) to terminate such Sublease or would cause termination of such
Sublease or would entitle Lessee (as sublessor) to dispossess the Subtenant
under such Sublease. Each Sublease shall contain the following language:
"The Tenant hereunder agrees that this Lease is subject and
subordinate to the lease under which the Landlord hereunder
occupies the
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Property (the "Overlease", with the landlord under the
Overlease and its successors and assigns in interest to the
Property or this Lease being hereinafter referred to as the
"Overlandlord") and in the event of the termination of the
Overlease or in the event the Overlandlord terminates the
Landlord's right of possession under the Overlease (the date
on which either such termination becomes effective being
referred to herein as the "Turnover Date"), the Overlandlord
shall have (i) the right to terminate this Lease and the
Tenant's right of possession hereunder, or, in the alternative
(at the Overlandlord's option), (ii) the right to require the
Tenant hereunder to attorn to the Overlandlord; and in the
case of such required attornment election, the Tenant
hereunder will attorn to the Overlandlord and pay the
Overlandlord all of the rents and other monies required to be
paid by the Tenant hereunder, and perform all of the terms,
covenants, conditions and obligations contained in this Lease,
and this Lease shall continue as a direct lease between the
Tenant hereunder and the Overlandlord upon all of the terms
and conditions hereof except that in no event shall the
Overlandlord have any obligation to perform any obligation of
the Landlord hereunder with respect to obligations of the
Landlord hereunder accruing prior to the Turnover Date and
that any obligations of the Overlandlord (or any successor
Overlandlord) hereunder arising after the Turnover Date shall
be without recourse to Overlandlord (other than the interest
of the Overlandlord in the property demised by this Lease)."
ARTICLE XIII
LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE
SECTION 13.1. Event of Loss; Condemnation or Casualty.
(a) If an Event of Loss shall occur, Lessee shall give Lessor
and Agent prompt written notice of such occurrence and the date thereof and
Lessee shall purchase the Site(s) affected thereby from Lessor on the next
succeeding Payment Date after the date such Event of Loss shall have occurred at
a purchase price
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Lease Agreement
equal to the sum of (A) the Allocated Amount, plus (B) all accrued but unpaid
Rent, plus (C) all other sums due and payable by Lessee to Lessor, Agent or any
Lender with respect to such affected Site(s) under any of the Operative
Documents.
(b) Upon payment in full of all amounts payable pursuant to
Section 13.1(a) and the discharge of the Lien of the Mortgage pursuant to
Section 6.3 thereof, (i) the Lease Term shall end with respect to the affected
Site(s), (ii) the obligations of Lessee hereunder with respect to the affected
Site(s) (other than any obligations expressed herein as surviving termination of
this Lease) shall terminate as of the date of such payment.
SECTION 13.2. Application of Payments Relating to an Event of Loss. All
Net Condemnation Proceeds and property insurance proceeds received at any time
by Lessor, Lessee or Agent from any Authority or other Person with respect to
any Event of Loss of one or more Sites shall be promptly remitted to Lessor and,
in the event Lessee purchases the affected Site(s) pursuant to Section 13.1(a),
be applied against the purchase price payable by Lessee pursuant to Section
13.1(a), and any such Net Condemnation Proceeds and property insurance proceeds
remaining thereafter shall be paid over to, or retained by, Lessee, or as Lessee
may direct.
SECTION 13.3. Application of Certain Payments Relating to a
Condemnation. In case of a requisition for temporary use of all or a portion of
any Site which is not an Event of Taking, this Lease shall remain in full force
and effect, without any abatement or reduction of Rent, and the proceeds
received from any Authority relating to a Condemnation for the affected Site
shall be paid to Lessee, except that any portion of such proceeds that is
awarded with respect to the time period after the expiration or termination of
the Lease Term (unless Lessee shall have exercised an option to purchase the
Sites and no Lease Payment/Bankruptcy Default or Lease Event of Default shall
have occurred and be continuing) shall be paid to Lessor; provided, that if
Lessee has paid the Lease Balance to Lessor, such proceeds (or the portion of
such proceeds in excess of the portion thereof applied to payment of the Lease
Balance) shall be paid over to Lessee.
SECTION 13.4. Casualty. Upon any Casualty with respect to a Site the
cost of repair of which would exceed $250,000, Lessee shall give to Lessor
written notice thereof. As soon as practicable after a Casualty, Lessee shall
repair and rebuild the affected portions of the Site suffering such Casualty (or
cause such affected portions to be repaired and rebuilt) to the
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condition required to be maintained by Section 9.1 hereof; provided, that the
value and functional capability of such item as restored is at least equivalent
to the value and functional capability of such item as in effect immediately
prior to the occurrence of such Casualty. If any insurance proceeds received
with respect to any Casualty shall be in excess of twenty-five percent (25%) of
the Allocated Amount for the applicable Site, the insurance proceeds received
with respect to such Casualty shall be paid over to or retained by Agent (on
behalf of the Participants), to be distributed to Lessee upon completion of such
repairs and rebuilding of the affected portions of the applicable Site in
accordance with the conditions set forth in this Section 13.4; provided that in
such event, at Lessee's request and expense, Agent and Lessee shall enter into
an insurance escrow and disbursement agreement in form and substance reasonably
satisfactory to Agent providing for the disbursement of proceeds (not more often
than once per month and with each monthly disbursement being not less than
$100,000) to Lessee or its contractor during the course of such repair and
rebuilding upon conditions satisfactory to Agent in its reasonable judgment.
SECTION 13.5. Other Dispositions. Notwithstanding the foregoing
provisions of this Article XIII, as long as a Lease Payment/Bankruptcy Default
or Lease Event of Default shall have occurred and be continuing, any amount that
would otherwise be payable to or for the account of, or that would otherwise be
retained by, Lessee pursuant to this Article XIII shall be paid to Agent (or to
Lessor after the Loan Agreement shall have been satisfied and discharged) as
security for the obligations of Lessee under this Lease, shall be invested by
Agent (or Lessor) in accordance with Section 21.18 in Permitted Investments and,
if a Lease Event of Default is continuing, may be applied to the obligations of
Lessee hereunder, and, at such time thereafter as no Lease Payment/Bankruptcy
Default or Lease Event of Default shall be continuing, such amount and gain
thereon shall be paid promptly to Lessee to the extent not previously applied in
accordance with the terms of this Lease.
SECTION 13.6. Negotiations. In the event any part of a Site becomes
subject to condemnation or requisition proceedings, Lessee shall give notice
thereof to Lessor and Agent promptly after Lessee has knowledge thereof and, to
the extent permitted by any Applicable Laws and Regulations, Lessee shall
control the negotiations with the relevant Authority unless a Lease
Payment/Bankruptcy Default or Lease Event of Default shall be continuing, in
which case Lessor shall control such negotiations; provided that in any event
Lessor may participate at Lessor's expense (or if a Lease Payment/Bankruptcy
Default or Lease Event of Default shall be continuing, at Lessee's expense) in
such
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negotiations; and provided in all cases, that no settlement will be made without
Lessor's prior written consent, not to be unreasonably withheld. Lessee shall
give to Lessor and Agent such information, and copies of such documents, which
relate to such proceedings, or which relate to the settlement of amounts due
under insurance policies required by Article XI, and are in the possession of
Lessee, as are reasonably requested by Lessor or Agent. If the proceedings
relate to an Event of Taking, Lessee shall act diligently in connection
therewith.
SECTION 13.7. No Rent Abatement. Rent shall not abate hereunder by
reason of any Casualty, any Event of Loss, any Event of Taking or any
Condemnation of a Site, and Lessee shall continue to perform and fulfill all of
Lessee's obligations, covenants and agreements hereunder notwithstanding such
Casualty, Event of Loss, Event of Taking or Condemnation until the Lease
Termination Date.
ARTICLE XIV
NON-INTERFERENCE
SECTION 14.1. Non-Interference. Lessor covenants that it will not
interfere in Lessee's or any of its Subtenants' use of the Sites in accordance
with this Lease during the Lease Term, so long as no Lease Event of Default has
occurred and is continuing; it being agreed that Lessee's remedies for breach of
the foregoing covenant shall be limited to a claim for damages or the
commencement of proceedings to enjoin such breach. Such right is independent of
and shall not affect Lessor's rights otherwise to initiate legal action to
enforce the obligations of Lessee under this Lease.
SECTION 14.2. Certain Duties and Responsibilities of Lessor. Lessor
undertakes to perform such duties and only such duties as are specifically set
forth herein and in the other Operative Documents, and no implied covenants or
obligations shall be read into this Lease against Lessor, and Lessor agrees that
it shall not, nor shall it have a duty to, manage, control, use, sell, maintain,
insure, register, lease, operate, modify, dispose of or otherwise deal with the
Sites in any manner whatsoever, except as required by the terms of the Operative
Documents and as otherwise provided herein; provided that during the continuance
of a Lease Event of Default or a Lease Payment/Bankruptcy Default, Lessor shall
have no obligation to Lessee to perform any such duties.
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Lease Agreement
ARTICLE XV
INSPECTION AND REPORTS
SECTION 15.1. Inspection. Upon five (5) Business Days prior notice to
Lessee, each of Agent, Lessor, any Lender and their respective authorized
representatives (the "Inspecting Parties") may inspect (a) any Site and (b) the
books and records of Lessee relating directly and primarily to the Site and make
copies and abstracts therefrom, but only after material related to matters other
than the Site shall have been redacted therefrom. All such inspections shall be
at the expense and risk of the Inspecting Parties, except that if a Lease Event
of Default or Lease Payment/Bankruptcy Default has occurred and is continuing,
Lessee shall reimburse the Inspecting Parties for the reasonable costs of such
inspections and such inspection shall be at Lessee's risk. Lessee shall furnish
to the Inspecting Parties statements accurate in all material respects regarding
the condition and state of repair of the Sites, all at such times and as often
as may be reasonably requested. No inspection shall unreasonably interfere with
Lessee's operations or the operations of any other occupant of the Sites. None
of the Inspecting Parties shall have any duty to make any such inspection or
inquiry, and none of the Inspecting Parties shall incur any liability or
obligation by reason of not making any such inspection or inquiry. None of the
Inspecting Parties shall incur any liability or obligation by reason of making
any such inspection or inquiry unless and to the extent, so long as no Lease
Event of Default has occurred and is continuing at the time of inspection, such
Inspecting Party causes damage to the Site or any property of Lessee or any
other Person during the course of such inspection.
SECTION 15.2. Reports. To the extent permissible under Applicable Laws
and Regulations, Lessee shall prepare and file in timely fashion, or, where
Lessor shall be required to file, Lessee shall prepare and make available to
Lessor and Agent within a reasonable time prior to the date for filing and
Lessor shall file, any reports with respect to the condition or operation of the
Sites that shall be required to be filed with any Authority.
