Exhibit 10.13

 

AMENDED AND RESTATED MASTER LEASE AGREEMENT

(LEASE NO. 3),

 

dated as of June 30, 2008,

 

by and among

 

CERTAIN AFFILIATES OF SENIOR HOUSING PROPERTIES TRUST,

 

AS LANDLORD,

 

AND

 

FIVE STAR QUALITY CARE TRUST,

 

AS TENANT

 

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ARTICLE 1

DEFINITIONS

1

1.1

“Additional Charges”

1

1.2

“Additional Rent”

2

1.3

“Affiliated Person”

2

1.4

“Agreement”

2

1.5

“Applicable Laws”

2

1.6

“Award”

3

1.7

“Base Gross Revenues”

3

1.8

“Base Year”

3

1.9

“Business Day”

3

1.10

“Capital Addition”

3

1.11

“Capital Expenditure”

4

1.12

“Change in Control”

4

1.13

“Claim”

4

1.14

“Code”

4

1.15

“Commencement Date”

4

1.16

“Condemnation”

5

1.17

“Condemnor”

5

1.18

“Consolidated Financials”

5

1.19

“Date of Taking”

5

1.20

“Default”

5

1.21

“Disbursement Rate”

5

1.22

“Distribution”

5

1.23

“Easement Agreement”

6

1.24

“Encumbrance”

6

1.25

“Entity”

6

1.26

“Environment”

6

1.27

“Environmental Obligation”

6

1.28

“Environmental Notice”

6

1.29

“Event of Default”

6

1.30

“Excess Gross Revenues”

6

1.31

“Extended Term”

6

1.32

“Facility”

6

1.33

“Facility Mortgage”

6

1.34

“Facility Mortgagee”

7

1.35

“Financial Officer’s Certificate”

7

1.36

“Fiscal Year”

7

1.37

“Five Star”

7

1.38

“Fixed Term”

7

1.39

“Fixtures”

7

1.40

“GAAP”

7

1.41

“Government Agencies”

7

1.42

“Gross Revenues”

7

1.43

“Guarantor”

9

1.44

“Guaranty”

9

1.45

“Hazardous Substances”

9

1.46

“Immediate Family”

10

1.47

“Impositions”

10

1.48

“Incidental Documents”

11

1.49

“Indebtedness”

11

1.50

“Insurance Requirements”

11

1.51

“Interest Rate”

11

1.52

“Land”

11

 

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1.53

“Landlord”

11

1.54

“Landlord Default”

11

1.55

“Landlord Liens”

12

1.56

“Lease Year”

12

1.57

“Leased Improvements”

12

1.58

“Leased Intangible Property”

12

1.59

“Leased Property”

12

1.60

“Legal Requirements”

12

1.61

“Lien”

13

1.62

“Manager”

13

1.63

“Management Agreement”

13

1.64

“Master Lease Agreement No. 1”

13

1.65

“Minimum Rent”

13

1.66

“Notice”

13

1.67

“Officer’s Certificate”

13

1.68

“Original Lease”

14

1.69

“Overdue Rate”

14

1.70

“Parent”

14

1.71

“Permitted Encumbrances”

14

1.72

“Permitted Liens”

14

1.73

“Permitted Use”

14

1.74

“Person”

14

1.75

“Pledge Agreement”

14

1.76

“Property”

14

1.77

“Provider Agreements”

14

1.78

“Records”

15

1.79

“Regulated Medical Wastes”

15

1.80

“Rent”

15

1.81

“SEC”

15

1.82

“Security Agreement”

15

1.83

“State”

15

1.84

“Subordinated Creditor”

15

1.85

“Subordination Agreement”

15

1.86

“Subsidiary”

15

1.87

“Successor Landlord”

15

1.88

“Tenant”

16

1.89

“Tenant’s Personal Property”

16

1.90

“Term”

16

1.91

“Third Party Payor Programs”

16

1.92

“Third Party Payors”

16

1.93

“Unsuitable for Its Permitted Use”

16

1.94

“Work”

17

ARTICLE 2

LEASED PROPERTY AND TERM

17

2.1

Leased Property

17

2.2

Condition of Leased Property

18

2.3

Fixed Term

19

2.4

Extended Terms

19

ARTICLE 3

RENT

19

3.1

Rent

19

3.2

Late Payment of Rent, Etc.

25

3.3

Net Lease

26

3.4

No Termination, Abatement, Etc.

26

 

2

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ARTICLE 4

USE OF THE LEASED PROPERTY

27

4.1

Permitted Use

27

4.2

Compliance with Legal/Insurance Requirements, Etc.

29

4.3

Compliance with Medicaid and Medicare Requirements

29

4.4

Environmental Matters

30

ARTICLE 5

MAINTENANCE AND REPAIRS

32

5.1

Maintenance and Repair

32

5.2

Tenant’s Personal Property

34

5.3

Yield Up

34

5.4

Management Agreement

35

ARTICLE 6

IMPROVEMENTS, ETC.

35

6.1

Improvements to the Leased Property

35

6.2

Salvage

36

ARTICLE 7

LIENS

36

7.1

Liens

36

7.2

Landlord’s Lien

37

ARTICLE 8

PERMITTED CONTESTS

37

ARTICLE 9

INSURANCE AND INDEMNIFICATION

38

9.1

General Insurance Requirements

38

9.2

Waiver of Subrogation

39

9.3

Form Satisfactory, Etc.

39

9.4

No Separate Insurance; Self-Insurance

40

9.5

Indemnification of Landlord

40

ARTICLE 10

CASUALTY

41

10.1

Insurance Proceeds

41

10.2

Damage or Destruction

42

10.3

Damage Near End of Term

44

10.4

Tenant’s Property

44

10.5

Restoration of Tenant’s Property

44

10.6

No Abatement of Rent

44

10.7

Waiver

44

ARTICLE 11

CONDEMNATION

45

11.1

Total Condemnation, Etc.

45

11.2

Partial Condemnation

45

11.3

Abatement of Rent

46

11.4

Temporary Condemnation

46

11.5

Allocation of Award

47

ARTICLE 12

DEFAULTS AND REMEDIES

47

12.1

Events of Default

47

12.2

Remedies

50

12.3

Tenant’s Waiver

51

12.4

Application of Funds

52

12.5

Landlord’s Right to Cure Tenant’s Default

52

ARTICLE 13

HOLDING OVER

52

ARTICLE 14

LANDLORD DEFAULT

53

ARTICLE 15

PURCHASE RIGHTS

53

ARTICLE 16

SUBLETTING AND ASSIGNMENT

54

16.1

Subletting and Assignment

54

16.2

Required Sublease Provisions

55

16.3

Permitted Sublease

57

 

3

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16.4

Sublease Limitation

57

ARTICLE 17

ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

58

17.1

Estoppel Certificates

58

17.2

Financial Statements

58

17.3

General Operations

59

ARTICLE 18

LANDLORD’S RIGHT TO INSPECT

60

ARTICLE 19

EASEMENTS

60

19.1

Grant of Easements

60

19.2

Exercise of Rights by Tenant

61

19.3

Permitted Encumbrances

61

ARTICLE 20

FACILITY MORTGAGES

61

20.1

Landlord May Grant Liens

61

20.2

Subordination of Lease

61

20.3

Notice to Mortgagee and Superior Landlord

63

ARTICLE 21

ADDITIONAL COVENANTS OF TENANT

64

21.1

Prompt Payment of Indebtedness

64

21.2

Conduct of Business

64

21.3

Maintenance of Accounts and Records

64

21.4

Notice of Litigation, Etc.

65

21.5

Indebtedness of Tenant

65

21.6

Distributions, Payments to Affiliated Persons, Etc.

66

21.7

Prohibited Transactions

66

21.8

Liens and Encumbrances

66

21.9

Merger; Sale of Assets; Etc.

67

ARTICLE 22

ARBITRATION

68

ARTICLE 23

MISCELLANEOUS

69

23.1

Limitation on Payment of Rent

69

23.2

No Waiver

69

23.3

Remedies Cumulative

69

23.4

Severability

70

23.5

Acceptance of Surrender

70

23.6

No Merger of Title

70

23.7

Conveyance by Landlord

70

23.8

Quiet Enjoyment

70

23.9

No Recordation

71

23.10

Notices

71

23.11

Construction

72

23.12

Counterparts; Headings

72

23.13

Applicable Law, Etc.

73

23.14

Right to Make Agreement

73

23.15

Attorneys’ Fees

73

23.16

Nonliability of Trustees

74

23.17

Original Lease

74

 

4

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AMENDED AND RESTATED MASTER LEASE AGREEMENT
(LEASE NO. 3)

 

THIS AMENDED AND RESTATED MASTER LEASE AGREEMENT (LEASE NO. 3) is entered into
as of June 30, 2008 by and among each of the parties identified on the signature
page hereof as a landlord, as landlord (collectively, “Landlord”), and FIVE STAR
QUALITY CARE TRUST, a Maryland business trust, as tenant (“Tenant”).

 

W I T N E S S E T H :

 

WHEREAS, Landlord and Tenant are parties to that certain Second Amended and
Restated Lease Agreement, dated as of November 19, 2004, as the same has been
amended to date (as so amended, the “Original Lease”); and

 

WHEREAS, Landlord and Tenant wish to amend, restate and bifurcate the Original
Lease into two separate leases and to make such other modifications thereto as
are set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, Landlord and Tenant hereby agree that,
effective as of the date hereof, the Original Lease is hereby amended and
restated with respect to the Leased Property (as hereinafter defined), as
follows:

 

ARTICLE 1

 

DEFINITIONS

 

For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, (a) the terms defined in this
Article shall have the meanings assigned to them in this Article and include the
plural as well as the singular, (b) all accounting terms not otherwise defined
herein shall have the meanings assigned to them in accordance with GAAP, (c) all
references in this Agreement to designated “Articles”, “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Agreement, and (d) the words “herein”, “hereof”, “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.

 

1.1          “ADDITIONAL CHARGES”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 3.1.3.

 

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1.2          “ADDITIONAL RENT”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 3.1.2(A).

 

1.3          “AFFILIATED PERSON”  SHALL MEAN, WITH RESPECT TO ANY PERSON, (A) 
IN THE CASE OF ANY SUCH PERSON WHICH IS A PARTNERSHIP, ANY PARTNER IN SUCH
PARTNERSHIP, (B) IN THE CASE OF ANY SUCH PERSON WHICH IS A LIMITED LIABILITY
COMPANY, ANY MEMBER OF SUCH COMPANY, (C) ANY OTHER PERSON WHICH IS A PARENT, A
SUBSIDIARY, OR A SUBSIDIARY OF A PARENT WITH RESPECT TO SUCH PERSON OR TO ONE OR
MORE OF THE PERSONS REFERRED TO IN THE PRECEDING CLAUSES (A) AND (B), (D) ANY
OTHER PERSON WHO IS AN OFFICER, DIRECTOR, TRUSTEE OR EMPLOYEE OF, OR PARTNER IN
OR MEMBER OF, SUCH PERSON OR ANY PERSON REFERRED TO IN THE PRECEDING CLAUSES
(A), (B) AND (C), AND (E) ANY OTHER PERSON WHO IS A MEMBER OF THE IMMEDIATE
FAMILY OF SUCH PERSON OR OF ANY PERSON REFERRED TO IN THE PRECEDING CLAUSES
(A) THROUGH (D).

 

1.4          “AGREEMENT”  SHALL MEAN THIS AMENDED AND RESTATED MASTER LEASE
AGREEMENT (LEASE NO. 3), INCLUDING ALL SCHEDULES AND EXHIBITS ATTACHED HERETO,
AS IT AND THEY MAY BE AMENDED FROM TIME TO TIME AS HEREIN PROVIDED.

 

1.5          “APPLICABLE LAWS”  SHALL MEAN ALL APPLICABLE LAWS, STATUTES,
REGULATIONS, RULES, ORDINANCES, CODES, LICENSES, PERMITS AND ORDERS, FROM TIME
TO TIME IN EXISTENCE, OF ALL COURTS OF COMPETENT JURISDICTION AND GOVERNMENT
AGENCIES, AND ALL APPLICABLE JUDICIAL AND ADMINISTRATIVE AND REGULATORY DECREES,
JUDGMENTS AND ORDERS, INCLUDING COMMON LAW RULINGS AND DETERMINATIONS, RELATING
TO INJURY TO, OR THE PROTECTION OF, REAL OR PERSONAL PROPERTY OR HUMAN HEALTH OR
THE ENVIRONMENT, INCLUDING, WITHOUT LIMITATION, ALL VALID AND LAWFUL
REQUIREMENTS OF COURTS AND OTHER GOVERNMENT AGENCIES PERTAINING TO REPORTING,
LICENSING, PERMITTING, INVESTIGATION, REMEDIATION AND REMOVAL OF UNDERGROUND
IMPROVEMENTS (INCLUDING, WITHOUT LIMITATION, TREATMENT OR STORAGE TANKS, OR
WATER, GAS OR OIL WELLS), OR EMISSIONS, DISCHARGES, RELEASES OR THREATENED
RELEASES OF HAZARDOUS SUBSTANCES, CHEMICAL SUBSTANCES, PESTICIDES, PETROLEUM OR
PETROLEUM PRODUCTS, POLLUTANTS, CONTAMINANTS OR HAZARDOUS OR TOXIC SUBSTANCES,
MATERIALS OR WASTES WHETHER SOLID, LIQUID OR GASEOUS IN NATURE, INTO THE
ENVIRONMENT, OR RELATING TO THE MANUFACTURE, PROCESSING, DISTRIBUTION, USE,
TREATMENT, STORAGE, DISPOSAL, TRANSPORT OR HANDLING OF HAZARDOUS SUBSTANCES OR
REGULATED MEDICAL WASTES, UNDERGROUND IMPROVEMENTS (INCLUDING, WITHOUT
LIMITATION, TREATMENT OR STORAGE TANKS, OR WATER, GAS OR OIL WELLS), OR
POLLUTANTS, CONTAMINANTS OR HAZARDOUS OR TOXIC SUBSTANCES, MATERIALS OR WASTES,
WHETHER SOLID, LIQUID OR GASEOUS IN NATURE.

 

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1.6          “AWARD”  SHALL MEAN ALL COMPENSATION, SUMS OR OTHER VALUE AWARDED,
PAID OR RECEIVED BY VIRTUE OF A TOTAL OR PARTIAL CONDEMNATION OF ANY PROPERTY
(AFTER DEDUCTION OF ALL REASONABLE LEGAL FEES AND OTHER REASONABLE COSTS AND
EXPENSES, INCLUDING, WITHOUT LIMITATION, EXPERT WITNESS FEES, INCURRED BY
LANDLORD, IN CONNECTION WITH OBTAINING ANY SUCH AWARD).

 

1.7          “BASE GROSS REVENUES”  SHALL MEAN THE AMOUNT OF GROSS REVENUES FOR
THE LEASED PROPERTY FOR THE BASE YEAR, PROVIDED, HOWEVER, THAT IN THE EVENT
THAT, WITH RESPECT TO ANY LEASE YEAR, OR PORTION THEREOF, FOR ANY REASON
(INCLUDING, WITHOUT LIMITATION, A CASUALTY OR CONDEMNATION) THERE SHALL BE A
REDUCTION IN THE NUMBER OF UNITS AVAILABLE AT ANY FACILITY LOCATED AT THE LEASED
PROPERTY OR IN THE SERVICES PROVIDED AT SUCH FACILITY FROM THE NUMBER OF SUCH
UNITS OR THE SERVICES PROVIDED DURING THE BASE YEAR, IN DETERMINING ADDITIONAL
RENT PAYABLE FOR SUCH LEASE YEAR, BASE GROSS REVENUES SHALL BE REDUCED AS
FOLLOWS:  (A) IN THE EVENT OF THE TERMINATION OF THIS AGREEMENT WITH RESPECT TO
ANY PROPERTY PURSUANT TO ARTICLE 10, 11 OR 12, ALL GROSS REVENUES FOR SUCH
PROPERTY FOR THE PERIOD DURING THE BASE YEAR EQUIVALENT TO THE PERIOD AFTER THE
TERMINATION OF THIS AGREEMENT WITH RESPECT TO SUCH PROPERTY SHALL BE SUBTRACTED
FROM BASE GROSS REVENUES; (B) IN THE EVENT OF A PARTIAL CLOSING OF ANY FACILITY
AFFECTING THE NUMBER OF UNITS, OR THE SERVICES PROVIDED, AT SUCH FACILITY, GROSS
REVENUES ATTRIBUTABLE TO UNITS OR SERVICES AT SUCH FACILITY SHALL BE RATABLY
ALLOCATED AMONG ALL UNITS IN SERVICE AT SUCH FACILITY DURING THE BASE YEAR AND
ALL SUCH GROSS REVENUES ATTRIBUTABLE TO UNITS NO LONGER IN SERVICE SHALL BE
SUBTRACTED FROM BASE GROSS REVENUES THROUGHOUT THE PERIOD OF SUCH CLOSING; AND
(C) IN THE EVENT OF ANY OTHER CHANGE IN CIRCUMSTANCES AFFECTING ANY FACILITY,
BASE GROSS REVENUES SHALL BE EQUITABLY ADJUSTED IN SUCH MANNER AS LANDLORD AND
TENANT SHALL REASONABLY AGREE.

 

1.8          “BASE YEAR”  SHALL MEAN, WITH RESPECT TO EACH PROPERTY, THE
CALENDAR YEAR SPECIFIED AS THE BASE YEAR WITH RESPECT TO SUCH PROPERTY ON
SCHEDULE 1 ATTACHED HERETO AND MADE A PART HEREOF.

 

1.9          “BUSINESS DAY”  SHALL MEAN ANY DAY OTHER THAN SATURDAY, SUNDAY, OR
ANY OTHER DAY ON WHICH BANKING INSTITUTIONS IN THE COMMONWEALTH OF MASSACHUSETTS
ARE AUTHORIZED BY LAW OR EXECUTIVE ACTION TO CLOSE.

 

1.10        “CAPITAL ADDITION”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY, ANY
RENOVATION, REPAIR OR IMPROVEMENT TO SUCH PROPERTY, THE COST OF WHICH
CONSTITUTES A CAPITAL EXPENDITURE.

 

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1.11        “CAPITAL EXPENDITURE”  SHALL MEAN ANY EXPENDITURE TREATED AS CAPITAL
IN NATURE IN ACCORDANCE WITH GAAP.

 

1.12        “CHANGE IN CONTROL”  SHALL MEAN (A) THE ACQUISITION BY ANY PERSON,
OR TWO OR MORE PERSONS ACTING IN CONCERT, OF BENEFICIAL OWNERSHIP (WITHIN THE
MEANING OF RULE 13D-3 OF THE SEC) OF 9.8% OR MORE, OR RIGHTS, OPTIONS OR
WARRANTS TO ACQUIRE 9.8% OR MORE, OF THE OUTSTANDING SHARES OF VOTING STOCK OR
OTHER VOTING INTERESTS OF TENANT OR ANY GUARANTOR, AS THE CASE MAY BE, OR THE
POWER TO DIRECT THE MANAGEMENT AND POLICIES OF TENANT OR ANY GUARANTOR, DIRECTLY
OR INDIRECTLY, (B) THE MERGER OR CONSOLIDATION OF TENANT OR ANY GUARANTOR WITH
OR INTO ANY PERSON OR THE MERGER OR CONSOLIDATION OF ANY PERSON INTO TENANT OR
ANY GUARANTOR (OTHER THAN THE MERGER OR CONSOLIDATION OF ANY PERSON INTO TENANT
OR ANY GUARANTOR THAT DOES NOT RESULT IN A CHANGE IN CONTROL OF TENANT OR SUCH
GUARANTOR UNDER CLAUSES (A), (C), (D) OR (E) OF THIS DEFINITION), (C) ANY ONE OR
MORE SALES, CONVEYANCES, DIVIDENDS OR DISTRIBUTIONS TO ANY PERSON OF ALL OR ANY
MATERIAL PORTION OF THE ASSETS (INCLUDING CAPITAL STOCK OR OTHER EQUITY
INTERESTS) OR BUSINESS OF TENANT OR ANY GUARANTOR, WHETHER OR NOT OTHERWISE A
CHANGE IN CONTROL, (D) THE CESSATION, FOR ANY REASON, OF THE INDIVIDUALS WHO AT
THE BEGINNING OF ANY TWENTY-FOUR (24) CONSECUTIVE MONTH PERIOD (COMMENCING ON
THE DATE HEREOF) CONSTITUTED THE BOARD OF DIRECTORS OF TENANT OR ANY GUARANTOR
(TOGETHER WITH ANY NEW DIRECTORS WHOSE ELECTION BY SUCH BOARD OR WHOSE
NOMINATION FOR ELECTION BY THE SHAREHOLDERS OF TENANT OR SUCH GUARANTOR WAS
APPROVED BY A VOTE OF A MAJORITY OF THE DIRECTORS THEN STILL IN OFFICE WHO WERE
EITHER DIRECTORS AT THE BEGINNING OF ANY SUCH PERIOD OR WHOSE ELECTION OR
NOMINATION FOR ELECTION WAS PREVIOUSLY SO APPROVED) TO CONSTITUTE A MAJORITY OF
THE BOARD OF DIRECTORS OF TENANT OR SUCH GUARANTOR THEN IN OFFICE, OR (E) THE
ELECTION TO THE BOARD OF DIRECTORS OF TENANT OR ANY GUARANTOR OF ANY INDIVIDUAL
NOT NOMINATED OR APPOINTED BY VOTE OF A MAJORITY OF THE DIRECTORS OF TENANT OR
SUCH GUARANTOR IN OFFICE IMMEDIATELY PRIOR TO THE NOMINATION OR APPOINTMENT OF
SUCH INDIVIDUAL.

 

1.13        “CLAIM”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN ARTICLE 8.

 

1.14        “CODE”  SHALL MEAN THE INTERNAL REVENUE CODE OF 1986 AND, TO THE
EXTENT APPLICABLE, THE TREASURY REGULATIONS PROMULGATED THEREUNDER, EACH AS FROM
TIME TO TIME AMENDED.

 

1.15        “COMMENCEMENT DATE”  SHALL MEAN, WITH RESPECT TO EACH PROPERTY, THE
CALENDAR DATE SPECIFIED AS THE COMMENCEMENT DATE WITH RESPECT TO SUCH PROPERTY
ON SCHEDULE 1 ATTACHED HERETO AND MADE A PART HEREOF.

 

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1.16        “CONDEMNATION”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY, OR ANY
PORTION THEREOF, (A) THE EXERCISE OF ANY GOVERNMENTAL POWER WITH RESPECT TO SUCH
PROPERTY, WHETHER BY LEGAL PROCEEDINGS OR OTHERWISE, BY A CONDEMNOR OF ITS POWER
OF CONDEMNATION, (B) A VOLUNTARY SALE OR TRANSFER OF SUCH PROPERTY BY LANDLORD
TO ANY CONDEMNOR, EITHER UNDER THREAT OF CONDEMNATION OR WHILE LEGAL PROCEEDINGS
FOR CONDEMNATION ARE PENDING, OR (C) A TAKING OR VOLUNTARY CONVEYANCE OF SUCH
PROPERTY, OR ANY INTEREST THEREIN, OR RIGHT ACCRUING THERETO OR USE THEREOF, AS
THE RESULT OR IN SETTLEMENT OF ANY CONDEMNATION OR OTHER EMINENT DOMAIN
PROCEEDING AFFECTING SUCH PROPERTY, WHETHER OR NOT THE SAME SHALL HAVE ACTUALLY
BEEN COMMENCED.

 

1.17        “CONDEMNOR”  SHALL MEAN ANY PUBLIC OR QUASI-PUBLIC PERSON, HAVING
THE POWER OF CONDEMNATION.

 

1.18        “CONSOLIDATED FINANCIALS”  SHALL MEAN, FOR ANY FISCAL YEAR OR OTHER
ACCOUNTING PERIOD OF FIVE STAR, ANNUAL AUDITED AND QUARTERLY UNAUDITED FINANCIAL
STATEMENTS OF FIVE STAR PREPARED ON A CONSOLIDATED BASIS, INCLUDING FIVE STAR’S
CONSOLIDATED BALANCE SHEET AND THE RELATED STATEMENTS OF INCOME AND CASH FLOWS,
ALL IN REASONABLE DETAIL, AND SETTING FORTH IN COMPARATIVE FORM THE
CORRESPONDING FIGURES FOR THE CORRESPONDING PERIOD IN THE PRECEDING FISCAL YEAR,
AND PREPARED IN ACCORDANCE WITH GAAP THROUGHOUT THE PERIODS REFLECTED.

 

1.19        “DATE OF TAKING”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY, THE DATE
THE CONDEMNOR HAS THE RIGHT TO POSSESSION OF SUCH PROPERTY, OR ANY PORTION
THEREOF, IN CONNECTION WITH A CONDEMNATION.

 

1.20        “DEFAULT”  SHALL MEAN ANY EVENT OR CONDITION WHICH WITH THE GIVING
OF NOTICE AND/OR LAPSE OF TIME WOULD RIPEN INTO AN EVENT OF DEFAULT.

 

1.21        “DISBURSEMENT RATE”  SHALL MEAN AN ANNUAL RATE OF INTEREST, AS OF
THE DATE OF DETERMINATION, EQUAL TO THE GREATER OF (A) EIGHT PERCENT (8%) AND
(B) THE PER ANNUM RATE FOR TEN (10) YEAR U.S. TREASURY OBLIGATIONS AS PUBLISHED
IN THE WALL STREET JOURNAL PLUS THREE HUNDRED (300) BASIS POINTS; PROVIDED,
HOWEVER, THAT IN NO EVENT SHALL THE DISBURSEMENT RATE EXCEED ELEVEN AND ONE-HALF
PERCENT (11.5%).

 

1.22        “DISTRIBUTION”  SHALL MEAN (A) ANY DECLARATION OR PAYMENT OF ANY
DIVIDEND (EXCEPT ORDINARY CASH DIVIDENDS PAYABLE IN COMMON STOCK OR OTHER EQUITY
INTERESTS OF TENANT) ON OR IN RESPECT OF ANY SHARES OF ANY CLASS OF CAPITAL
STOCK OR OTHER EQUITY INTERESTS OF TENANT, (B) ANY PURCHASE, REDEMPTION,
RETIREMENT OR OTHER ACQUISITION OF ANY SHARES OF ANY CLASS OF

 

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CAPITAL STOCK OF A CORPORATION, (C) ANY OTHER DISTRIBUTION ON OR IN RESPECT OF
ANY SHARES OF ANY CLASS OF CAPITAL STOCK OF A CORPORATION OR (D) ANY RETURN OF
CAPITAL TO SHAREHOLDERS.

 

1.23        “EASEMENT AGREEMENT”  SHALL MEAN ANY CONDITIONS, COVENANTS AND
RESTRICTIONS, EASEMENTS, DECLARATIONS, LICENSES AND OTHER AGREEMENTS WHICH ARE
PERMITTED ENCUMBRANCES AND SUCH OTHER AGREEMENTS AS MAY BE GRANTED IN ACCORDANCE
WITH SECTION 19.1.

 

1.24        “ENCUMBRANCE”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 20.1.

 

1.25        “ENTITY”  SHALL MEAN ANY CORPORATION, GENERAL OR LIMITED
PARTNERSHIP, LIMITED LIABILITY COMPANY OR PARTNERSHIP, STOCK COMPANY OR
ASSOCIATION, JOINT VENTURE, ASSOCIATION, COMPANY, TRUST, BANK, TRUST COMPANY,
LAND TRUST, BUSINESS TRUST, COOPERATIVE, ANY GOVERNMENT OR AGENCY, AUTHORITY OR
POLITICAL SUBDIVISION THEREOF OR ANY OTHER ENTITY.

 

1.26        “ENVIRONMENT”  SHALL MEAN SOIL, SURFACE WATERS, GROUND WATERS, LAND,
STREAM, SEDIMENTS, SURFACE OR SUBSURFACE STRATA AND AMBIENT AIR.

 

1.27        “ENVIRONMENTAL OBLIGATION”  SHALL HAVE THE MEANING GIVEN SUCH TERM
IN SECTION 4.4.1.

 

1.28        “ENVIRONMENTAL NOTICE”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 4.4.1.

 

1.29        “EVENT OF DEFAULT”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 12.1.

 

1.30        “EXCESS GROSS REVENUES”  SHALL MEAN THE AMOUNT OF GROSS REVENUES FOR
ANY LEASE YEAR, OR PORTION THEREOF, IN EXCESS OF BASE GROSS REVENUES FOR THE
EQUIVALENT PERIOD DURING THE BASE YEAR.

 

1.31        “EXTENDED TERM”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 2.4.

 

1.32        “FACILITY”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY, THE SKILLED
NURSING/INTERMEDIATE CARE/INDEPENDENT LIVING/ASSISTED LIVING/SPECIAL CARE/GROUP
HOME FACILITY BEING OPERATED OR PROPOSED TO BE OPERATED ON SUCH PROPERTY.

 

1.33        “FACILITY MORTGAGE”  SHALL MEAN ANY ENCUMBRANCE PLACED UPON THE
LEASED PROPERTY, OR ANY PORTION THEREOF, IN ACCORDANCE WITH ARTICLE 20.

 

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1.34        “FACILITY MORTGAGEE”  SHALL MEAN THE HOLDER OF ANY FACILITY
MORTGAGE.

 

1.35        “FINANCIAL OFFICER’S CERTIFICATE”  SHALL MEAN, AS TO ANY PERSON, A
CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER OR CHIEF
ACCOUNTING OFFICER (OR SUCH OFFICERS’ AUTHORIZED DESIGNEE) OF SUCH PERSON, DULY
AUTHORIZED, ACCOMPANYING THE FINANCIAL STATEMENTS REQUIRED TO BE DELIVERED BY
SUCH PERSON PURSUANT TO SECTION 17.2, IN WHICH SUCH OFFICER SHALL CERTIFY
(A) THAT SUCH STATEMENTS HAVE BEEN PROPERLY PREPARED IN ACCORDANCE WITH GAAP AND
ARE TRUE, CORRECT AND COMPLETE IN ALL MATERIAL RESPECTS AND FAIRLY PRESENT THE
CONSOLIDATED FINANCIAL CONDITION OF SUCH PERSON AT AND AS OF THE DATES THEREOF
AND THE RESULTS OF ITS AND THEIR OPERATIONS FOR THE PERIODS COVERED THEREBY, AND
(B) IN THE EVENT THAT THE CERTIFYING PARTY IS AN OFFICER OF TENANT AND THE
CERTIFICATE IS BEING GIVEN IN SUCH CAPACITY, THAT NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING HEREUNDER.