ARTICLE XVI
OWNERSHIP, GRANT OF SECURITY INTEREST
AND FURTHER ASSURANCES
SECTION 16.1. Grant of Security Interest. Lessee hereby
assigns, grants and pledges to Lessor for the benefit of Agent
and the Lenders a security interest in and Lien against all of
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Lessee's right, title and interest, whether now or hereafter existing or
acquired, in the Sites and proceeds therefrom, to secure the payment and
performance of all obligations of Lessee now or hereafter existing under this
Lease or any other Operative Document. Lessee shall, at its expense, do any
further act and execute, acknowledge, deliver, file, register and record any
further documents which Lessor or any Lender may reasonably request in order to
protect Lessor's title to and their perfected Lien in the Sites, subject to no
Liens other than Permitted Liens, and Lessor's rights and benefits under this
Lease. Lessee shall promptly and duly execute and deliver to Lessor such
documents and assurances and take such further actions as Lessor or any Lender
may from time to time reasonably request in order to carry out more effectively
the intent and purpose of this Lease and the other Operative Documents, to
establish and protect the rights and remedies created or intended to be created
in favor of Lessor hereunder and thereunder, and to establish, perfect and
maintain the right, title and interest of Lessor in and to the Sites, subject to
no Lien other than Permitted Liens, or of such financing statements or fixture
filings or other documents with respect hereto as Lessor or any Lender may from
time to time reasonably request, and Lessee agrees to execute and deliver
promptly such of the foregoing financing statement and fixture filings or other
documents as may require execution by Lessee. To the extent permitted by
Applicable Laws and Regulations, Lessee hereby authorizes any such financing
statement and fixture filings to be filed without the necessity of the signature
of Lessee. Upon Lessee's request, Lessor shall at such time as all of the
obligations of Lessee under this Lease or any other Operative Documents have
been indefeasibly paid or performed in full (other than Lessee's contingent
obligations, if any, under Article VII of the Participation Agreement) execute
and deliver termination statements and other appropriate documentation
reasonably requested by Lessee, all at Lessee's expense, to evidence Lessor's
release of its Lien against the Sites.
SECTION 16.2. Attorney-in-Fact. Lessee hereby irrevocably appoints
Agent as Lessee's attorney-in-fact, with full authority in the place and stead
of Lessee and in the name of Lessee or otherwise, from time to time in Lessor's
discretion, upon the occurrence and during the continuance of a Lease Event of
Default, to take any action (including any action that Lessee is entitled to
take) and to execute any instrument which Lessor may deem necessary or advisable
to accomplish the purposes of this Lease (subject to any limitations set forth
in the Operative Documents), including, without limitation:
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(a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for money due and to become due under
or in connection with the Sites;
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with the foregoing clause
(a);
(c) to file any claim or take any action or institute any
proceedings which Lessor may deem to be necessary or advisable for the
collection thereof or to enforce compliance with the terms and conditions of the
Lease; and
(d) to perform any affirmative obligations of Lessee
hereunder.
Lessee hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 16.2 is irrevocable and coupled with an
interest.
ARTICLE XVII
LEASE EVENTS OF DEFAULT
The occurrence of any one or more of the following events,
whether any such event shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute a "Lease Event of
Default":
(a) Lessee shall fail to make any payment (i) of any
Supplemental Rent payable to Agent or any Participant or of Basic Rent when due
and such failure shall continue for a period of five days, or (ii) of amounts
payable pursuant to the exercise of the Sale Option, or amounts payable pursuant
to Section 13.1, when due, or (iii) of Supplemental Rent payable to any Person
other than Agent or a Participant and such failure under this clause (iii) shall
continue for a period of five days after notice to Lessee from any Person of
such failure;
(b) Lessee or any Guarantor shall fail to make any payment of
any other amount payable hereunder or under any of the other Operative Documents
and such failure shall continue for a period of five days after such amount
first became due and payable (or in the case of any payment to any Person other
than Agent or any Participant, such failure shall continue for a period of five
days after notice to Lessee from any Person of such failure);
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Lease Agreement
(c) Lessee shall (i) fail to maintain insurance as required by
Section 11.1, or (ii) default in the performance or observance of any term,
covenant, condition or agreement on its part to be performed or observed under
Section 5.2, 5.3, 5.4, 5.7 or 5.11 of the Participation Agreement;
(d) any representation or warranty by Lessee or any Guarantor
in any Operative Document or in any certificate or document delivered to Lessor,
Agent or any Lender pursuant to any Operative Document shall have been incorrect
in any material respect when made and shall remain material when discovered and
if curable shall continue for a period of 30 days; provided that if Lessee or
such Guarantor shall commence such cure within said 30-day period and shall
diligently be pursuing such cure, then said 30-day period shall be extended to
90 days;
(e) Lessee or any Guarantor shall fail in any material respect
timely to perform or observe any covenant, condition or agreement (not included
in any other clause of this Article XVII) to be performed or observed by it
hereunder or under any other Operative Document and such failure shall continue
for a period of 30 days; provided that if Lessee or such Guarantor shall
commence such cure within said 30-day period and shall diligently be pursuing
such cure, then said 30-day period shall be extended to 90 days;
(f) (i) Lessee or any Guarantor shall generally fail to pay,
or admit in writing its inability to pay, its debts as they become due, or shall
voluntarily commence any case or proceeding or file any petition under any
bankruptcy, insolvency or similar law or seeking dissolution, liquidation or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for itself or a substantial portion of its property, assets or
business or to effect a plan or other arrangement with its creditors, or shall
file any answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition filed against it in any bankruptcy,
insolvency or similar case or proceeding, or shall be adjudicated bankrupt, or
shall make a general assignment for the benefit or creditors, or shall consent
to, or acquiesce in the appointment of, a receiver, trustee, custodian or
liquidator for itself or a substantial portion of its property, assets or
business, or (ii) corporate action shall be taken by Lessee or any Guarantor for
the purpose of effectuating any of the foregoing;
(g) involuntary proceedings or an involuntary petition shall
be commenced or filed against Lessee or any Guarantor under any bankruptcy,
insolvency or similar law or seeking the
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dissolution, liquidation or reorganization of Lessee or the appointment of a
receiver, trustee, custodian or liquidator for Lessee or any Guarantor or of a
substantial part of the property, assets or business of Lessee or any Guarantor
or, any writ, judgment, warrant of attachment, execution or similar process
shall be issued or levied against a substantial part of the property, assets or
business of Lessee or any Guarantor, and such proceedings or petition shall not
be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded, within 30 days
after commencement, filing or levy, as the case may be;
(h) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction against Lessee
or any Guarantor or any Subsidiary of any Guarantor, and such judgment or
judgements remain undischarged, unbonded, unstayed or unsatisfied for a period
(during which execution shall be effectively stayed) of 30 days; provided, that
the aggregate of all such judgments exceeds $500,000;
(i) Lessee or any Guarantor shall directly or indirectly
contest the validity of any Operative Document in any manner in any court of
competent jurisdiction or the Lien granted by this Lease or any Mortgage;
(j) (A) an event of default shall occur in the payment when
due (subject to any applicable grace period), whether by acceleration or
otherwise, of any Indebtedness of Lessee or any Guarantor or any Subsidiary of
any Guarantor that individually or in the aggregate exceeds $1,000,000 or (B)
any other event of default shall occur with respect to any Indebtedness of
Lessee or any Guarantor or any Subsidiary of any Guarantor that individually or
in the aggregate exceeds $1,000,000;
(k) Any one or more Pension-Related Events referred to in
subsection (a)(ii), (b) or (e) of the definition of "Pension-Related Event"
shall have occurred; or any one or more other Pension-Related Events shall have
occurred and the Agent shall determine in good faith (which determination shall
be conclusive) that such other Pension-Related Events, individually or in the
aggregate, could have a Material Adverse Effect;
(l) either of the Guaranties shall no longer be in full force
and effect; or
(m) an Event of Default (as defined in the Credit Agreement)
shall occur under the Credit Agreement.
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ARTICLE XVIII
ENFORCEMENT
SECTION 18.1. Remedies. Upon the occurrence of a Lease Event of
Default, at Lessor's option and without limiting Lessor in the exercise of any
other right or remedy Lessor may have on account of such default (including,
without limitation, the obligation of Lessee to purchase the Sites as set forth
below), and without any further demand or notice, Lessor may cause the following
to occur:
(i) By notice to Lessee, Lessor may terminate
Lessee's right to possession of the Sites. A notice given in connection
with unlawful detainer proceedings specifying a time within which to
cure a default shall terminate Lessee's right to possession if Lessee
fails to cure the default within the time specified in the notice.
(ii) Upon termination of Lessee's right to possession
and without further demand or notice, Lessee shall surrender possession
and vacate the Sites and deliver possession thereof, and Lessor may
re-enter the Sites and remove any persons in possession thereof.
(iii) Upon termination of Lessee's right to
possession, this Lease shall terminate and Lessor may declare to be
immediately due and payable, and Lessor shall be entitled to (x)
recover from Lessee the following amounts and (y) take the following
actions:
(A) Lessee shall pay all accrued and unpaid
Rent hereunder (including, without limitation, Basic Rent and
Supplemental Rent) which had been earned at the time of termination;
(B) Lessor may elect any of the following:
(1) Lessor may demand, by written notice to
the Lessee specifying a Payment Date (the
"Final Rent Payment Date") not earlier than
ten (10) days after the date of such notice,
that Lessee pay to Lessor, and Lessee shall
pay to Lessor, on the Final Rent Payment
Date (in lieu of Basic Rent due after the
Final Rent Payment Date), an amount equal to
the sum of (A) the Lease Balance computed as
of the Final Rent Payment Date, plus (B) all
accrued and unpaid Rent due and unpaid to
and
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including the Final Rent Payment Date, and
upon payment of such amount, and the amount
of all other sums due and payable by Lessee
under this Lease and the other Operative
Documents (and interest at the Overdue Rate
on the amounts payable under this clause
(B)(1) from the Final Rent Payment Date to
the date of actual payment), Lessor shall
transfer by quitclaim deed to Lessee all of
Lessor's right, title and interest in and to
the Sites without recourse or warranty, but
free and clear of Lessor Liens; or
(2) Lessor may sell its interest in the
Sites, in which event Lessee shall pay to
Lessor an amount equal to the excess, if
any, of (x) all amounts due Lessor under
clause (B)(1) above over (y) the net sale
proceeds received by Lessor from the
foregoing sale (provided, that in
calculating such net sale proceeds, all
expenses and taxes incurred by Lessor, Agent
or any of the Lenders in connection with
such sale, including, without limitation,
legal fees, shall be deducted from such
sales proceeds);
(C) Any other amount necessary to compensate
Lessor for all actual damages caused by Lessee's failure to perform
Lessee's obligation under this Lease or which in the ordinary course
of things would be likely to result therefrom, including, but not
limited to, the costs and expenses (including without limitation,
reasonable attorneys' fees, advertising costs and brokers'
commissions) of recovering possession of the Sites, removing persons
or property therefrom, placing the Sites in good order, condition, and
repair, preparing and altering the Sites for reletting, and all other
costs and expenses of reletting; and
(D) Such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by
applicable law.
(iv) Lessor may enforce the Lien given hereunder
pursuant to Section 16.1 hereof, Section 11 of the Lease Supplements,
the Uniform Commercial Code or any other law.
(v) If Lessee has breached this Lease and abandoned
the Site, this Lease shall continue in effect for
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so long as Lessor does not terminate Lessee's right to possession, and
Lessor may enforce all of Lessor's rights and remedies under this
Lease, including the right to recover the Rent hereunder (including,
without limitation, Basic Rent and Supplemental Rent) as it becomes due
under this Lease. Lessee's right to possession shall not be deemed to
have been terminated by Lessor except pursuant to clause (i) above. The
following do not constitute a termination of Lessee's right to
possession:
(A) Acts of maintenance or preservation or
efforts to relet the Sites;
(B) The appointment of a receiver upon the
initiative of Lessor to protect Lessor's interest under this Lease;
(C) Reasonable withholding of consent to an
assignment or subletting, or terminating a subletting or assignment by
Lessee.
(vi) In the event that Lessor elects to continue this
Lease in full force and effect, Lessor may enforce all its rights and
remedies under this Lease, including, but not limited to, the right to
recover Rent hereunder (including, without limitation, Basic Rent and
Supplemental Rent) as it becomes due. During the continuance of a Lease
Event of Default, Lessor may enter the Sites in accordance with
applicable law without terminating this Lease and sublet all or any
part of the Sites for Lessee's account to any Person, for such term
(which may be a period beyond the remaining Lease Term), at such rents
and on such other terms and conditions as are commercially reasonable.
In the event of any such subletting, rents received by Lessor from such
subletting shall be applied (i) first, to the payment of the reasonable
costs incurred by Lessor in maintaining, preserving, altering and
preparing the Sites for subletting and other costs of subletting,
including, but not limited to, brokers' commissions and attorneys' fee;
(ii) second, to the payment of Rent hereunder (including, without
limitation, Basic Rent and Supplemental Rent) then due and payable;
(iii) third, to the payment of future Rent hereunder (including,
without limitation, Basic Rent and Supplemental Rent) as the same may
become due and payable hereunder; (iv) fourth, to the payment of all
other obligations of Lessee hereunder, and (v) fifth, the balance, if
any, shall be paid to Lessee upon (but not before) expiration of the
Lease Term. If the rents received by Lessor from such subletting, after
application as provided
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Lease Agreement
above, are insufficient in any period to pay the Rent (including,
without limitation, Basic Rent and Supplemental Rent) due and payable
hereunder for such period, Lessee shall pay such deficiency to Lessor
upon demand. Notwithstanding any such subletting for Lessee's account
without termination, Lessor may at any time thereafter, by written
notice to Lessee, elect to terminate this Lease by virtue of a previous
Lease Event of Default.
Upon (but not before) and during the continuance of a Lease
Event of Default, if Lessee has abandoned the Sites, for so long as
Lessor does not terminate Lessee's right to possession of the Sites,
Lessor shall not unreasonably withhold its approval to a sublease of
the Sites; provided, however, that Lessor's withholding of such consent
shall not be deemed unreasonable upon the standard contained in Section
12.1.
(vii) Lessor may exercise any other right or remedy
that may be available to it under Applicable Laws and Regulations or in
equity, or proceed by appropriate court action (legal or equitable) to
enforce the terms or to recover damages for the breach hereof. Separate
suits may be brought to collect any such damages for any Rent
Installment Period(s), and such suits shall not in any manner prejudice
Lessor's right to collect any such damages for any subsequent Rent
Installment Period(s), or Lessor may defer any such suit until after
the expiration of the Basic Term or any Renewal Term, in which event
such suit shall be deemed not to have accrued until the expiration of
the Basic Term, or such Renewal Term; or
(viii) Lessor may retain and apply against Lessor's
damages all sums which Lessor would, absent such Lease Event of
Default, be required to pay to, or turn over to, Lessee pursuant to the
terms of this Lease.
(ix) Lessor may exercise the remedies described in
Section 11 of the Lease Supplement.
In addition to the foregoing, Lessee acknowledges that (i) pursuant to the
Collateral Agency Agreement and the Security Agreement, the Joint Stock
Collateral constitutes additional security for the payment and performance of
Lessee's obligations under this Lease and the other Operative Documents, and
(ii) the Guaranty and Agreement of Suretyship Regarding Obligations Lessee and
Affiliates, as it may be amended from time to time, which constitutes one of the
Guaranties shall constitute further additional security for, among other things,
the payment and
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Lease Agreement
performance of Lessee's obligations under this Lease and the other Operative
Documents.
SECTION 18.2. Proceeds of Sale; Deficiency. All payments received and
amounts held or realized by Lessor at any time when a Lease Event of Default
shall have occurred and be continuing and after the Lease Balance shall have
been accelerated pursuant to Article XVIII as well as all payments or amounts
then held or thereafter received by Lessor, except for rents received by Lessor
from subletting pursuant to Section 18.1(vi) and the proceeds of sale pursuant
to Section 11 of the Lease Supplements, shall be distributed forthwith upon
receipt by Lessor in the following order of priority:
first: so much of such payments or amounts as shall be
required to reimburse Lessor for any tax (other than any income tax
payable on Basic Rent or interest and on fees and other compensation of
Lessor), expense or other amount owed to Lessor in connection with the
collection or distribution of such payments or amounts to the extent
not previously reimbursed by Lessee (including, without limitation, the
expenses of any sale, taking or other proceeding, expenses in
connection with realizing on any of the Sites, reasonable attorneys'
fees and expenses (including the allocated costs of internal counsel),
court costs and any other reasonable expenditures incurred or
reasonable expenditures or advances made by Lessor in the protection,
exercise or enforcement of any right, power or remedy upon such Lease
Event of Default whether pursuant to Article XVII or otherwise) shall
be so applied by Lessor;
second: so much of such payments or amounts except those
specified in clause third below, which under the terms of this Lease
and the other Operative Documents have accrued shall be so applied;
third: so much of such payments or amounts remaining as shall
be required to pay Agent (on behalf of the Participants) in full the
aggregate unpaid Lease Balance and all Basic Rent (including, to the
extent permitted by applicable law, interest on interest) shall be so
applied (to be distributed by Agent pursuant to Section 3.3 of the Loan
Agreement); and
fourth: so much of such payments or amounts as shall
remain shall be distributed to Lessee.
SECTION 18.3. Grant and Foreclosure on Lessee's Estate. Each Lease
Supplement shall contain a provision by which Lessee
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Lease Agreement
grants to a trustee, in trust, with power of sale, or grants a mortgage lien to
Lessor in, all of Lessee's right, title and interest in and to the Sites subject
to each such Lease Supplement and, upon the occurrence of a Lease Event of
Default, granting Lessor the power and authority, after fulfillment of certain
conditions, to cause the trustee to sell, or foreclose its mortgage lien
against, the Sites.
SECTION 18.4. Remedies Cumulative; No Waiver; Consents. To the extent
permitted by, and subject to the mandatory requirements of, Applicable Laws and
Regulations, each and every right, power and remedy herein specifically given to
Lessor or otherwise in this Lease shall be cumulative and shall be in addition
to every other right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by Lessor, and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any right, power or remedy. No delay or omission
by Lessor in the exercise of any right, power or remedy or in the pursuit of any
remedy shall impair any such right, power or remedy or be construed to be a
waiver of any default on the part of Lessee or be an acquiescence therein.
Lessor's consent to any request made by Lessee shall not be deemed to constitute
or preclude the necessity for obtaining Lessor's consent, in the future, to all
similar requests. No express or implied waiver by Lessor of any Lease Event of
Default shall in any way be, or be construed to be, a waiver of any future or
subsequent Lease Default or Lease Event of Default. To the extent permitted by
Applicable Laws and Regulations, Lessee hereby waives any rights now or
hereafter conferred by statute or otherwise that may require Lessor (i) to
provide any notice to Lessee, or (ii) to sell, lease or otherwise use the Site
or part thereof in mitigation of Lessor's damages, or (iii) to take any other
action, upon the occurrence of a Lease Event of Default, or that may otherwise
limit or modify any of Lessor's rights or remedies under this Article XVIII.
ARTICLE XIX
RIGHT TO PERFORM FOR LESSEE
If Lessee shall fail to perform or comply with any of its
agreements contained herein, Lessor may, but shall not be obligated to, on five
Business Days' prior notice to Lessee (except in the event of an emergency, in
which case only one Business Day's prior notice shall be required), perform or
comply
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Lease Agreement
with such agreement, and Lessor shall not thereby be deemed to have waived any
default caused by such failure, and the amount of such payment and the amount of
the expenses of Lessor (including reasonable attorneys' fees and expenses)
incurred in connection with such payment or the performance of or compliance
with such agreement, as the case may be, together with interest thereon at the
Overdue Rate, shall be deemed Supplemental Rent, payable by Lessee to Lessor
upon demand; provided that in the case of an emergency Lessee shall permit
Lessor so to perform or comply on less than one Business Day's notice unless
Lessee has a good faith reason not to permit Lessor to do so.
ARTICLE XX
LESSOR LIENS
In the event that Lessor shall be obligated to remove any Lessor Liens
from the Sites and shall fail to do so, Lessee shall have a claim against Lessor
for such failure, but shall not have any right of offset.
ARTICLE XXI
MISCELLANEOUS
SECTION 21.1. Binding Effect; Successors and Assigns; Survival. The
terms and provisions of this Lease, and the respective rights and obligations
hereunder of Lessor, Lessee, Agent and the Lenders shall be binding upon them
and their respective successors, legal representatives and assigns (including,
in the case of Lessor, any Person to whom Lessor may transfer the Sites or any
interest therein in accordance with the provisions of the Operative Documents),
and inure to their benefit and the benefit of their respective permitted
successors, legal representatives and assigns.
SECTION 21.2. Severability. Any provision of this Lease that shall be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, and Lessee shall remain
liable to perform its obligations hereunder except to the extent of such
unenforceability. To the extent permitted by Applicable Laws and Regulations,
Lessee hereby waives any provision of law that renders any provision hereof
prohibited or unenforceable in any respect.
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Lease Agreement
SECTION 21.3. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be in writing and shall be delivered and shall be deemed to have
been given in accordance with Section 9.3 of the Participation Agreement.
SECTION 21.4. Amendment; Complete Agreements. Neither this Lease nor
any of the terms hereof may be terminated, amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by the party
against which the enforcement of the termination, amendment, supplement, waiver
or modification shall be sought. This Lease, together with the other Operative
Documents, is intended by the parties as a final expression of their agreement
and as a complete and exclusive statement of the terms thereof, all
negotiations, considerations and representations between the parties having been
incorporated herein and therein. No course of prior dealings between the parties
or their officers, employees, agents or Affiliates shall be relevant or
admissible to supplement, explain, or vary any of the terms of this Lease or any
other Operative Document. Acceptance of, or acquiescence in, a course of
performance rendered under this or any prior agreement between the parties or
their Affiliates shall not be relevant or admissible to determine the meaning of
any of the terms of this Lease or any other Operative Document. No
representations, undertakings, or agreements have been made or relied upon in
the making of this Lease other than those specifically set forth in the
Operative Documents.
SECTION 21.5. Headings. The Table of Contents and headings of the
various Articles and Sections of this Lease are for convenience of reference
only and shall not modify, define or limit any of the terms or provisions
hereof.
SECTION 21.6. Original Lease. The single executed original of this
Lease containing the receipt of Lessor therefor on or following the signature
page thereof shall be the "original executed counterpart" of this Lease. To the
extent that this Lease constitutes chattel paper, as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction, no security
interest in this Lease may be created through the transfer or possession of any
counterpart other than the "original executed counterpart".
SECTION 21.7. GOVERNING LAW. THIS LEASE HAS BEEN DELIVERED IN, AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS TO MATTERS RELATING TO THE
CREATION,
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Lease Agreement
PERFECTION AND ENFORCEMENT OF LIENS AND SECURITY INTERESTS AND THE EXERCISE OF
REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE APPLICABLE SITE IS LOCATED.
SECTION 21.8. Discharge of Lessee's Obligations by its Affiliates.
Lessor agrees that performance of any of Lessee's obligations hereunder by one
or more of its Affiliates or one or more sublessees of the Site or any part
thereof shall constitute performance by Lessee of such obligations to the same
extent and with the same effect hereunder as if such obligations were performed
by Lessee, but no such performance shall excuse Lessee from any obligation not
performed by it or on its behalf under the Operative Documents.