 

1.36        “FISCAL YEAR”  SHALL MEAN THE CALENDAR YEAR OR SUCH OTHER ANNUAL
PERIOD DESIGNATED BY TENANT AND APPROVED BY LANDLORD.

 

1.37        “FIVE STAR”  SHALL MEAN FIVE STAR QUALITY CARE, INC., A MARYLAND
CORPORATION, AND ITS PERMITTED SUCCESSORS AND ASSIGNS.

 

1.38        “FIXED TERM”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN SECTION 2.3.

 

1.39        “FIXTURES”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 2.1(D).

 

1.40        “GAAP”  SHALL MEAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
CONSISTENTLY APPLIED.

 

1.41        “GOVERNMENT AGENCIES”  SHALL MEAN ANY COURT, AGENCY, AUTHORITY,
BOARD (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL PROTECTION, PLANNING AND
ZONING), BUREAU, COMMISSION, DEPARTMENT, OFFICE OR INSTRUMENTALITY OF ANY NATURE
WHATSOEVER OF ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL UNIT OF THE UNITED STATES
OR ANY STATE OR ANY COUNTY OR ANY POLITICAL SUBDIVISION OF ANY OF THE FOREGOING,
WHETHER NOW OR HEREAFTER IN EXISTENCE, HAVING JURISDICTION OVER TENANT OR ANY
PROPERTY, OR ANY PORTION THEREOF, OR ANY FACILITY OPERATED THEREON.

 

1.42        “GROSS REVENUES”  SHALL MEAN, FOR EACH FISCAL YEAR DURING THE TERM,
IN THE AGGREGATE, ALL REVENUES AND RECEIPTS (DETERMINED ON AN ACCRUAL BASIS AND
IN ALL MATERIAL RESPECTS IN

 

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ACCORDANCE WITH GAAP) OF EVERY KIND DERIVED FROM RENTING, USING AND/OR OPERATING
THE LEASED PROPERTY AND PARTS THEREOF, INCLUDING, BUT NOT LIMITED TO:  ALL RENTS
AND REVENUES RECEIVED OR RECEIVABLE FOR THE USE OF OR OTHERWISE BY REASON OF ALL
UNITS, BEDS AND OTHER FACILITIES PROVIDED, MEALS SERVED, SERVICES PERFORMED,
SPACE OR FACILITIES SUBLEASED OR GOODS SOLD ON THE LEASED PROPERTY, OR ANY
PORTION THEREOF, INCLUDING, WITHOUT LIMITATION, ANY OTHER ARRANGEMENTS WITH
THIRD PARTIES RELATING TO THE POSSESSION OR USE OF ANY PORTION OF THE LEASED
PROPERTY; AND PROCEEDS, IF ANY, FROM BUSINESS INTERRUPTION OR OTHER LOSS OF
INCOME INSURANCE; PROVIDED, HOWEVER, THAT GROSS REVENUES SHALL NOT INCLUDE THE
FOLLOWING:  REVENUE FROM PROFESSIONAL FEES OR CHARGES BY PHYSICIANS AND
UNAFFILIATED PROVIDERS OF SERVICES, WHEN AND TO THE EXTENT SUCH CHARGES ARE PAID
OVER TO SUCH PHYSICIANS AND UNAFFILIATED PROVIDERS OF SERVICES, OR ARE
SEPARATELY BILLED AND NOT INCLUDED IN COMPREHENSIVE FEES; CONTRACTUAL ALLOWANCES
(RELATING TO ANY PERIOD DURING THE TERM) FOR BILLINGS NOT PAID BY OR RECEIVED
FROM THE APPROPRIATE GOVERNMENTAL AGENCIES OR THIRD PARTY PROVIDERS; ALLOWANCES
ACCORDING TO GAAP FOR UNCOLLECTIBLE ACCOUNTS, INCLUDING CREDIT CARD ACCOUNTS AND
CHARITY CARE OR OTHER ADMINISTRATIVE DISCOUNTS; ALL PROPER PATIENT BILLING
CREDITS AND ADJUSTMENTS ACCORDING TO GAAP RELATING TO HEALTH CARE ACCOUNTING;
PROVIDER DISCOUNTS FOR HOSPITAL OR OTHER MEDICAL FACILITY UTILIZATION CONTRACTS
AND CREDIT CARD DISCOUNTS; ANY AMOUNTS ACTUALLY PAID BY TENANT FOR THE COST OF
ANY FEDERAL, STATE OR LOCAL GOVERNMENTAL PROGRAMS IMPOSED SPECIALLY TO PROVIDE
OR FINANCE INDIGENT PATIENT CARE; FEDERAL, STATE OR MUNICIPAL EXCISE, SALES,
USE, OCCUPANCY OR SIMILAR TAXES COLLECTED DIRECTLY FROM PATIENTS, CLIENTS OR
RESIDENTS OR INCLUDED AS PART OF THE SALES PRICE OF ANY GOODS OR SERVICES;
INSURANCE PROCEEDS (OTHER THAN PROCEEDS FROM BUSINESS INTERRUPTION OR OTHER LOSS
OF INCOME INSURANCE); AWARD PROCEEDS (OTHER THAN FOR A TEMPORARY CONDEMNATION);
REVENUES ATTRIBUTABLE TO SERVICES ACTUALLY PROVIDED OFF-SITE OR OTHERWISE AWAY
FROM THE LEASED PROPERTY, SUCH AS HOME HEALTH CARE, TO PERSONS THAT ARE NOT
PATIENTS, CLIENTS OR RESIDENTS AT THE LEASED PROPERTY; REVENUES ATTRIBUTABLE TO
CHILD CARE SERVICES PROVIDED PRIMARILY TO EMPLOYEES OF THE LEASED PROPERTY; ANY
PROCEEDS FROM ANY SALE OF THE LEASED PROPERTY OR FROM THE REFINANCING OF ANY
DEBT ENCUMBERING THE LEASED PROPERTY; PROCEEDS FROM THE DISPOSITION OF
FURNISHINGS, FIXTURE AND EQUIPMENT NO LONGER NECESSARY FOR THE OPERATION OF THE
FACILITY LOCATED THEREON; ANY SECURITY DEPOSITS AND OTHER ADVANCE DEPOSITS,
UNTIL AND UNLESS THE SAME ARE FORFEITED TO TENANT OR APPLIED FOR THE PURPOSE FOR
WHICH THEY WERE COLLECTED; AND INTEREST INCOME FROM ANY BANK ACCOUNT OR
INVESTMENT OF TENANT.

 

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1.43        “GUARANTOR”  SHALL MEAN FIVE STAR AND EACH AND EVERY OTHER GUARANTOR
OF TENANT’S OBLIGATIONS UNDER THIS AGREEMENT, AND EACH SUCH GUARANTOR’S
SUCCESSORS AND ASSIGNS.

 

1.44        “GUARANTY”  SHALL MEAN ANY GUARANTY AGREEMENT EXECUTED BY A
GUARANTOR IN FAVOR OF LANDLORD PURSUANT TO WHICH THE PAYMENT OR PERFORMANCE OF
TENANT’S OBLIGATIONS UNDER THIS AGREEMENT ARE GUARANTEED, TOGETHER WITH ALL
MODIFICATIONS, AMENDMENTS AND SUPPLEMENTS THERETO.

 

1.45        “HAZARDOUS SUBSTANCES”  SHALL MEAN ANY SUBSTANCE:

 

(A)           THE PRESENCE OF WHICH REQUIRES OR MAY HEREAFTER REQUIRE
NOTIFICATION, INVESTIGATION OR REMEDIATION UNDER ANY FEDERAL, STATE OR LOCAL
STATUTE, REGULATION, RULE, ORDINANCE, ORDER, ACTION OR POLICY; OR

 

(B)           WHICH IS OR BECOMES DEFINED AS A “HAZARDOUS WASTE”, “HAZARDOUS
MATERIAL” OR “HAZARDOUS SUBSTANCE” OR “POLLUTANT” OR “CONTAMINANT” UNDER ANY
PRESENT OR FUTURE FEDERAL, STATE OR LOCAL STATUTE, REGULATION, RULE OR ORDINANCE
OR AMENDMENTS THERETO INCLUDING, WITHOUT LIMITATION, THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT (42 U.S.C. SECTION 9601
ET SEQ.) AND THE RESOURCE CONSERVATION AND RECOVERY ACT (42 U.S.C. SECTION 6901
ET SEQ.) AND THE REGULATIONS PROMULGATED THEREUNDER; OR

 

(C)           WHICH IS TOXIC, EXPLOSIVE, CORROSIVE, FLAMMABLE, INFECTIOUS,
RADIOACTIVE, CARCINOGENIC, MUTAGENIC OR OTHERWISE HAZARDOUS AND IS OR BECOMES
REGULATED BY ANY GOVERNMENTAL AUTHORITY, AGENCY, DEPARTMENT, COMMISSION, BOARD,
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES, ANY STATE OF THE UNITED STATES,
OR ANY POLITICAL SUBDIVISION THEREOF; OR

 

(D)           THE PRESENCE OF WHICH ON ANY PROPERTY, OR ANY PORTION THEREOF,
CAUSES OR MATERIALLY THREATENS TO CAUSE AN UNLAWFUL NUISANCE UPON SUCH PROPERTY,
OR ANY PORTION THEREOF, OR TO ADJACENT PROPERTIES OR POSES OR MATERIALLY
THREATENS TO POSE A HAZARD TO SUCH PROPERTY, OR ANY PORTION THEREOF, OR TO THE
HEALTH OR SAFETY OF PERSONS ON OR ABOUT SUCH PROPERTY, OR ANY PORTION THEREOF;
OR

 

(E)           WITHOUT LIMITATION, WHICH CONTAINS GASOLINE, DIESEL FUEL OR OTHER
PETROLEUM HYDROCARBONS OR VOLATILE ORGANIC COMPOUNDS; OR

 

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(F)            WITHOUT LIMITATION, WHICH CONTAINS POLYCHLORINATED BIPHENYLS
(PCBS) OR ASBESTOS OR UREA FORMALDEHYDE FOAM INSULATION; OR

 

(G)           WITHOUT LIMITATION, WHICH CONTAINS OR EMITS RADIOACTIVE PARTICLES,
WAVES OR MATERIAL; OR

 

(H)           WITHOUT LIMITATION, CONSTITUTES REGULATED MEDICAL WASTES.

 

1.46        “IMMEDIATE FAMILY”  SHALL MEAN, WITH RESPECT TO ANY INDIVIDUAL, SUCH
INDIVIDUAL’S SPOUSE, PARENTS, BROTHERS, SISTERS, CHILDREN (NATURAL OR ADOPTED),
STEPCHILDREN, GRANDCHILDREN, GRANDPARENTS, PARENTS-IN-LAW, BROTHERS-IN-LAW,
SISTERS-IN-LAW, NEPHEWS AND NIECES.

 

1.47        “IMPOSITIONS”  SHALL MEAN, COLLECTIVELY, ALL TAXES (INCLUDING,
WITHOUT LIMITATION, ALL TAXES IMPOSED UNDER THE LAWS OF ANY STATE, AS SUCH LAWS
MAY BE AMENDED FROM TIME TO TIME, AND ALL AD VALOREM, SALES AND USE, OR SIMILAR
TAXES AS THE SAME RELATE TO OR ARE IMPOSED UPON LANDLORD, TENANT OR THE BUSINESS
CONDUCTED UPON THE LEASED PROPERTY), ASSESSMENTS (INCLUDING, WITHOUT LIMITATION,
ALL ASSESSMENTS FOR PUBLIC IMPROVEMENTS OR BENEFIT, WHETHER OR NOT COMMENCED OR
COMPLETED PRIOR TO THE DATE HEREOF), GROUND RENTS (INCLUDING ANY MINIMUM RENT
UNDER ANY GROUND LEASE, AND ANY ADDITIONAL RENT OR CHARGES THEREUNDER), WATER,
SEWER OR OTHER RENTS AND CHARGES, EXCISES, TAX LEVIES, FEES (INCLUDING, WITHOUT
LIMITATION, LICENSE, PERMIT, INSPECTION, AUTHORIZATION AND SIMILAR FEES), AND
ALL OTHER GOVERNMENTAL CHARGES, IN EACH CASE WHETHER GENERAL OR SPECIAL,
ORDINARY OR EXTRAORDINARY, FORESEEN OR UNFORESEEN, OF EVERY CHARACTER IN RESPECT
OF THE LEASED PROPERTY OR THE BUSINESS CONDUCTED THEREON BY TENANT (INCLUDING
ALL INTEREST AND PENALTIES THEREON DUE TO ANY FAILURE IN PAYMENT BY TENANT),
WHICH AT ANY TIME PRIOR TO, DURING OR IN RESPECT OF THE TERM HEREOF MAY BE
ASSESSED OR IMPOSED ON OR IN RESPECT OF OR BE A LIEN UPON (A) LANDLORD’S
INTEREST IN THE LEASED PROPERTY, (B) THE LEASED PROPERTY OR ANY PART THEREOF OR
ANY RENT THEREFROM OR ANY ESTATE, RIGHT, TITLE OR INTEREST THEREIN, OR (C) ANY
OCCUPANCY, OPERATION, USE OR POSSESSION OF, OR SALES FROM, OR ACTIVITY CONDUCTED
ON, OR IN CONNECTION WITH THE LEASED PROPERTY OR THE LEASING OR USE OF THE
LEASED PROPERTY OR ANY PART THEREOF BY TENANT; PROVIDED, HOWEVER, THAT NOTHING
CONTAINED HEREIN SHALL BE CONSTRUED TO REQUIRE TENANT TO PAY AND THE TERM
“IMPOSITIONS” SHALL NOT INCLUDE (I) ANY TAX BASED ON NET INCOME IMPOSED ON
LANDLORD, (II) ANY NET REVENUE TAX OF LANDLORD, (III) ANY TRANSFER FEE (BUT
EXCLUDING ANY MORTGAGE OR SIMILAR TAX PAYABLE IN CONNECTION WITH A FACILITY
MORTGAGE) OR OTHER TAX IMPOSED WITH RESPECT TO THE SALE, EXCHANGE OR OTHER
DISPOSITION

 

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BY LANDLORD OF THE LEASED PROPERTY OR THE PROCEEDS THEREOF, (IV) ANY SINGLE
BUSINESS, GROSS RECEIPTS TAX, TRANSACTION PRIVILEGE, RENT OR SIMILAR TAXES AS
THE SAME RELATE TO OR ARE IMPOSED UPON LANDLORD, (V) ANY INTEREST OR PENALTIES
IMPOSED ON LANDLORD AS A RESULT OF THE FAILURE OF LANDLORD TO FILE ANY RETURN OR
REPORT TIMELY AND IN THE FORM PRESCRIBED BY LAW OR TO PAY ANY TAX OR IMPOSITION,
EXCEPT TO THE EXTENT SUCH FAILURE IS A RESULT OF A BREACH BY TENANT OF ITS
OBLIGATIONS PURSUANT TO SECTION 3.1.3, (VI) ANY IMPOSITIONS IMPOSED ON LANDLORD
THAT ARE A RESULT OF LANDLORD NOT BEING CONSIDERED A “UNITED STATES PERSON” AS
DEFINED IN SECTION 7701(A)(30) OF THE CODE, (VII) ANY IMPOSITIONS THAT ARE
ENACTED OR ADOPTED BY THEIR EXPRESS TERMS AS A SUBSTITUTE FOR ANY TAX THAT WOULD
NOT HAVE BEEN PAYABLE BY TENANT PURSUANT TO THE TERMS OF THIS AGREEMENT OR
(VIII) ANY IMPOSITIONS IMPOSED AS A RESULT OF A BREACH OF COVENANT OR
REPRESENTATION BY LANDLORD IN ANY AGREEMENT GOVERNING LANDLORD’S CONDUCT OR
OPERATION OR AS A RESULT OF THE NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD.

 

1.48        “INCIDENTAL DOCUMENTS”  SHALL MEAN, COLLECTIVELY, ANY GUARANTY, ANY
SECURITY AGREEMENT AND ANY PLEDGE AGREEMENT.

 

1.49        “INDEBTEDNESS”  SHALL MEAN ALL OBLIGATIONS, CONTINGENT OR OTHERWISE,
WHICH IN ACCORDANCE WITH GAAP SHOULD BE REFLECTED ON THE OBLIGOR’S BALANCE SHEET
AS LIABILITIES.

 

1.50        “INSURANCE REQUIREMENTS”  SHALL MEAN ALL TERMS OF ANY INSURANCE
POLICY REQUIRED BY THIS AGREEMENT AND ALL REQUIREMENTS OF THE ISSUER OF ANY SUCH
POLICY AND ALL ORDERS, RULES AND REGULATIONS AND ANY OTHER REQUIREMENTS OF THE
NATIONAL BOARD OF FIRE UNDERWRITERS (OR ANY OTHER BODY EXERCISING SIMILAR
FUNCTIONS) BINDING UPON LANDLORD, TENANT, ANY MANAGER OR THE LEASED PROPERTY.

 

1.51        “INTEREST RATE”  SHALL MEAN, WITH RESPECT TO EACH PROPERTY, THE PER
ANNUM INTEREST RATE SPECIFIED AS THE INTEREST RATE WITH RESPECT TO SUCH PROPERTY
ON SCHEDULE 1 ATTACHED HERETO AND MADE A PART HEREOF.

 

1.52        “LAND”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN SECTION 2.1(A).

 

1.53        “LANDLORD”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN THE PREAMBLES
TO THIS AGREEMENT AND SHALL ALSO INCLUDE THEIR RESPECTIVE PERMITTED SUCCESSORS
AND ASSIGNS.

 

1.54        “LANDLORD DEFAULT”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
ARTICLE 14.

 

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1.55        “LANDLORD LIENS”  SHALL MEAN LIENS ON OR AGAINST THE LEASED PROPERTY
OR ANY PAYMENT OF RENT (A) WHICH RESULT FROM ANY ACT OF, OR ANY CLAIM AGAINST,
LANDLORD OR ANY OWNER OF A DIRECT OR INDIRECT INTEREST IN THE LEASED PROPERTY
(OTHER THAN THE LESSOR UNDER ANY GROUND LEASE AFFECTING ANY PORTION OF THE
LEASED PROPERTY), OR WHICH RESULT FROM ANY VIOLATION BY LANDLORD OF ANY TERMS OF
THIS AGREEMENT, OR (B) WHICH RESULT FROM LIENS IN FAVOR OF ANY TAXING AUTHORITY
BY REASON OF ANY TAX OWED BY LANDLORD OR ANY FEE OWNER OF A DIRECT OR INDIRECT
INTEREST IN THE LEASED PROPERTY (OTHER THAN THE LESSOR UNDER ANY GROUND LEASE
AFFECTING ANY PORTION OF THE LEASED PROPERTY); PROVIDED, HOWEVER, THAT “LANDLORD
LIEN” SHALL NOT INCLUDE ANY LIEN RESULTING FROM ANY TAX FOR WHICH TENANT IS
OBLIGATED TO PAY OR INDEMNIFY LANDLORD AGAINST UNTIL SUCH TIME AS TENANT SHALL
HAVE ALREADY PAID TO OR ON BEHALF OF LANDLORD THE TAX OR THE REQUIRED INDEMNITY
WITH RESPECT TO THE SAME.

 

1.56        “LEASE YEAR”  SHALL MEAN ANY FISCAL YEAR OR PORTION THEREOF DURING
THE TERM.

 

1.57        “LEASED IMPROVEMENTS”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 2.1(B).

 

1.58        “LEASED INTANGIBLE PROPERTY”  SHALL MEAN ALL AGREEMENTS, SERVICE
CONTRACTS, EQUIPMENT LEASES, BOOKING AGREEMENTS AND OTHER ARRANGEMENTS OR
AGREEMENTS AFFECTING THE OWNERSHIP, REPAIR, MAINTENANCE, MANAGEMENT, LEASING OR
OPERATION OF THE LEASED PROPERTY, OR ANY PORTION THEREOF, TO WHICH LANDLORD IS A
PARTY; ALL BOOKS, RECORDS AND FILES RELATING TO THE LEASING, MAINTENANCE,
MANAGEMENT OR OPERATION OF THE LEASED PROPERTY, OR ANY PORTION THEREOF,
BELONGING TO LANDLORD; ALL TRANSFERABLE OR ASSIGNABLE PERMITS, CERTIFICATES OF
OCCUPANCY, OPERATING PERMITS, SIGN PERMITS, DEVELOPMENT RIGHTS AND APPROVALS,
CERTIFICATES, LICENSES, WARRANTIES AND GUARANTEES, RIGHTS TO DEPOSITS, TRADE
NAMES, SERVICE MARKS, TELEPHONE EXCHANGE NUMBERS IDENTIFIED WITH THE LEASED
PROPERTY, AND ALL OTHER TRANSFERABLE INTANGIBLE PROPERTY, MISCELLANEOUS RIGHTS,
BENEFITS AND PRIVILEGES OF ANY KIND OR CHARACTER BELONGING TO LANDLORD WITH
RESPECT TO THE LEASED PROPERTY.

 

1.59        “LEASED PROPERTY”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 2.1.

 

1.60        “LEGAL REQUIREMENTS”  SHALL MEAN ALL FEDERAL, STATE, COUNTY,
MUNICIPAL AND OTHER GOVERNMENTAL STATUTES, LAWS, RULES, ORDERS, REGULATIONS,
ORDINANCES, JUDGMENTS, DECREES AND INJUNCTIONS AFFECTING THE LEASED PROPERTY OR
THE MAINTENANCE, CONSTRUCTION, ALTERATION OR OPERATION THEREOF, WHETHER NOW OR
HEREAFTER ENACTED OR IN EXISTENCE, INCLUDING, WITHOUT

 

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LIMITATION, (A) ALL PERMITS, LICENSES, AUTHORIZATIONS, CERTIFICATES OF NEED,
AUTHORIZATIONS AND REGULATIONS NECESSARY TO OPERATE ANY PROPERTY FOR ITS
PERMITTED USE, AND (B) ALL COVENANTS, AGREEMENTS, RESTRICTIONS AND ENCUMBRANCES
CONTAINED IN ANY INSTRUMENTS AT ANY TIME IN FORCE AFFECTING ANY PROPERTY,
INCLUDING THOSE WHICH MAY (I) REQUIRE MATERIAL REPAIRS, MODIFICATIONS OR
ALTERATIONS IN OR TO ANY PROPERTY OR (II) IN ANY WAY MATERIALLY AND ADVERSELY
AFFECT THE USE AND ENJOYMENT THEREOF, BUT EXCLUDING ANY REQUIREMENTS ARISING AS
A RESULT OF LANDLORD’S STATUS AS A REAL ESTATE INVESTMENT TRUST.

 

1.61        “LIEN”  SHALL MEAN ANY MORTGAGE, SECURITY INTEREST, PLEDGE,
COLLATERAL ASSIGNMENT, OR OTHER ENCUMBRANCE, LIEN OR CHARGE OF ANY KIND, OR ANY
TRANSFER OF PROPERTY OR ASSETS FOR THE PURPOSE OF SUBJECTING THE SAME TO THE
PAYMENT OF INDEBTEDNESS OR PERFORMANCE OF ANY OTHER OBLIGATION IN PRIORITY TO
PAYMENT OF GENERAL CREDITORS.

 

1.62        “MANAGER”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY, THE OPERATOR OR
MANAGER UNDER ANY MANAGEMENT AGREEMENT FROM TIME TO TIME IN EFFECT WITH RESPECT
TO SUCH PROPERTY, AND ITS PERMITTED SUCCESSORS AND ASSIGNS.

 

1.63        “MANAGEMENT AGREEMENT”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY,
ANY OPERATING OR MANAGEMENT AGREEMENT FROM TIME TO TIME ENTERED INTO BY TENANT
WITH RESPECT TO SUCH PROPERTY IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF
THIS AGREEMENT, TOGETHER WITH ALL AMENDMENTS, MODIFICATIONS AND SUPPLEMENTS
THERETO.

 

1.64        “MASTER LEASE AGREEMENT NO. 1”  SHALL MEAN THAT CERTAIN AMENDED AND
RESTATED MASTER LEASE AGREEMENT (LEASE NO. 1), DATED AS OF JUNE 30, 2008, AMONG
CERTAIN ENTITIES COMPRISING LANDLORD, CERTAIN OTHER AFFILIATES OF LANDLORD AND
TENANT, AS IT MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM
TIME TO TIME.

 

1.65        “MINIMUM RENT”  SHALL MEAN THE SUM OF FOURTEEN MILLION THREE HUNDRED
THIRTY-SEVEN THOUSAND SEVEN HUNDRED SEVENTY-ONE AND 00/100S DOLLARS
($14,337,771.00) PER ANNUM.

 

1.66        “NOTICE”  SHALL MEAN A NOTICE GIVEN IN ACCORDANCE WITH
SECTION 23.10.

 

1.67        “OFFICER’S CERTIFICATE”  SHALL MEAN A CERTIFICATE SIGNED BY AN
OFFICER OR OTHER DULY AUTHORIZED INDIVIDUAL OF THE CERTIFYING ENTITY DULY
AUTHORIZED BY THE BOARD OF DIRECTORS OR OTHER GOVERNING BODY OF THE CERTIFYING
ENTITY.

 

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1.68        “ORIGINAL LEASE”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN THE
RECITALS TO THIS AGREEMENT.

 

1.69        “OVERDUE RATE”  SHALL MEAN, ON ANY DATE, A PER ANNUM RATE OF
INTEREST EQUAL TO THE LESSER OF FIFTEEN PERCENT (15%) AND THE MAXIMUM RATE THEN
PERMITTED UNDER APPLICABLE LAW.

 

1.70        “PARENT”  SHALL MEAN, WITH RESPECT TO ANY PERSON, ANY PERSON WHICH
OWNS DIRECTLY, OR INDIRECTLY THROUGH ONE OR MORE SUBSIDIARIES OR AFFILIATED
PERSONS, TWENTY PERCENT (20%) OR MORE OF THE VOTING OR BENEFICIAL INTEREST IN,
OR OTHERWISE HAS THE RIGHT OR POWER (WHETHER BY CONTRACT, THROUGH OWNERSHIP OF
SECURITIES OR OTHERWISE) TO CONTROL, SUCH PERSON.

 

1.71        “PERMITTED ENCUMBRANCES”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY,
ALL RIGHTS, RESTRICTIONS, AND EASEMENTS OF RECORD SET FORTH ON SCHEDULE B TO THE
APPLICABLE OWNER’S OR LEASEHOLD TITLE INSURANCE POLICY ISSUED TO LANDLORD WITH
RESPECT TO SUCH PROPERTY, PLUS ANY OTHER ENCUMBRANCES AS MAY HAVE BEEN GRANTED
OR CAUSED BY LANDLORD OR OTHERWISE CONSENTED TO IN WRITING BY LANDLORD FROM TIME
TO TIME.

 

1.72        “PERMITTED LIENS”  SHALL MEAN ANY LIENS GRANTED IN ACCORDANCE WITH
SECTION 21.8(A).

 

1.73        “PERMITTED USE”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY, ANY USE
OF SUCH PROPERTY PERMITTED PURSUANT TO SECTION 4.1.1.

 

1.74        “PERSON”  SHALL MEAN ANY INDIVIDUAL OR ENTITY, AND THE HEIRS,
EXECUTORS, ADMINISTRATORS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS OF SUCH
PERSON WHERE THE CONTEXT SO ADMITS.

 

1.75        “PLEDGE AGREEMENT”  SHALL MEAN ANY PLEDGE AGREEMENT MADE IN FAVOR OF
LANDLORD WITH RESPECT TO THE STOCK OR OTHER EQUITY INTERESTS OF TENANT OR ANY
ASSIGNEE, SUBTENANT OR OTHER TRANSFEREE, AS IT OR THEY MAY BE AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME.

 

1.76        “PROPERTY”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN SECTION 2.1.

 

1.77        “PROVIDER AGREEMENTS”  SHALL MEAN ALL PARTICIPATION, PROVIDER AND
REIMBURSEMENT AGREEMENTS OR ARRANGEMENTS NOW OR HEREAFTER IN EFFECT FOR THE
BENEFIT OF TENANT OR ANY MANAGER IN CONNECTION WITH THE OPERATION OF ANY
FACILITY RELATING TO ANY RIGHT OF PAYMENT OR OTHER CLAIM ARISING OUT OF OR IN
CONNECTION WITH TENANT’S PARTICIPATION IN ANY THIRD PARTY PAYOR PROGRAM.

 

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1.78        “RECORDS”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN SECTION 7.2.

 

1.79        “REGULATED MEDICAL WASTES”  SHALL MEAN ALL MATERIALS GENERATED BY
TENANT, SUBTENANTS, PATIENTS, OCCUPANTS OR THE OPERATORS OF THE LEASED
PROPERTIES WHICH ARE NOW OR MAY HEREAFTER BE SUBJECT TO REGULATION PURSUANT TO
THE MATERIAL WASTE TRACKING ACT OF 1988, OR ANY APPLICABLE LAWS PROMULGATED BY
ANY GOVERNMENT AGENCIES.

 

1.80        “RENT”  SHALL MEAN, COLLECTIVELY, THE MINIMUM RENT, ADDITIONAL RENT
AND ADDITIONAL CHARGES.

 

1.81        “SEC”  SHALL MEAN THE SECURITIES AND EXCHANGE COMMISSION.

 

1.82        “SECURITY AGREEMENT”  SHALL MEAN ANY SECURITY AGREEMENT MADE BY
TENANT OR ANY ASSIGNEE, SUBTENANT OR OTHER TRANSFEREE FOR THE BENEFIT OF
LANDLORD, AS IT OR THEY MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME.

 

1.83        “STATE”  SHALL MEAN, WITH RESPECT TO ANY PROPERTY, THE STATE,
COMMONWEALTH OR DISTRICT IN WHICH THE SUCH PROPERTY IS LOCATED.

 

1.84        “SUBORDINATED CREDITOR”  SHALL MEAN ANY CREDITOR OF TENANT WHICH IS
A PARTY TO A SUBORDINATION AGREEMENT IN FAVOR OF LANDLORD.

 

1.85        “SUBORDINATION AGREEMENT”  SHALL MEAN ANY AGREEMENT (AND ANY
AMENDMENTS THERETO) EXECUTED BY A SUBORDINATED CREDITOR PURSUANT TO WHICH THE
PAYMENT AND PERFORMANCE OF TENANT’S OBLIGATIONS TO SUCH SUBORDINATED CREDITOR
ARE SUBORDINATED TO THE PAYMENT AND PERFORMANCE OF TENANT’S OBLIGATIONS TO
LANDLORD UNDER THIS AGREEMENT.

 

1.86        “SUBSIDIARY”  SHALL MEAN, WITH RESPECT TO ANY PERSON, ANY ENTITY
(A) IN WHICH SUCH PERSON OWNS DIRECTLY, OR INDIRECTLY THROUGH ONE OR MORE
SUBSIDIARIES, TWENTY PERCENT (20%) OR MORE OF THE VOTING OR BENEFICIAL INTEREST
OR (B) WHICH SUCH PERSON OTHERWISE HAS THE RIGHT OR POWER TO CONTROL (WHETHER BY
CONTRACT, THROUGH OWNERSHIP OF SECURITIES OR OTHERWISE).

 

1.87        “SUCCESSOR LANDLORD”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 20.2.

 

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1.88                        “TENANT”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
THE PREAMBLES TO THIS AGREEMENT AND SHALL ALSO INCLUDE ITS PERMITTED SUCCESSORS
AND ASSIGNS.

 

1.89                        “TENANT’S PERSONAL PROPERTY”  SHALL MEAN ALL MOTOR
VEHICLES AND CONSUMABLE INVENTORY AND SUPPLIES, FURNITURE, FURNISHINGS,
EQUIPMENT, MOVABLE WALLS AND PARTITIONS, EQUIPMENT AND MACHINERY AND ALL OTHER
TANGIBLE PERSONAL PROPERTY OF TENANT AND TENANT’S RECEIVABLES, IF ANY, ACQUIRED
BY TENANT ON AND AFTER THE APPLICABLE COMMENCEMENT DATE FOR ANY PROPERTY AND
LOCATED AT SUCH PROPERTY OR USED IN TENANT’S BUSINESS AT THE LEASED PROPERTY AND
ALL MODIFICATIONS, REPLACEMENTS, ALTERATIONS AND ADDITIONS TO SUCH PERSONAL
PROPERTY INSTALLED AT THE EXPENSE OF TENANT, OTHER THAN ANY ITEMS INCLUDED
WITHIN THE DEFINITION OF FIXTURES.

 

1.90                        “TERM”  SHALL MEAN, COLLECTIVELY, THE FIXED TERM AND
THE EXTENDED TERM, TO THE EXTENT PROPERLY EXERCISED PURSUANT TO THE PROVISIONS
OF SECTION 2.4, UNLESS SOONER TERMINATED PURSUANT TO THE PROVISIONS OF THIS
AGREEMENT.

 

1.91                        “THIRD PARTY PAYOR PROGRAMS”  SHALL MEAN ALL THIRD
PARTY PAYOR PROGRAMS IN WHICH TENANT PRESENTLY OR IN THE FUTURE MAY PARTICIPATE,
INCLUDING, WITHOUT LIMITATION, MEDICARE, MEDICAID, CHAMPUS, BLUE CROSS AND/OR
BLUE SHIELD, MANAGED CARE PLANS, OTHER PRIVATE INSURANCE PROGRAMS AND EMPLOYEE
ASSISTANCE PROGRAMS.

 

1.92                        “THIRD PARTY PAYORS”  SHALL MEAN MEDICARE, MEDICAID,
CHAMPUS, BLUE CROSS AND/OR BLUE SHIELD, PRIVATE INSURERS AND ANY OTHER PERSON
WHICH PRESENTLY OR IN THE FUTURE MAINTAINS THIRD PARTY PAYOR PROGRAMS.

 

1.93                        “UNSUITABLE FOR ITS PERMITTED USE”  SHALL MEAN, WITH
RESPECT TO ANY FACILITY, A STATE OR CONDITION OF SUCH FACILITY SUCH THAT
(A) FOLLOWING ANY DAMAGE OR DESTRUCTION INVOLVING A FACILITY, (I) SUCH FACILITY
CANNOT BE OPERATED ON A COMMERCIALLY PRACTICABLE BASIS FOR ITS PERMITTED USE AND
IT CANNOT REASONABLY BE EXPECTED TO BE RESTORED TO SUBSTANTIALLY THE SAME
CONDITION AS EXISTED IMMEDIATELY BEFORE SUCH DAMAGE OR DESTRUCTION, AND AS
OTHERWISE REQUIRED BY SECTION 10.2.4, WITHIN TWELVE (12) MONTHS FOLLOWING SUCH
DAMAGE OR DESTRUCTION OR SUCH LONGER PERIOD OF TIME AS TO WHICH BUSINESS
INTERRUPTION INSURANCE IS AVAILABLE TO COVER RENT AND OTHER COSTS RELATED TO THE
APPLICABLE PROPERTY FOLLOWING SUCH DAMAGE OR DESTRUCTION, (II) THE DAMAGE OR
DESTRUCTION, IF UNINSURED, EXCEEDS $1,000,000 OR (III) THE COST OF SUCH
RESTORATION EXCEEDS TEN PERCENT (10%) OF THE FAIR MARKET VALUE OF SUCH PROPERTY
IMMEDIATELY PRIOR TO SUCH DAMAGE OR DESTRUCTION, OR (B) AS THE RESULT OF A
PARTIAL TAKING BY

 

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CONDEMNATION, SUCH FACILITY CANNOT BE OPERATED, IN THE GOOD FAITH JUDGMENT OF
TENANT, ON A COMMERCIALLY PRACTICABLE BASIS FOR ITS PERMITTED USE.

 

1.94                        “WORK”  SHALL HAVE THE MEANING GIVEN SUCH TERM IN
SECTION 10.2.4.

 

ARTICLE 2

 

LEASED PROPERTY AND TERM

 

2.1                               LEASED PROPERTY.  UPON AND SUBJECT TO THE
TERMS AND CONDITIONS HEREINAFTER SET FORTH, LANDLORD LEASES TO TENANT AND TENANT
LEASES FROM LANDLORD ALL OF LANDLORD’S RIGHT, TITLE AND INTEREST IN AND TO ALL
OF THE FOLLOWING (EACH OF ITEMS (A) THROUGH (G) BELOW WHICH RELATES TO ANY
SINGLE FACILITY, A “PROPERTY” AND, COLLECTIVELY, THE “LEASED PROPERTY”):

 

(A)                                  THOSE CERTAIN TRACTS, PIECES AND PARCELS OF
LAND, AS MORE PARTICULARLY DESCRIBED IN EXHIBITS A-1 THROUGH A-34 ATTACHED
HERETO AND MADE A PART HEREOF (THE “LAND”);

 

(B)                                 ALL BUILDINGS, STRUCTURES AND OTHER
IMPROVEMENTS OF EVERY KIND INCLUDING, BUT NOT LIMITED TO, ALLEYWAYS AND
CONNECTING TUNNELS, SIDEWALKS, UTILITY PIPES, CONDUITS AND LINES (ON-SITE AND
OFF-SITE), PARKING AREAS AND ROADWAYS APPURTENANT TO SUCH BUILDINGS AND
STRUCTURES PRESENTLY SITUATED UPON THE LAND (COLLECTIVELY, THE “LEASED
IMPROVEMENTS”);

 

(C)                                  ALL EASEMENTS, RIGHTS AND APPURTENANCES
RELATING TO THE LAND AND THE LEASED IMPROVEMENTS;

 

(D)                                 ALL EQUIPMENT, MACHINERY, FIXTURES, AND
OTHER ITEMS OF PROPERTY, NOW OR HEREAFTER PERMANENTLY AFFIXED TO OR INCORPORATED
INTO THE LEASED IMPROVEMENTS, INCLUDING, WITHOUT LIMITATION, ALL FURNACES,
BOILERS, HEATERS, ELECTRICAL EQUIPMENT, HEATING, PLUMBING, LIGHTING,
VENTILATING, REFRIGERATING, INCINERATION, AIR AND WATER POLLUTION CONTROL, WASTE
DISPOSAL, AIR-COOLING AND AIR-CONDITIONING SYSTEMS AND APPARATUS, SPRINKLER
SYSTEMS AND FIRE AND THEFT PROTECTION EQUIPMENT, ALL OF WHICH, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ARE HEREBY DEEMED BY THE PARTIES HERETO TO CONSTITUTE
REAL ESTATE, TOGETHER WITH ALL REPLACEMENTS, MODIFICATIONS, ALTERATIONS AND
ADDITIONS THERETO, BUT SPECIFICALLY EXCLUDING ALL ITEMS INCLUDED

 

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WITHIN THE CATEGORY OF TENANT’S PERSONAL PROPERTY (COLLECTIVELY, THE
“FIXTURES”);

 

(E)                                  ALL MACHINERY, EQUIPMENT, FURNITURE,
FURNISHINGS, MOVEABLE WALLS OR PARTITIONS, COMPUTERS OR TRADE FIXTURES OR OTHER
PERSONAL PROPERTY OF ANY KIND OR DESCRIPTION USED OR USEFUL IN TENANT’S BUSINESS
ON OR IN THE LEASED IMPROVEMENTS, AND LOCATED ON OR IN THE LEASED IMPROVEMENTS,
AND ALL MODIFICATIONS, REPLACEMENTS, ALTERATIONS AND ADDITIONS TO SUCH PERSONAL
PROPERTY, EXCEPT ITEMS, IF ANY, INCLUDED WITHIN THE CATEGORY OF FIXTURES, BUT
SPECIFICALLY EXCLUDING ALL ITEMS INCLUDED WITHIN THE CATEGORY OF TENANT’S
PERSONAL PROPERTY;

 

(F)                                    ALL OF THE LEASED INTANGIBLE PROPERTY;
AND

 

(G)                                 ANY AND ALL LEASES OF SPACE IN THE LEASED
IMPROVEMENTS.

 

2.2                               CONDITION OF LEASED PROPERTY.  TENANT
ACKNOWLEDGES RECEIPT AND DELIVERY OF POSSESSION OF THE LEASED PROPERTY AND
TENANT ACCEPTS THE LEASED PROPERTY IN ITS “AS IS” CONDITION, SUBJECT TO THE
RIGHTS OF PARTIES IN POSSESSION, THE EXISTING STATE OF TITLE, INCLUDING ALL
COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, MINERAL LEASES, EASEMENTS AND
OTHER MATTERS OF RECORD OR THAT ARE VISIBLE OR APPARENT ON THE LEASED  PROPERTY,
ALL APPLICABLE LEGAL REQUIREMENTS, THE LIEN OF ANY FINANCING INSTRUMENTS,
MORTGAGES AND DEEDS OF TRUST EXISTING PRIOR TO THE APPLICABLE COMMENCEMENT DATE
FOR ANY PROPERTY OR PERMITTED BY THE TERMS OF THIS AGREEMENT, AND SUCH OTHER
MATTERS WHICH WOULD BE DISCLOSED BY AN INSPECTION OF THE LEASED PROPERTY AND THE
RECORD TITLE THERETO OR BY AN ACCURATE SURVEY THEREOF.  TENANT REPRESENTS THAT
IT HAS INSPECTED THE LEASED PROPERTY AND ALL OF THE FOREGOING AND HAS FOUND THE
CONDITION THEREOF SATISFACTORY AND IS NOT RELYING ON ANY REPRESENTATION OR
WARRANTY OF LANDLORD OR LANDLORD’S AGENTS OR EMPLOYEES WITH RESPECT THERETO AND
TENANT WAIVES ANY CLAIM OR ACTION AGAINST LANDLORD IN RESPECT OF THE CONDITION
OF THE LEASED PROPERTY.  LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS
OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO
ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR
OTHERWISE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR
PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.  TO THE
MAXIMUM EXTENT PERMITTED BY LAW, HOWEVER, LANDLORD HEREBY ASSIGNS TO TENANT ALL
OF LANDLORD’S RIGHTS TO PROCEED AGAINST ANY PREDECESSOR IN INTEREST OR INSURER
FOR BREACHES OF WARRANTIES OR REPRESENTATIONS OR FOR LATENT DEFECTS IN THE
LEASED PROPERTY.  LANDLORD SHALL FULLY COOPERATE WITH TENANT IN

 

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THE PROSECUTION OF ANY SUCH CLAIMS, IN LANDLORD’S OR TENANT’S NAME, ALL AT
TENANT’S SOLE COST AND EXPENSE.  TENANT SHALL INDEMNIFY, DEFEND, AND HOLD
HARMLESS LANDLORD FROM AND AGAINST ANY LOSS, COST, DAMAGE OR LIABILITY
(INCLUDING REASONABLE ATTORNEYS’ FEES) INCURRED BY LANDLORD IN CONNECTION WITH
SUCH COOPERATION.

 

2.3                               FIXED TERM.  THE INITIAL TERM OF THIS
AGREEMENT (THE “FIXED TERM”) WITH RESPECT TO EACH PROPERTY COMMENCED ON THE
COMMENCEMENT DATE WITH RESPECT TO SUCH PROPERTY AND SHALL EXPIRE ON DECEMBER 31,
2024.

 

2.4                               EXTENDED TERMS.  PROVIDED THAT NO EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, TENANT SHALL HAVE THE RIGHT TO
EXTEND THE TERM FOR ONE RENEWAL TERM OF FIFTEEN (15) YEARS (THE “EXTENDED
TERM”).

 

The Extended Term shall commence on the day succeeding the expiration of the
Fixed Term.  All of the terms, covenants and provisions of this Agreement shall
apply to the Extended Term, except that Tenant shall have no right to extend the
Term beyond the expiration of the Extended Term.  If Tenant shall elect to
exercise the aforesaid option, it shall do so by giving Landlord Notice thereof
not later than December 31, 2020, it being understood and agreed that time shall
be of the essence with respect to the giving of such Notice.  If Tenant shall
fail to give such Notice, this Agreement shall automatically terminate at the
end of the Fixed Term and Tenant shall have no further option to extend the Term
of this Agreement.  If Tenant shall give such Notice, the extension of this
Agreement shall be automatically effected without the execution of any
additional documents; it being understood and agreed, however, that Tenant and
Landlord shall execute such documents and agreements as either party shall
reasonably require to evidence the same.  Notwithstanding the provisions of the
foregoing sentence, if, subsequent to the giving of such Notice, an Event of
Default shall occur, at Landlord’s option, the extension of this Agreement shall
cease to take effect and this Agreement shall automatically terminate at the end
of the Fixed Term, and Tenant shall have no further option to extend the Term of
this Agreement.

 

ARTICLE 3

 

RENT

 

3.1                               RENT.  TENANT SHALL PAY, IN LAWFUL MONEY OF
THE UNITED STATES OF AMERICA WHICH SHALL BE LEGAL TENDER FOR THE PAYMENT OF
PUBLIC AND PRIVATE DEBTS, WITHOUT OFFSET, ABATEMENT, DEMAND OR

 

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DEDUCTION (UNLESS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT), MINIMUM RENT
AND ADDITIONAL RENT TO LANDLORD AND ADDITIONAL CHARGES TO THE PARTY TO WHOM SUCH
ADDITIONAL CHARGES ARE PAYABLE, DURING THE TERM.  ALL PAYMENTS TO LANDLORD SHALL
BE MADE BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FEDERAL FUNDS OR BY OTHER
MEANS ACCEPTABLE TO LANDLORD IN ITS SOLE DISCRETION.  RENT FOR ANY PARTIAL
CALENDAR MONTH SHALL BE PRORATED ON A PER DIEM BASIS.

 

3.1.1                                 MINIMUM RENT.

 

(A)                                  PAYMENTS.  MINIMUM RENT SHALL BE PAID IN
EQUAL MONTHLY INSTALLMENTS IN ARREARS ON THE FIRST BUSINESS DAY OF EACH CALENDAR
MONTH DURING THE TERM.

 

(B)                                 ALLOCATION OF MINIMUM RENT.  MINIMUM RENT
MAY BE ALLOCATED AND REALLOCATED AMONG THE PROPERTIES COMPRISING THE LEASED
PROPERTY BY AGREEMENT AMONG LANDLORD AND TENANT; PROVIDED, HOWEVER THAT IN NO
EVENT SHALL THE MINIMUM RENT ALLOCATED TO ANY PROPERTY BE LESS THAN THE MONTHLY
AMOUNT PAYABLE BY LANDLORD ON ACCOUNT OF ANY FACILITY MORTGAGE AND/OR GROUND OR
MASTER LEASE WITH RESPECT TO SUCH PROPERTY NOR SHALL THE AGGREGATE AMOUNT OF
MINIMUM RENT ALLOCATED AMONG THE PROPERTIES EXCEED THE TOTAL AMOUNT PAYABLE FOR
THE LEASED PROPERTY.

 

(C)                                  ADJUSTMENTS OF MINIMUM RENT FOLLOWING
DISBURSEMENTS UNDER SECTIONS 5.1.2(B), 10.2.3 AND 11.2.  EFFECTIVE ON THE DATE
OF EACH DISBURSEMENT TO PAY FOR THE COST OF ANY REPAIRS, MAINTENANCE,
RENOVATIONS OR REPLACEMENTS PURSUANT TO SECTIONS 5.1.2(B), 10.2.3 OR 11.2, THE
ANNUAL MINIMUM RENT SHALL BE INCREASED BY A PER ANNUM AMOUNT EQUAL TO THE
DISBURSEMENT RATE TIMES THE AMOUNT SO DISBURSED.  IF ANY SUCH DISBURSEMENT IS
MADE DURING ANY CALENDAR MONTH ON A DAY OTHER THAN THE FIRST BUSINESS DAY OF
SUCH CALENDAR MONTH, TENANT SHALL PAY TO LANDLORD ON THE FIRST BUSINESS DAY OF
THE IMMEDIATELY FOLLOWING CALENDAR MONTH (IN ADDITION TO THE AMOUNT OF MINIMUM
RENT PAYABLE WITH RESPECT TO SUCH CALENDAR MONTH, AS ADJUSTED PURSUANT TO THIS
PARAGRAPH (C)) THE AMOUNT BY WHICH MINIMUM RENT FOR THE PRECEDING CALENDAR
MONTH, AS ADJUSTED FOR SUCH DISBURSEMENT ON A PER DIEM BASIS, EXCEEDED THE
AMOUNT OF MINIMUM RENT PAID BY TENANT FOR SUCH PRECEDING CALENDAR MONTH.

 

(D)                                 ADJUSTMENTS OF MINIMUM RENT FOLLOWING
PARTIAL LEASE TERMINATION.  SUBJECT TO SECTION 4.1.1(B), IF THIS AGREEMENT SHALL
TERMINATE WITH RESPECT TO ANY PROPERTY BUT LESS THAN ALL OF THE LEASED PROPERTY,
MINIMUM RENT SHALL BE

 

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REDUCED BY THE AFFECTED PROPERTY’S ALLOCABLE SHARE OF MINIMUM RENT DETERMINED IN
ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THIS AGREEMENT.

 

3.1.2                                 ADDITIONAL RENT.

 

(A)                                  AMOUNT.  TENANT SHALL PAY ADDITIONAL RENT
(“ADDITIONAL RENT”) WITH RESPECT TO EACH LEASE YEAR DURING THE TERM SUBSEQUENT
TO THE BASE YEAR IN AN AMOUNT, NOT LESS THAN ZERO, EQUAL TO FOUR PERCENT (4%) OF
EXCESS GROSS REVENUES AT THE LEASED PROPERTY.

 

(B)                                 QUARTERLY INSTALLMENTS.  INSTALLMENTS OF
ADDITIONAL RENT FOR EACH LEASE YEAR DURING THE TERM, OR PORTION THEREOF, SHALL
BE CALCULATED AND PAID QUARTERLY IN ARREARS.  QUARTERLY PAYMENTS OF ADDITIONAL
RENT FOR THE LEASED PROPERTY SHALL BE CALCULATED BASED ON GROSS REVENUES FOR
SUCH QUARTER DURING THE PRECEDING YEAR AND SHALL BE DUE AND PAYABLE AND
DELIVERED TO LANDLORD ON THE FIRST BUSINESS DAY OF EACH CALENDAR QUARTER, OR
PORTION THEREOF, THEREAFTER OCCURRING DURING THE TERM, TOGETHER WITH AN
OFFICER’S CERTIFICATE SETTING FORTH THE CALCULATION OF ADDITIONAL RENT DUE AND
PAYABLE FOR SUCH QUARTER.

 

(C)                                  RECONCILIATION OF ADDITIONAL RENT.  IN
ADDITION, WITHIN SEVENTY-FIVE (75) DAYS AFTER THE END OF THE BASE YEAR AND EACH
LEASE YEAR THEREAFTER (OR ANY PORTION THEREOF OCCURRING DURING THE TERM), TENANT
SHALL DELIVER, OR CAUSE TO BE DELIVERED, TO LANDLORD (I) A FINANCIAL REPORT
SETTING FORTH THE GROSS REVENUES FOR EACH PROPERTY FOR SUCH PRECEDING LEASE
YEAR, OR PORTION THEREOF, TOGETHER WITH AN OFFICER’S CERTIFICATE FROM TENANT’S
CHIEF FINANCIAL OR ACCOUNTING OFFICER CERTIFYING THAT SUCH REPORT IS TRUE AND
CORRECT, (II) AN AUDIT OF GROSS REVENUES PREPARED BY A FIRM OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS PROPOSED BY TENANT AND APPROVED BY LANDLORD (WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED), AND
(III) A STATEMENT SHOWING TENANT’S CALCULATION OF ADDITIONAL RENT DUE FOR SUCH
PRECEDING LEASE YEAR BASED ON THE GROSS REVENUES SET FORTH IN SUCH FINANCIAL
REPORT, TOGETHER WITH AN OFFICER’S CERTIFICATE FROM TENANT’S CHIEF FINANCIAL OR
ACCOUNTING OFFICER CERTIFYING THAT SUCH STATEMENT IS TRUE AND CORRECT.

 

If the annual Additional Rent for such preceding Lease Year as set forth in
Tenant’s statement thereof exceeds the amount previously paid with respect
thereto by Tenant, Tenant shall pay such excess to Landlord at such time as the
statement is delivered, together with interest at the

 

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Interest Rate, which interest shall accrue from the close of such preceding
Lease Year until the date that such statement is required to be delivered and,
thereafter, such interest shall accrue at the Overdue Rate, until the amount of
such difference shall be paid or otherwise discharged.  If the annual Additional
Rent for such preceding Lease Year as shown in such statement is less than the
amount previously paid with respect thereto by Tenant, provided that no Event of
Default shall have occurred and be continuing, Landlord shall grant Tenant a
credit against the Additional Rent next coming due in the amount of such
difference, together with interest at the Interest Rate, which interest shall
accrue from the date of payment by Tenant until the date such credit is applied
or paid, as the case may be.  If such credit cannot be made because the Term has
expired prior to application in full thereof, provided no Event of Default has
occurred and is continuing, Landlord shall pay the unapplied balance of such
credit to Tenant, together with interest at the Interest Rate, which interest
shall accrue from the date of payment by Tenant until the date of payment by
Landlord.

 

(D)                                 CONFIRMATION OF ADDITIONAL RENT.  TENANT
SHALL UTILIZE, OR CAUSE TO BE UTILIZED, AN ACCOUNTING SYSTEM FOR THE LEASED
PROPERTY IN ACCORDANCE WITH ITS USUAL AND CUSTOMARY PRACTICES AND IN ALL
MATERIAL RESPECTS IN ACCORDANCE WITH GAAP, WHICH WILL ACCURATELY RECORD ALL
GROSS REVENUES AND TENANT SHALL RETAIN, FOR AT LEAST THREE (3) YEARS AFTER THE
EXPIRATION OF EACH LEASE YEAR, REASONABLY ADEQUATE RECORDS CONFORMING TO SUCH
ACCOUNTING SYSTEM SHOWING ALL GROSS REVENUES FOR SUCH LEASE YEAR.  LANDLORD, AT
ITS OWN EXPENSE, EXCEPT AS PROVIDED HEREINBELOW, SHALL HAVE THE RIGHT,
EXERCISABLE BY NOTICE TO TENANT, BY ITS ACCOUNTANTS OR REPRESENTATIVES, TO AUDIT
THE INFORMATION SET FORTH IN THE OFFICER’S CERTIFICATE REFERRED TO IN
SUBPARAGRAPH (C) ABOVE AND, IN CONNECTION WITH SUCH AUDITS, TO EXAMINE TENANT’S
BOOKS AND RECORDS WITH RESPECT THERETO (INCLUDING SUPPORTING DATA AND SALES AND
EXCISE TAX RETURNS).  LANDLORD SHALL BEGIN SUCH AUDIT AS SOON AS REASONABLY
POSSIBLE FOLLOWING ITS RECEIPT OF THE APPLICABLE OFFICER’S CERTIFICATE AND SHALL
COMPLETE SUCH AUDIT AS SOON AS REASONABLY POSSIBLE THEREAFTER.  ALL SUCH AUDITS
SHALL BE PERFORMED AT THE LOCATION WHERE SUCH BOOKS AND RECORDS ARE CUSTOMARILY
KEPT AND IN SUCH A MANNER SO AS TO MINIMIZE ANY INTERFERENCE WITH TENANT’S
BUSINESS OPERATIONS.  IF ANY SUCH AUDIT DISCLOSES A DEFICIENCY IN THE PAYMENT OF
ADDITIONAL RENT AND EITHER TENANT AGREES WITH THE RESULT OF SUCH AUDIT OR THE
MATTER IS OTHERWISE DETERMINED, TENANT

 

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SHALL FORTHWITH PAY TO LANDLORD THE AMOUNT OF THE DEFICIENCY, AS FINALLY AGREED
OR DETERMINED, TOGETHER WITH INTEREST AT THE INTEREST RATE, FROM THE DATE SUCH
PAYMENT SHOULD HAVE BEEN MADE TO THE DATE OF PAYMENT THEREOF, AND IF THE AMOUNT
OF SUCH DEFICIENCY EXCEEDS FIVE PERCENT (5%) OF THE ADDITIONAL RENT THAT SHOULD
HAVE BEEN PAID FOR ANY LEASE YEAR, TENANT SHALL FORTHWITH PAY TO LANDLORD THE
AGGREGATE AMOUNT OF ALL COSTS AND EXPENSES INCURRED BY LANDLORD IN CONNECTION
WITH ANY SUCH AUDIT.  IF ANY SUCH AUDIT DISCLOSES THAT TENANT PAID MORE
ADDITIONAL RENT FOR ANY LEASE YEAR THAN WAS DUE HEREUNDER, AND EITHER LANDLORD
AGREES WITH THE RESULT OF SUCH AUDIT OR THE MATTER IS OTHERWISE DETERMINED,
PROVIDED NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LANDLORD SHALL, AT
LANDLORD’S OPTION, EITHER GRANT TENANT A CREDIT OR PAY TO TENANT AN AMOUNT EQUAL
TO THE AMOUNT OF SUCH OVERPAYMENT AGAINST ADDITIONAL RENT NEXT COMING DUE IN THE
AMOUNT OF SUCH DIFFERENCE, AS FINALLY AGREED OR DETERMINED, TOGETHER WITH
INTEREST AT THE INTEREST RATE, WHICH INTEREST SHALL ACCRUE FROM THE TIME OF
PAYMENT BY TENANT UNTIL THE DATE SUCH CREDIT IS APPLIED OR PAID, AS THE CASE MAY
BE; PROVIDED, HOWEVER, THAT, UPON THE EXPIRATION OR SOONER TERMINATION OF THE
TERM, PROVIDED NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LANDLORD
SHALL PAY THE UNAPPLIED BALANCE OF SUCH CREDIT TO TENANT, TOGETHER WITH INTEREST
AT THE INTEREST RATE, WHICH INTEREST SHALL ACCRUE FROM THE DATE OF PAYMENT BY
TENANT UNTIL THE DATE OF PAYMENT FROM LANDLORD.  ANY DISPUTE CONCERNING THE
CORRECTNESS OF AN AUDIT SHALL BE SETTLED BY ARBITRATION PURSUANT TO THE
PROVISIONS OF ARTICLE 22.

 

Any proprietary information obtained by Landlord with respect to Tenant pursuant
to the provisions of this Agreement shall be treated as confidential, except
that such information may be disclosed or used, subject to appropriate
confidentiality safeguards, pursuant to court order or in any litigation between
the parties and except further that Landlord may disclose such information to
its prospective lenders, provided that Landlord shall direct such lenders to
maintain such information as confidential.  The obligations of Tenant and
Landlord contained in this Section 3.1.2 shall survive the expiration or earlier
termination of this Agreement.