SECTION 21.9. Liability of Lessor Limited. The parties hereto agree
that Lessor shall have no personal liability whatsoever to Lessee or its
respective successors and assigns for any Claim based on or in respect of this
Lease or any of the other Operative Documents or arising in any way from the
transactions contemplated hereby or thereby; provided, however, that Lessor
shall be liable in its individual capacity for (i) Lessor Liens required to be
removed by Lessor under Section 6.2(a) of the Participation Agreement and (ii)
its own willful misconduct or gross negligence. It is understood and agreed
that, except as provided in the preceding proviso: (i) Lessor shall have no
personal liability under any of the Operative Documents; (ii) all obligations of
Lessor to Lessee are solely nonrecourse obligations, recourse being limited to
its interest in the Sites and the Operative Documents (excluding Excluded
Amounts); and (iii) all such personal liability of Lessor is expressly waived
and released as a condition of, and as consideration for, the execution and
delivery of the Operative Documents by Lessor.
SECTION 21.10. Estoppel Certificates. Each party hereto agrees that at
any time and from time to time during the Lease Term, it will promptly, but in
no event later than thirty (30) days after request by the other party hereto,
execute, acknowledge and deliver to such other party or to any prospective
purchaser (if such prospective purchaser has signed a commitment letter or
letter of intent to purchase the Sites or any part thereof or to purchase any
Note), assignee or mortgagee or third party designated by such other party, a
certificate stating (a) that this Lease is unmodified and in force and effect
(or if there have been modifications, that this Lease is in force and effect as
modified, and identifying the modification agreements); (b) the date to which
Basic Rent has been paid; (c) in the case of an estoppel certificate to be given
by Lessee, whether or not
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Lease Agreement
there is any existing default by Lessee in the payment of Basic Rent or any
other sum of money hereunder, and whether or not there is any other existing
Lease Default or Lease Event of Default with respect to which a notice of
default has been served, and, if there is any such default, specifying the
nature and extent thereof; (d) in the case of an estoppel certificate to be
given by Lessee, whether or not, to the knowledge of Lessee after due inquiry
and investigation, there are any purported setoffs, defenses or counterclaims
against enforcement of the obligations to be performed hereunder existing in
favor of Lessee; and (e) other items that may be reasonably requested; provided
that no such certificate may be requested unless the requesting party has a good
faith reason for such request. In addition, Lessee, promptly, but in no event
later than thirty days after request by any other party hereto, shall obtain and
deliver to such other party or to any prospective purchaser (if such prospective
purchaser has signed a commitment letter or letter of intent to purchase the
Site or any part thereof or to purchase any Note), assignee, mortgagee or third
party designated by such other party, an estoppel certificate from each
Subtenant under each Sublease containing such items as reasonably requested by
the party requesting the same; provided that no such certificate may be
requested unless the requesting party has a good faith reason for such request.
SECTION 21.11. No Joint Venture. Any intention to create a joint
venture or partnership relation between Lessor and Lessee is hereby expressly
disclaimed.
SECTION 21.12. No Accord and Satisfaction. The acceptance by Lessor of
any sums from Lessee (whether as Basic Rent or otherwise) in amounts which are
less than the amounts due and payable by Lessee hereunder is not intended, nor
shall be construed, to constitute an accord and satisfaction of any dispute
between Lessor and Lessee regarding sums due and payable by Lessee hereunder,
unless the Required Participants specifically deem it as such in writing.
SECTION 21.13. No Merger. In no event shall the Leasehold Estate of
Lessee hereunder, or the rights and interests of the holder of any Notes secured
by a Lien in this Lease, merge with any interests, estates or rights of Lessor
in or to the Site, it being understood that such Leasehold Estate of Lessee
hereunder, and the rights and interests of the holder of any Notes secured by a
Lien in this Lease, shall be deemed to be separate and distinct from Lessor's
interests, estates and rights in or to the Site, notwithstanding that any such
interests, estates or rights shall at any time or times be held by or vested in
the same Person.
48
Lease Agreement
SECTION 21.14. Successor Lessor. Lessee agrees that, in the case of any
transfer of the Sites to a successor Lessor in accordance with the provisions of
Section 6.2 of the Participation Agreement from time to time, such successor
Lessor shall, upon written notice by such successor Lessor to Lessee, succeed to
all the rights, powers and title of Lessor hereunder and shall be deemed to be
Lessor for all purposes hereof and without in any way altering the terms of this
Lease or Lessee's obligations hereunder. Such transfer to a successor Lessor
shall not exhaust the right to any further transfer to another successor Lessor
pursuant to said Section 6.2, but such right may be exercised repeatedly as long
as this Lease shall be in effect.
SECTION 21.15. Survival. The obligations of Lessee to be performed
under this Lease prior to the Lease Termination Date and the obligations of
Lessee pursuant to Sections 4.1, 4.2, 4.4, 4.5, Article XVIII and Section 21.1
shall survive the expiration or termination of this Lease. The extension of any
applicable statute of limitations by Lessor, Agent, Lessee or any other
Indemnitee shall not affect such survival.
SECTION 21.16. Transfer of Sites to Lessee or any other Person.
Whenever pursuant to any provision of this Lease Lessor is required to transfer
the Sites to Lessee or to any other Person, such transfer shall be made at
Lessee's expense (including, without limitation, all costs of conveyance,
applicable transfer taxes and recording fees without regard to local custom) by
the quitclaim transfer of all of Lessor's right, title and interest in and to
the Sites on an "as is, where is, with all faults" basis free and clear of all
Lessor Liens, but subject to the Lien of the Loan Agreement if and to the extent
it may then attach, and otherwise without recourse, representation or warranty
of any kind, and together with the due assumption by Lessee (or such third
party) of, and due release of Lessor from, all obligations relating to the Sites
or the Operative Documents. Any provision in this Lease or other Operative
Document to the contrary notwithstanding, Lessor shall not be obligated to make
any such transfer until Lessor has received all Rent and other amounts due and
owing hereunder.
SECTION 21.17. Enforcement of Certain Warranties.
(a) Unless a Lease Event of Default shall have occurred and be
continuing, Lessor authorizes Lessee (directly or through agents), at Lessee's
expense, to assert, during the Lease Term, all of Lessor's rights (if any) under
any applicable warranty and any other claim that Lessee or Lessor may have under
the warranties provided to Lessor in connection with the purchase, of the Sites
and Lessor agrees to cooperate, at Lessee's expense,
49
Lease Agreement
with Lessee and its agents in asserting such rights. Any amount recovered by
Lessee under any such warranties shall be paid to Lessee.
(b) Notwithstanding the foregoing provisions of this Section
21.17, so long as a Lease Event of Default or Lease Payment/Bankruptcy Default
shall have occurred and be continuing, any amount that would otherwise be
retained by Lessee pursuant to Section 21.17(a) shall be paid to Lessor as
security for the obligations of Lessee under this Lease, shall be invested by
Lessor in accordance with Section 21.18 in Permitted Investments and, if a Lease
Event of Default is continuing, may be applied to the obligations of Lessee
hereunder, and, at such time thereafter as no Lease Event of Default or Lease
Payment/Bankruptcy Default shall be continuing, such amount and gain thereon
shall be paid promptly to Lessee to the extent not previously applied in
accordance with the terms of this Lease.
SECTION 21.18. Investment of Security Funds. Any amounts not payable to
Lessee and paid to or retained by Lessor pursuant to any provision hereof solely
because a Lease Event of Default or Lease Payment/Bankruptcy Default shall have
occurred and be continuing or because Lessee shall not have performed in full
its obligations under Article XIII shall be held by Lessor as security for the
obligations of Lessee under this Lease and the other Operative Documents. At
such time as no Lease Event of Default or Lease Payment/Bankruptcy Default, or
failure to perform shall be continuing, such amounts, net of any amounts
previously applied to Lessee's obligations hereunder or under any other
Operative Documents, shall be paid to Lessee. Any such amounts which are held
pending payment to Lessee or application hereunder shall be invested by Lessor
(or Agent) as directed from time to time in writing by Lessee (provided,
however, if a Lease Event of Default has occurred and is continuing it will be
directed by Lessor), and at the expense and risk of Lessee, in Permitted
Investments. Any gain (including interest received) realized as the result of
any such investment (net of any fees, commissions and other expenses, if any,
incurred in connection with such investment) shall be applied from time to time
in the same manner as the principal invested. Lessee will promptly pay to Lessor
on demand, the amount of any loss realized as the result of any such investment
(together with any fees, commissions and other expenses, if any, incurred in
connection with such investment), such amount to be held, paid and applied in
the same manner as other amounts subject to this Section 21.18.
SECTION 21.19. Recording of Lease Supplements. Concurrently with the
execution and delivery of this Lease and
50
Lease Agreement
concurrently with the execution and delivery of each Lease Supplement, Lessor
and Lessee shall execute, acknowledge and cause to be recorded each such Lease
Supplement in the official records of each County where the Site(s) that are the
subject of this Lease or such Lease Supplement are located. Notwithstanding the
execution, delivery and recording of any such Lease Supplement, the terms,
covenants and conditions of this Lease shall control.
SECTION 21.20. Nature of Transaction. (a) It is the intent of the
parties hereto that: (i) the transaction contemplated hereby constitutes an
operating lease from Lessor to Lessee for purposes of Lessee's financial
reporting, (ii) the transaction contemplated hereby preserves ownership in the
Sites to Lessee for purposes of Federal and state tax and bankruptcy purposes,
(iii) Lessee, pursuant to the Lease, grants a security interest or lien, as the
case may be, in the Sites and the other Collateral to Lessor, (iv) for purposes
of Federal and state tax and bankruptcy purposes, the payment by Lessee of Basic
Rent shall be treated as payments of interest, and the payment by Lessee of any
amounts in respect of the Lease Balance shall be treated as repayments of
principal, and (v) the Mortgage and Assignment of Lease create a lien and
security interest in the Sites, subject to certain limited exceptions.
Nevertheless, Lessee acknowledges and agrees that none of Lessor, Agent or any
Lender has provided or will provide tax, accounting or legal advice to Lessee
regarding the Overall Transaction or made any representations or warranties
concerning the tax, accounting or legal characteristics of the Operative
Documents and that Lessee has obtained and relied upon such tax, accounting and
legal advice concerning the Operative Documents as it deems appropriate.
(b) Specifically, without limiting the generality of subsection (a) of
this Section 21.20, but understanding that the parties' characterization is not
the sole determinant of the issue, the parties hereto intend and agree that with
respect to the nature of the transactions evidenced by this Lease in the context
of the exercise of remedies under the Operative Documents, relating to and
arising out of any insolvency or receivership proceedings or a petition under
the United States bankruptcy laws or any other applicable insolvency laws or
statute of the United States of America or any State or Commonwealth thereof
affecting Lessee, Lessor or any Lender or any enforcement or collection actions,
the transactions evidenced by the Operative Documents are loans made by the
Lenders as unrelated third party lenders to Lessee secured by the Sites.
51
Lease Agreement
IN WITNESS WHEREOF, the undersigned have each caused this
Lease to be duly executed and delivered by their respective officers thereunto
duly authorized as of the day and year first above written.
MELLON FINANCIAL SERVICES
CORPORATION #4, as Lessor
By:
---------------------------------
Name Printed: Arthur A. Folsom, Jr.
Title: Senior Vice President
Address:
One Mellon Bank Center
Rm 151-4444
Pittsburgh, PA 15258-0001
Attention: Leasing Group
GENESIS ELDERCARE PROPERTIES, INC.,
as Lessee
By:
---------------------------------
Name Printed: Ira C. Gubernick
Title: Secretary
Address:
148 West State Street
Kennett Square, PA 19348
Attn: George V. Hager, Jr.
52
Lease Agreement
RECEIPT FOR COUNTERPART NO. 1
MELLON BANK, N.A., as Agent
By:
--------------------------------------------
Name Printed: Carol Paige
Title: Vice President
53
Lease Agreement
STATE OF _______________ )
) SS.:
COUNTY OF ______________ )
The foregoing Lease Agreement was acknowledged before me, the undersigned
Notary Public, in the County of _______________, State of ____________, this
____ day of July, 1996, by Carol Paige, as Vice President of MELLON BANK, N.A.,
a national banking association, on behalf of the such national banking
association.