 

3.1.3                                 ADDITIONAL CHARGES.  IN ADDITION TO THE
MINIMUM RENT AND ADDITIONAL RENT PAYABLE HEREUNDER, TENANT SHALL PAY (OR CAUSE
TO BE PAID) TO THE APPROPRIATE PARTIES AND DISCHARGE (OR

 

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CAUSE TO BE DISCHARGED) AS AND WHEN DUE AND PAYABLE THE FOLLOWING (COLLECTIVELY,
“ADDITIONAL CHARGES”):

 

(A)                                  IMPOSITIONS.  SUBJECT TO ARTICLE 8 RELATING
TO PERMITTED CONTESTS, TENANT SHALL PAY, OR CAUSE TO BE PAID, ALL IMPOSITIONS
BEFORE ANY FINE, PENALTY, INTEREST OR COST (OTHER THAN ANY OPPORTUNITY COST AS A
RESULT OF A FAILURE TO TAKE ADVANTAGE OF ANY DISCOUNT FOR EARLY PAYMENT) MAY BE
ADDED FOR NON-PAYMENT, SUCH PAYMENTS TO BE MADE DIRECTLY TO THE TAXING
AUTHORITIES WHERE FEASIBLE, AND SHALL PROMPTLY, UPON REQUEST, FURNISH TO
LANDLORD COPIES OF OFFICIAL RECEIPTS OR OTHER REASONABLY SATISFACTORY PROOF
EVIDENCING SUCH PAYMENTS.  IF ANY SUCH IMPOSITION MAY, AT THE OPTION OF THE
TAXPAYER, LAWFULLY BE PAID IN INSTALLMENTS (WHETHER OR NOT INTEREST SHALL ACCRUE
ON THE UNPAID BALANCE OF SUCH IMPOSITION), TENANT MAY EXERCISE THE OPTION TO PAY
THE SAME (AND ANY ACCRUED INTEREST ON THE UNPAID BALANCE OF SUCH IMPOSITION) IN
INSTALLMENTS AND, IN SUCH EVENT, SHALL PAY, OR CAUSE TO PAY, SUCH INSTALLMENTS
DURING THE TERM AS THE SAME BECOME DUE AND BEFORE ANY FINE, PENALTY, PREMIUM,
FURTHER INTEREST OR COST MAY BE ADDED THERETO.  LANDLORD, AT ITS EXPENSE, SHALL,
TO THE EXTENT REQUIRED OR PERMITTED BY APPLICABLE LAW, PREPARE AND FILE, OR
CAUSE TO BE PREPARED AND FILED, ALL TAX RETURNS AND PAY ALL TAXES DUE IN RESPECT
OF LANDLORD’S NET INCOME, GROSS RECEIPTS, SALES AND USE, SINGLE BUSINESS,
TRANSACTION PRIVILEGE, RENT, AD VALOREM, FRANCHISE TAXES AND TAXES ON ITS
CAPITAL STOCK OR OTHER EQUITY INTERESTS, AND TENANT, AT ITS EXPENSE, SHALL, TO
THE EXTENT REQUIRED OR PERMITTED BY APPLICABLE LAWS AND REGULATIONS, PREPARE AND
FILE ALL OTHER TAX RETURNS AND REPORTS IN RESPECT OF ANY IMPOSITION AS MAY BE
REQUIRED BY GOVERNMENT AGENCIES.  PROVIDED NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, IF ANY REFUND SHALL BE DUE FROM ANY TAXING AUTHORITY
IN RESPECT OF ANY IMPOSITION PAID BY OR ON BEHALF OF TENANT, THE SAME SHALL BE
PAID OVER TO OR RETAINED BY TENANT.  LANDLORD AND TENANT SHALL, UPON REQUEST OF
THE OTHER, PROVIDE SUCH DATA AS IS MAINTAINED BY THE PARTY TO WHOM THE REQUEST
IS MADE WITH RESPECT TO THE LEASED PROPERTY AS MAY BE NECESSARY TO PREPARE ANY
REQUIRED RETURNS AND REPORTS.  IN THE EVENT GOVERNMENT AGENCIES CLASSIFY ANY
PROPERTY COVERED BY THIS AGREEMENT AS PERSONAL PROPERTY, TENANT SHALL FILE, OR
CAUSE TO BE FILED, ALL PERSONAL PROPERTY TAX RETURNS IN SUCH JURISDICTIONS WHERE
IT MAY LEGALLY SO FILE.  EACH PARTY SHALL, TO THE EXTENT IT POSSESSES THE SAME,
PROVIDE THE OTHER, UPON REQUEST, WITH COST AND DEPRECIATION RECORDS NECESSARY
FOR FILING RETURNS FOR ANY PROPERTY SO CLASSIFIED AS PERSONAL PROPERTY.  WHERE
LANDLORD IS LEGALLY REQUIRED TO FILE PERSONAL PROPERTY TAX

 

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RETURNS FOR PROPERTY COVERED BY THIS AGREEMENT, LANDLORD SHALL PROVIDE TENANT
WITH COPIES OF ASSESSMENT NOTICES IN SUFFICIENT TIME FOR TENANT TO FILE A
PROTEST.  ALL IMPOSITIONS ASSESSED AGAINST SUCH PERSONAL PROPERTY SHALL BE
(IRRESPECTIVE OF WHETHER LANDLORD OR TENANT SHALL FILE THE RELEVANT RETURN) PAID
BY TENANT NOT LATER THAN THE LAST DATE ON WHICH THE SAME MAY BE MADE WITHOUT
INTEREST OR PENALTY, SUBJECT TO THE PROVISIONS OF ARTICLE 8.

 

Landlord shall give prompt Notice to Tenant of all Impositions payable by Tenant
hereunder of which Landlord at any time has knowledge; provided, however, that
Landlord’s failure to give any such notice shall in no way diminish Tenant’s
obligation hereunder to pay such Impositions.

 

(B)                                 UTILITY CHARGES.  TENANT SHALL PAY OR CAUSE
TO BE PAID ALL CHARGES FOR ELECTRICITY, POWER, GAS, OIL, WATER AND OTHER
UTILITIES USED IN CONNECTION WITH THE LEASED PROPERTY.

 

(C)                                  INSURANCE PREMIUMS.  TENANT SHALL PAY OR
CAUSE TO BE PAID ALL PREMIUMS FOR THE INSURANCE COVERAGE REQUIRED TO BE
MAINTAINED PURSUANT TO ARTICLE 9.

 

(D)                                 OTHER CHARGES.  TENANT SHALL PAY OR CAUSE TO
BE PAID ALL OTHER AMOUNTS, LIABILITIES AND OBLIGATIONS, INCLUDING, WITHOUT
LIMITATION, GROUND RENTS, IF ANY, AND ALL AMOUNTS PAYABLE UNDER ANY EQUIPMENT
LEASES AND ALL AGREEMENTS TO INDEMNIFY LANDLORD UNDER SECTIONS 4.4.2 AND 9.5.

 

(E)                                  REIMBURSEMENT FOR ADDITIONAL CHARGES.  IF
TENANT PAYS OR CAUSES TO BE PAID PROPERTY TAXES OR SIMILAR OR OTHER ADDITIONAL
CHARGES ATTRIBUTABLE TO PERIODS AFTER THE END OF THE TERM, WHETHER UPON
EXPIRATION OR SOONER TERMINATION OF THIS AGREEMENT (OTHER THAN TERMINATION BY
REASON OF AN EVENT OF DEFAULT), TENANT MAY, WITHIN A REASONABLE TIME AFTER THE
END OF THE TERM, PROVIDE NOTICE TO LANDLORD OF ITS ESTIMATE OF SUCH AMOUNTS. 
LANDLORD SHALL PROMPTLY REIMBURSE TENANT FOR ALL PAYMENTS OF SUCH TAXES AND
OTHER SIMILAR ADDITIONAL CHARGES THAT ARE ATTRIBUTABLE TO ANY PERIOD AFTER THE
TERM OF THIS AGREEMENT.

 

3.2                               LATE PAYMENT OF RENT, ETC.  IF ANY INSTALLMENT
OF MINIMUM RENT, ADDITIONAL RENT OR ADDITIONAL CHARGES (BUT ONLY AS TO THOSE
ADDITIONAL CHARGES WHICH ARE PAYABLE DIRECTLY TO LANDLORD) SHALL NOT BE PAID
WITHIN TEN (10) DAYS AFTER ITS DUE

 

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DATE, TENANT SHALL PAY LANDLORD, ON DEMAND, AS ADDITIONAL CHARGES, A LATE CHARGE
(TO THE EXTENT PERMITTED BY LAW) COMPUTED AT THE OVERDUE RATE ON THE AMOUNT OF
SUCH INSTALLMENT, FROM THE DUE DATE OF SUCH INSTALLMENT TO THE DATE OF PAYMENT
THEREOF. TO THE EXTENT THAT TENANT PAYS ANY ADDITIONAL CHARGES DIRECTLY TO
LANDLORD OR ANY FACILITY MORTGAGEE PURSUANT TO ANY REQUIREMENT OF THIS
AGREEMENT, TENANT SHALL BE RELIEVED OF ITS OBLIGATION TO PAY SUCH ADDITIONAL
CHARGES TO THE ENTITY TO WHICH THEY WOULD OTHERWISE BE DUE.  IF ANY PAYMENTS DUE
FROM LANDLORD TO TENANT SHALL NOT BE PAID WITHIN TEN (10) DAYS AFTER ITS DUE
DATE, LANDLORD SHALL PAY TO TENANT, ON DEMAND, A LATE CHARGE (TO THE EXTENT
PERMITTED BY LAW) COMPUTED AT THE OVERDUE RATE ON THE AMOUNT OF SUCH INSTALLMENT
FROM THE DUE DATE OF SUCH INSTALLMENT TO THE DATE OF PAYMENT THEREOF.

 

In the event of any failure by Tenant to pay any Additional Charges when due,
Tenant shall promptly pay and discharge, as Additional Charges, every fine,
penalty, interest and cost which is added for non-payment or late payment of
such items.  Landlord shall have all legal, equitable and contractual rights,
powers and remedies provided either in this Agreement or by statute or otherwise
in the case of non-payment of the Additional Charges as in the case of
non-payment of the Minimum Rent and Additional Rent.

 

3.3                               NET LEASE.  THE RENT SHALL BE ABSOLUTELY NET
TO LANDLORD SO THAT THIS AGREEMENT SHALL YIELD TO LANDLORD THE FULL AMOUNT OF
THE INSTALLMENTS OR AMOUNTS OF THE RENT THROUGHOUT THE TERM, SUBJECT TO ANY
OTHER PROVISIONS OF THIS AGREEMENT WHICH EXPRESSLY PROVIDE OTHERWISE, INCLUDING
THOSE PROVISIONS FOR ADJUSTMENT OR ABATEMENT OF SUCH RENT.

 

3.4                               NO TERMINATION, ABATEMENT, ETC.   EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, EACH OF LANDLORD AND TENANT,
TO THE MAXIMUM EXTENT PERMITTED BY LAW, SHALL REMAIN BOUND BY THIS AGREEMENT IN
ACCORDANCE WITH ITS TERMS AND SHALL NOT TAKE ANY ACTION WITHOUT THE CONSENT OF
THE OTHER TO MODIFY, SURRENDER OR TERMINATE THIS AGREEMENT.  IN ADDITION, EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, TENANT SHALL NOT SEEK, OR BE
ENTITLED TO, ANY ABATEMENT, DEDUCTION, DEFERMENT OR REDUCTION OF THE RENT, OR
SET-OFF AGAINST THE RENT, NOR SHALL THE RESPECTIVE OBLIGATIONS OF LANDLORD AND
TENANT BE OTHERWISE AFFECTED BY REASON OF (A) ANY DAMAGE TO OR DESTRUCTION OF
THE LEASED PROPERTY, OR ANY PORTION THEREOF, FROM WHATEVER CAUSE OR ANY
CONDEMNATION, (B) THE LAWFUL OR UNLAWFUL PROHIBITION OF, OR RESTRICTION UPON,
TENANT’S USE OF THE LEASED PROPERTY, OR ANY PORTION THEREOF, OR THE INTERFERENCE
WITH SUCH USE BY ANY PERSON OR BY REASON OF EVICTION BY PARAMOUNT TITLE; (C) ANY
CLAIM WHICH TENANT MAY HAVE AGAINST LANDLORD BY REASON OF ANY DEFAULT (OTHER

 

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THAN A MONETARY DEFAULT) OR BREACH OF ANY WARRANTY BY LANDLORD UNDER THIS
AGREEMENT OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT, OR TO WHICH
LANDLORD AND TENANT ARE PARTIES; (D) ANY BANKRUPTCY, INSOLVENCY, REORGANIZATION,
COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, WINDING UP OR OTHER
PROCEEDINGS AFFECTING LANDLORD OR ANY ASSIGNEE OR TRANSFEREE OF LANDLORD; OR
(E) FOR ANY OTHER CAUSE WHETHER SIMILAR OR DISSIMILAR TO ANY OF THE FOREGOING
(OTHER THAN A MONETARY DEFAULT BY LANDLORD).  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS AGREEMENT, TENANT HEREBY WAIVES ALL RIGHTS ARISING FROM ANY
OCCURRENCE WHATSOEVER, WHICH MAY NOW OR HEREAFTER BE CONFERRED UPON IT BY LAW
(A) TO MODIFY, SURRENDER OR TERMINATE THIS AGREEMENT OR QUIT OR SURRENDER THE
LEASED PROPERTY, OR ANY PORTION THEREOF, OR (B) WHICH WOULD ENTITLE TENANT TO
ANY ABATEMENT, REDUCTION, SUSPENSION OR DEFERMENT OF THE RENT OR OTHER SUMS
PAYABLE OR OTHER OBLIGATIONS TO BE PERFORMED BY TENANT HEREUNDER.  THE
OBLIGATIONS OF TENANT HEREUNDER SHALL BE SEPARATE AND INDEPENDENT COVENANTS AND
AGREEMENTS, AND THE RENT AND ALL OTHER SUMS PAYABLE BY TENANT HEREUNDER SHALL
CONTINUE TO BE PAYABLE IN ALL EVENTS UNLESS THE OBLIGATIONS TO PAY THE SAME
SHALL BE TERMINATED PURSUANT TO THE EXPRESS PROVISIONS OF THIS AGREEMENT.

 

ARTICLE 4

 

USE OF THE LEASED PROPERTY

 

4.1                               PERMITTED USE.

 

4.1.1                                 PERMITTED USE.

 

(A)                                  TENANT SHALL, AT ALL TIMES DURING THE TERM,
AND AT ANY OTHER TIME THAT TENANT SHALL BE IN POSSESSION OF ANY PROPERTY,
CONTINUOUSLY USE AND OPERATE, OR CAUSE TO BE USED AND OPERATED, SUCH PROPERTY AS
A SKILLED NURSING/ INTERMEDIATE CARE/INDEPENDENT LIVING/ASSISTED LIVING/ SPECIAL
CARE/GROUP HOME FACILITY AS CURRENTLY OPERATED, AND ANY USES INCIDENTAL
THERETO.  TENANT SHALL NOT USE (AND SHALL NOT PERMIT ANY PERSON TO USE) ANY
PROPERTY, OR ANY PORTION THEREOF, FOR ANY OTHER USE WITHOUT THE PRIOR WRITTEN
CONSENT OF LANDLORD, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, DELAYED
OR CONDITIONED.  NO USE SHALL BE MADE OR PERMITTED TO BE MADE OF ANY PROPERTY
AND NO ACTS SHALL BE DONE THEREON WHICH WILL CAUSE THE CANCELLATION OF ANY
INSURANCE POLICY COVERING SUCH PROPERTY OR ANY PART THEREOF (UNLESS ANOTHER
ADEQUATE POLICY IS AVAILABLE) OR WHICH WOULD CONSTITUTE A DEFAULT UNDER ANY
GROUND LEASE AFFECTING SUCH PROPERTY, NOR SHALL TENANT SELL OR OTHERWISE PROVIDE
TO RESIDENTS OR PATIENTS THEREIN, OR

 

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PERMIT TO BE KEPT, USED OR SOLD IN OR ABOUT ANY PROPERTY ANY ARTICLE WHICH MAY
BE PROHIBITED BY LAW OR BY THE STANDARD FORM OF FIRE INSURANCE POLICIES, OR ANY
OTHER INSURANCE POLICIES REQUIRED TO BE CARRIED HEREUNDER, OR FIRE UNDERWRITER’S
REGULATIONS.  TENANT SHALL, AT ITS SOLE COST (EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 5.1.2(B)), COMPLY OR CAUSE TO BE COMPLIED WITH ALL INSURANCE
REQUIREMENTS.  TENANT SHALL NOT TAKE OR OMIT TO TAKE, OR PERMIT TO BE TAKEN OR
OMITTED TO BE TAKEN, ANY ACTION, THE TAKING OR OMISSION OF WHICH MATERIALLY
IMPAIRS THE VALUE OR THE USEFULNESS OF ANY PROPERTY OR ANY PART THEREOF FOR ITS
PERMITTED USE.

 

(B)                                 IN THE EVENT THAT, IN THE REASONABLE
DETERMINATION OF TENANT, IT SHALL NO LONGER BE ECONOMICALLY PRACTICAL TO OPERATE
ANY PROPERTY AS CURRENTLY OPERATED, TENANT SHALL GIVE LANDLORD NOTICE THEREOF,
WHICH NOTICE SHALL SET FORTH IN REASONABLE DETAIL THE REASONS THEREFOR. 
THEREAFTER, LANDLORD AND TENANT SHALL NEGOTIATE IN GOOD FAITH TO AGREE ON AN
ALTERNATIVE USE FOR SUCH PROPERTY, APPROPRIATE ADJUSTMENTS TO THE ADDITIONAL
RENT AND OTHER RELATED MATTERS; PROVIDED, HOWEVER, IN NO EVENT SHALL THE MINIMUM
RENT BE REDUCED OR ABATED AS A RESULT THEREOF.  IF LANDLORD AND TENANT FAIL TO
AGREE ON AN ALTERNATIVE USE FOR SUCH PROPERTY WITHIN SIXTY (60) DAYS AFTER
COMMENCING NEGOTIATIONS AS AFORESAID, TENANT MAY MARKET SUCH PROPERTY FOR SALE
TO A THIRD PARTY.  IF TENANT RECEIVES A BONA FIDE OFFER (AN “OFFER”) TO PURCHASE
SUCH PROPERTY FROM A PERSON HAVING THE FINANCIAL CAPACITY TO IMPLEMENT THE TERMS
OF SUCH OFFER, TENANT SHALL GIVE LANDLORD NOTICE THEREOF, WHICH NOTICE SHALL
INCLUDE A COPY OF THE OFFER EXECUTED BY SUCH THIRD PARTY.  IN THE EVENT THAT
LANDLORD SHALL FAIL TO ACCEPT OR REJECT SUCH OFFER WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF SUCH NOTICE, SUCH OFFER SHALL BE DEEMED TO BE REJECTED BY LANDLORD. 
IF LANDLORD SHALL SELL THE PROPERTY PURSUANT TO SUCH OFFER, THEN, EFFECTIVE AS
OF THE DATE OF SUCH SALE, THIS AGREEMENT SHALL TERMINATE WITH RESPECT TO SUCH
PROPERTY, AND THE MINIMUM RENT SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE
PRODUCT OF THE NET PROCEEDS OF SALE RECEIVED BY LANDLORD MULTIPLIED BY THE
INTEREST RATE.  IF LANDLORD SHALL REJECT (OR BE DEEMED TO HAVE REJECTED) SUCH
OFFER, THEN, EFFECTIVE AS OF THE PROPOSED DATE OF SUCH SALE, THIS AGREEMENT
SHALL TERMINATE WITH RESPECT TO SUCH PROPERTY, AND THE MINIMUM RENT SHALL BE
REDUCED BY AN AMOUNT EQUAL TO THE PRODUCT OF THE PROJECTED NET PROCEEDS
DETERMINED BY REFERENCE TO SUCH OFFER MULTIPLIED BY THE INTEREST RATE.

 

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4.1.2                                 NECESSARY APPROVALS.  TENANT SHALL PROCEED
WITH ALL DUE DILIGENCE AND EXERCISE REASONABLE EFFORTS TO OBTAIN AND MAINTAIN,
OR CAUSE TO BE OBTAINED AND MAINTAINED, ALL APPROVALS NECESSARY TO USE AND
OPERATE, FOR ITS PERMITTED USE, EACH PROPERTY AND THE FACILITY LOCATED THEREON
UNDER APPLICABLE LAW AND, WITHOUT LIMITING THE FOREGOING, SHALL EXERCISE
REASONABLE EFFORTS TO MAINTAIN (OR CAUSE TO BE MAINTAINED) APPROPRIATE
CERTIFICATIONS FOR REIMBURSEMENT AND LICENSURE.

 

4.1.3                                 LAWFUL USE, ETC.  TENANT SHALL NOT, AND
SHALL NOT PERMIT ANY PERSON TO USE OR SUFFER OR PERMIT THE USE OF ANY PROPERTY
OR TENANT’S PERSONAL PROPERTY, IF ANY, FOR ANY UNLAWFUL PURPOSE.  TENANT SHALL
NOT, AND SHALL NOT PERMIT ANY PERSON TO, COMMIT OR SUFFER TO BE COMMITTED ANY
WASTE ON ANY PROPERTY, OR IN ANY FACILITY, NOR SHALL TENANT CAUSE OR PERMIT ANY
UNLAWFUL NUISANCE THEREON OR THEREIN.  TENANT SHALL NOT, AND SHALL NOT PERMIT
ANY PERSON TO, SUFFER NOR PERMIT ANY PROPERTY, OR ANY PORTION THEREOF, TO BE
USED IN SUCH A MANNER AS (A) MAY MATERIALLY AND ADVERSELY IMPAIR LANDLORD’S
TITLE THERETO OR TO ANY PORTION THEREOF, OR (B) MAY REASONABLY ALLOW A CLAIM OR
CLAIMS FOR ADVERSE USAGE OR ADVERSE POSSESSION BY THE PUBLIC, AS SUCH, OR OF
IMPLIED DEDICATION OF SUCH PROPERTY, OR ANY PORTION THEREOF.

 

4.2                               COMPLIANCE WITH LEGAL/INSURANCE REQUIREMENTS,
ETC.  SUBJECT TO THE PROVISIONS OF SECTION 5.1.2(B) AND ARTICLE 8, TENANT, AT
ITS SOLE EXPENSE, SHALL (A) COMPLY WITH (OR CAUSE TO BE COMPLIED WITH) ALL
MATERIAL LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS IN RESPECT OF THE USE,
OPERATION, MAINTENANCE, REPAIR, ALTERATION AND RESTORATION OF ANY PROPERTY AND
WITH THE TERMS AND CONDITIONS OF ANY GROUND LEASE AFFECTING ANY PROPERTY,
(B) PERFORM (OR CAUSE TO BE PERFORMED) IN A TIMELY FASHION ALL OF LANDLORD’S
OBLIGATIONS UNDER ANY GROUND LEASE AFFECTING ANY PROPERTY AND (C) PROCURE,
MAINTAIN AND COMPLY WITH (OR CAUSE TO BE PROCURED, MAINTAINED AND COMPLIED WITH)
ALL MATERIAL LICENSES, CERTIFICATES OF NEED, PERMITS, PROVIDER AGREEMENTS AND
OTHER AUTHORIZATIONS AND AGREEMENTS REQUIRED FOR ANY USE OF ANY PROPERTY AND
TENANT’S PERSONAL PROPERTY, IF ANY, THEN BEING MADE, AND FOR THE PROPER
ERECTION, INSTALLATION, OPERATION AND MAINTENANCE OF THE LEASED PROPERTY OR ANY
PART THEREOF.

 

4.3                               COMPLIANCE WITH MEDICAID AND MEDICARE
REQUIREMENTS.  TENANT, AT ITS SOLE COST AND EXPENSE, SHALL MAKE (OR SHALL CAUSE
TO BE MADE), WHATEVER IMPROVEMENTS (CAPITAL OR ORDINARY) AS ARE REQUIRED TO
CONFORM EACH PROPERTY TO SUCH STANDARDS AS MAY, FROM TIME TO TIME, BE REQUIRED
BY FEDERAL MEDICARE (TITLE 18) OR MEDICAID (TITLE 19) FOR SKILLED AND/OR
INTERMEDIATE CARE NURSING PROGRAMS, TO THE EXTENT TENANT IS A PARTICIPANT IN
SUCH PROGRAMS WITH RESPECT TO SUCH PROPERTY, OR ANY OTHER APPLICABLE PROGRAMS

 

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OR LEGISLATION, OR CAPITAL IMPROVEMENTS REQUIRED BY ANY OTHER GOVERNMENTAL
AGENCY HAVING JURISDICTION OVER ANY PROPERTY AS A CONDITION OF THE CONTINUED
OPERATION OF SUCH PROPERTY FOR ITS PERMITTED USE.

 

4.4                               ENVIRONMENTAL MATTERS.

 

4.4.1                                 RESTRICTION ON USE, ETC.  DURING THE TERM
AND ANY OTHER TIME THAT TENANT SHALL BE IN POSSESSION OF ANY PROPERTY, TENANT
SHALL NOT, AND SHALL NOT PERMIT ANY PERSON TO, STORE, SPILL UPON, DISPOSE OF OR
TRANSFER TO OR FROM SUCH PROPERTY ANY HAZARDOUS SUBSTANCE, EXCEPT IN COMPLIANCE
WITH ALL APPLICABLE LAWS.  DURING THE TERM AND ANY OTHER TIME THAT TENANT SHALL
BE IN POSSESSION OF ANY PROPERTY, TENANT SHALL MAINTAIN (OR SHALL CAUSE TO BE
MAINTAINED) SUCH PROPERTY AT ALL TIMES FREE OF ANY HAZARDOUS SUBSTANCE (EXCEPT
IN COMPLIANCE WITH ALL APPLICABLE LAWS).  TENANT SHALL PROMPTLY:  (A) UPON
RECEIPT OF NOTICE OR KNOWLEDGE, NOTIFY LANDLORD IN WRITING OF ANY MATERIAL
CHANGE IN THE NATURE OR EXTENT OF HAZARDOUS SUBSTANCES AT ANY PROPERTY,
(B) TRANSMIT TO LANDLORD A COPY OF ANY REPORT WHICH IS REQUIRED TO BE FILED BY
TENANT OR ANY MANAGER WITH RESPECT TO ANY PROPERTY PURSUANT TO SARA TITLE III OR
ANY OTHER APPLICABLE LAW, (C) TRANSMIT TO LANDLORD COPIES OF ANY CITATIONS,
ORDERS, NOTICES OR OTHER GOVERNMENTAL COMMUNICATIONS RECEIVED BY TENANT OR ANY
MANAGER OR THEIR RESPECTIVE AGENTS OR REPRESENTATIVES WITH RESPECT THERETO
(COLLECTIVELY, “ENVIRONMENTAL NOTICE”), WHICH ENVIRONMENTAL NOTICE REQUIRES A
WRITTEN RESPONSE OR ANY ACTION TO BE TAKEN AND/OR IF SUCH ENVIRONMENTAL NOTICE
GIVES NOTICE OF AND/OR PRESENTS A MATERIAL RISK OF ANY MATERIAL VIOLATION OF ANY
APPLICABLE LAW AND/OR PRESENTS A MATERIAL RISK OF ANY MATERIAL COST, EXPENSE,
LOSS OR DAMAGE (AN “ENVIRONMENTAL OBLIGATION”), (D) OBSERVE AND COMPLY WITH (OR
CAUSE TO BE OBSERVED AND COMPLIED WITH) ALL APPLICABLE LAWS RELATING TO THE USE,
MAINTENANCE AND DISPOSAL OF HAZARDOUS SUBSTANCES AND ALL ORDERS OR DIRECTIVES
FROM ANY OFFICIAL, COURT OR AGENCY OF COMPETENT JURISDICTION RELATING TO THE USE
OR MAINTENANCE OR REQUIRING THE REMOVAL, TREATMENT, CONTAINMENT OR OTHER
DISPOSITION THEREOF, AND (E) PAY OR OTHERWISE DISPOSE (OR CAUSE TO BE PAID OR
OTHERWISE DISPOSED) OF ANY FINE, CHARGE OR IMPOSITION RELATED THERETO, UNLESS
TENANT OR ANY MANAGER SHALL CONTEST THE SAME IN GOOD FAITH AND BY APPROPRIATE
PROCEEDINGS AND THE RIGHT TO USE AND THE VALUE OF ANY OF THE LEASED PROPERTY IS
NOT MATERIALLY AND ADVERSELY AFFECTED THEREBY.

 

If, at any time prior to the termination of this Agreement, Hazardous Substances
(other than those maintained in accordance with Applicable Laws) are discovered
on any Property, subject to Tenant’s right to contest the same in accordance
with Article 8, Tenant shall take (and shall cause to be taken) all actions and

 

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incur any and all expenses, as are required by any Government Agency and by
Applicable Law, (x) to clean up and remove from and about such Property all
Hazardous Substances thereon, (y) to contain and prevent any further release or
threat of release of Hazardous Substances on or about such Property and (z) to
use good faith efforts to eliminate any further release or threat of release of
Hazardous Substances on or about such Property.

 

4.4.2                                 INDEMNIFICATION OF LANDLORD.  TENANT SHALL
PROTECT, INDEMNIFY AND HOLD HARMLESS LANDLORD AND EACH FACILITY MORTGAGEE, THEIR
TRUSTEES, OFFICERS, AGENTS, EMPLOYEES AND BENEFICIARIES, AND ANY OF THEIR
RESPECTIVE SUCCESSORS OR ASSIGNS WITH RESPECT TO THIS AGREEMENT (COLLECTIVELY,
THE “INDEMNITEES” AND, INDIVIDUALLY, AN “INDEMNITEE”) FOR, FROM AND AGAINST ANY
AND ALL DEBTS, LIENS, CLAIMS, CAUSES OF ACTION, ADMINISTRATIVE ORDERS OR
NOTICES, COSTS, FINES, PENALTIES OR EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEY’S FEES AND EXPENSES) IMPOSED UPON, INCURRED BY OR ASSERTED
AGAINST ANY INDEMNITEE RESULTING FROM, EITHER DIRECTLY OR INDIRECTLY, THE
PRESENCE IN, UPON OR UNDER THE SOIL OR GROUND WATER OF ANY PROPERTY OR ANY
PROPERTIES SURROUNDING SUCH PROPERTY OF ANY HAZARDOUS SUBSTANCES IN VIOLATION OF
ANY APPLICABLE LAW, EXCEPT TO THE EXTENT THE SAME ARISE FROM THE ACTS OR
OMISSIONS OF LANDLORD OR ANY OTHER INDEMNITEE OR DURING ANY PERIOD THAT LANDLORD
OR A PERSON DESIGNATED BY LANDLORD (OTHER THAN TENANT) IS IN POSSESSION OF SUCH
PROPERTY FROM AND AFTER THE COMMENCEMENT DATE FOR SUCH PROPERTY.  TENANT’S DUTY
HEREIN INCLUDES, BUT IS NOT LIMITED TO, COSTS ASSOCIATED WITH PERSONAL INJURY OR
PROPERTY DAMAGE CLAIMS AS A RESULT OF THE PRESENCE PRIOR TO THE EXPIRATION OR
SOONER TERMINATION OF THE TERM AND THE SURRENDER OF SUCH PROPERTY TO LANDLORD IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT OF HAZARDOUS SUBSTANCES IN, UPON OR
UNDER THE SOIL OR GROUND WATER OF SUCH PROPERTY IN VIOLATION OF ANY APPLICABLE
LAW.  UPON NOTICE FROM LANDLORD AND ANY OTHER OF THE INDEMNITEES, TENANT SHALL
UNDERTAKE THE DEFENSE, AT TENANT’S SOLE COST AND EXPENSE, OF ANY INDEMNIFICATION
DUTIES SET FORTH HEREIN, IN WHICH EVENT, TENANT SHALL NOT BE LIABLE FOR PAYMENT
OF ANY DUPLICATIVE ATTORNEYS’ FEES INCURRED BY ANY INDEMNITEE.

 

Tenant shall, upon demand, pay (or cause to be paid) to Landlord, as an
Additional Charge, any cost, expense, loss or damage (including, without
limitation, reasonable attorneys’ fees) reasonably incurred by Landlord and
arising from a failure of Tenant to observe and perform  (or to cause to be
observed and performed) the requirements of this Section 4.4, which amounts
shall bear interest from the date ten (10) Business Days after written demand
therefor is given to Tenant until paid by Tenant to Landlord at the Overdue
Rate.

 

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4.4.3                                 SURVIVAL.  THE PROVISIONS OF THIS
SECTION 4.4 SHALL SURVIVE THE EXPIRATION OR SOONER TERMINATION OF THIS
AGREEMENT.

 

ARTICLE 5

 

MAINTENANCE AND REPAIRS

 

5.1                               MAINTENANCE AND REPAIR.

 

5.1.1                                 TENANT’S GENERAL OBLIGATIONS.  TENANT
SHALL KEEP (OR CAUSE TO BE KEPT), AT TENANT’S SOLE COST AND EXPENSE, THE LEASED
PROPERTY AND ALL PRIVATE ROADWAYS, SIDEWALKS AND CURBS APPURTENANT THERETO (AND
TENANT’S PERSONAL PROPERTY) IN GOOD ORDER AND REPAIR, REASONABLE WEAR AND TEAR
EXCEPTED (WHETHER OR NOT THE NEED FOR SUCH REPAIRS OCCURS AS A RESULT OF
TENANT’S OR ANY MANAGER’S USE, ANY PRIOR USE, THE ELEMENTS OR THE AGE OF THE
LEASED PROPERTY OR TENANT’S PERSONAL PROPERTY OR ANY PORTION THEREOF), AND SHALL
PROMPTLY MAKE OR CAUSE TO BE MADE ALL NECESSARY AND APPROPRIATE REPAIRS AND
REPLACEMENTS TO EACH PROPERTY OF EVERY KIND AND NATURE, WHETHER INTERIOR OR
EXTERIOR, STRUCTURAL OR NONSTRUCTURAL, ORDINARY OR EXTRAORDINARY, FORESEEN OR
UNFORESEEN OR ARISING BY REASON OF A CONDITION EXISTING PRIOR TO THE
COMMENCEMENT DATE FOR SUCH PROPERTY (CONCEALED OR OTHERWISE).  ALL REPAIRS SHALL
BE MADE IN A GOOD, WORKMANLIKE MANNER, CONSISTENT WITH INDUSTRY STANDARDS FOR
COMPARABLE FACILITIES IN LIKE LOCALES, IN ACCORDANCE WITH ALL APPLICABLE
FEDERAL, STATE AND LOCAL STATUTES, ORDINANCES, CODES, RULES AND REGULATIONS
RELATING TO ANY SUCH WORK.  TENANT SHALL NOT TAKE OR OMIT TO TAKE (OR PERMIT ANY
PERSON TO TAKE OR OMIT TO TAKE) ANY ACTION, THE TAKING OR OMISSION OF WHICH
WOULD MATERIALLY AND ADVERSELY IMPAIR THE VALUE OR THE USEFULNESS OF THE LEASED
PROPERTY OR ANY MATERIAL PART THEREOF FOR ITS PERMITTED USE.  TENANT’S
OBLIGATIONS UNDER THIS SECTION 5.1.1 SHALL BE LIMITED IN THE EVENT OF ANY
CASUALTY OR CONDEMNATION AS SET FORTH IN ARTICLE 10 AND ARTICLE 11 AND TENANT’S
OBLIGATIONS WITH RESPECT TO HAZARDOUS SUBSTANCES ARE AS SET FORTH IN
SECTION 4.4.

 

5.1.2                                 LANDLORD’S OBLIGATIONS.

 

(A)                                  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, LANDLORD SHALL NOT, UNDER ANY CIRCUMSTANCES, BE REQUIRED TO
BUILD OR REBUILD ANY IMPROVEMENT ON THE LEASED PROPERTY, OR TO MAKE ANY REPAIRS,
REPLACEMENTS, ALTERATIONS, RESTORATIONS OR RENEWALS OF ANY NATURE OR DESCRIPTION
TO THE LEASED PROPERTY, WHETHER ORDINARY OR EXTRAORDINARY, STRUCTURAL OR
NONSTRUCTURAL, FORESEEN OR UNFORESEEN, OR TO MAKE ANY EXPENDITURE WHATSOEVER
WITH RESPECT THERETO, OR TO MAINTAIN THE LEASED PROPERTY IN ANY

 

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WAY.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, TENANT HEREBY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE RIGHT TO MAKE REPAIRS AT ANY
PROPERTY AT THE EXPENSE OF LANDLORD PURSUANT TO ANY LAW IN EFFECT ON THE
COMMENCEMENT DATE FOR SUCH PROPERTY OR THEREAFTER ENACTED.  LANDLORD SHALL HAVE
THE RIGHT TO GIVE, RECORD AND POST, AS APPROPRIATE, NOTICES OF NONRESPONSIBILITY
UNDER ANY MECHANIC’S LIEN LAWS NOW OR HEREAFTER EXISTING.

 

(B)                                 IF, PURSUANT TO THE TERMS OF THIS AGREEMENT,
TENANT IS REQUIRED TO MAKE ANY EXPENDITURES IN CONNECTION WITH ANY REPAIR,
MAINTENANCE OR RENOVATION WITH RESPECT TO ANY PROPERTY, TENANT MAY, AT ITS
ELECTION, ADVANCE SUCH FUNDS OR GIVE LANDLORD NOTICE THEREOF, WHICH NOTICE SHALL
SET FORTH, IN REASONABLE DETAIL, THE NATURE OF THE REQUIRED REPAIR, RENOVATION
OR REPLACEMENT, THE ESTIMATED COST THEREOF AND SUCH OTHER INFORMATION WITH
RESPECT THERETO AS LANDLORD MAY REASONABLY REQUIRE.  PROVIDED THAT NO EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND TENANT SHALL OTHERWISE COMPLY
WITH THE APPLICABLE PROVISIONS OF ARTICLE 6, LANDLORD SHALL, WITHIN TEN
(10) BUSINESS DAYS AFTER SUCH NOTICE, SUBJECT TO AND IN ACCORDANCE WITH THE
APPLICABLE PROVISIONS OF ARTICLE 6, DISBURSE SUCH REQUIRED FUNDS TO TENANT (OR,
IF TENANT SHALL SO ELECT, DIRECTLY TO THE MANAGER OR ANY OTHER PERSON PERFORMING
THE REQUIRED WORK) AND, UPON SUCH DISBURSEMENT, THE MINIMUM RENT SHALL BE
ADJUSTED AS PROVIDED IN SECTION 3.1.1(C).  NOTWITHSTANDING THE FOREGOING,
LANDLORD MAY ELECT NOT TO DISBURSE SUCH REQUIRED FUNDS TO TENANT; PROVIDED,
HOWEVER, THAT IF LANDLORD SHALL ELECT NOT TO DISBURSE SUCH REQUIRED FUNDS AS
AFORESAID, TENANT’S OBLIGATION TO MAKE SUCH REQUIRED REPAIR, RENOVATION OR
REPLACEMENT SHALL BE DEEMED WAIVED BY LANDLORD, AND, NOTWITHSTANDING ANYTHING
CONTAINED IN THIS AGREEMENT TO THE CONTRARY, TENANT SHALL HAVE NO OBLIGATION TO
MAKE SUCH REQUIRED REPAIR, RENOVATION OR REPLACEMENT.

 

5.1.3                                 NONRESPONSIBILITY OF LANDLORD, ETC.  ALL
MATERIALMEN, CONTRACTORS, ARTISANS, MECHANICS AND LABORERS AND OTHER PERSONS
CONTRACTING WITH TENANT WITH RESPECT TO THE LEASED PROPERTY, OR ANY PART
THEREOF, ARE HEREBY CHARGED WITH NOTICE THAT LIENS ON THE LEASED PROPERTY OR ON
LANDLORD’S INTEREST THEREIN ARE EXPRESSLY PROHIBITED AND THAT THEY MUST LOOK
SOLELY TO TENANT TO SECURE PAYMENT FOR ANY WORK DONE OR MATERIAL FURNISHED TO
TENANT OR ANY MANAGER OR FOR ANY OTHER PURPOSE DURING THE TERM OF THIS
AGREEMENT.

 

Nothing contained in this Agreement shall be deemed or construed in any way as
constituting the consent or request of

 

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Landlord, express or implied, by inference or otherwise, to any contractor,
subcontractor, laborer or materialmen for the performance of any labor or the
furnishing of any materials for any alteration, addition, improvement or repair
to the Leased Property or any part thereof or as giving Tenant any right, power
or authority to contract for or permit the rendering of any services or the
furnishing of any materials that would give rise to the filing of any lien
against the Leased Property or any part thereof nor to subject Landlord’s estate
in the Leased Property or any part thereof to liability under any mechanic’s
lien law of any State in any way, it being expressly understood Landlord’s
estate shall not be subject to any such liability.

 

5.2                               TENANT’S PERSONAL PROPERTY.  TENANT SHALL
PROVIDE AND MAINTAIN (OR CAUSE TO BE PROVIDED AND MAINTAINED) THROUGHOUT THE
TERM ALL SUCH TENANT’S PERSONAL PROPERTY AS SHALL BE NECESSARY IN ORDER TO
OPERATE IN COMPLIANCE WITH APPLICABLE MATERIAL LEGAL REQUIREMENTS AND INSURANCE
REQUIREMENTS AND OTHERWISE IN ACCORDANCE WITH CUSTOMARY PRACTICE IN THE INDUSTRY
FOR THE PERMITTED USE.  IF, FROM AND AFTER THE COMMENCEMENT DATE WITH RESPECT TO
ANY PROPERTY, TENANT ACQUIRES AN INTEREST IN ANY ITEM OF TANGIBLE PERSONAL
PROPERTY (OTHER THAN MOTOR VEHICLES) ON, OR IN CONNECTION WITH, THE LEASED
PROPERTY, OR ANY PORTION THEREOF, WHICH BELONGS TO ANYONE OTHER THAN TENANT,
TENANT SHALL REQUIRE THE AGREEMENTS PERMITTING SUCH USE TO PROVIDE THAT LANDLORD
OR ITS DESIGNEE MAY ASSUME TENANT’S RIGHTS AND OBLIGATIONS UNDER SUCH AGREEMENT
UPON LANDLORD’S PURCHASE OF THE SAME IN ACCORDANCE WITH THE PROVISIONS OF
ARTICLE 15 AND THE ASSUMPTION OF MANAGEMENT OR OPERATION OF THE FACILITY BY
LANDLORD OR ITS DESIGNEE.

 

5.3                               YIELD UP.  UPON THE EXPIRATION OR SOONER
TERMINATION OF THIS AGREEMENT (OR THE TERMINATION OF THIS AGREEMENT WITH RESPECT
TO ANY PROPERTY), TENANT SHALL VACATE AND SURRENDER THE LEASED PROPERTY OR SUCH
PROPERTY (AS APPLICABLE) TO LANDLORD IN SUBSTANTIALLY THE SAME CONDITION IN
WHICH SUCH PROPERTY WAS IN ON ITS COMMENCEMENT DATE, EXCEPT AS REPAIRED,
REBUILT, RESTORED, ALTERED OR ADDED TO AS PERMITTED OR REQUIRED BY THE
PROVISIONS OF THIS AGREEMENT, REASONABLE WEAR AND TEAR EXCEPTED (AND CASUALTY
DAMAGE AND CONDEMNATION, IN THE EVENT THAT THIS AGREEMENT IS TERMINATED
FOLLOWING A CASUALTY OR CONDEMNATION IN ACCORDANCE WITH ARTICLE 10 OR ARTICLE 11
EXCEPTED).

 

In addition, upon the expiration or earlier termination of this Agreement,
Tenant shall, at Landlord’s sole cost and expense, use its good faith efforts to
transfer (or cause to be transferred) to and cooperate with Landlord or
Landlord’s nominee in connection with the processing of all applications for
licenses, operating permits and other governmental

 

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authorizations and all contracts, including contracts with governmental or
quasi-governmental Entities which may be necessary for the use and operation of
the Facility as then operated.  If requested by Landlord, Tenant shall continue
to manage one or more of the Facilities after the expiration of the Term for up
to one hundred eighty (180) days, on such reasonable terms (which shall include
an agreement to reimburse Tenant for its reasonable out-of-pocket costs and
expenses, and reasonable administrative costs), as Landlord shall reasonably
request.

 

5.4                               MANAGEMENT AGREEMENT.  TENANT SHALL NOT,
WITHOUT LANDLORD’S PRIOR WRITTEN CONSENT (WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD, DELAYED OR CONDITIONED), ENTER INTO, AMEND OR MODIFY THE
PROVISIONS OF ANY MANAGEMENT AGREEMENT WITH RESPECT TO ANY PROPERTY.  ANY
MANAGEMENT AGREEMENT ENTERED INTO PURSUANT TO THE PROVISIONS OF THIS SECTION 5.4
SHALL BE SUBORDINATE TO THIS AGREEMENT AND SHALL PROVIDE, INTER ALIA, THAT ALL
AMOUNTS DUE FROM TENANT TO MANAGER THEREUNDER SHALL BE SUBORDINATE TO ALL
AMOUNTS DUE FROM TENANT TO LANDLORD (PROVIDED THAT, AS LONG AS NO EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, TENANT MAY PAY ALL AMOUNTS DUE TO
MANAGER THEREUNDER PURSUANT TO SUCH MANAGEMENT AGREEMENT) AND FOR TERMINATION
THEREOF, AT LANDLORD’S OPTION, UPON THE TERMINATION OF THIS AGREEMENT.  TENANT
SHALL NOT TAKE ANY ACTION, GRANT ANY CONSENT OR PERMIT ANY ACTION UNDER ANY SUCH
MANAGEMENT AGREEMENT WHICH MIGHT HAVE A MATERIAL ADVERSE EFFECT ON LANDLORD,
WITHOUT THE PRIOR WRITTEN CONSENT OF LANDLORD, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD, DELAYED OR CONDITIONED.

 

ARTICLE 6

 

IMPROVEMENTS, ETC.

 

6.1                               IMPROVEMENTS TO THE LEASED PROPERTY.  TENANT
SHALL NOT MAKE, CONSTRUCT OR INSTALL (OR PERMIT TO BE MADE, CONSTRUCTED OR
INSTALLED) ANY CAPITAL ADDITIONS WITHOUT, IN EACH INSTANCE, OBTAINING LANDLORD’S
PRIOR WRITTEN CONSENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD, DELAYED
OR CONDITIONED PROVIDED THAT (A) CONSTRUCTION OR INSTALLATION OF THE SAME WOULD
NOT ADVERSELY AFFECT OR VIOLATE ANY MATERIAL LEGAL REQUIREMENT OR INSURANCE
REQUIREMENT APPLICABLE TO ANY PROPERTY AND (B) LANDLORD SHALL HAVE RECEIVED AN
OFFICER’S CERTIFICATE CERTIFYING AS TO THE SATISFACTION OF THE CONDITIONS SET
OUT IN CLAUSE (A) ABOVE; PROVIDED, HOWEVER, THAT NO SUCH CONSENT SHALL BE
REQUIRED IN THE EVENT IMMEDIATE ACTION IS REQUIRED TO PREVENT IMMINENT HARM TO
PERSON OR PROPERTY.  PRIOR TO COMMENCING CONSTRUCTION OF ANY CAPITAL ADDITION,
TENANT SHALL SUBMIT TO LANDLORD, IN WRITING, A PROPOSAL SETTING FORTH, IN
REASONABLE DETAIL, ANY SUCH PROPOSED IMPROVEMENT AND SHALL PROVIDE TO LANDLORD
SUCH

 

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PLANS AND SPECIFICATIONS, AND SUCH PERMITS, LICENSES, CONTRACTS AND SUCH OTHER
INFORMATION CONCERNING THE SAME AS LANDLORD MAY REASONABLY REQUEST.  LANDLORD
SHALL HAVE THIRTY (30) DAYS TO REVIEW ALL MATERIALS SUBMITTED TO LANDLORD IN
CONNECTION WITH ANY SUCH PROPOSAL.  FAILURE OF LANDLORD TO RESPOND TO TENANT’S
PROPOSAL WITHIN THIRTY (30) DAYS AFTER RECEIPT OF ALL INFORMATION AND MATERIALS
REQUESTED BY LANDLORD IN CONNECTION WITH THE PROPOSED IMPROVEMENT SHALL BE
DEEMED TO CONSTITUTE APPROVAL OF THE SAME.  WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, SUCH PROPOSAL SHALL INDICATE THE APPROXIMATE PROJECTED COST OF
CONSTRUCTING SUCH PROPOSED IMPROVEMENT AND THE USE OR USES TO WHICH IT WILL BE
PUT.  NO CAPITAL ADDITION SHALL BE MADE WHICH WOULD TIE IN OR CONNECT ANY LEASED
IMPROVEMENTS WITH ANY OTHER IMPROVEMENTS ON PROPERTY ADJACENT TO ANY PROPERTY
(AND NOT PART OF THE LAND) INCLUDING, WITHOUT LIMITATION, TIE-INS OF BUILDINGS
OR OTHER STRUCTURES OR UTILITIES.  EXCEPT AS PERMITTED HEREIN, TENANT SHALL NOT
FINANCE THE COST OF ANY CONSTRUCTION OF SUCH IMPROVEMENT BY THE GRANTING OF A
LIEN ON OR SECURITY INTEREST IN THE LEASED PROPERTY OR SUCH IMPROVEMENT, OR
TENANT’S INTEREST THEREIN, WITHOUT THE PRIOR WRITTEN CONSENT OF LANDLORD, WHICH
CONSENT MAY BE WITHHELD BY LANDLORD IN LANDLORD’S SOLE DISCRETION.  ANY SUCH
IMPROVEMENTS SHALL, UPON THE EXPIRATION OR SOONER TERMINATION OF THIS AGREEMENT,
REMAIN OR PASS TO AND BECOME THE PROPERTY OF LANDLORD, FREE AND CLEAR OF ALL
ENCUMBRANCES OTHER THAN PERMITTED ENCUMBRANCES.

 

6.2                               SALVAGE.  ALL MATERIALS WHICH ARE SCRAPPED OR
REMOVED IN CONNECTION WITH THE MAKING OF EITHER CAPITAL ADDITIONS OR NON-CAPITAL
ADDITIONS OR REPAIRS REQUIRED BY ARTICLE 5 SHALL BE OR BECOME THE PROPERTY OF
THE PARTY THAT PAID FOR SUCH WORK.

 

ARTICLE 7

 

LIENS

 

7.1                               LIENS.  SUBJECT TO ARTICLE 8, TENANT SHALL USE
ITS BEST EFFORTS NOT, DIRECTLY OR INDIRECTLY, TO CREATE OR ALLOW TO REMAIN AND
SHALL PROMPTLY DISCHARGE (OR CAUSE TO BE DISCHARGED), AT ITS EXPENSE, ANY LIEN,
ENCUMBRANCE, ATTACHMENT, TITLE RETENTION AGREEMENT OR CLAIM UPON THE LEASED
PROPERTY, OR ANY PORTION THEREOF, OR TENANT’S LEASEHOLD INTEREST THEREIN OR ANY
ATTACHMENT, LEVY, CLAIM OR ENCUMBRANCE IN RESPECT OF THE RENT, OTHER THAN
(A) PERMITTED ENCUMBRANCES, (B) RESTRICTIONS, LIENS AND OTHER ENCUMBRANCES WHICH
ARE CONSENTED TO IN WRITING BY LANDLORD, (C) LIENS FOR THOSE TAXES OF LANDLORD
WHICH TENANT IS NOT REQUIRED TO PAY HEREUNDER, (D) SUBLEASES PERMITTED BY
ARTICLE 16, (E) LIENS FOR IMPOSITIONS OR FOR SUMS RESULTING FROM NONCOMPLIANCE
WITH LEGAL REQUIREMENTS SO LONG AS (I) THE SAME ARE NOT YET DUE AND PAYABLE, OR
(II) ARE BEING CONTESTED IN

 

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ACCORDANCE WITH ARTICLE 8, (F) LIENS OF MECHANICS, LABORERS, MATERIALMEN,
SUPPLIERS OR VENDORS INCURRED IN THE ORDINARY COURSE OF BUSINESS THAT ARE NOT
YET DUE AND PAYABLE OR ARE FOR SUMS THAT ARE BEING CONTESTED IN ACCORDANCE WITH
ARTICLE 8, (G) ANY FACILITY MORTGAGES OR OTHER LIENS WHICH ARE THE
RESPONSIBILITY OF LANDLORD PURSUANT TO THE PROVISIONS OF ARTICLE 20 AND
(H) LANDLORD LIENS AND ANY OTHER VOLUNTARY LIENS CREATED BY LANDLORD.

 

7.2                               LANDLORD’S LIEN.  IN ADDITION TO ANY STATUTORY
LANDLORD’S LIEN AND IN ORDER TO SECURE PAYMENT OF THE RENT AND ALL OTHER SUMS
PAYABLE HEREUNDER BY TENANT, AND TO SECURE PAYMENT OF ANY LOSS, COST OR DAMAGE
WHICH LANDLORD MAY SUFFER BY REASON OF TENANT’S BREACH OF THIS AGREEMENT, TENANT
HEREBY GRANTS UNTO LANDLORD, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
A SECURITY INTEREST IN AND AN EXPRESS CONTRACTUAL LIEN UPON TENANT’S PERSONAL
PROPERTY (EXCEPT MOTOR VEHICLES), AND TENANT’S INTEREST IN ALL LEDGER SHEETS,
FILES, RECORDS, DOCUMENTS AND INSTRUMENTS (INCLUDING, WITHOUT LIMITATION,
COMPUTER PROGRAMS, TAPES AND RELATED ELECTRONIC DATA PROCESSING) RELATING TO THE
OPERATION OF THE FACILITIES (THE “RECORDS”) AND ALL PROCEEDS THEREFROM, SUBJECT
TO ANY PERMITTED ENCUMBRANCES; AND SUCH TENANT’S PERSONAL PROPERTY SHALL NOT BE
REMOVED FROM THE LEASED PROPERTY AT ANY TIME WHEN AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING.

 

Upon Landlord’s request, Tenant shall execute and deliver to Landlord financing
statements in form sufficient to perfect the security interest of Landlord in
Tenant’s Personal Property and the proceeds thereof in accordance with the
provisions of the applicable laws of the State.  During the continuance of an
Event of Default, Tenant hereby grants Landlord an irrevocable limited power of
attorney, coupled with an interest, to execute all such financing statements in
Tenant’s name, place and stead.  The security interest herein granted is in
addition to any statutory lien for the Rent.

 

ARTICLE 8

 

PERMITTED CONTESTS

 

Tenant shall have the right to contest the amount or validity of any Imposition,
Legal Requirement, Insurance Requirement, Environmental Obligation, lien,
attachment, levy, encumbrance, charge or claim (collectively, “Claims”) as to
the Leased Property, by appropriate legal proceedings, conducted in good faith
and with due diligence, provided that (a) the foregoing shall in no way be
construed as relieving, modifying or extending Tenant’s obligation to pay (or
cause to be paid)

 

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any Claims as finally determined, (b) such contest shall not cause Landlord or
Tenant to be in default under any mortgage or deed of trust encumbering the
Leased Property, or any portion thereof (Landlord agreeing that any such
mortgage or deed of trust shall permit Tenant to exercise the rights granted
pursuant to this Article 8) or any interest therein or result in or reasonably
be expected to result in a lien attaching to the Leased Property, or any portion
thereof, (c) no part of the Leased Property nor any Rent therefrom shall be in
any immediate danger of sale, forfeiture, attachment or loss, and (d) Tenant
shall indemnify and hold harmless Landlord from and against any cost, claim,
damage, penalty or reasonable expense, including reasonable attorneys’ fees,
incurred by Landlord in connection therewith or as a result thereof.  Landlord
agrees to join in any such proceedings if required legally to prosecute such
contest, provided that Landlord shall not thereby be subjected to any liability
therefor (including, without limitation, for the payment of any costs or
expenses in connection therewith) unless Tenant agrees by agreement in form and
substance reasonably satisfactory to Landlord, to assume and indemnify Landlord
with respect to the same.  Tenant shall be entitled to any refund of any Claims
and such charges and penalties or interest thereon which have been paid by
Tenant or paid by Landlord to the extent that Landlord has been fully reimbursed
by Tenant.  If Tenant shall fail (x) to pay or cause to be paid any Claims when
finally determined, (y) to provide reasonable security therefor or (z) to
prosecute or cause to be prosecuted any such contest diligently and in good
faith, Landlord may, upon reasonable notice to Tenant (which notice shall not be
required if Landlord shall reasonably determine that the same is not
practicable), pay such charges, together with interest and penalties due with
respect thereto, and Tenant shall reimburse Landlord therefor, upon demand, as
Additional Charges.

 

ARTICLE 9

 

INSURANCE AND INDEMNIFICATION

 

9.1                               GENERAL INSURANCE REQUIREMENTS.  TENANT SHALL,
AT ALL TIMES DURING THE TERM AND AT ANY OTHER TIME TENANT SHALL BE IN POSSESSION
OF ANY PROPERTY, OR ANY PORTION THEREOF, KEEP (OR CAUSE TO BE KEPT) SUCH
PROPERTY AND ALL PROPERTY LOCATED THEREIN OR THEREON, INSURED AGAINST THE RISKS
AND IN SUCH AMOUNTS AS IS AGAINST SUCH RISKS AND IN SUCH AMOUNTS AS LANDLORD
SHALL REASONABLY REQUIRE AND MAY BE COMMERCIALLY REASONABLE.  TENANT SHALL
PREPARE A PROPOSAL SETTING FORTH THE INSURANCE TENANT PROPOSES TO BE MAINTAINED
WITH RESPECT TO EACH PROPERTY DURING THE ENSUING FISCAL YEAR AND SHALL SUBMIT
SUCH PROPOSAL TO

 

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LANDLORD ON OR BEFORE DECEMBER 1 OF THE PRECEDING LEASE YEAR FOR LANDLORD’S
REVIEW AND APPROVAL, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, DELAYED
OR CONDITIONED.  IN THE EVENT THAT LANDLORD SHALL FAIL TO RESPOND WITHIN THIRTY
(30) DAYS AFTER RECEIPT OF SUCH PROPOSAL, SUCH PROPOSAL SHALL BE DEEMED
APPROVED.

 

9.2                               WAIVER OF SUBROGATION.  LANDLORD AND TENANT
AGREE THAT (INSOFAR AS AND TO THE EXTENT THAT SUCH AGREEMENT MAY BE EFFECTIVE
WITHOUT INVALIDATING OR MAKING IT IMPOSSIBLE TO SECURE INSURANCE COVERAGE FROM
RESPONSIBLE INSURANCE COMPANIES DOING BUSINESS IN ANY STATE) WITH RESPECT TO ANY
PROPERTY LOSS WHICH IS COVERED BY INSURANCE THEN BEING CARRIED BY LANDLORD OR
TENANT, THE PARTY CARRYING SUCH INSURANCE AND SUFFERING SAID LOSS RELEASES THE
OTHERS OF AND FROM ANY AND ALL CLAIMS WITH RESPECT TO SUCH LOSS; AND THEY
FURTHER AGREE THAT THEIR RESPECTIVE INSURANCE COMPANIES (AND, IF LANDLORD OR
TENANT SHALL SELF INSURE IN ACCORDANCE WITH THE TERMS HEREOF, LANDLORD OR
TENANT, AS THE CASE MAY BE) SHALL HAVE NO RIGHT OF SUBROGATION AGAINST THE OTHER
ON ACCOUNT THEREOF, EVEN THOUGH EXTRA PREMIUM MAY RESULT THEREFROM.  IN THE
EVENT THAT ANY EXTRA PREMIUM IS PAYABLE BY TENANT AS A RESULT OF THIS PROVISION,
LANDLORD SHALL NOT BE LIABLE FOR REIMBURSEMENT TO TENANT FOR SUCH EXTRA PREMIUM.

 

9.3                               FORM SATISFACTORY, ETC.  ALL INSURANCE
POLICIES AND ENDORSEMENTS REQUIRED PURSUANT TO THIS ARTICLE 9 SHALL BE FULLY
PAID FOR, NONASSESSABLE, AND ISSUED BY REPUTABLE INSURANCE COMPANIES AUTHORIZED
TO DO BUSINESS IN THE STATE AND HAVING A GENERAL POLICY HOLDER’S RATING OF NO
LESS THAN A IN BEST’S LATEST RATING GUIDE.  ALL PROPERTY, BUSINESS INTERRUPTION,
LIABILITY AND FLOOD INSURANCE POLICIES WITH RESPECT TO EACH PROPERTY SHALL
INCLUDE NO DEDUCTIBLE IN EXCESS OF TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000).  AT ALL TIMES, ALL PROPERTY, BUSINESS INTERRUPTION, LIABILITY AND
FLOOD INSURANCE POLICIES, WITH THE EXCEPTION OF WORKER’S COMPENSATION INSURANCE
COVERAGE, SHALL NAME LANDLORD AND ANY FACILITY MORTGAGEE AS ADDITIONAL INSUREDS,
AS THEIR INTERESTS MAY APPEAR.  ALL LOSS ADJUSTMENTS SHALL BE PAYABLE AS
PROVIDED IN ARTICLE 10, EXCEPT THAT LOSSES UNDER LIABILITY AND WORKER’S
COMPENSATION INSURANCE POLICIES SHALL BE PAYABLE DIRECTLY TO THE PARTY ENTITLED
THERETO.  TENANT SHALL CAUSE ALL INSURANCE PREMIUMS TO BE PAID AND SHALL DELIVER
(OR CAUSE TO BE DELIVERED) POLICIES OR CERTIFICATES THEREOF TO LANDLORD PRIOR TO
THEIR EFFECTIVE DATE (AND, WITH RESPECT TO ANY RENEWAL POLICY, PRIOR TO THE
EXPIRATION OF THE EXISTING POLICY).  ALL SUCH POLICIES SHALL PROVIDE LANDLORD
(AND ANY FACILITY MORTGAGEE IF REQUIRED BY THE SAME) THIRTY (30) DAYS PRIOR
WRITTEN NOTICE OF ANY MATERIAL CHANGE OR CANCELLATION OF SUCH

 

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POLICY.  IN THE EVENT TENANT SHALL FAIL TO EFFECT (OR CAUSE TO BE EFFECTED) SUCH
INSURANCE AS HEREIN REQUIRED, TO PAY (OR CAUSE TO BE PAID) THE PREMIUMS THEREFOR
OR TO DELIVER (OR CAUSE TO BE DELIVERED) SUCH POLICIES OR CERTIFICATES TO
LANDLORD OR ANY FACILITY MORTGAGEE AT THE TIMES REQUIRED, LANDLORD SHALL HAVE
THE RIGHT, BUT NOT THE OBLIGATION, UPON NOTICE TO TENANT, TO ACQUIRE SUCH
INSURANCE AND PAY THE PREMIUMS THEREFOR, WHICH AMOUNTS SHALL BE PAYABLE TO
LANDLORD, UPON DEMAND, AS ADDITIONAL CHARGES, TOGETHER WITH INTEREST ACCRUED
THEREON AT THE OVERDUE RATE FROM THE DATE SUCH PAYMENT IS MADE UNTIL (BUT
EXCLUDING) THE DATE REPAID.