[Notarial Seal] _________________________
Notary Public
My commission expires:________________
54
Lease Agreement
STATE OF ________ )
) SS.:
COUNTY OF ________ )
The foregoing Lease Agreement was acknowledged before me, the undersigned
Notary Public, in the County of ______, State of ________, this ____ day of
July, 1996, by Ira C. Gubernick, as Secretary of GENESIS ELDERCARE PROPERTIES,
INC., a Pennsylvania corporation, on behalf of the corporation.
[Notarial Seal] _________________________
Notary Public
My commission expires: _____________________
55
Lease Agreement
STATE OF ________ )
) SS.:
COUNTY OF ________ )
The foregoing Lease Agreement was acknowledged before me, the undersigned
Notary Public, in the County of ______, State of ________, this ____ day of
July, 1996, by Arthur A. Folsom, Jr., as Senior Vice President of MELLON
FINANCIAL SERVICES CORPORATION #4, a Pennsylvania corporation, on behalf of the
corporation.
[Notarial Seal] _________________________
Notary Public
My commission expires: ____________________
56
Lease Agreement
SCHEDULE I
to
LEASE AGREEMENT
DESCRIPTION OF SITES
DELIVERED ON DOCUMENT CLOSING DATE
Atlantis Rehabilitation and Health Care Center
Old Congress Road, Lantana, Florida;
Bowman's Health Care Center
South Ridgewood, Ormand Beach, Florida;
Eagle Crest Nursing Center
Parental Home Road, Jacksonville, Florida;
Oakwood Rehabilitation and Health Care Center
South East Bay Street, Eustis, Florida;
Tierra Pines Health Care Center
Ulmerton Road, Largo, Florida;
Woodlands Nursing Center
North 46th Street, Tampa, Florida;
Williamsburg Health Care and Rehabilitation Center
Mount Vernon Avenue, Williamsburg, Virginia;
Windham
Main Street, Route 240, Crozet, Virginia;
Woodmont Health Care Center
Dairy Lane, Fredricksburg, Virginia;
Attached hereto are legal descriptions for the above-described Sites.
Lease Agreement
Atlantis
Legal Description
A tract of land in Section 6, Township 45 South, Range 43 East, Palm Beach
County, Florida, said parcel of land being specifically described as follows, to
wit:
BEGINNING at a point 33.00 feet West of the East line of said Section 6 and
40.00 feet South of the North line of said Section; thence bear South 00(degree)
10' 40" West, along a line parallel to and 33.00 feet West of, as measured at
right angles to, the East line of said Section 6, a distance of 257.00 feet;
thence North 89(degree) 55' 30" West, along a line parallel to the North line of
said Section, a distance of 350.20 feet; thence North 00(degree) 10' 40" East,
along a line parallel to the East line of said Section, a distance of 257 feet
to a point on the South right-of-way line of the Lake Worth Drainage District
Lateral No. 16; thence South 89(degree) 55' 30" East along said South
right-of-way line, said line being parallel to and 40.00 feet South of, as
measured at right angles to, the North line of said Section, a distance of
350.20 feet to the POINT OF BEGINNING.
Said lands situate, lying and being in Palm Beach County, Florida.
Tax Assessor's No. PCN 00-43-45-06-00-000-1051
2
Lease Agreement
Bowman's
Legal Description
Lots 7, 8, 9, 10, 11 and 12, Block 2, HAND TRACT IN THE THOMAS FITCH GRANT,
according to the map thereof, as recorded in Map Book P, Page 1, of the Public
Records of Volusia County, Florida.
3
Lease Agreement
Eagle Crest
Legal Description
That certain piece, parcel or tract of land, situate, lying and being a part of
Farm 10, as shown on the Plat of Love Grove Farms, as recorded in Plat Book 7,
page 3 of the current public records of Duval County, Florida, and being more
particularly described as follows: Beginning at the Southeast corner of those
lands shown on Plat of Sans Souci Estates Unit 2, as recorded in Plat Book 29
page 25 of said public records, said point also being the Southwest corner of
said Farm 10; thence North 2 degrees 06 minutes 20 seconds East along the East
line of said Sans Souci Estates, Unit 2, 342.62 feet; thence North 78 degrees 33
minutes 20 seconds East, 608.72 feet to the Southwesterly right of way line of
Dean Road (a 50-foot right of way as now established by possession and usage);
thence South 19 degrees 20 minutes 20 seconds East along said Southwesterly
right of way line of Dean Road, 215.28 feet to its intersection with the
Westerly right of way line of Parental Home Road (a 66-foot right of way as now
established); thence South 8 degrees 14 minutes 00 seconds West along said
Westerly right of way line of Parental Home Road, 286.04 feet to its
intersection with the South line of said Farm 10; thence North 87 degrees 56
minutes 10 seconds West along said South line of Farm 10, 639.95 feet to the
point of beginning.
4
Lease Agreement
Oakwood
Legal Description
A tract of land located in the City of Eustis, Section 11, Township 19 South,
Range 26 East, Lake County, Florida, and being Lots 1 to 16, inclusive, of Block
34, in Pendryville, a subdivision in the City of Eustis, Florida, according to
the plat thereof recorded in Plat Book 1, Page 45, of the Public Records of Lake
County, Florida, and also being otherwise described as Lots 1 to 16, inclusive,
of Block 84, in the City of Eustis, Florida, according to the plat thereof
recorded in Plat Book 1, Page 79, Public Records of Lake County, Florida, and
being measured and described as follows:
Beginning at a concrete monument located at the intersection of the Southerly
edge of the right-of-way of Lemon Avenue (a 66-foot wide right-of-way) and the
Westerly edge of Eustis Street (a 66-foot wide right-of-way); thence running
Southerly along the Westerly edge of the right-of-way of Eustis Street, a
distance of 264.35 feet to a concrete monument at the point of intersection of
said Westerly edge of the right-of-way of Eustis Street and the Northerly edge
of the right-of-way of Ward Avenue (a 66-foot wide right-of-way); thence running
Westerly along a course making an interior angle of 89(degree)59'36" with the
preceding course, a distance of 263.96 feet along the Northerly edge of the
right-of-way of Ward Avenue to the point of intersection of said Northerly edge
of the right-of-way of Ward Avenue with the Easterly edge of the right-of-way of
Bay Street (a 66-foot wide right-of-way), said point being marked by an "X" cut
in a retaining wall; thence running Northerly along a course making an interior
angle of 90(degree)07'44" with the preceding course, a distance of 264.29 feet
along the Easterly edge of the right-of-way of Bay Street, to the intersection
of said Easterly right-of-way of Bay Street, with the Southerly edge of Lemon
Avenue, said intersecting point being presently marked by an "X" cut in a
sidewalk to an old residence; thence running Easterly along a course making an
interior angle of 89(degree)53'03" with the preceding course, a distance of
264.59 feet along the Southerly edge of the right-of-way of Lemon Avenue to the
point of beginning.
5
Lease Agreement
Tierra Pines
Legal Description
Parcel 1:
Commence at the Northeast corner of the Northwest 1/4 of Section 7, Township 30
South, Range 16 East, Pinellas County, Florida; thence North 87 deg 36 min 11
sec West along the North boundary of the Northwest 1/4 of said Section 7, 768.79
feet; thence South 00 deg 18 min 30 sec East, 75.00 feet Westerly of and
parallel to the East boundary of Lot 2 of Pinellas Groves Subdivision of the
Northwest 1/4 of said Section 7, as recorded in Plat Book 1, Page 55 of the
public records of Pinellas County, Florida, 72.08 feet to a Point of Beginning;
thence continue South 00 deg 18 min 30 sec East along the West boundary of a 50
foot wide non-exclusive easement recorded in O.R. Book 4636, Page 1802 of the
public records of Pinellas County, Florida, 606.00 feet; thence North 87 deg 36
min 11 sec West, 215.00 feet; thence North 00 deg 18 min 30 sec West, 606.00
feet; thence South 87 deg 36 min 11 sec East along the Southerly right-of-way
line of Ulmerton Road, 215.00 feet to the Point of Beginning.
Parcel 2:
Commence at the Northeast corner of the Northwest 1/4 of Section 7, Township 30
South, Range 16 East, Pinellas County, Florida; thence North 87 deg 36 min 11
sec West along the North boundary of the Northwest 1/4 of said Section 7, 743.76
feet; thence South 00 deg 18 min 30 sec East, 50.00 feet Westerly of and
parallel to the East boundary of Lot 2 of Pinellas Groves Subdivision of the
Northwest 1/4 of said Section 7, as recorded in Plat Book 1, Page 55 of the
public records of Pinellas County, Florida, 72.08 feet to a Point of Beginning;
thence continue South 00 deg 18 min 30 sec East along the centerline of a 50.00
foot wide non-exclusive easement recorded in O.R. Book 4636, Page 1802 of the
public records of Pinellas County, Florida, 606.00 feet; thence North 87 deg 36
min 11 sec West, 25.03 feet; thence North 00 deg 18 min 30 sec West, 606.00
feet; thence South 87 deg 36 min 11 sec East along the Southerly right-of-way
line of Ulmerton Road, 25.03 feet to the Point of Beginning.
TOGETHER WITH a non-exclusive easement for ingress, egress, utilities and
drainage, described as follows:
The Westerly 25.00 feet of the Easterly 50.00 feet of the Southerly 605.32 feet
of the Northerly 677.32 feet of Lot 2 of Pinellas Groves Subdivision of the
Northwest 1/4 of said Section 7, Township 30 South, Range 16 East, as recorded
in Plat Book 1, Page 55 of the public records of Pinellas County, Florida.
6
Lease Agreement
Woodlands
Legal Description
The South 1/2 of the Southeast 1/4 of the Northeast 1/4 of the Southwest 1/4 of
Section 4, Township 28 South, Range 19 East, LESS the East 25 feet thereof for
road right-of-way, all lying and being in Hillsborough County, Florida.
7
Lease Agreement
Williamsburg
Legal Description
ALL those certain lots, pieces or parcels of land located in the City of
Williamsburg, Virginia, on the eastern most line of Mount Vernon Avenue,
together with all improvements thereon and appurtenances thereto belonging,
which are shown on a certain plat of survey dated March 10, 1989, by Harvey L.
Parks, Inc., entitled "PLAT OF TWO PARCELS OF LAND WITH IMPROVEMENTS SHOWN
THEREON, SITUATED ON THE EASTERN MOST LINE OF MOUNT VERNON AVENUE IN THE CITY OF
WILLIAMSBURG, VIRGINIA.", and being more particularly described as follows:
BEGINNING at a rod found on the northern line of Mount Vernon Avenue (55' R/W),
said rod being 196.91' from the intersection with the southern line of
Monticello Avenue, and running from said rod in a northerly direction N 49
degrees 37' 30" E a distance of 199.54' to a rod; thence S 40 degrees 22' 30" E
a distance of 580.62' to a rod; thence S 49 degrees 37' 30" W a distance of
193.75' to a rod on the northern right-of-way line of Mount Vernon Avenue;
thence along the northern right-of-way line of Mount Vernon Avenue along a curve
to the right with a radius of 322.50' a length of 63.59' to a rod; thence along
said right-of-way line N 40 degrees 22' 30" W a distance of 496.95' to a rod;
thence continuing along said right-of-way on a curve to the right with a radius
of 472.50' a length of 20.53' to a rod found, being the point and place of
beginning, containing 2.663 acres, more or less, all in the City of
Williamsburg, Virginia further described as Parcel No. 2 and Parcel No. 3, as
shown on plat of survey made by Harvey L. Parks, Inc., dated March 10, 1989, a
copy of which is attached to the Deed of Trust, recorded February 6, 1990, in
the Clerk's Office, Circuit Court, City of Williamsburg, Virginia, in Deed Book
90, at page 710, reference to which is made for a more particular description.