 

9.4                               NO SEPARATE INSURANCE; SELF-INSURANCE.  TENANT
SHALL NOT TAKE (OR PERMIT ANY PERSON TO TAKE) OUT SEPARATE INSURANCE, CONCURRENT
IN FORM OR CONTRIBUTING IN THE EVENT OF LOSS WITH THAT REQUIRED BY THIS
ARTICLE 9, OR INCREASE THE AMOUNT OF ANY EXISTING INSURANCE BY SECURING AN
ADDITIONAL POLICY OR ADDITIONAL POLICIES, UNLESS ALL PARTIES HAVING AN INSURABLE
INTEREST IN THE SUBJECT MATTER OF SUCH INSURANCE, INCLUDING LANDLORD AND ALL
FACILITY MORTGAGEES, ARE INCLUDED THEREIN AS ADDITIONAL INSUREDS AND THE LOSS IS
PAYABLE UNDER SUCH INSURANCE IN THE SAME MANNER AS LOSSES ARE PAYABLE UNDER THIS
AGREEMENT.  IN THE EVENT TENANT SHALL TAKE OUT ANY SUCH SEPARATE INSURANCE OR
INCREASE ANY OF THE AMOUNTS OF THE THEN EXISTING INSURANCE, TENANT SHALL GIVE
LANDLORD PROMPT NOTICE THEREOF.  TENANT SHALL NOT SELF-INSURE (OR PERMIT ANY
PERSON TO SELF-INSURE).

 

9.5                               INDEMNIFICATION OF LANDLORD.  NOTWITHSTANDING
THE EXISTENCE OF ANY INSURANCE PROVIDED FOR HEREIN AND WITHOUT REGARD TO THE
POLICY LIMITS OF ANY SUCH INSURANCE, TENANT SHALL PROTECT, INDEMNIFY AND HOLD
HARMLESS LANDLORD FOR, FROM AND AGAINST ALL LIABILITIES, OBLIGATIONS, CLAIMS,
DAMAGES, PENALTIES, CAUSES OF ACTION, COSTS AND REASONABLE EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES), TO THE MAXIMUM EXTENT PERMITTED
BY LAW, IMPOSED UPON OR INCURRED BY OR ASSERTED AGAINST LANDLORD BY REASON OF
THE FOLLOWING, EXCEPT TO THE EXTENT CAUSED BY LANDLORD’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT:  (A) ANY ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OF
OR DAMAGE TO PROPERTY OCCURRING ON OR ABOUT ANY PROPERTY OR PORTION THEREOF OR
ADJOINING SIDEWALKS OR RIGHTS OF WAY, (B) ANY PAST, PRESENT OR FUTURE USE,
MISUSE, NON-USE, CONDITION, MANAGEMENT, MAINTENANCE OR REPAIR BY TENANT, ANY
MANAGER OR ANYONE CLAIMING UNDER ANY OF THEM OR TENANT’S PERSONAL PROPERTY OR
ANY LITIGATION, PROCEEDING OR CLAIM BY GOVERNMENTAL ENTITIES OR OTHER THIRD
PARTIES TO WHICH LANDLORD IS MADE A PARTY OR PARTICIPANT RELATING TO ANY
PROPERTY OR PORTION THEREOF OR TENANT’S PERSONAL PROPERTY OR SUCH USE, MISUSE,
NON-USE, CONDITION, MANAGEMENT, MAINTENANCE, OR REPAIR THEREOF INCLUDING,

 

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FAILURE TO PERFORM OBLIGATIONS (OTHER THAN CONDEMNATION PROCEEDINGS) TO WHICH
LANDLORD IS MADE A PARTY, (C) ANY IMPOSITIONS THAT ARE THE OBLIGATIONS OF TENANT
TO PAY PURSUANT TO THE APPLICABLE PROVISIONS OF THIS AGREEMENT, AND (D) ANY
FAILURE ON THE PART OF TENANT OR ANYONE CLAIMING UNDER TENANT TO PERFORM OR
COMPLY WITH ANY OF THE TERMS OF THIS AGREEMENT.  TENANT, AT ITS EXPENSE, SHALL
CONTEST, RESIST AND DEFEND ANY SUCH CLAIM, ACTION OR PROCEEDING ASSERTED OR
INSTITUTED AGAINST LANDLORD (AND SHALL NOT BE RESPONSIBLE FOR ANY DUPLICATIVE
ATTORNEYS’ FEES INCURRED BY LANDLORD) OR MAY COMPROMISE OR OTHERWISE DISPOSE OF
THE SAME, WITH LANDLORD’S PRIOR WRITTEN CONSENT (WHICH CONSENT MAY NOT BE
UNREASONABLY WITHHELD, DELAYED OR CONDITIONED).  THE OBLIGATIONS OF TENANT UNDER
THIS SECTION 9.5 ARE IN ADDITION TO THE OBLIGATIONS SET FORTH IN SECTION 4.4 AND
SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

 

ARTICLE 10

 

CASUALTY

 

10.1                        INSURANCE PROCEEDS.  EXCEPT AS PROVIDED IN THE LAST
CLAUSE OF THIS SENTENCE, ALL PROCEEDS PAYABLE BY REASON OF ANY LOSS OR DAMAGE TO
ANY PROPERTY, OR ANY PORTION THEREOF, AND INSURED UNDER ANY POLICY OF INSURANCE
REQUIRED BY ARTICLE 9 (OTHER THAN THE PROCEEDS OF ANY BUSINESS INTERRUPTION
INSURANCE) SHALL BE PAID DIRECTLY TO LANDLORD (SUBJECT TO THE PROVISIONS OF
SECTION 10.2) AND ALL LOSS ADJUSTMENTS WITH RESPECT TO LOSSES PAYABLE TO
LANDLORD SHALL REQUIRE THE PRIOR WRITTEN CONSENT OF LANDLORD, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED; PROVIDED, HOWEVER,
THAT, SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, ALL
SUCH PROCEEDS LESS THAN OR EQUAL TO TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000) SHALL BE PAID DIRECTLY TO TENANT AND SUCH LOSSES MAY BE ADJUSTED
WITHOUT LANDLORD’S CONSENT.  IF TENANT IS REQUIRED TO RECONSTRUCT OR REPAIR ANY
PROPERTY AS PROVIDED HEREIN, SUCH PROCEEDS SHALL BE PAID OUT BY LANDLORD FROM
TIME TO TIME FOR THE REASONABLE COSTS OF RECONSTRUCTION OR REPAIR OF SUCH
PROPERTY NECESSITATED BY SUCH DAMAGE OR DESTRUCTION, SUBJECT TO AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 10.2.4.  PROVIDED NO DEFAULT OR EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING, ANY EXCESS PROCEEDS OF INSURANCE
REMAINING AFTER THE COMPLETION OF THE RESTORATION SHALL BE PAID TO TENANT.  IN
THE EVENT THAT THE PROVISIONS OF SECTION 10.2.1 ARE APPLICABLE, THE INSURANCE
PROCEEDS SHALL BE RETAINED BY THE PARTY ENTITLED THERETO PURSUANT TO
SECTION 10.2.1.

 

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10.2                        DAMAGE OR DESTRUCTION.

 

10.2.1                          DAMAGE OR DESTRUCTION OF LEASED PROPERTY.  IF,
DURING THE TERM, ANY PROPERTY SHALL BE TOTALLY OR PARTIALLY DESTROYED AND THE
FACILITY LOCATED THEREON IS THEREBY RENDERED UNSUITABLE FOR ITS PERMITTED USE,
EITHER LANDLORD OR TENANT MAY, BY THE GIVING OF NOTICE THEREOF TO THE OTHER,
TERMINATE THIS AGREEMENT WITH RESPECT TO SUCH AFFECTED PROPERTY, WHEREUPON, THIS
AGREEMENT SHALL TERMINATE WITH RESPECT TO SUCH AFFECTED PROPERTY AND LANDLORD
SHALL BE ENTITLED TO RETAIN THE INSURANCE PROCEEDS PAYABLE ON ACCOUNT OF SUCH
DAMAGE.  IN SUCH EVENT, TENANT SHALL PAY TO LANDLORD THE AMOUNT OF ANY
DEDUCTIBLE UNDER THE INSURANCE POLICIES COVERING SUCH FACILITY, THE AMOUNT OF
ANY UNINSURED LOSS AND ANY DIFFERENCE BETWEEN THE REPLACEMENT COST OF THE
AFFECTED PROPERTY AND THE CASUALTY INSURANCE PROCEEDS THEREFOR.

 

10.2.2                          PARTIAL DAMAGE OR DESTRUCTION.  IF, DURING THE
TERM, ANY PROPERTY SHALL BE TOTALLY OR PARTIALLY DESTROYED BUT THE FACILITY IS
NOT RENDERED UNSUITABLE FOR ITS PERMITTED USE, TENANT SHALL, SUBJECT TO
SECTION 10.2.3, PROMPTLY RESTORE SUCH FACILITY AS PROVIDED IN SECTION 10.2.4.

 

10.2.3                          INSUFFICIENT INSURANCE PROCEEDS.  IF THE COST OF
THE REPAIR OR RESTORATION OF THE APPLICABLE FACILITY EXCEEDS THE AMOUNT OF
INSURANCE PROCEEDS RECEIVED BY LANDLORD AND TENANT PURSUANT TO SECTION 9.1,
TENANT SHALL GIVE LANDLORD NOTICE THEREOF WHICH NOTICE SHALL SET FORTH IN
REASONABLE DETAIL THE NATURE OF SUCH DEFICIENCY AND WHETHER TENANT SHALL PAY AND
ASSUME THE AMOUNT OF SUCH DEFICIENCY (TENANT HAVING NO OBLIGATION TO DO SO,
EXCEPT THAT, IF TENANT SHALL ELECT TO MAKE SUCH FUNDS AVAILABLE, THE SAME SHALL
BECOME AN IRREVOCABLE OBLIGATION OF TENANT PURSUANT TO THIS AGREEMENT).  IN THE
EVENT TENANT SHALL ELECT NOT TO PAY AND ASSUME THE AMOUNT OF SUCH DEFICIENCY,
LANDLORD SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION), EXERCISABLE AT
LANDLORD’S SOLE ELECTION BY NOTICE TO TENANT, GIVEN WITHIN SIXTY (60) DAYS AFTER
TENANT’S NOTICE OF THE DEFICIENCY, TO ELECT TO MAKE AVAILABLE FOR APPLICATION TO
THE COST OF REPAIR OR RESTORATION THE AMOUNT OF SUCH DEFICIENCY; PROVIDED,
HOWEVER, IN SUCH EVENT, UPON ANY DISBURSEMENT BY LANDLORD THEREOF, THE MINIMUM
RENT SHALL BE ADJUSTED AS PROVIDED IN SECTION 3.1.1(C).  IN THE EVENT THAT
NEITHER LANDLORD NOR TENANT SHALL ELECT TO MAKE SUCH DEFICIENCY AVAILABLE FOR
RESTORATION, EITHER LANDLORD OR TENANT MAY TERMINATE THIS AGREEMENT WITH RESPECT
TO THE AFFECTED PROPERTY BY NOTICE TO THE OTHER, WHEREUPON, THIS AGREEMENT SHALL
SO TERMINATE AND INSURANCE PROCEEDS SHALL BE DISTRIBUTED AS PROVIDED IN
SECTION 10.2.1.  IT IS EXPRESSLY UNDERSTOOD AND AGREED, HOWEVER, THAT,
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,

 

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TENANT SHALL BE STRICTLY LIABLE AND SOLELY RESPONSIBLE FOR THE AMOUNT OF ANY
DEDUCTIBLE AND SHALL, UPON ANY INSURABLE LOSS, PAY OVER THE AMOUNT OF SUCH
DEDUCTIBLE TO LANDLORD AT THE TIME AND IN THE MANNER HEREIN PROVIDED FOR PAYMENT
OF THE APPLICABLE PROCEEDS TO LANDLORD.

 

10.2.4                          DISBURSEMENT OF PROCEEDS.  IN THE EVENT TENANT
IS REQUIRED TO RESTORE ANY PROPERTY PURSUANT TO SECTION 10.2 AND THIS AGREEMENT
IS NOT TERMINATED AS TO SUCH PROPERTY PURSUANT TO THIS ARTICLE 10, TENANT SHALL
COMMENCE (OR CAUSE TO BE COMMENCED) PROMPTLY AND CONTINUE DILIGENTLY TO PERFORM
(OR CAUSE TO BE PERFORMED) THE REPAIR AND RESTORATION OF SUCH PROPERTY
(HEREINAFTER CALLED THE “WORK”), SO AS TO RESTORE (OR CAUSE TO BE RESTORED) THE
APPLICABLE PROPERTY IN MATERIAL COMPLIANCE WITH ALL LEGAL REQUIREMENTS AND SO
THAT SUCH PROPERTY SHALL BE, TO THE EXTENT PRACTICABLE, SUBSTANTIALLY EQUIVALENT
IN VALUE AND GENERAL UTILITY TO ITS GENERAL UTILITY AND VALUE IMMEDIATELY PRIOR
TO SUCH DAMAGE OR DESTRUCTION.  SUBJECT TO THE TERMS HEREOF, LANDLORD SHALL
ADVANCE THE INSURANCE PROCEEDS AND ANY ADDITIONAL AMOUNTS PAYABLE BY LANDLORD
PURSUANT TO SECTION 10.2.3 OR OTHERWISE DEPOSITED WITH LANDLORD TO TENANT
REGULARLY DURING THE REPAIR AND RESTORATION PERIOD SO AS TO PERMIT PAYMENT FOR
THE COST OF ANY SUCH RESTORATION AND REPAIR.  ANY SUCH ADVANCES SHALL BE MADE
NOT MORE THAN MONTHLY WITHIN TEN (10) BUSINESS DAYS AFTER TENANT SUBMITS TO
LANDLORD A WRITTEN REQUISITION AND SUBSTANTIATION THEREFOR ON AIA FORMS G702 AND
G703 (OR ON SUCH OTHER FORM OR FORMS AS MAY BE REASONABLY ACCEPTABLE TO
LANDLORD).  LANDLORD MAY, AT ITS OPTION, CONDITION ADVANCEMENT OF SUCH INSURANCE
PROCEEDS AND OTHER AMOUNTS ON (A) THE ABSENCE OF ANY EVENT OF DEFAULT, (B) ITS
APPROVAL OF PLANS AND SPECIFICATIONS OF AN ARCHITECT SATISFACTORY TO LANDLORD
(WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED),
(C) GENERAL CONTRACTORS’ ESTIMATES, (D) ARCHITECT’S CERTIFICATES,
(E) CONDITIONAL LIEN WAIVERS OF GENERAL CONTRACTORS, IF AVAILABLE, (F) EVIDENCE
OF APPROVAL BY ALL GOVERNMENTAL AUTHORITIES AND OTHER REGULATORY BODIES WHOSE
APPROVAL IS REQUIRED, (G), IF TENANT HAS ELECTED TO ADVANCE DEFICIENCY FUNDS
PURSUANT TO SECTION 10.2.3, TENANT DEPOSITING THE AMOUNT THEREOF WITH LANDLORD
AND (H) SUCH OTHER CERTIFICATES AS LANDLORD MAY, FROM TIME TO TIME, REASONABLY
REQUIRE.

 

Landlord’s obligation to disburse insurance proceeds under this Article 10 shall
be subject to the release of such proceeds by any Facility Mortgagee to
Landlord.

 

Tenant’s obligation to restore the applicable Property pursuant to this
Article 10 shall be subject to the release of available insurance proceeds by
the applicable Facility Mortgagee to Landlord or directly to Tenant and, in the
event

 

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such proceeds are insufficient, Landlord electing to make such deficiency
available therefor (and disbursement of such deficiency).

 

10.3                        DAMAGE NEAR END OF TERM.  NOTWITHSTANDING ANY
PROVISIONS OF SECTION 10.1 OR 10.2 TO THE CONTRARY, IF DAMAGE TO OR DESTRUCTION
OF ANY PROPERTY OCCURS DURING THE LAST TWELVE (12) MONTHS OF THE TERM AND IF
SUCH DAMAGE OR DESTRUCTION CANNOT REASONABLY BE EXPECTED TO BE FULLY REPAIRED
AND RESTORED PRIOR TO THE DATE THAT IS SIX (6) MONTHS PRIOR TO THE END OF THE
TERM, THE PROVISIONS OF SECTION 10.2.1 SHALL APPLY AS IF SUCH PROPERTY HAD BEEN
TOTALLY OR PARTIALLY DESTROYED AND THE FACILITY THEREON RENDERED UNSUITABLE FOR
ITS PERMITTED USE.

 

10.4                        TENANT’S PROPERTY.  ALL INSURANCE PROCEEDS PAYABLE
BY REASON OF ANY LOSS OF OR DAMAGE TO ANY OF TENANT’S PERSONAL PROPERTY SHALL BE
PAID TO TENANT AND, TO THE EXTENT NECESSARY TO REPAIR OR REPLACE TENANT’S
PERSONAL PROPERTY IN ACCORDANCE WITH SECTION 10.5, TENANT SHALL HOLD SUCH
PROCEEDS IN TRUST TO PAY THE COST OF REPAIRING OR REPLACING DAMAGED TENANT’S
PERSONAL PROPERTY.

 

10.5                        RESTORATION OF TENANT’S PROPERTY.  IF TENANT IS
REQUIRED TO RESTORE ANY PROPERTY AS HEREINABOVE PROVIDED, TENANT SHALL EITHER
(A) RESTORE ALL ALTERATIONS AND IMPROVEMENTS MADE BY TENANT AND TENANT’S
PERSONAL PROPERTY, OR (B) REPLACE SUCH ALTERATIONS AND IMPROVEMENTS AND TENANT’S
PERSONAL PROPERTY WITH IMPROVEMENTS OR ITEMS OF THE SAME OR BETTER QUALITY AND
UTILITY IN THE OPERATION OF SUCH PROPERTY.

 

10.6                        NO ABATEMENT OF RENT.  THIS AGREEMENT SHALL REMAIN
IN FULL FORCE AND EFFECT AND TENANT’S OBLIGATION TO MAKE ALL PAYMENTS OF RENT
AND TO PAY ALL OTHER CHARGES AS AND WHEN REQUIRED UNDER THIS AGREEMENT SHALL
REMAIN UNABATED DURING THE TERM NOTWITHSTANDING ANY DAMAGE INVOLVING THE LEASED
PROPERTY, OR ANY PORTION THEREOF (PROVIDED THAT LANDLORD SHALL CREDIT AGAINST
SUCH PAYMENTS ANY AMOUNTS PAID TO LANDLORD AS A CONSEQUENCE OF SUCH DAMAGE UNDER
ANY BUSINESS INTERRUPTION INSURANCE OBTAINED BY TENANT HEREUNDER).  THE
PROVISIONS OF THIS ARTICLE 10 SHALL BE CONSIDERED AN EXPRESS AGREEMENT GOVERNING
ANY CAUSE OF DAMAGE OR DESTRUCTION TO THE LEASED PROPERTY, OR ANY PORTION
THEREOF, AND, TO THE MAXIMUM EXTENT PERMITTED BY LAW, NO LOCAL OR STATE STATUTE,
LAWS, RULES, REGULATION OR ORDINANCE IN EFFECT DURING THE TERM WHICH PROVIDE FOR
SUCH A CONTINGENCY SHALL HAVE ANY APPLICATION IN SUCH CASE.

 

10.7                        WAIVER.  TENANT HEREBY WAIVES ANY STATUTORY RIGHTS
OF TERMINATION WHICH MAY ARISE BY REASON OF ANY DAMAGE OR DESTRUCTION OF THE
LEASED PROPERTY, OR ANY PORTION THEREOF.

 

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ARTICLE 11

 

CONDEMNATION

 

11.1                        TOTAL CONDEMNATION, ETC.  IF EITHER (A) THE WHOLE OF
ANY PROPERTY SHALL BE TAKEN BY CONDEMNATION OR (B) A CONDEMNATION OF LESS THAN
THE WHOLE OF ANY PROPERTY RENDERS ANY PROPERTY UNSUITABLE FOR ITS PERMITTED USE,
THIS AGREEMENT SHALL TERMINATE WITH RESPECT TO SUCH PROPERTY, TENANT AND
LANDLORD SHALL SEEK THE AWARD FOR THEIR INTERESTS IN THE APPLICABLE PROPERTY AS
PROVIDED IN SECTION 11.5.

 

11.2                        PARTIAL CONDEMNATION.  IN THE EVENT OF A
CONDEMNATION OF LESS THAN THE WHOLE OF ANY PROPERTY SUCH THAT SUCH PROPERTY IS
STILL SUITABLE FOR ITS PERMITTED USE, TENANT SHALL, TO THE EXTENT OF THE AWARD
AND ANY ADDITIONAL AMOUNTS DISBURSED BY LANDLORD AS HEREINAFTER PROVIDED,
COMMENCE (OR CAUSE TO BE COMMENCED) PROMPTLY AND CONTINUE DILIGENTLY TO RESTORE
(OR CAUSE TO BE RESTORED) THE UNTAKEN PORTION OF THE APPLICABLE LEASED
IMPROVEMENTS SO THAT SUCH LEASED IMPROVEMENTS SHALL CONSTITUTE A COMPLETE
ARCHITECTURAL UNIT OF THE SAME GENERAL CHARACTER AND CONDITION (AS NEARLY AS MAY
BE POSSIBLE UNDER THE CIRCUMSTANCES) AS SUCH LEASED IMPROVEMENTS EXISTING
IMMEDIATELY PRIOR TO SUCH CONDEMNATION, IN MATERIAL COMPLIANCE WITH ALL LEGAL
REQUIREMENTS, SUBJECT TO THE PROVISIONS OF THIS SECTION 11.2.  IF THE COST OF
THE REPAIR OR RESTORATION OF THE AFFECTED PROPERTY EXCEEDS THE AMOUNT OF THE
AWARD, TENANT SHALL GIVE LANDLORD NOTICE THEREOF WHICH NOTICE SHALL SET FORTH IN
REASONABLE DETAIL THE NATURE OF SUCH DEFICIENCY AND WHETHER TENANT SHALL PAY AND
ASSUME THE AMOUNT OF SUCH DEFICIENCY (TENANT HAVING NO OBLIGATION TO DO SO,
EXCEPT THAT IF TENANT SHALL ELECT TO MAKE SUCH FUNDS AVAILABLE, THE SAME SHALL
BECOME AN IRREVOCABLE OBLIGATION OF TENANT PURSUANT TO THIS AGREEMENT).  IN THE
EVENT TENANT SHALL ELECT NOT TO PAY AND ASSUME THE AMOUNT OF SUCH DEFICIENCY,
LANDLORD SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION), EXERCISABLE AT
LANDLORD’S SOLE ELECTION BY NOTICE TO TENANT GIVEN WITHIN SIXTY (60) DAYS AFTER
TENANT’S NOTICE OF THE DEFICIENCY, TO ELECT TO MAKE AVAILABLE FOR APPLICATION TO
THE COST OF REPAIR OR RESTORATION THE AMOUNT OF SUCH DEFICIENCY; PROVIDED,
HOWEVER, IN SUCH EVENT, UPON ANY DISBURSEMENT BY LANDLORD THEREOF, THE MINIMUM
RENT SHALL BE ADJUSTED AS PROVIDED IN SECTION 3.1.1(C).  IN THE EVENT THAT
NEITHER LANDLORD NOR TENANT SHALL ELECT TO MAKE SUCH DEFICIENCY AVAILABLE FOR
RESTORATION, EITHER LANDLORD OR TENANT MAY TERMINATE THIS AGREEMENT WITH RESPECT
TO THE AFFECTED PROPERTY AND THE ENTIRE AWARD SHALL BE ALLOCATED AS SET FORTH IN
SECTION 11.5.

 

Subject to the terms hereof, Landlord shall contribute to the cost of
restoration that part of the Award necessary to

 

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complete such repair or restoration, together with severance and other damages
awarded for the taken Leased Improvements and any deficiency Landlord has agreed
to disburse, to Tenant regularly during the restoration period so as to permit
payment for the cost of such repair or restoration.  Landlord may, at its
option, condition advancement of such Award and other amounts on (a) the absence
of any Event of Default, (b) its approval of plans and specifications of an
architect satisfactory to Landlord (which approval shall not be unreasonably
withheld, delayed or conditioned), (c) general contractors’ estimates,
(iv) architect’s certificates, (d) conditional lien waivers of general
contractors, if available, (e) evidence of approval by all governmental
authorities and other regulatory bodies whose approval is required, (f), if
Tenant has elected to advance deficiency funds pursuant to the preceding
paragraph, Tenant depositing the amount thereof with Landlord and (g) such other
certificates as Landlord may, from time to time, reasonably require.  Landlord’s
obligation under this Section 11.2 to disburse the Award and such other amounts
shall be subject to (x) the collection thereof by Landlord and (y) the
satisfaction of any applicable requirements of any Facility Mortgage, and the
release of such Award by the applicable Facility Mortgagee.  Tenant’s obligation
to restore the Leased Property shall be subject to the release of the Award by
the applicable Facility Mortgagee to Landlord.

 

11.3                        ABATEMENT OF RENT.  OTHER THAN AS SPECIFICALLY
PROVIDED IN THIS AGREEMENT, THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT
AND TENANT’S OBLIGATION TO MAKE ALL PAYMENTS OF RENT AND TO PAY ALL OTHER
CHARGES AS AND WHEN REQUIRED UNDER THIS AGREEMENT SHALL REMAIN UNABATED DURING
THE TERM NOTWITHSTANDING ANY CONDEMNATION INVOLVING THE LEASED PROPERTY, OR ANY
PORTION THEREOF.  THE PROVISIONS OF THIS ARTICLE 11 SHALL BE CONSIDERED AN
EXPRESS AGREEMENT GOVERNING ANY CONDEMNATION INVOLVING THE LEASED PROPERTY AND,
TO THE MAXIMUM EXTENT PERMITTED BY LAW, NO LOCAL OR STATE STATUTE, LAW, RULE,
REGULATION OR ORDINANCE IN EFFECT DURING THE TERM WHICH PROVIDES FOR SUCH A
CONTINGENCY SHALL HAVE ANY APPLICATION IN SUCH CASE.

 

11.4                        TEMPORARY CONDEMNATION.  IN THE EVENT OF ANY
TEMPORARY CONDEMNATION OF ANY PROPERTY OR TENANT’S INTEREST THEREIN, THIS
AGREEMENT SHALL CONTINUE IN FULL FORCE AND EFFECT AND TENANT SHALL CONTINUE TO
PAY (OR CAUSE TO BE PAID), IN THE MANNER AND ON THE TERMS HEREIN SPECIFIED, THE
FULL AMOUNT OF THE RENT.  TENANT SHALL CONTINUE TO PERFORM AND OBSERVE (OR CAUSE
TO BE PERFORMED AND OBSERVED) ALL OF THE OTHER TERMS AND CONDITIONS OF THIS
AGREEMENT ON THE PART OF THE TENANT TO BE PERFORMED AND OBSERVED.  PROVIDED NO
EVENT OF DEFAULT HAS OCCURRED AND IS

 

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CONTINUING, THE ENTIRE AMOUNT OF ANY AWARD MADE FOR SUCH TEMPORARY CONDEMNATION
ALLOCABLE TO THE TERM, WHETHER PAID BY WAY OF DAMAGES, RENT OR OTHERWISE, SHALL
BE PAID TO TENANT.  TENANT SHALL, PROMPTLY UPON THE TERMINATION OF ANY SUCH
PERIOD OF TEMPORARY CONDEMNATION, AT ITS SOLE COST AND EXPENSE, RESTORE THE
AFFECTED PROPERTY TO THE CONDITION THAT EXISTED IMMEDIATELY PRIOR TO SUCH
CONDEMNATION, IN MATERIAL COMPLIANCE WITH ALL APPLICABLE LEGAL REQUIREMENTS,
UNLESS SUCH PERIOD OF TEMPORARY CONDEMNATION SHALL EXTEND BEYOND THE EXPIRATION
OF THE TERM, IN WHICH EVENT TENANT SHALL NOT BE REQUIRED TO MAKE SUCH
RESTORATION.

 

11.5                        ALLOCATION OF AWARD.  EXCEPT AS PROVIDED IN
SECTION 11.4 AND THE SECOND SENTENCE OF THIS SECTION 11.5, THE TOTAL AWARD SHALL
BE SOLELY THE PROPERTY OF AND PAYABLE TO LANDLORD.  ANY PORTION OF THE AWARD
MADE FOR THE TAKING OF TENANT’S LEASEHOLD INTEREST IN THE LEASED PROPERTY, LOSS
OF BUSINESS DURING THE REMAINDER OF THE TERM, THE TAKING OF TENANT’S PERSONAL
PROPERTY, THE TAKING OF CAPITAL ADDITIONS PAID FOR BY TENANT AND TENANT’S
REMOVAL AND RELOCATION EXPENSES SHALL BE THE SOLE PROPERTY OF AND PAYABLE TO
TENANT (SUBJECT TO THE PROVISIONS OF SECTION 11.2).  IN ANY CONDEMNATION
PROCEEDINGS, LANDLORD AND TENANT SHALL EACH SEEK ITS OWN AWARD IN CONFORMITY
HEREWITH, AT ITS OWN EXPENSE.

 

ARTICLE 12

 

DEFAULTS AND REMEDIES

 

12.1                        EVENTS OF DEFAULT.  THE OCCURRENCE OF ANY ONE OR
MORE OF THE FOLLOWING EVENTS SHALL CONSTITUTE AN “EVENT OF DEFAULT” HEREUNDER:

 

(A)                                  SHOULD TENANT FAIL TO MAKE ANY PAYMENT OF
THE RENT OR ANY OTHER SUM PAYABLE HEREUNDER WHEN DUE; OR

 

(B)                                 SHOULD TENANT FAIL TO MAINTAIN THE INSURANCE
COVERAGES REQUIRED UNDER ARTICLE 9; OR

 

(C)                                  SHOULD TENANT DEFAULT IN THE DUE OBSERVANCE
OR PERFORMANCE OF ANY OF THE TERMS, COVENANTS OR AGREEMENTS CONTAINED HEREIN TO
BE PERFORMED OR OBSERVED BY IT (OTHER THAN AS SPECIFIED IN CLAUSES (A) AND
(B) ABOVE) AND SHOULD SUCH DEFAULT CONTINUE FOR A PERIOD OF THIRTY (30) DAYS
AFTER NOTICE THEREOF FROM LANDLORD TO TENANT; PROVIDED, HOWEVER, THAT IF SUCH
DEFAULT IS SUSCEPTIBLE OF CURE BUT SUCH CURE CANNOT BE ACCOMPLISHED WITH DUE
DILIGENCE WITHIN SUCH PERIOD OF TIME AND IF, IN ADDITION, TENANT COMMENCES TO
CURE OR CAUSE TO BE CURED SUCH DEFAULT WITHIN THIRTY

 

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(30) DAYS AFTER NOTICE THEREOF FROM LANDLORD AND THEREAFTER PROSECUTES THE
CURING OF SUCH DEFAULT WITH ALL DUE DILIGENCE, SUCH PERIOD OF TIME SHALL BE
EXTENDED TO SUCH PERIOD OF TIME (NOT TO EXCEED AN ADDITIONAL NINETY (90) DAYS IN
THE AGGREGATE) AS MAY BE NECESSARY TO CURE SUCH DEFAULT WITH ALL DUE DILIGENCE;
OR

 

(D)                                 SHOULD ANY OBLIGATION OF TENANT IN RESPECT
OF ANY INDEBTEDNESS FOR MONEY BORROWED OR FOR ANY MATERIAL PROPERTY OR SERVICES,
OR ANY GUARANTY RELATING THERETO, BE DECLARED TO BE OR BECOME DUE AND PAYABLE
PRIOR TO THE STATED MATURITY THEREOF, OR SHOULD THERE OCCUR AND BE CONTINUING
WITH RESPECT TO ANY SUCH INDEBTEDNESS ANY EVENT OF DEFAULT UNDER ANY INSTRUMENT
OR AGREEMENT EVIDENCING OR SECURING THE SAME, THE EFFECT OF WHICH IS TO PERMIT
THE HOLDER OR HOLDERS OF SUCH INSTRUMENT OR AGREEMENT OR A TRUSTEE, AGENT OR
OTHER REPRESENTATIVE ON BEHALF OF SUCH HOLDER OR HOLDERS, TO CAUSE ANY SUCH
OBLIGATIONS TO BECOME DUE PRIOR TO ITS STATED MATURITY; OR

 

(E)                                  SHOULD AN EVENT OF DEFAULT BY TENANT, ANY
GUARANTOR OR ANY AFFILIATED PERSON AS TO TENANT OR ANY GUARANTOR OCCUR AND BE
CONTINUING BEYOND THE EXPIRATION OF ANY APPLICABLE CURE PERIOD UNDER ANY OF THE
INCIDENTAL DOCUMENTS; OR

 

(F)                                    SHOULD TENANT OR ANY GUARANTOR GENERALLY
NOT BE PAYING ITS DEBTS AS THEY BECOME DUE OR SHOULD TENANT OR ANY GUARANTOR
MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS; OR

 

(G)                                 SHOULD ANY PETITION BE FILED BY OR AGAINST
TENANT OR ANY GUARANTOR UNDER THE FEDERAL BANKRUPTCY LAWS, OR SHOULD ANY OTHER
PROCEEDING BE INSTITUTED BY OR AGAINST TENANT OR ANY GUARANTOR SEEKING TO
ADJUDICATE TENANT OR ANY GUARANTOR A BANKRUPT OR INSOLVENT, OR SEEKING
LIQUIDATION, REORGANIZATION, ARRANGEMENT, ADJUSTMENT OR COMPOSITION OF TENANT’S
DEBTS UNDER ANY LAW RELATING TO BANKRUPTCY, INSOLVENCY OR REORGANIZATION OR
RELIEF OF DEBTORS, OR SEEKING THE ENTRY OF AN ORDER FOR RELIEF OR THE
APPOINTMENT OF A RECEIVER, TRUSTEE, CUSTODIAN OR OTHER SIMILAR OFFICIAL FOR
TENANT OR ANY GUARANTOR OR FOR ANY SUBSTANTIAL PART OF THE PROPERTY OF TENANT OR
ANY GUARANTOR AND SUCH PROCEEDING IS NOT DISMISSED WITHIN ONE HUNDRED EIGHTY
(180) DAYS AFTER INSTITUTION THEREOF; OR

 

(H)                                 SHOULD TENANT OR ANY GUARANTOR CAUSE OR
INSTITUTE ANY PROCEEDING FOR ITS DISSOLUTION OR TERMINATION; OR

 

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(I)                                     SHOULD THE ESTATE OR INTEREST OF TENANT
IN THE LEASED PROPERTY OR ANY PART THEREOF BE LEVIED UPON OR ATTACHED IN ANY
PROCEEDING AND THE SAME SHALL NOT BE VACATED OR DISCHARGED WITHIN THE LATER OF
(X) NINETY (90) DAYS AFTER COMMENCEMENT THEREOF, UNLESS THE AMOUNT IN DISPUTE IS
LESS THAN $250,000, IN WHICH CASE TENANT SHALL GIVE NOTICE TO LANDLORD OF THE
DISPUTE BUT TENANT MAY DEFEND IN ANY SUITABLE WAY, AND (Y) TWO HUNDRED SEVENTY
(270) DAYS AFTER RECEIPT BY TENANT OF NOTICE THEREOF FROM LANDLORD (UNLESS
TENANT SHALL BE CONTESTING SUCH LIEN OR ATTACHMENT IN GOOD FAITH IN ACCORDANCE
WITH ARTICLE 8); OR

 

(J)                                     SHOULD THERE OCCUR ANY DIRECT OR
INDIRECT CHANGE IN CONTROL OF TENANT OR ANY GUARANTOR; OR

 

(K)                                  SHOULD A FINAL UNAPPEALABLE DETERMINATION
BE MADE BY THE APPLICABLE GOVERNMENT AGENCY THAT TENANT SHALL HAVE FAILED TO
COMPLY WITH APPLICABLE MEDICARE AND/OR MEDICAID REGULATIONS IN THE OPERATION OF
ANY FACILITY, AS A RESULT OF WHICH FAILURE TENANT IS DECLARED INELIGIBLE TO
RECEIVE REIMBURSEMENTS UNDER THE MEDICARE AND/OR MEDICAID PROGRAMS FOR SUCH
FACILITY;

 

then, and in any such event, Landlord, in addition to all other remedies
available to it, may terminate this Agreement with respect to any or all of the
Leased Property by giving Notice thereof to Tenant and upon the expiration of
the time, if any, fixed in such Notice, this Agreement shall terminate with
respect to all or the designated portion of the Leased Property and all rights
of Tenant under this Agreement with respect thereto shall cease.  Landlord shall
have and may exercise all rights and remedies available at law and in equity to
Landlord as a result of Tenant’s breach of this Agreement.

 

Upon the occurrence of an Event of Default, Landlord may, in addition to any
other remedies provided herein, enter upon the Leased Property, or any portion
thereof, and take possession of any and all of Tenant’s Personal Property, if
any, and the Records, without liability for trespass or conversion (Tenant
hereby waiving any right to notice or hearing prior to such taking of possession
by Landlord) and sell the same at public or private sale, after giving Tenant
reasonable Notice of the time and place of any public or private sale, at which
sale Landlord or its assigns may purchase all or any portion of Tenant’s
Personal Property, if any, unless otherwise prohibited by law.  Unless otherwise
provided by law and without intending to exclude any other manner of giving
Tenant reasonable notice, the requirement of reasonable Notice shall be met if
such Notice is given at least ten (10) days before the date of sale.  The

 

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proceeds from any such disposition, less all expenses incurred in connection
with the taking of possession, holding and selling of such property (including,
reasonable attorneys’ fees) shall be applied as a credit against the
indebtedness which is secured by the security interest granted in Section 7.2. 
Any surplus shall be paid to Tenant or as otherwise required by law and Tenant
shall pay any deficiency to Landlord, as Additional Charges, upon demand.

 

12.2                        REMEDIES.  NONE OF (A) THE TERMINATION OF THIS
AGREEMENT PURSUANT TO SECTION 12.1, (B) THE REPOSSESSION OF THE LEASED PROPERTY,
OR ANY PORTION THEREOF, (C) THE FAILURE OF LANDLORD TO RELET THE LEASED
PROPERTY, OR ANY PORTION THEREOF, NOR (D) THE RELETTING OF ALL OR ANY OF PORTION
OF THE LEASED PROPERTY, SHALL RELIEVE TENANT OF ITS LIABILITY AND OBLIGATIONS
HEREUNDER, ALL OF WHICH SHALL SURVIVE ANY SUCH TERMINATION, REPOSSESSION OR
RELETTING.  IN THE EVENT OF ANY SUCH TERMINATION, TENANT SHALL FORTHWITH PAY TO
LANDLORD ALL RENT DUE AND PAYABLE WITH RESPECT TO THE LEASED PROPERTY, OR
TERMINATED PORTION THEREOF, THROUGH AND INCLUDING THE DATE OF SUCH TERMINATION. 
THEREAFTER, TENANT, UNTIL THE END OF WHAT WOULD HAVE BEEN THE TERM OF THIS
AGREEMENT IN THE ABSENCE OF SUCH TERMINATION, AND WHETHER OR NOT THE LEASED
PROPERTY, OR ANY PORTION THEREOF, SHALL HAVE BEEN RELET, SHALL BE LIABLE TO
LANDLORD FOR, AND SHALL PAY TO LANDLORD, AS CURRENT DAMAGES, THE RENT
(ADDITIONAL RENT TO BE REASONABLY CALCULATED BY LANDLORD BASED ON HISTORICAL
GROSS REVENUES) AND OTHER CHARGES WHICH WOULD BE PAYABLE HEREUNDER FOR THE
REMAINDER OF THE TERM HAD SUCH TERMINATION NOT OCCURRED, LESS THE NET PROCEEDS,
IF ANY, OF ANY RELETTING OF THE LEASED PROPERTY, OR ANY PORTION THEREOF, AFTER
DEDUCTING ALL REASONABLE EXPENSES IN CONNECTION WITH SUCH RELETTING, INCLUDING,
WITHOUT LIMITATION, ALL REPOSSESSION COSTS, BROKERAGE COMMISSIONS, LEGAL
EXPENSES, ATTORNEYS’ FEES, ADVERTISING, EXPENSES OF EMPLOYEES, ALTERATION COSTS
AND EXPENSES OF PREPARATION FOR SUCH RELETTING.  TENANT SHALL PAY SUCH CURRENT
DAMAGES TO LANDLORD MONTHLY ON THE DAYS ON WHICH THE MINIMUM RENT WOULD HAVE
BEEN PAYABLE HEREUNDER IF THIS AGREEMENT HAD NOT BEEN SO TERMINATED WITH RESPECT
TO SUCH OF THE LEASED PROPERTY.

 

At any time after such termination, whether or not Landlord shall have collected
any such current damages, as liquidated final damages beyond the date of such
termination, at Landlord’s election, Tenant shall pay to Landlord an amount
equal to the present value (as reasonably determined by Landlord) of the excess,
if any, of the Rent and other charges which would be payable hereunder from the
date of such termination (assuming that, for the purposes of this paragraph,
annual payments by

 

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Tenant on account of Impositions and Additional Rent would be the same as
payments required for the immediately preceding twelve calendar months, or if
less than twelve calendar months have expired since the applicable Commencement
Date for any Property, the payments required for such lesser period projected to
an annual amount) for what would be the then unexpired term of this Agreement if
the same remained in effect, over the fair market rental for the same period. 
Nothing contained in this Agreement shall, however, limit or prejudice the right
of Landlord to prove and obtain in proceedings for bankruptcy or insolvency an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater than, equal to, or less than the
amount of the loss or damages referred to above.

 

In case of any Event of Default, re-entry, expiration and dispossession by
summary proceedings or otherwise, Landlord may (a) relet the Leased Property or
any part or parts thereof, either in the name of Landlord or otherwise, for a
term or terms which may at Landlord’s option, be equal to, less than or exceed
the period which would otherwise have constituted the balance of the Term and
may grant concessions or free rent to the extent that Landlord considers
advisable and necessary to relet the same, and (b) make such reasonable
alterations, repairs and decorations in the Leased Property, or any portion
thereof, as Landlord, in its sole and absolute discretion, considers advisable
and necessary for the purpose of reletting the Leased Property; and the making
of such alterations, repairs and decorations shall not operate or be construed
to release Tenant from liability hereunder as aforesaid.  Landlord shall in no
event be liable in any way whatsoever for any failure to relet all or any
portion of the Leased Property, or, in the event that the Leased Property is
relet, for failure to collect the rent under such reletting.  To the maximum
extent permitted by law, Tenant hereby expressly waives any and all rights of
redemption granted under any present or future laws in the event of Tenant being
evicted or dispossessed, or in the event of Landlord obtaining possession of the
Leased Property, by reason of the occurrence and continuation of an Event of
Default hereunder.

 

12.3                        TENANT’S WAIVER.  IF THIS AGREEMENT IS TERMINATED
PURSUANT TO SECTION 12.1 OR 12.2, TENANT WAIVES, TO THE EXTENT PERMITTED BY LAW,
ANY RIGHT TO A TRIAL BY JURY IN THE EVENT OF SUMMARY PROCEEDINGS TO ENFORCE THE
REMEDIES SET FORTH IN THIS ARTICLE 12, AND THE BENEFIT OF ANY LAWS NOW OR
HEREAFTER IN FORCE EXEMPTING PROPERTY FROM LIABILITY FOR RENT OR FOR DEBT.

 

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12.4                        APPLICATION OF FUNDS.  ANY PAYMENTS RECEIVED BY
LANDLORD UNDER ANY OF THE PROVISIONS OF THIS AGREEMENT DURING THE EXISTENCE OR
CONTINUANCE OF ANY EVENT OF DEFAULT (AND ANY PAYMENT MADE TO LANDLORD RATHER
THAN TENANT DUE TO THE EXISTENCE OF ANY EVENT OF DEFAULT) SHALL BE APPLIED TO
TENANT’S CURRENT AND PAST DUE OBLIGATIONS UNDER THIS AGREEMENT IN SUCH ORDER AS
LANDLORD MAY DETERMINE OR AS MAY BE PRESCRIBED BY THE LAWS OF THE STATE.  ANY
BALANCE SHALL BE PAID TO TENANT.

 

12.5                        LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT.  IF AN
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, LANDLORD, AFTER NOTICE
TO TENANT (WHICH NOTICE SHALL NOT BE REQUIRED IF LANDLORD SHALL REASONABLY
DETERMINE IMMEDIATE ACTION IS NECESSARY TO PROTECT PERSON OR PROPERTY), WITHOUT
WAIVING OR RELEASING ANY OBLIGATION OF TENANT AND WITHOUT WAIVING OR RELEASING
ANY EVENT OF DEFAULT, MAY (BUT SHALL NOT BE OBLIGATED TO), AT ANY TIME
THEREAFTER, MAKE SUCH PAYMENT OR PERFORM SUCH ACT FOR THE ACCOUNT AND AT THE
EXPENSE OF TENANT, AND MAY, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ENTER UPON
THE LEASED PROPERTY, OR ANY PORTION THEREOF, FOR SUCH PURPOSE AND TAKE ALL SUCH
ACTION THEREON AS, IN LANDLORD’S SOLE AND ABSOLUTE DISCRETION, MAY BE NECESSARY
OR APPROPRIATE THEREFOR.  NO SUCH ENTRY SHALL BE DEEMED AN EVICTION OF TENANT. 
ALL REASONABLE COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS’ FEES) INCURRED BY LANDLORD IN CONNECTION THEREWITH, TOGETHER WITH
INTEREST THEREON (TO THE EXTENT PERMITTED BY LAW) AT THE OVERDUE RATE FROM THE
DATE SUCH SUMS ARE PAID BY LANDLORD UNTIL REPAID, SHALL BE PAID BY TENANT TO
LANDLORD, ON DEMAND.

 

ARTICLE 13

 

HOLDING OVER

 

Any holding over by Tenant after the expiration or sooner termination of this
Agreement shall be treated as a daily tenancy at sufferance at a rate equal to
two (2) times the Minimum Rent and other charges herein provided (prorated on a
daily basis).  Tenant shall also pay to Landlord all damages (direct or
indirect) sustained by reason of any such holding over.  Otherwise, such holding
over shall be on the terms and conditions set forth in this Agreement, to the
extent applicable.  Nothing contained herein shall constitute the consent,
express or implied, of Landlord to the holding over of Tenant after the
expiration or earlier termination of this Agreement.

 

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ARTICLE 14

 

LANDLORD DEFAULT

 

If Landlord shall default in the performance or observance of any of its
covenants or obligations set forth in this Agreement or any obligation of
Landlord, if any, under any agreement affecting the Leased Property, the
performance of which is not Tenant’s obligation pursuant to this Agreement, and
any such default shall continue for a period of thirty (30) days after Notice
thereof from Tenant to Landlord and any applicable Facility Mortgagee, or such
additional period as may be reasonably required to correct the same, Tenant may
declare the occurrence of a “Landlord Default” by a second Notice to Landlord
and to such Facility Mortgagee.  Thereafter, Tenant may forthwith cure the same
and, subject to the provisions of the following paragraph, invoice Landlord for
costs and expenses (including reasonable attorneys’ fees and court costs)
incurred by Tenant in curing the same, together with interest thereon (to the
extent permitted by law) from the date Landlord receives Tenant’s invoice until
paid, at the Overdue Rate.  Tenant shall have no right to terminate this
Agreement for any default by Landlord hereunder and no right, for any such
default, to offset or counterclaim against any Rent or other charges due
hereunder.

 

If Landlord shall in good faith dispute the occurrence of any Landlord Default
and Landlord, before the expiration of the applicable cure period, shall give
Notice thereof to Tenant, setting forth, in reasonable detail, the basis
therefor, no Landlord Default shall be deemed to have occurred and Landlord
shall have no obligation with respect thereto until final adverse determination
thereof.  If Tenant and Landlord shall fail, in good faith, to resolve any such
dispute within ten (10) days after Landlord’s Notice of dispute, either may
submit the matter for resolution in accordance with Article 22.

 

ARTICLE 15

 

PURCHASE RIGHTS

 

Landlord shall have the option to purchase Tenant’s Personal Property, at the
expiration or sooner termination of this Agreement, for an amount equal to the
then fair market value thereof (current replacement cost as determined by
agreement of the parties or, in the absence of such agreement, appraisal),
subject to, and with appropriate price adjustments for, all equipment leases,
conditional sale contracts, UCC-1 financing statements and other encumbrances to
which such Personal Property is subject.  Upon the expiration or sooner

 

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termination of this Agreement, Tenant shall use its reasonable efforts to
transfer and assign, or cause to be transferred and assigned, to Landlord or its
designee, or assist Landlord or its designee in obtaining, any contracts,
licenses, and certificates required for the then operation of the Leased
Property.  Notwithstanding the foregoing, Tenant expressly acknowledges and
agrees that nothing contained in this Article 15 shall diminish, impair or
otherwise modify Landlord’s rights under the Security Agreement and that any
amounts paid by Landlord in order to purchase Tenant’s Personal Property in
accordance with this Article 15 shall be applied first to Tenant’s current and
past due obligations under this Agreement in such order as Landlord may
reasonably determine or as may be prescribed by the laws of the State and any
balance shall be paid to Tenant.

 

ARTICLE 16

 

SUBLETTING AND ASSIGNMENT

 

16.1                        SUBLETTING AND ASSIGNMENT.  EXCEPT AS PROVIDED IN
SECTION 16.3, TENANT SHALL NOT, WITHOUT LANDLORD’S PRIOR WRITTEN CONSENT (WHICH
CONSENT MAY BE GIVEN OR WITHHELD IN LANDLORD’S SOLE AND ABSOLUTE DISCRETION),
ASSIGN, MORTGAGE, PLEDGE, HYPOTHECATE, ENCUMBER OR OTHERWISE TRANSFER THIS
AGREEMENT OR SUBLEASE OR PERMIT THE SUBLEASE (WHICH TERM SHALL BE DEEMED TO
INCLUDE THE GRANTING OF CONCESSIONS, LICENSES AND THE LIKE), OF THE LEASED
PROPERTY, OR ANY PORTION THEREOF, OR SUFFER OR PERMIT THIS AGREEMENT OR THE
LEASEHOLD ESTATE CREATED HEREBY OR ANY OTHER RIGHTS ARISING UNDER THIS AGREEMENT
TO BE ASSIGNED, TRANSFERRED, MORTGAGED, PLEDGED, HYPOTHECATED OR ENCUMBERED, IN
WHOLE OR IN PART, WHETHER VOLUNTARILY, INVOLUNTARILY OR BY OPERATION OF LAW, OR
PERMIT THE USE OR OPERATION OF THE LEASED PROPERTY, OR ANY PORTION THEREOF, BY
ANYONE OTHER THAN TENANT, ANY MANAGER APPROVED BY LANDLORD PURSUANT TO THE
APPLICABLE PROVISIONS OF THIS AGREEMENT OR RESIDENTS AND PATIENTS OF TENANT, OR
THE LEASED PROPERTY, OR ANY PORTION THEREOF, TO BE OFFERED OR ADVERTISED FOR
ASSIGNMENT OR SUBLETTING.

 

For purposes of this Section 16.1, an assignment of this Agreement shall be
deemed to include, without limitation, any direct or indirect Change in Control
of Tenant.

 

If this Agreement is assigned or if the Leased Property, or any portion thereof,
is sublet (or occupied by anybody other than Tenant or any Manager, their
respective employees or residents or patients of Tenant), Landlord may collect
the rents from such assignee, subtenant or occupant, as the case may be, and
apply the net amount collected to the Rent herein reserved, but no such
collection shall be deemed a waiver of the

 

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provisions set forth in the first paragraph of this Section 16.1, the acceptance
by Landlord of such assignee, subtenant or occupant, as the case may be, as a
tenant, or a release of Tenant from the future performance by Tenant of its
covenants, agreements or obligations contained in this Agreement.

 

Any assignment or transfer of Tenant’s interest under this Agreement shall be
subject to such assignee’s or transferee’s delivery to Landlord of (i) a
Guaranty, which Guaranty shall be in form and substance satisfactory to Landlord
in its sole discretion and which Guaranty shall constitute an Incidental
Document hereunder; (ii) a pledge of the stock, partnership, membership or other
ownership interests of such assignee or other transferee to secure Tenant’s
obligations under this Agreement and the Incidental Documents, which pledge
shall be in form and substance satisfactory to Landlord in its sole discretion
and which pledge shall constitute an Incidental Document hereunder; (iii) a
security agreement granting Landlord a security interest in all of such
assignee’s or transferee’s right, title and interest in and to any personal
property, intangibles and fixtures (other than accounts receivable) with respect
to any Property which is subject to any such assignment or transfer to secure
Tenant’s obligations under this Agreement and the Incidental Documents, which
security agreement shall be in form and substance satisfactory to Landlord in
its sole discretion and which security agreement shall constitute an Incidental
Document hereunder; and (iv) in the case of a sublease, an assignment which
assigns all of such subtenant’s right, title and interest in such sublease to
Landlord to secure Tenant’s obligations under this Agreement and the Incidental
Documents, which assignment shall be in form and substance satisfactory to
Landlord in its sole discretion and which assignment shall constitute an
Incidental Document hereunder.

 

No subletting or assignment shall in any way impair the continuing primary
liability of Tenant hereunder (unless Landlord and Tenant expressly otherwise
agree that Tenant shall be released from all obligations hereunder), and no
consent to any subletting or assignment in a particular instance shall be deemed
to be a waiver of the prohibition set forth in this Section 16.1.  No
assignment, subletting or occupancy shall affect any Permitted Use.  Any
subletting, assignment or other transfer of Tenant’s interest under this
Agreement in contravention of this Section 16.1 shall be voidable at Landlord’s
option.

 

16.2                        REQUIRED SUBLEASE PROVISIONS.  ANY SUBLEASE OF ALL
OR ANY PORTION OF THE LEASED PROPERTY SHALL PROVIDE (A) THAT IT IS SUBJECT AND
SUBORDINATE TO THIS AGREEMENT AND TO THE MATTERS TO

 

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WHICH THIS AGREEMENT IS OR SHALL BE SUBJECT OR SUBORDINATE; (B) THAT IN THE
EVENT OF TERMINATION OF THIS AGREEMENT OR REENTRY OR DISPOSSESSION OF TENANT BY
LANDLORD UNDER THIS AGREEMENT, LANDLORD MAY, AT ITS OPTION, TERMINATE SUCH
SUBLEASE OR TAKE OVER ALL OF THE RIGHT, TITLE AND INTEREST OF TENANT, AS
SUBLESSOR UNDER SUCH SUBLEASE, AND SUCH SUBTENANT SHALL, AT LANDLORD’S OPTION,
ATTORN TO LANDLORD PURSUANT TO THE THEN EXECUTORY PROVISIONS OF SUCH SUBLEASE,
EXCEPT THAT NEITHER LANDLORD NOR ANY FACILITY MORTGAGEE, AS HOLDER OF A MORTGAGE
OR AS LANDLORD UNDER THIS AGREEMENT, IF SUCH MORTGAGEE SUCCEEDS TO THAT
POSITION, SHALL (I) BE LIABLE FOR ANY ACT OR OMISSION OF TENANT UNDER SUCH
SUBLEASE, (II) BE SUBJECT TO ANY CREDIT, COUNTERCLAIM, OFFSET OR DEFENSE WHICH
THERETOFORE ACCRUED TO SUCH SUBTENANT AGAINST TENANT, (III) BE BOUND BY ANY
PREVIOUS MODIFICATION OF SUCH SUBLEASE NOT CONSENTED TO IN WRITING BY LANDLORD
OR BY ANY PREVIOUS PREPAYMENT OF MORE THAN ONE (1) MONTH’S RENT, (IV) BE BOUND
BY ANY COVENANT OF TENANT TO UNDERTAKE OR COMPLETE ANY CONSTRUCTION OF THE
APPLICABLE PROPERTY, OR ANY PORTION THEREOF, (V) BE REQUIRED TO ACCOUNT FOR ANY
SECURITY DEPOSIT OF THE SUBTENANT OTHER THAN ANY SECURITY DEPOSIT ACTUALLY
DELIVERED TO LANDLORD BY TENANT, (VI) BE BOUND BY ANY OBLIGATION TO MAKE ANY
PAYMENT TO SUCH SUBTENANT OR GRANT ANY CREDITS, EXCEPT FOR SERVICES, REPAIRS,
MAINTENANCE AND RESTORATION PROVIDED FOR UNDER THE SUBLEASE THAT ARE PERFORMED
AFTER THE DATE OF SUCH ATTORNMENT, (VII) BE RESPONSIBLE FOR ANY MONIES OWING BY
TENANT TO THE CREDIT OF SUCH SUBTENANT UNLESS ACTUALLY DELIVERED TO LANDLORD BY
TENANT, OR (VIII) BE REQUIRED TO REMOVE ANY PERSON OCCUPYING ANY PORTION OF THE
LEASED PROPERTY; AND (C) IN THE EVENT THAT SUCH SUBTENANT RECEIVES A WRITTEN
NOTICE FROM LANDLORD OR ANY FACILITY MORTGAGEE STATING THAT AN EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING, SUCH SUBTENANT SHALL THEREAFTER BE OBLIGATED TO
PAY ALL RENTALS ACCRUING UNDER SUCH SUBLEASE DIRECTLY TO THE PARTY GIVING SUCH
NOTICE OR AS SUCH PARTY MAY DIRECT.  ALL RENTALS RECEIVED FROM SUCH SUBTENANT BY
LANDLORD OR THE FACILITY MORTGAGEE, AS THE CASE MAY BE, SHALL BE CREDITED
AGAINST THE AMOUNTS OWING BY TENANT UNDER THIS AGREEMENT AND SUCH SUBLEASE SHALL
PROVIDE THAT THE SUBTENANT THEREUNDER SHALL, AT THE REQUEST OF LANDLORD, EXECUTE
A SUITABLE INSTRUMENT IN CONFIRMATION OF SUCH AGREEMENT TO ATTORN.  AN ORIGINAL
COUNTERPART OF EACH SUCH SUBLEASE AND ASSIGNMENT AND ASSUMPTION, DULY EXECUTED
BY TENANT AND SUCH SUBTENANT OR ASSIGNEE, AS THE CASE MAY BE, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO LANDLORD, SHALL BE DELIVERED PROMPTLY TO
LANDLORD AND (X) IN THE CASE OF AN ASSIGNMENT, THE ASSIGNEE SHALL ASSUME IN
WRITING AND AGREE TO KEEP AND PERFORM ALL OF THE TERMS OF THIS AGREEMENT ON THE
PART OF TENANT TO BE KEPT AND PERFORMED AND SHALL BE, AND BECOME, JOINTLY AND
SEVERALLY LIABLE WITH TENANT FOR THE PERFORMANCE THEREOF AND (Y) IN THE CASE OF

 

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EITHER AN ASSIGNMENT OR SUBLETTING, TENANT SHALL REMAIN PRIMARILY LIABLE, AS
PRINCIPAL RATHER THAN AS SURETY, FOR THE PROMPT PAYMENT OF THE RENT AND FOR THE
PERFORMANCE AND OBSERVANCE OF ALL OF THE COVENANTS AND CONDITIONS TO BE
PERFORMED BY TENANT HEREUNDER.

 

The provisions of this Section 16.2 shall not be deemed a waiver of the
provisions set forth in the first paragraph of Section 16.1.