BEING the same property conveyed to The Industrial Development Authority of the
City of Hopewell, Virginia, by deed from United Health Services, Inc., a
Virginia corporation, dated October 14, 1976, recorded October 15, 1976, in the
Clerk's Office, Circuit Court, City of Williamsburg, Virginia, in Deed Book 54,
page 167.
8
Lease Agreement
Windham
Legal Description
PARCEL ONE:
ALL that certain lot, piece or parcel of land, with all improvements thereon and
appurtenances thereto belonging, lying and being in White Hall District of
Albemarle County, Virginia, containing 0.856 acres according to plat entitled
"Plat Showing 0.856 Acre of Land With Improvements Shown, Situated On The
Western Line of State Route No. 240, Lying in Crozet, White Hall District,
Albemarle County, Virginia", made by Harvey L. Parks, Inc., dated March 15,
1989, and recorded in the Clerk's Office of the Circuit Court of Albermarle
County, Virginia, in Deed Book 1086, page 505.
BEGINNING at a rod found at the intersection of the northern property line of
Parcel 62 owned by National Health Care Affiliates, Inc., and the eastern right
of way line of High Street, running from said rod in a northerly direction N 26
degrees 12' 51" E a distance of 57.17' to a rod; thence S 74 degrees 17' 10" E a
distance of 186.00' to a rod; thence S 58 degrees 47' 06" E a distance of 99.11'
to a rod; thence S 65 degrees 06' 06" E a distance of 100.11' to a rod; thence S
37 degrees 06' 06" E a distance of 42.55' to a P.K. Nail found on the northern
line of State Route No. 240; thence along the northern line of State Route No.
240 S 32 degrees 18' 45" W a distance of 62.72' to a point; thence continuing
along the northern line of State Route No. 240 S 29 degrees 27' 54" W a distance
of 40.88' to a point on the northern boundary line of property owned by the VA.
National Bank (Parcel 60); thence N 64 degrees 36' 31" W a distance of 212.70'
to a rod; thence N 25 degrees 40' 17" E a distance of 31.48' to a rod; thence S
64 degrees 21' 49" E a distance of 30.00' to a rod; thence N 25 degrees 38' 11"
E a distance of 10.22' to a rod; thence S 64 degrees 21' 49" E a distance of
32.00" to a rod; thence N 25 degrees 38' 11" E a distance of 30.00' to a rod,
thence N 64 degrees 21' 49" W a distance of 125.00' to a rod; thence S 25
degrees 38' 11" W a distance of 29.16' to a rod; thence N 64 degrees 19' 43" W a
distance of 134.66' to a rod found, being the point and place of beginning,
containing 0.856 acre, more or less, all in Crozet, White Hall District of
Albemarle County, Virginia, as shown on plat of survey by Harvey L. Parks, Inc.,
dated March 15, 1989.
Together with a non-exclusive easement, with maintenance agreement, 10 feet in
width for vehicular and pedestrian traffic, parking and ingress and egress from
State Route 240, recorded in
9
Lease Agreement
the Clerk's Office of the Circuit Court of Albermarle County, Virginia, in Deed
Book, 779, page 239.
BEING the same property conveyed to the Industrial Development Authority of
Albemarle County, Virginia, by deed from Windham, Incorporated, a Virginia
corporation, dated January 1, 1980, recorded January 29, 1980, in the Clerk's
Office, Circuit Court, Albemarle County, Virginia, in Deed Book 688, page 476,
and leased to Windham, Incorporated by instrument dated January 1, 1980,
recorded in the Clerk's Office, Circuit Court, Albermarle County, Virginia, in
Deed Book 688, page 481. By Articles of Merger recorded May 21, 1984 in the
aforesaid Clerk's Office in Deed Book 799, page 341, Windham, Incorporated
merged into United Service Industries, Inc. By Certificate of Merger issued by
the Commonwealth of Virginia State Corporation Commission on February 10, 1984,
United Service Industries, Inc., a Virginia corporation merged into National
Health Care Affiliates, Inc., a Florida corporation, thereby vesting fee simple
title in the name of National Health Care Affiliates, Inc.
PARCEL TWO:
ALL that certain lot, piece or parcel of land, with all improvements thereon and
appurtenances thereto belonging, lying and being in White Hall District of
Albemarle County, Virginia, containing 0.2905 acre according to plat entitled
"Plat of 0.2905 Acre Of Land, With Improvements Shown, Situated On The Eastern
Line Of High Street, Lying in Crozet, White Hall District of Albemarle County,
Virginia", made by Harvey L. Parks, Inc., dated March 15, 1989, recorded in the
Clerk's Office of the Circuit Court of Albemarle County, Virginia, in Deed Book
1086, page 507.
BEGINNING at a spike found at the intersection of the southern line of High
Street and the northern property line of Va. National Bank (Parcel 60A), and
running from said spike along the southern line of High Street in a northerly
direction N 26 degrees 12' 51" E a distance of 44.91' to a pipe; thence S 64
degrees 19' 43" E a distance of 134.66' to a rod; thence N 25 degrees 38' 11" E
a distance of 29.16' to a rod; thence S 64 degrees 21' 49" E a distance of
125.00' to a rod; thence S 25 degrees 38' 11" W a distance of 30.00' to a rod;
thence N 64 degrees 21' 49" W a distance of 32.00' to a rod; thence S 25 degrees
38' 11" W a distance of 10.22' to a rod; thence N 64 degrees 21' 49" W a
distance of 30.00' to a rod; thence S 25 degrees 40' 17" W a distance of 31.48'
to a rod; thence N 65 degrees 01' 29" W a distance of 198.11' to a spike found,
being the point and place of beginning, containing 0.2905 acre, more or less,
all in Crozet, White Hall District of Albemarle County, Virginia, further
described as Parcel 62, as shown on plat of
10
Lease Agreement
survey made by Harvey L. Parks, Inc., dated March 15, 1989, recorded in Deed
Book 1086, page 507.
TOGETHER WITH a non-exclusive easement, with maintenance agreement, 10 feet in
width for vehicular and pedestrian traffic, parking and ingress and egress from
State Route 240, recorded in the Clerk's Office of the Circuit Court of
Albemarle County, Virginia, in Deed Book 779, page 239.
BEING the same real estate conveyed to Central Virginia Health Facilities, Inc.,
a Virginia corporation, by deed of exchange from Julia Sharp Vergara, divorced,
dated January 4, 1979, recorded in the Clerk's Office of the Circuit Court of
Albemarle County, Virginia, in Deed Book 664, page 615, and a portion conveyed
to Central Virginia Health Facilities, Inc., recorded in Deed Book 655, page
191. By Consent of Shareholder, dated June 29, 1979; Plan of Merger of Central
Virginia Health Facilities, Inc., with and into United Service Industries, Inc.,
dated June 30, 1979; and by Certificate of Merger issued by the Commonwealth of
Virginia State Corporation Commission on February 10, 1984, United Service
Industries, Inc., a Virginia corporation merged into National Health Care
Affiliates, Inc., a Florida corporation, thereby vesting fee simple title in the
name of National Health Care Affiliates, Inc., a Florida corporation.
PARCEL THREE:
ALL that certain lot of land situated in Albemarle County, Virginia, in Crozet,
fronting on State Route 240 parallel to the C & O Railroad and bounded on the
south by the land owned by the Industrial Development Authority of Albemarle
County and on the west by High Street, on the east by State Route 240 and on the
north by the C & O Railroad.
BEING a portion of the same property conveyed to The Miller Manual School of
Albemarle by the following deeds from:
(i) Abraham Wayland and Martha T. Wayland, dated September 10, 1894, recorded in
the Clerk's Office, Circuit Court, Albemarle County, Virginia, in Deed Book 102,
page 231; and
(ii) R.T.W. Duke, Commissioner of Circuit Court of Albemarle County, dated May
25, 1887, recorded June 13, 1887, in the Clerk's Office, Circuit Court,
Albemarle County, Virginia, in Deed Book 88, page 103.
11
Lease Agreement
Leased to National Health Care Affiliates by instrument dated January 1, 1979,
recorded in Deed Book 786, page 655.
12
Lease Agreement
PARCEL FOUR:
ALL that certain lot, piece or parcel of land, with all improvements thereon and
appurtenances thereto belonging, lying and being in White Hill District of
Albemarle County, Virginia, containing 0.3927 acre according to plat entitled
"Plat Showing 0.3927 Acre Of Land With Improvements Shown Situated On The
Eastern Line Of High Street, Lying in Crozet, White Hill District of Albemarle
County, Virginia", made by Harvey L. Parks, Inc., dated March 15, 1989, recorded
in the Clerk's Office of the Circuit Court of Albemarle County, Virginia, in
Deed Book 1086, page 506.
BEGINNING at a rod found at the intersection of southern line of High Street and
the northern property line of Stanley P. Wilcox (Parcel 56) and running from
said rod in a northerly direction along the southern line of High Street N 32
degrees 06' 32" E a distance of 60.15' to a spike; thence S 57 degrees 40' 33" E
a distance of 102.86' to a rod; thence S 32 degrees 21' 53" W a distance of
48.93' to a P.K. set; thence S 57 degrees 38' 07" E a distance of 109.00' to a
P.K. set; thence N 32 degrees 21' 53" E a distance of 49.01' to a rod; thence S
57 degrees 40' 33" E a distance of 162.60 feet to a P.K. set on the northern
line of State Route No. 240; thence along the northern line of State Route No.
240 S 34 degrees 00' W a distance of 60.33' to a P.K. set; thence N 57 degrees
34' 43" W a distance of 215.56' to a spike set; thence N 57 degrees 44' 44" W a
distance of 156.91' to a rod found, being the point and place of beginning,
containing 0.3927 acre, more or less, all in Crozet, White Hall District of
Albemarle County, Virginia, as shown on plat of survey made by Harvey L. Parks,
Inc., dated March 15, 1989, recorded in Deed Book 1086, page 506.
TOGETHER WITH the right of way of ingress and egress over 10-foot strip as
described in deed recorded in Deed Book 170, page 370, which strip adjoins the
lot hereby conveyed on its southern boundary by instrument recorded in the
Clerk's Office, Circuit Court, Albemarle County, Virginia, in Deed Book 695,
page 232.
TOGETHER WITH perpetual non-exclusive easement, with maintenance agreement, for
vehicular and pedestrian traffic, parking and ingress and egress as recorded in
the Clerk's Office, Circuit Court, Albemarle County, Virginia, in Deed Book 695,
page 237.
TOGETHER WITH a non-exclusive easement, with maintenance agreement, 10-feet in
width for vehicular and pedestrian traffic, parking and ingress and egress from
State Route 240 recorded in the Clerk's Office, Circuit Court, Albemarle County,
Virginia, in Deed Book 779, page 239.
13
Lease Agreement
BEING a part of the same real estate conveyed to United Service Industries,
Inc., by the following deeds from:
(i) Virginia National Bank, a national banking association, dated April 25,
1983, recorded June 15, 1983, in the Clerk's Office, Circuit Court, Albemarle
County, Virginia, in Deed Book 766, page 29; and
(ii) Central Fidelity Bank Charlottesville, a Virginia corporation, dated June
13, 1980, recorded June 20, 1980, in the aforesaid Clerk's Office, in Deed Book
695, page 232.
By Certificate of Merger issued by the Commonwealth of Virginia State
Corporation Commission on February 10, 1984, United Service Industries, Inc., a
Virginia corporation merged into National Health Care Affiliates, Inc., a
Florida corporation, thereby vesting fee simple title in the name of National
Health Care Affiliates, Inc.
14
Lease Agreement
Woodmont
Legal Description
All that certain tract or parcel of land, situate lying and being in Falmouth
District, Stafford County, Virginia, containing 8.770 acres, as shown on plat of
survey shown as Parcels 1 and 2 on plat of survey made by Potts, Minter &
Associates, P.C., dated May 31, 1996, and further described as:
Beginning at a point on the southern line of State Route 607, and from said
point and place of beginning along a curve to the right with a radius of 2754.87
feet and an arc length of 214.97 feet, having a chord bearing South
46(degree)27'37" West and a distance of 214.92 feet to a point; thence along a
curve to the right with a radius of 2277.50 feet, an arc length of 429.29, a
chord bearing South 54(degree)05'44" West, and a distance of 428.65 feet to a
point; thence, North 30(degree)30'14" West 40.00 feet to a point; thence along a
curve to the right with a radius of 2237.50 feet, an arc length of 668.34 feet,
a chord bearing South 68(degree)03'11" West, and a distance of 665.86 feet to a
point; thence, South 76(degree)36'37" West 218.25 feet to a point; thence North
13(degree)23'23" West 362.21 feet to a point; thence, north 66(degree)54'00"
East 209.00 feet to a point; thence, South 23(degree)06'00" East, 55.00 feet to
a point; thence, North 66(degree)54'00" East, 100.00 feet to a point; thence,
North 23(degree)06'00" West, 55.00 feet to a point; thence, North
66(degree)54'00" East, 364.44 feet to a point; thence South 37(degree)25'55"
East, 191.34 feet to a point; thence, along a curve to the left with a radius of
230.00 feet, and an arc length of 370.11 feet to a point; thence along a
non-tangent curve to the left with a radius of 248.41 feet, an arc length of
83.65 feet, a chord bearing North 18(degree)37'39" East 83.27 feet to a point;
thence, North 08(degree)58'45" East, 193.51 feet to a point; thence, along the
centerline of the old Route 607 South 81(degree)01'15" East, 80.01 feet to a
point; thence, continuing along said old Route 607 South 85(degree)03'45" East,
263.09 feet to a point and place of beginning 8.770 acres.
Parcel 1 is the same property conveyed to National Health Care Affiliates, Inc.,
by deed of Industrial Development Authority of Stafford County, Virginia, dated
April 1, 1989, recorded in Deed Book 669, at Page 469, in the Clerk's Office of
the Circuit Court of Stafford County, Virginia.
Parcel 2 is part of the same property conveyed to United Health Services,
Incorporated, by deed from Woodmont, Incorporated, dated November 19, 1975,
recorded in Deed Book 281, page 492 in the aforesaid Clerk's Office. By Articles
of Amendment recorded
15
Lease Agreement
in Deed Book 549, page 101, United Health Services, Incorporated changed their
name to United Service Industries, Incorporated. By Articles of Merger recorded
in Deed Book 458, page 158, United Service Industries, Inc. merged into National
Health Care Affiliates, Inc.
16
EXHIBIT A
TO
LEASE AGREEMENT
FORM OF LEASE SUPPLEMENT AND MEMORANDUM OF LEASE AND AGREEMENT
THIS LEASE SUPPLEMENT AND MEMORANDUM OF LEASE AND AGREEMENT dated
_____________, 19__ (this "Lease Supplement") is between MELLON FINANCIAL
SERVICES CORPORATION #4, as Lessor (the "Lessor"), and GENESIS ELDERCARE
PROPERTIES, INC., a Pennsylvania corporation and a wholly-owned subsidiary of
Genesis Health Ventures, Inc., as Lessee (the "Lessee");
W I T N E S S E T H:
WHEREAS, Lessee and Lessor have heretofore entered into that certain
Lease and Agreement dated as of July 24, 1996 (as amended, supplemented, or
otherwise modified from time to time, the "Lease"). Unless otherwise defined
herein, capitalized terms used herein shall have the meanings specified in the
Lease; and
WHEREAS, the Lease provides for the execution and delivery of a Lease
Supplement on the Document Closing Date substantially in the form hereof for the
purpose of confirming the acceptance and lease of certain Sites, specifying the
Rent applicable to such Sites and setting forth certain other matters, all as
required pursuant to the Lease;
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:
1. Delivery and Acceptance. Lessor hereby delivers and leases
to, and confirms delivery and lease to, Lessee, and Lessee hereby
accepts delivery and leases, and confirms acceptance of delivery and
lease, from Lessor, under the Lease as hereby supplemented, of the
Site(s) listed on Schedule I hereto. The term "Site" includes, without
limitation, all of the right, title and interest of Lessor or Lessee in
and to the following:
Lease Supplement
(A) the real property described in Schedule III attached to
the Participation Agreement (the "Land"); all buildings, structures and
other improvements now or in the future located on the Land (the
"Improvements"; the Improvements and the Land are sometimes
collectively referred to herein as the "Property");
(B) all the estate, right, title, claim or demand whatsoever
of Lessor or Lessee, in possession or expectancy, in and to the
Property or any part thereof;
(C) all right, title and interest of Lessor in and to all of
the fixtures, furnishings and fittings of every kind and nature
whatsoever, and all appurtenances and additions thereto and
substitutions or replacements thereof (together with, in each case,
attachments, components, parts and accessories) currently owned or
subsequently acquired by the Mortgagor and now or subsequently attached
to, or contained in or used or usable in any way in connection with any
operation or letting of the Property (all of the foregoing in this
paragraph (C) being referred to as the "Fixtures");
(D) all right, title and interest of Lessor or Lessee in and
to all of the fixtures, chattels, business machines, machinery,
apparatus, equipment, furnishings, fittings and articles of personal
property of every kind and nature whatsoever, and all appurtenances and
additions thereto and substitutions or replacements thereof (together
with, in each case, attachments, components, parts and accessories)
currently owned or subsequently acquired by Mortgagor and now or
subsequently attached to, or contained in or used or usable in any way
in connection with any operation or letting of the Property, including
but without limiting the generality of the foregoing, all screens,
awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs,
storm doors and windows, furniture and furnishings, heating,
electrical, and mechanical equipment, lighting, switchboards, plumbing,
ventilating, air conditioning and air-cooling apparatus, refrigerating,
and incinerating equipment, escalators, refrigerators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
antennae), televisions, computers (excluding software), sprinkler
systems and other fire prevention and extinguishing apparatus and
materials, security systems, motors, engines, machinery, pipes, pumps,
tanks, conduits, appliances, fittings and fixtures of every
2
Lease Supplement
kind and description (all of the foregoing in this paragraph (D) being
referred to as the "Equipment");
(E) all right, title and interest of Lessor or Lessee in and
to all substitutes and replacements of, and all additions and
improvements to, the Improvements and the Fixtures and Equipment,
subsequently acquired by Lessor or Lessee or constructed, assembled or
placed by Lessor or Lessee on the Land, immediately upon such
acquisition, release, construction, assembling or placement, including,
without limitation, any and all building materials whether stored at
the Property or offsite, and, in each such case, without any further
lease, mortgage, conveyance, assignment or other act by Lessor or
Lessee;
(F) all right, title and interest of Lessor or Lessee in, to
and under all books and records relating to or used in connection with
the operation of the Property or the Fixtures or any part thereof; and
all general intangibles related to the operation of the Improvements
now existing or hereafter arising; and
(G) all right, title and interest of Lessor or Lessee in and
to (to the extent assignable) (i) all consents, licenses, building
permits, certificates of occupancy and other governmental approvals
relating to construction, completion, occupancy, use or operation of
the Property or any part thereof and (ii) all plans and specifications
relating to the Property.
2. Warranty. Lessee hereby represents and warrants that no
event which would constitute a Casualty or an Event of Taking and no
notice of such Casualty or Event of Taking has been given to Lessee or
any of its Affiliates with respect to the Sites under the Lease has
occurred with respect to the Sites set forth on Schedule I hereto as of
the date hereof. Lessee hereby reaffirms each of the representations
and warranties set forth at Section 4.1 of the Participation Agreement
as if made on the date hereof, except to the extent any such
representation and warranty relates to an earlier date, including the
Sites set forth on Schedule I hereto are free and clear of all Liens
other than Permitted Liens.
3. Term, Applicable Percentage. The term of this
Lease Supplement shall commence on the date hereof and end
on the Lease Termination Date. The Applicable Percentage on
each Payment Date is set forth in the appropriate portion of
Schedule II.
3
Lease Supplement
4. Renewal Terms, Lessee's Cost and Estimated Sales Costs.
With respect to the Sites covered by this Lease Supplement and subject
to the consent of the Participants pursuant to Section 2.10 of the
Participation Agreement, Lessee shall have a five-year renewal option
to be exercised pursuant to Section 6.1 of the Lease. The estimated
sales costs for the Sites are set forth in Schedule II attached hereto.
5. Confirmation. Lessee hereby confirms its agreement, in
accordance with the Lease as supplemented by this Lease Supplement, to
pay Rent to Agent, for the benefit of Lessor, for the Sites leased
hereunder. Nothing herein shall reduce Lessee's obligation to make all
other payments required under the Lease, including those payments to be
made on the last day of the Lease Term pursuant to Article VI of the
Lease.
6. Incorporation into Lease. This Lease Supplement shall be
construed in connection with and as part of the Lease, and all terms,
conditions and covenants contained in the Lease, as supplemented by
this Lease Supplement, shall be and remain in full force and effect and
shall govern the Sites described in Schedule I hereto.
7. References. Any and all notices, requests, certificates and
other instruments executed and delivered concurrently with or after the
execution and delivery of this Lease Supplement may refer to the "Lease
Agreement, dated as of July 24, 1996", or may identify the Lease in any
other respect without making specific reference to this Lease
Supplement, but nevertheless all such references shall be deemed to
include this Lease Supplement, unless the context shall otherwise
require.
8. Recording. Lessor and Lessee agree that this Lease
Supplement shall be recorded at Lessee's sole cost and
expense as required under Section 21.19 of the Lease.
9. Counterparts. This Lease Supplement may be
executed in any number of counterparts, each executed
counterpart constituting an original but all together one
and the same instrument.
10. Nature of Transaction. (A) IT IS THE INTENT OF THE PARTIES
HERETO THAT: (i) THE TRANSACTION CONTEMPLATED HEREBY CONSTITUTES AN
OPERATING LEASE FROM LESSOR TO LESSEE FOR PURPOSES OF LESSEE'S
FINANCIAL REPORTING, (ii) THE TRANSACTION CONTEMPLATED HEREBY PRESERVES
OWNERSHIP IN THE
4
Lease Supplement
SITES TO LESSEE FOR PURPOSES OF FEDERAL AND STATE TAX AND BANKRUPTCY
PURPOSES, (iii) LESSEE, PURSUANT TO THE LEASE, GRANTS A SECURITY
INTEREST OR LIEN, AS THE CASE MAY BE, IN THE SITES AND THE OTHER
COLLATERAL TO LESSOR, (iv) FOR PURPOSES OF FEDERAL AND STATE TAX AND
BANKRUPTCY PURPOSES, THE PAYMENT BY LESSEE OF BASIC RENT SHALL BE
TREATED AS PAYMENTS OF INTEREST, AND THE PAYMENT BY LESSEE OF ANY
AMOUNTS IN RESPECT OF THE LEASE BALANCE SHALL BE TREATED AS REPAYMENTS
OF PRINCIPAL, AND (v) THE MORTGAGE AND ASSIGNMENT OF LEASE CREATE A
LIEN AND SECURITY INTEREST IN LESSOR'S INTEREST IN AND TO THE SITES,
THE LEASE AND THE OTHER OPERATIVE DOCUMENTS, SUBJECT TO CERTAIN LIMITED
EXCEPTIONS. NEVERTHELESS, LESSEE ACKNOWLEDGES AND AGREES THAT NONE OF
LESSOR, AGENT OR ANY LENDER HAS PROVIDED OR WILL PROVIDE TAX,
ACCOUNTING OR LEGAL ADVICE TO LESSEE REGARDING THE OVERALL TRANSACTION
OR MADE ANY REPRESENTATIONS OR WARRANTIES CONCERNING THE TAX,
ACCOUNTING OR LEGAL CHARACTERISTICS OF THE OPERATIVE DOCUMENTS AND THAT
LESSEE HAS OBTAINED AND RELIED UPON SUCH TAX, ACCOUNTING AND LEGAL
ADVICE CONCERNING THE OPERATIVE DOCUMENTS AS IT DEEMS APPROPRIATE.
(B) SPECIFICALLY, WITHOUT LIMITING THE GENERALITY OF
SUBSECTION (A) OF THIS SECTION 10, BUT UNDERSTANDING THAT THE PARTIES'
CHARACTERIZATION IS NOT THE SOLE DETERMINANT OF THE ISSUE, THE PARTIES
HERETO INTEND AND AGREE THAT WITH RESPECT TO THE NATURE OF THE
TRANSACTIONS EVIDENCED BY THIS LEASE IN THE CONTEXT OF THE EXERCISE OF
REMEDIES UNDER THE OPERATIVE DOCUMENTS, RELATING TO AND ARISING OUT OF
ANY INSOLVENCY OR RECEIVERSHIP PROCEEDINGS OR A PETITION UNDER THE
UNITED STATES BANKRUPTCY LAWS OR ANY OTHER APPLICABLE INSOLVENCY LAWS
OR STATUTE OF THE UNITED STATES OF AMERICA OR ANY STATE OR COMMONWEALTH
THEREOF AFFECTING LESSEE, LESSOR OR ANY LENDER OR ANY ENFORCEMENT OR
COLLECTION ACTIONS, THE TRANSACTIONS EVIDENCED BY THE OPERATIVE
DOCUMENTS ARE LOANS MADE BY THE LESSOR AND THE LENDERS AS UNRELATED
THIRD PARTY LENDERS TO LESSEE SECURED BY THE SITES.
11. Grant and Foreclosure on Lessee's Estate.1 Lessee hereby
grants to ____________________, as trustee (together with all successor
trustees, the "Trustee"), IN TRUST, WITH POWER OF SALE, all of Lessee's
right, title and interest in and to the Sites listed on Schedule I and,
upon the occurrence of a Lease Event of Default, Lessor shall have the
power and authority, after proper notice and lapse
- --------
1 To be conformed to requirements of local law for each state.
5
Lease Supplement
of such time as may be required by law, to cause Trustee to sell such
Sites by notifying Trustee of that election and depositing with Trustee
this instrument and receipts and evidence of expenditures made and
secured hereby as Trustee may reasonably require. Upon receipt of any
such notice from Lessor, Trustee shall cause to be recorded, published
and delivered to Lessee such Notice of Default and Election to Sell as
is then required by applicable statutory authority and by this
instrument, which notice shall set forth, among other things, the
nature of the breach(es) or default(s), the action(s) required to
effect a cure thereof and the time period within which that cure may be
effected. If no cure is effected within the statutory time limits
following recordation of the Notice of Default and Election to Sell and
after Notice of Sale has been given as required by the above-referenced
statutes, Trustee may without further notice or demand sell and convey
the Sites in accordance with the above-referenced statutes. The Sites
may be sold as a whole or in separate lots, parcels or items and in
such order as Lessor may direct, at public auction to the highest
bidder for cash in lawful money of the United States payable at the
time of sale. Lessor may purchase all or any part of the Sites at such
sale. Lessee acknowledges that sales for cash or on credit to a
wholesaler, retailer or user of the Sites, at a public or private
auction, are all commercially reasonable. Trustee shall deliver to such
purchaser(s) a good and sufficient deed or deeds conveying the property
so sold, but without any covenant or warranty express or implied. The
recitals in such deed of any matter or fact shall be conclusive proof
of the truthfulness thereof. Any Person, including Lessee, Trustee or
Lessor, may purchase at any sale. After deducting all costs, fees and
expenses of Lessor and Trustee, including costs of evidence of title in
connection with any sale, Lessor shall apply the proceeds of sale, in
the following order of priority, to payment of the following
(collectively, the "Obligations"): (i) first, all amounts expended by
or for the account of Lessor under the terms hereof and not then
repaid, with accrued interest at the Overdue Rate; and (ii) second, all
other amounts then due and owing hereunder including, without
limitation, all Accrued Variable Rent, Supplemental Rent, the full
amount of the Lease Balance as of the date of sale as if this Lease had
been terminated with respect to all of the Sites then subject to this
Lease under Section 6.3, and all other amounts then payable by Lessee
under this Lease and the other Operative Documents, with Lessor having
the right to apply the proceeds of sale to the amounts described above
in this clause (ii) in such order, proportion and priority as Lessor
may elect in its
6
Lease Supplement
sole and absolute discretion. To the extent permitted by applicable
statutes, Trustee may postpone the sale of all or any portion of the
Sites by public announcement at the time and place of sale, and from
time to time thereafter may again postpone that sale by public
announcement or subsequently noticed sale, and without further notice
may make such sale at the time fixed at the last postponement or may,
in its discretion, give a new notice of sale. A sale of less than all
of the Sites or any defective or irregular sale made hereunder shall
not exhaust the power of sale provided for herein, and subsequent sales
may be made hereunder until all of the Obligations have been satisfied
or the entire Sites sold, without defect or irregularity. No action of
Lessor or Trustee based upon the provisions contained herein or
contained in the applicable statutes, including, without limitation,
the giving of the Notice of Default and Election to Sell or the Notice
of Sale, shall constitute an election of remedies which would preclude
Lessor from pursuing judicial foreclosure before a completed sale
pursuant to the power of sale contained herein. Lessor shall have the
right, with the irrevocable consent of Lessee hereby given and
evidenced by the execution of this instrument, to obtain appointment of
a receiver by any court of competent jurisdiction without further
notice to Lessee, which receiver shall be authorized and empowered to
enter upon and take possession of the Sites, including all personal
property constituting a permanent part of the Site and fixtures thereto
used upon or in connection with the real property herein conveyed (and
any other personal property constituting a part of the Site which
Lessee acquired with the funds of Lessor or the Lenders), to let the
Sites, to receive all the rents, issues and profits, if any, which may
be due or become due in respect to the leasing of the Sites to another
party and apply the rents after payment of all necessary charges and
expenses to reduction of the Obligations in such order, proportion and
priority as Lessor may elect. At the option of Lessor, the receiver
shall accomplish entry and taking possession of the Sites by actual
entry and possession or by notice to Lessee. The receiver so appointed
by a court of competent jurisdiction shall be empowered to issue
receiver's certificates for funds advanced by Lessor for the purpose of
protecting the value of the Sites as security for the Obligations. The
amounts evidenced by receiver's certificates shall bear interest at the
Overdue Rate and may be added to the Obligations if Lessee or a junior
lienholder purchases the Sites at the trustee's sale. Trustee or any
successor acting hereunder may resign and thereupon be discharged of
the trusts hereunder upon thirty (30) days'
7
Lease Supplement
prior written notice to Lessor. Regardless of whether Trustee resigns,
Lessor may, from time to time, substitute a successor or successors to
any Trustee named herein or acting hereunder in accordance with any
statutory procedure for such substitution; or if Lessor, in its sole
and absolute discretion, so elects, and if permitted by law, Lessor may
substitute such successors or successors by recording, in the office of
the recorder of the county or counties where a Site is located, a
document executed by Lessor and containing the name of the original
Lessee and Lessor hereunder, the book and page where this instrument
(or a memorandum hereof) is recorded (and/or instrument number, as
applicable) and the name of the new Trustee, which instrument shall be
conclusive proof of proper substitution of such successor Trustee or
Trustees, who shall, without conveyance from the predecessor Trustee,
succeed to the rights, powers and duties hereunder. It is acknowledged
that A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT; A POWER OF
SALE MAY ALLOW LESSOR TO TAKE THE SITES AND SELL THEM WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON DEFAULT BY LESSEE UNDER THIS
INSTRUMENT.
12. Governing Law. THIS LEASE SUPPLEMENT HAS BEEN DELIVERED
IN, AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
EXCEPT THAT FORECLOSURE UPON THE SITES SUBJECT TO THIS LEASE SUPPLEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE IN WHICH THE SITE SUBJECT TO
THIS LEASE SUPPLEMENT IS LOCATED.
[remainder of page intentionally left blank]
8
Lease Supplement
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement
to be duly executed and delivered on the day and year first above written.
MELLON FINANCIAL SERVICES
CORPORATION, as Lessor
By___________________________
Name Printed:________________
Title:_______________________
Address:
One Mellon Bank Center
Rm 151-4444
Pittsburgh, PA 15258-0001
Attention: Leasing Group
GENESIS ELDERCARE PROPERTIES,
INC., as Lessee
By___________________________
Name Printed:________________
Title:_______________________
Address:
148 West State Street
Kennett Square, PA 19348
Attn: George V. Hager, Jr.
[Conform execution and acknowledgments to applicable state
requirements in state where applicable Site is located]
Lease Supplement
STATE OF _______________ )
) SS.:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _______________, State of
____________, this ____ day of _______________, 19____, by
___________________________, as _________________________ of GENESIS ELDERCARE
PROPERTIES, INC., a Pennsylvania corporation, on behalf of the corporation.
[Notarial Seal] _________________________
Notary Public
My commission expires:________________
[USE APPROPRIATE NOTARY FORMS FOR APPLICABLE STATE]
10
Lease Supplement
STATE OF _______________ )
) SS.:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _______________, State of
____________, this ____ day of _______________, 19____, by
___________________________, as _________________________ of MELLON FINANCIAL
SERVICES CORPORATION #4, on behalf of the Corporation.
[Notarial Seal] _________________________
Notary Public
My commission expires:________________
[USE APPROPRIATE NOTARY FORMS FOR APPLICABLE STATE]
11
Lease Supplement
SCHEDULE I
TO
LEASE SUPPLEMENT
Sites
12
Lease Supplement
SCHEDULE II
TO
LEASE SUPPLEMENT
Applicable Estimated
Site Percentage Sales Costs
- ---- ---------- -----------
Atlantis Rehabilitation 84.855% 1%
and Health Care Center
Old Congress Road,
Lantana, Florida
Bowman's Health Care Center 84.855% 1%
South Ridgewood
Ormand Beach, Florida
Eagle Crest Nursing Center 84.855% 1%
Parental Home Road
Jacksonville, Florida
Oakwood Rehabilitation 84.855% 1%
and Health Care Center
South East Bay Street
Eustis, Florida
Tierra Pines Health 84.855% 1%
Care Center
Ulmerton Road
Largo, Florida
Woodlands Nursing Center 84.855% 1%
North 46th Street
Tampa, Florida
Williamsburg Health Care 84.855% 1%
and Rehabilitation Center
Mount Vernon Avenue
Williamsburg, Virginia
Windham 84.855% 1%
Main Street, Route 240
Crozet, Virginia
Woodmont Health Care Center 84.855% 1%
Dairy Lane
Fredricksburg, Virginia
13