 

16.3                        PERMITTED SUBLEASE.  NOTWITHSTANDING THE FOREGOING,
INCLUDING, WITHOUT LIMITATION, SECTION 16.2, BUT SUBJECT TO THE PROVISIONS OF
SECTION 16.4 AND ANY OTHER EXPRESS CONDITIONS OR LIMITATIONS SET FORTH HEREIN,
TENANT MAY, IN EACH INSTANCE AFTER NOTICE TO LANDLORD, (A) ENTER INTO THIRD
PARTY RESIDENCY AGREEMENTS WITH RESPECT TO THE UNITS LOCATED AT THE FACILITIES,
(B) SUBLEASE SPACE AT ANY PROPERTY FOR LAUNDRY, COMMISSARY OR CHILD CARE
PURPOSES OR OTHER CONCESSIONS IN FURTHERANCE OF THE PERMITTED USE, SO LONG AS
SUCH SUBLEASES WILL NOT REDUCE THE NUMBER OF UNITS AT ANY FACILITY, WILL NOT
VIOLATE OR AFFECT ANY LEGAL REQUIREMENT OR INSURANCE REQUIREMENT, AND TENANT
SHALL PROVIDE SUCH ADDITIONAL INSURANCE COVERAGE APPLICABLE TO THE ACTIVITIES TO
BE CONDUCTED IN SUCH SUBLEASED SPACE AS LANDLORD AND ANY FACILITY MORTGAGEE MAY
REASONABLY REQUIRE, AND (C) ENTER INTO ONE OR MORE SUBLEASES WITH AFFILIATED
PERSONS OF TENANT WITH RESPECT TO THE LEASED PROPERTY, OR ANY PORTION THEREOF,
PROVIDED TENANT GIVES LANDLORD NOTICE OF THE MATERIAL TERMS AND CONDITIONS
THEREOF.  LANDLORD AND TENANT ACKNOWLEDGE AND AGREE THAT IF TENANT ENTERS INTO
ONE (1) OR MORE SUBLEASES WITH AFFILIATED PERSONS OF TENANT WITH RESPECT TO ANY
PROPERTY, OR ANY PORTION THEREOF, IN ACCORDANCE WITH THE PRECEDING CLAUSE (C),
TENANT MAY ALLOCATE THE RENT AND OTHER CHARGES WITH RESPECT TO THE AFFECTED
PROPERTY IN ANY REASONABLE MANNER; PROVIDED, HOWEVER, THAT SUCH ALLOCATION SHALL
NOT AFFECT TENANT’S (NOR ANY GUARANTOR’S) LIABILITY FOR THE RENT AND OTHER
OBLIGATIONS OF TENANT UNDER THIS AGREEMENT; AND, PROVIDED, FURTHER, THAT TENANT
SHALL GIVE LANDLORD PROMPT WRITTEN NOTICE OF ANY ALLOCATION OR REALLOCATION OF
THE RENT AND OTHER CHARGES WITH RESPECT TO THE AFFECTED PROPERTY AND, IN ANY
EVENT, TENANT SHALL GIVE LANDLORD WRITTEN NOTICE OF THE AMOUNT OF SUCH
ALLOCATIONS AT LEAST TEN (10) BUSINESS DAYS PRIOR TO THE DATE THAT LANDLORD OR
SENIOR HOUSING PROPERTIES TRUST IS REQUIRED TO FILE ANY TAX RETURNS IN ANY STATE
WHERE SUCH AFFECTED PROPERTY IS LOCATED.

 

16.4                        SUBLEASE LIMITATION.  ANYTHING CONTAINED IN THIS
AGREEMENT TO THE CONTRARY NOTWITHSTANDING, TENANT SHALL NOT SUBLET THE LEASED
PROPERTY, OR ANY PORTION THEREOF, ON ANY BASIS SUCH THAT THE RENTAL TO BE PAID
BY ANY SUBLESSEE THEREUNDER WOULD BE BASED, IN WHOLE OR IN PART, ON THE NET
INCOME OR

 

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PROFITS DERIVED BY THE BUSINESS ACTIVITIES OF SUCH SUBLESSEE, ANY OTHER FORMULA
SUCH THAT ANY PORTION OF SUCH SUBLEASE RENTAL WOULD FAIL TO QUALIFY AS “RENTS
FROM REAL PROPERTY” WITHIN THE MEANING OF SECTION 856(D) OF THE CODE, OR ANY
SIMILAR OR SUCCESSOR PROVISION THERETO OR WOULD OTHERWISE DISQUALIFY LANDLORD
FOR TREATMENT AS A REAL ESTATE INVESTMENT TRUST.

 

ARTICLE 17

 

ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

 

17.1                        ESTOPPEL CERTIFICATES.  AT ANY TIME AND FROM TIME TO
TIME, BUT NOT MORE THAN A REASONABLE NUMBER OF TIMES PER YEAR, UPON NOT LESS
THAN TEN (10) BUSINESS DAYS PRIOR NOTICE BY EITHER PARTY, THE PARTY RECEIVING
SUCH NOTICE SHALL FURNISH TO THE OTHER AN OFFICER’S CERTIFICATE CERTIFYING THAT
THIS AGREEMENT IS UNMODIFIED AND IN FULL FORCE AND EFFECT (OR THAT THIS
AGREEMENT IS IN FULL FORCE AND EFFECT AS MODIFIED AND SETTING FORTH THE
MODIFICATIONS), THE DATE TO WHICH THE RENT HAS BEEN PAID, THAT NO DEFAULT OR AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR, IF A DEFAULT OR AN EVENT OF
DEFAULT SHALL EXIST, SPECIFYING IN REASONABLE DETAIL THE NATURE THEREOF, AND THE
STEPS BEING TAKEN TO REMEDY THE SAME, AND SUCH ADDITIONAL INFORMATION AS THE
REQUESTING PARTY MAY REASONABLY REQUEST.  ANY SUCH CERTIFICATE FURNISHED
PURSUANT TO THIS SECTION 17.1 MAY BE RELIED UPON BY THE REQUESTING PARTY, ITS
LENDERS AND ANY PROSPECTIVE PURCHASER OR MORTGAGEE OF THE LEASED PROPERTY, OR
ANY PORTION THEREOF, OR THE LEASEHOLD ESTATE CREATED HEREBY.

 

17.2                        FINANCIAL STATEMENTS.  TENANT SHALL FURNISH OR CAUSE
FIVE STAR TO FURNISH, AS APPLICABLE, THE FOLLOWING STATEMENTS TO LANDLORD:

 

(A)                                  WITHIN FORTY-FIVE (45) DAYS AFTER EACH OF
THE FIRST THREE FISCAL QUARTERS OF ANY FISCAL YEAR, THE MOST RECENT CONSOLIDATED
FINANCIALS, ACCOMPANIED BY A FINANCIAL OFFICER’S CERTIFICATE;

 

(B)                                 WITHIN NINETY (90) DAYS AFTER THE END OF
EACH FISCAL YEAR, THE MOST RECENT CONSOLIDATED FINANCIALS AND FINANCIALS OF
TENANT FOR SUCH YEAR, CERTIFIED BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
REASONABLY SATISFACTORY TO LANDLORD AND ACCOMPANIED BY A FINANCIAL OFFICER’S
CERTIFICATE;

 

(C)                                  WITHIN FORTY-FIVE (45) DAYS AFTER THE END
OF EACH MONTH, AN UNAUDITED OPERATING STATEMENT AND STATEMENT OF CAPITAL
EXPENDITURES PREPARED ON A FACILITY BY FACILITY BASIS AND A COMBINED BASIS,
INCLUDING OCCUPANCY PERCENTAGES

 

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AND AVERAGE RATE, ACCOMPANIED BY A FINANCIAL OFFICER’S CERTIFICATE;

 

(D)                                 AT ANY TIME AND FROM TIME TO TIME UPON NOT
LESS THAN TWENTY (20) DAYS NOTICE FROM LANDLORD OR SUCH ADDITIONAL PERIOD AS MAY
BE REASONABLE UNDER THE CIRCUMSTANCES, ANY CONSOLIDATED FINANCIALS, TENANT
FINANCIALS OR ANY OTHER AUDITED OR UNAUDITED FINANCIAL REPORTING INFORMATION
REQUIRED TO BE FILED BY LANDLORD WITH ANY SECURITIES AND EXCHANGE COMMISSION,
THE SEC OR ANY SUCCESSOR AGENCY, OR ANY OTHER GOVERNMENTAL AUTHORITY, OR
REQUIRED PURSUANT TO ANY ORDER ISSUED BY ANY COURT, GOVERNMENTAL AUTHORITY OR
ARBITRATOR IN ANY LITIGATION TO WHICH LANDLORD IS A PARTY, FOR PURPOSES OF
COMPLIANCE THEREWITH; PROVIDED, HOWEVER, THAT, EXCEPT AS TO CALCULATIONS
PERTAINING TO GROSS REVENUES, TENANT SHALL NOT BE REQUIRED TO PROVIDE AUDITED
FINANCIALS WITH RESPECT TO ANY INDIVIDUAL FACILITY UNLESS LANDLORD SHALL AGREE
TO PAY FOR THE COST THEREOF;

 

(E)                                  PROMPTLY, AFTER RECEIPT OR SENDING THEREOF,
COPIES OF ALL NOTICES GIVEN OR RECEIVED BY TENANT UNDER ANY MANAGEMENT
AGREEMENT; AND

 

(F)                                    PROMPTLY, UPON NOTICE FROM LANDLORD, SUCH
OTHER INFORMATION CONCERNING THE BUSINESS, FINANCIAL CONDITION AND AFFAIRS OF
TENANT AND/OR ANY GUARANTOR AS LANDLORD REASONABLY MAY REQUEST FROM TIME TO
TIME.

 

Landlord may at any time, and from time to time, provide any Facility Mortgagee
with copies of any of the foregoing statements, subject to Landlord obtaining
the agreement of such Facility Mortgagee to maintain such statements and the
information therein as confidential.

 

17.3                        GENERAL OPERATIONS.  TENANT COVENANTS AND AGREES TO
FURNISH TO LANDLORD, WITHIN THIRTY (30) DAYS AFTER RECEIPT OR MODIFICATION
THEREOF, COPIES OF:

 

(A)                                  ALL LICENSES AUTHORIZING TENANT OR ANY
MANAGER TO OPERATE ANY FACILITY FOR ITS PERMITTED USE;

 

(B)                                 ALL MEDICARE AND MEDICAID CERTIFICATIONS,
TOGETHER WITH PROVIDER AGREEMENTS AND ALL MATERIAL CORRESPONDENCE RELATING
THERETO WITH RESPECT TO ANY FACILITY (EXCLUDING, HOWEVER, CORRESPONDENCE WHICH
MAY BE SUBJECT TO ANY ATTORNEY CLIENT PRIVILEGE);

 

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(C)                                  IF REQUIRED UNDER APPLICABLE LAW WITH
RESPECT TO ANY FACILITY, A LICENSE FOR EACH INDIVIDUAL EMPLOYED AS ADMINISTRATOR
WITH RESPECT TO SUCH FACILITY;

 

(D)                                 ALL REPORTS OF SURVEYS, STATEMENTS OF
DEFICIENCIES, PLANS OF CORRECTION, AND ALL MATERIAL CORRESPONDENCE RELATING
THERETO, INCLUDING, WITHOUT LIMITATION, ALL REPORTS AND MATERIAL CORRESPONDENCE
CONCERNING COMPLIANCE WITH OR ENFORCEMENT OF LICENSURE, MEDICARE/MEDICAID, AND
ACCREDITATION REQUIREMENTS, INCLUDING PHYSICAL ENVIRONMENT AND LIFE SAFETY CODE
SURVEY REPORTS (EXCLUDING, HOWEVER, CORRESPONDENCE WHICH MAY BE SUBJECT TO ANY
ATTORNEY CLIENT PRIVILEGE); AND

 

(E)                                  WITH REASONABLE PROMPTNESS, SUCH OTHER
CONFIRMATION AS TO THE LICENSURE AND MEDICARE AND MEDICAID PARTICIPATION OF
TENANT AS LANDLORD MAY REASONABLY REQUEST FROM TIME TO TIME.

 

ARTICLE 18

 

LANDLORD’S RIGHT TO INSPECT

 

Tenant shall permit Landlord and its authorized representatives to inspect the
Leased Property, or any portion thereof, during usual business hours upon not
less than forty-eight (48) hours’ notice and to make such repairs as Landlord is
permitted or required to make pursuant to the terms of this Agreement, provided
that any inspection or repair by Landlord or its representatives will not
unreasonably interfere with Tenant’s use and operation of the Leased Property
and further provided that in the event of an emergency, as determined by
Landlord in its reasonable discretion, prior Notice shall not be necessary.

 

ARTICLE 19

 

EASEMENTS

 

19.1                        GRANT OF EASEMENTS.  PROVIDED NO EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING, LANDLORD WILL JOIN IN GRANTING AND, IF
NECESSARY, MODIFYING OR ABANDONING SUCH RIGHTS-OF-WAY, EASEMENTS AND OTHER
INTERESTS AS MAY BE REASONABLY REQUESTED BY TENANT FOR INGRESS AND EGRESS, AND
ELECTRIC, TELEPHONE, GAS, WATER, SEWER AND OTHER UTILITIES SO LONG AS:

 

(A)                                  THE INSTRUMENT CREATING, MODIFYING OR
ABANDONING ANY SUCH EASEMENT, RIGHT-OF-WAY OR OTHER INTEREST IS SATISFACTORY TO
AND APPROVED BY LANDLORD (WHICH APPROVAL

 

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SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED);

 

(B)                                 LANDLORD RECEIVES AN OFFICER’S CERTIFICATE
FROM TENANT STATING (I) THAT SUCH GRANT, MODIFICATION OR ABANDONMENT IS NOT
DETRIMENTAL TO THE PROPER CONDUCT OF BUSINESS ON SUCH PROPERTY, (II) THE
CONSIDERATION, IF ANY, BEING PAID FOR SUCH GRANT, MODIFICATION OR ABANDONMENT
(WHICH CONSIDERATION SHALL BE PAID BY TENANT), (III) THAT SUCH GRANT,
MODIFICATION OR ABANDONMENT DOES NOT IMPAIR THE USE OR VALUE OF SUCH PROPERTY
FOR THE PERMITTED USE, AND (IV) THAT, FOR AS LONG AS THIS AGREEMENT SHALL BE IN
EFFECT, TENANT WILL PERFORM ALL OBLIGATIONS, IF ANY, OF LANDLORD UNDER ANY SUCH
INSTRUMENT; AND

 

(C)                                  LANDLORD RECEIVES EVIDENCE SATISFACTORY TO
LANDLORD THAT THE MANAGER HAS GRANTED ITS CONSENT TO SUCH GRANT, MODIFICATION OR
ABANDONMENT IN ACCORDANCE WITH THE REQUIREMENTS OF SUCH MANAGER’S MANAGEMENT
AGREEMENT OR THAT SUCH CONSENT IS NOT REQUIRED.

 

19.2                        EXERCISE OF RIGHTS BY TENANT.  SO LONG AS NO EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING, TENANT SHALL HAVE THE RIGHT TO
EXERCISE ALL RIGHTS OF LANDLORD UNDER THE EASEMENT AGREEMENTS AND, IN CONNECTION
THEREWITH, LANDLORD SHALL EXECUTE AND PROMPTLY RETURN TO TENANT SUCH DOCUMENTS
AS TENANT SHALL REASONABLY REQUEST.  TENANT SHALL PERFORM ALL OBLIGATIONS OF
LANDLORD UNDER THE EASEMENT AGREEMENTS.

 

19.3                        PERMITTED ENCUMBRANCES.  ANY AGREEMENTS ENTERED INTO
IN ACCORDANCE WITH THIS ARTICLE 19 SHALL BE DEEMED A PERMITTED ENCUMBRANCE.

 

ARTICLE 20

 

FACILITY MORTGAGES

 

20.1                        LANDLORD MAY GRANT LIENS.  WITHOUT THE CONSENT OF
TENANT, LANDLORD MAY, FROM TIME TO TIME, DIRECTLY OR INDIRECTLY, CREATE OR
OTHERWISE CAUSE TO EXIST ANY LIEN, ENCUMBRANCE OR TITLE RETENTION AGREEMENT
(“ENCUMBRANCE”) UPON THE LEASED PROPERTY, OR ANY PORTION THEREOF, OR INTEREST
THEREIN, WHETHER TO SECURE ANY BORROWING OR OTHER MEANS OF FINANCING OR
REFINANCING.

 

20.2                        SUBORDINATION OF LEASE.  THIS AGREEMENT AND ANY AND
ALL RIGHTS OF TENANT HEREUNDER ARE AND SHALL BE SUBJECT AND SUBORDINATE TO ANY
GROUND OR MASTER LEASE, AND ALL RENEWALS, EXTENSIONS, MODIFICATIONS AND
REPLACEMENTS THEREOF, AND TO ALL

 

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MORTGAGES AND DEEDS OF TRUST, WHICH MAY NOW OR HEREAFTER AFFECT THE LEASED
PROPERTY, OR ANY PORTION THEREOF, OR ANY IMPROVEMENTS THEREON AND/OR ANY OF SUCH
LEASES, WHETHER OR NOT SUCH MORTGAGES OR DEEDS OF TRUST SHALL ALSO COVER OTHER
LANDS AND/OR BUILDINGS AND/OR LEASES, TO EACH AND EVERY ADVANCE MADE OR
HEREAFTER TO BE MADE UNDER SUCH MORTGAGES AND DEEDS OF TRUST, AND TO ALL
RENEWALS, MODIFICATIONS, REPLACEMENTS AND EXTENSIONS OF SUCH LEASES AND SUCH
MORTGAGES AND DEEDS OF TRUST AND ALL CONSOLIDATIONS OF SUCH MORTGAGES AND DEEDS
OF TRUST.  THIS SECTION SHALL BE SELF-OPERATIVE AND NO FURTHER INSTRUMENT OF
SUBORDINATION SHALL BE REQUIRED.  IN CONFIRMATION OF SUCH SUBORDINATION, TENANT
SHALL PROMPTLY EXECUTE, ACKNOWLEDGE AND DELIVER ANY INSTRUMENT THAT LANDLORD,
THE LESSOR UNDER ANY SUCH LEASE OR THE HOLDER OF ANY SUCH MORTGAGE OR THE
TRUSTEE OR BENEFICIARY OF ANY DEED OF TRUST OR ANY OF THEIR RESPECTIVE
SUCCESSORS IN INTEREST MAY REASONABLY REQUEST TO EVIDENCE SUCH SUBORDINATION. 
ANY LEASE TO WHICH THIS AGREEMENT IS, AT THE TIME REFERRED TO, SUBJECT AND
SUBORDINATE IS HEREIN CALLED “SUPERIOR LEASE” AND THE LESSOR OF A SUPERIOR LEASE
OR ITS SUCCESSOR IN INTEREST AT THE TIME REFERRED TO IS HEREIN CALLED “SUPERIOR
LANDLORD” AND ANY MORTGAGE OR DEED OF TRUST TO WHICH THIS AGREEMENT IS, AT THE
TIME REFERRED TO, SUBJECT AND SUBORDINATE IS HEREIN CALLED “SUPERIOR MORTGAGE”
AND THE HOLDER, TRUSTEE OR BENEFICIARY OF A SUPERIOR MORTGAGE IS HEREIN CALLED
“SUPERIOR MORTGAGEE”.  TENANT SHALL HAVE NO OBLIGATIONS UNDER ANY SUPERIOR LEASE
OR SUPERIOR MORTGAGE OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS SECTION 20.2.

 

If any Superior Landlord or Superior Mortgagee or the nominee or designee of any
Superior Landlord or Superior Mortgagee shall succeed to the rights of Landlord
under this Agreement (any such person, “Successor Landlord”), whether through
possession or foreclosure action or delivery of a new lease or deed, or
otherwise, at such Successor Landlord’s request, Tenant shall attorn to and
recognize the Successor Landlord as Tenant’s landlord under this Agreement and
Tenant shall promptly execute and deliver any instrument that such Successor
Landlord may reasonably request to evidence such attornment (provided that such
instrument does not alter the terms of this Agreement), whereupon, this
Agreement shall continue in full force and effect as a direct lease between the
Successor Landlord and Tenant upon all of the terms, conditions and covenants as
are set forth in this Agreement, except that the Successor Landlord (unless
formerly the landlord under this Agreement or its nominee or designee) shall not
be (a) liable in any way to Tenant for any act or omission, neglect or default
on the part of any prior Landlord under this Agreement, (b) responsible for any
monies owing by or on deposit with any prior

 

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Landlord to the credit of Tenant (except to the extent actually paid or
delivered to the Successor Landlord), (c) subject to any counterclaim or setoff
which theretofore accrued to Tenant against any prior Landlord, (d) bound by any
modification of this Agreement subsequent to such Superior Lease or Mortgage, or
by any previous prepayment of Rent for more than one (1) month in advance of the
date due hereunder, which was not approved in writing by the Superior Landlord
or the Superior Mortgagee thereto, (e) liable to Tenant beyond the Successor
Landlord’s interest in the Leased Property and the rents, income, receipts,
revenues, issues and profits issuing from the Leased Property, (f) responsible
for the performance of any work to be done by the Landlord under this Agreement
to render the Leased Property ready for occupancy by Tenant (subject to
Landlord’s obligations under Section 5.1.2(b) or with respect to any insurance
or Condemnation proceeds), or (g) required to remove any Person occupying the
Leased Property or any part thereof, except if such person claims by, through or
under the Successor Landlord.  Tenant agrees at any time and from time to time
to execute a suitable instrument in confirmation of Tenant’s agreement to
attorn, as aforesaid and Landlord agrees to provide Tenant with an instrument of
nondisturbance and attornment from each such Superior Mortgagee and Superior
Landlord (other than the lessors under any ground leases with respect to the
Leased Property, or any portion thereof) in form and substance reasonably
satisfactory to Tenant.  Notwithstanding the foregoing, any Successor Landlord
shall be liable (a) to pay to Tenant any amounts owed under Section 5.1.2(b),
and (b) to pay to Tenant any portions of insurance proceeds or Awards received
by Landlord or the Successor Landlord required to be paid to Tenant pursuant to
the terms of this Agreement, and, as a condition to any mortgage, lien or lease
in respect of the Leased Property, or any portion thereof, and the subordination
of this Agreement thereto, the mortgagee, lienholder or lessor, as applicable,
shall expressly agree, for the benefit of Tenant, to make such payments, which
agreement shall be embodied in an instrument in form reasonably satisfactory to
Tenant.

 

20.3                        NOTICE TO MORTGAGEE AND SUPERIOR LANDLORD.
 SUBSEQUENT TO THE RECEIPT BY TENANT OF NOTICE FROM LANDLORD AS TO THE IDENTITY
OF ANY FACILITY MORTGAGEE OR SUPERIOR LANDLORD UNDER A LEASE WITH LANDLORD, AS
GROUND LESSEE, WHICH INCLUDES THE LEASED PROPERTY, OR ANY PORTION THEREOF, AS
PART OF THE DEMISED PREMISES AND WHICH COMPLIES WITH SECTION 20.1 (WHICH NOTICE
SHALL BE ACCOMPANIED BY A COPY OF THE APPLICABLE MORTGAGE OR LEASE), NO NOTICE
FROM TENANT TO LANDLORD AS TO A DEFAULT BY LANDLORD UNDER THIS AGREEMENT SHALL
BE EFFECTIVE WITH RESPECT TO A FACILITY MORTGAGEE OR SUPERIOR LANDLORD UNLESS
AND UNTIL A

 

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COPY OF THE SAME IS GIVEN TO SUCH FACILITY MORTGAGEE OR SUPERIOR LANDLORD AT THE
ADDRESS SET FORTH IN THE ABOVE DESCRIBED NOTICE, AND THE CURING OF ANY OF
LANDLORD’S DEFAULTS WITHIN THE APPLICABLE NOTICE AND CURE PERIODS SET FORTH IN
ARTICLE 14 BY SUCH FACILITY MORTGAGEE OR SUPERIOR LANDLORD SHALL BE TREATED AS
PERFORMANCE BY LANDLORD.

 

ARTICLE 21

 

ADDITIONAL COVENANTS OF TENANT

 

21.1                        PROMPT PAYMENT OF INDEBTEDNESS.  TENANT SHALL
(A) PAY OR CAUSE TO BE PAID WHEN DUE ALL PAYMENTS OF PRINCIPAL OF AND PREMIUM
AND INTEREST ON TENANT’S INDEBTEDNESS FOR MONEY BORROWED AND SHALL NOT PERMIT OR
SUFFER ANY SUCH INDEBTEDNESS TO BECOME OR REMAIN IN DEFAULT BEYOND ANY
APPLICABLE GRACE OR CURE PERIOD, (B) PAY OR CAUSE TO BE PAID WHEN DUE ALL LAWFUL
CLAIMS FOR LABOR AND RENTS WITH RESPECT TO THE LEASED PROPERTY, (C) PAY OR CAUSE
TO BE PAID WHEN DUE ALL TRADE PAYABLES AND (D) PAY OR CAUSE TO BE PAID WHEN DUE
ALL OTHER OF TENANT’S INDEBTEDNESS UPON WHICH IT IS OR BECOMES OBLIGATED,
EXCEPT, IN EACH CASE, OTHER THAN THAT REFERRED TO IN CLAUSE (A), TO THE EXTENT
PAYMENT IS BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS IN
ACCORDANCE WITH ARTICLE 8 AND IF TENANT SHALL HAVE SET ASIDE ON ITS BOOKS
ADEQUATE RESERVES WITH RESPECT THERETO IN ACCORDANCE WITH GAAP, IF APPROPRIATE,
OR UNLESS AND UNTIL FORECLOSURE, DISTRAINT SALE OR OTHER SIMILAR PROCEEDINGS
SHALL HAVE BEEN COMMENCED.

 

21.2                        CONDUCT OF BUSINESS.  TENANT SHALL NOT ENGAGE IN ANY
BUSINESS OTHER THAN THE LEASING AND OPERATION OF THE LEASED PROPERTY (INCLUDING
ANY INCIDENTAL OR ANCILLARY BUSINESS RELATING THERETO) AND THE LEASING AND
OPERATION OF THE LEASED PROPERTY UNDER MASTER LEASE AGREEMENT NO. 1 (INCLUDING
ANY INCIDENTAL OR ANCILLARY BUSINESS RELATING THERETO).  TENANT SHALL DO OR
CAUSE TO BE DONE ALL THINGS NECESSARY TO PRESERVE, RENEW AND KEEP IN FULL FORCE
AND EFFECT AND IN GOOD STANDING ITS CORPORATE EXISTENCE AND ITS RIGHTS AND
LICENSES NECESSARY TO CONDUCT SUCH BUSINESS.

 

21.3                        MAINTENANCE OF ACCOUNTS AND RECORDS.  TENANT SHALL
KEEP TRUE RECORDS AND BOOKS OF ACCOUNT OF TENANT IN WHICH FULL, TRUE AND CORRECT
ENTRIES WILL BE MADE OF DEALINGS AND TRANSACTIONS IN RELATION TO THE BUSINESS
AND AFFAIRS OF TENANT IN ACCORDANCE WITH GAAP.  TENANT SHALL APPLY ACCOUNTING
PRINCIPLES IN THE PREPARATION OF THE FINANCIAL STATEMENTS OF TENANT WHICH, IN
THE JUDGMENT OF AND THE OPINION OF ITS INDEPENDENT PUBLIC ACCOUNTANTS, ARE IN
ACCORDANCE WITH GAAP, WHERE APPLICABLE, EXCEPT FOR CHANGES APPROVED BY SUCH
INDEPENDENT PUBLIC ACCOUNTANTS.  TENANT SHALL PROVIDE TO

 

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LANDLORD EITHER IN A FOOTNOTE TO THE FINANCIAL STATEMENTS DELIVERED UNDER
SECTION 17.2 WHICH RELATE TO THE PERIOD IN WHICH SUCH CHANGE OCCURS, OR IN
SEPARATE SCHEDULES TO SUCH FINANCIAL STATEMENTS, INFORMATION SUFFICIENT TO SHOW
THE EFFECT OF ANY SUCH CHANGES ON SUCH FINANCIAL STATEMENTS.

 

21.4                        NOTICE OF LITIGATION, ETC.  TENANT SHALL GIVE PROMPT
NOTICE TO LANDLORD OF ANY LITIGATION OR ANY ADMINISTRATIVE PROCEEDING TO WHICH
IT MAY HEREAFTER BECOME A PARTY OF WHICH TENANT HAS NOTICE OR ACTUAL KNOWLEDGE
WHICH INVOLVES A POTENTIAL LIABILITY EQUAL TO OR GREATER THAN TWO HUNDRED FIFTY
THOUSAND DOLLARS ($250,000) OR WHICH MAY OTHERWISE RESULT IN ANY MATERIAL
ADVERSE CHANGE IN THE BUSINESS, OPERATIONS, PROPERTY, PROSPECTS, RESULTS OF
OPERATION OR CONDITION, FINANCIAL OR OTHER, OF TENANT.  FORTHWITH UPON TENANT
OBTAINING KNOWLEDGE OF ANY DEFAULT, EVENT OF DEFAULT OR ANY DEFAULT OR EVENT OF
DEFAULT UNDER ANY AGREEMENT RELATING TO INDEBTEDNESS FOR MONEY BORROWED IN AN
AGGREGATE AMOUNT EXCEEDING, AT ANY ONE TIME, TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000), OR ANY EVENT OR CONDITION THAT WOULD BE REQUIRED TO BE DISCLOSED IN
A CURRENT REPORT FILED BY TENANT ON FORM 8-K OR IN PART II OF A QUARTERLY REPORT
ON FORM 10-Q IF TENANT WERE REQUIRED TO FILE SUCH REPORTS UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, TENANT SHALL FURNISH NOTICE THEREOF TO
LANDLORD SPECIFYING THE NATURE AND PERIOD OF EXISTENCE THEREOF AND WHAT ACTION
TENANT HAS TAKEN OR IS TAKING OR PROPOSES TO TAKE WITH RESPECT THERETO.

 

21.5                        INDEBTEDNESS OF TENANT.  TENANT SHALL NOT CREATE,
INCUR, ASSUME OR GUARANTEE, OR PERMIT TO EXIST, OR BECOME OR REMAIN LIABLE
DIRECTLY OR INDIRECTLY UPON, ANY INDEBTEDNESS EXCEPT THE FOLLOWING:

 

(A)                                  INDEBTEDNESS OF TENANT TO LANDLORD;

 

(B)                                 INDEBTEDNESS OF TENANT FOR IMPOSITIONS, TO
THE EXTENT THAT PAYMENT THEREOF SHALL NOT AT THE TIME BE REQUIRED TO BE MADE IN
ACCORDANCE WITH THE PROVISIONS OF ARTICLE 8;

 

(C)                                  INDEBTEDNESS OF TENANT IN RESPECT OF
JUDGMENTS OR AWARDS (I) WHICH HAVE BEEN IN FORCE FOR LESS THAN THE APPLICABLE
APPEAL PERIOD AND IN RESPECT OF WHICH EXECUTION THEREOF SHALL HAVE BEEN STAYED
PENDING SUCH APPEAL OR REVIEW, OR (II) WHICH ARE FULLY COVERED BY INSURANCE
PAYABLE TO TENANT, OR (III) WHICH ARE FOR AN AMOUNT NOT IN EXCESS OF $250,000 IN
THE AGGREGATE AT ANY ONE TIME OUTSTANDING AND (X) WHICH HAVE BEEN IN FORCE FOR
NOT LONGER THAN THE APPLICABLE APPEAL PERIOD, SO LONG AS EXECUTION IS NOT LEVIED
THEREUNDER OR (Y) IN RESPECT OF WHICH AN APPEAL

 

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OR PROCEEDINGS FOR REVIEW SHALL AT THE TIME BE PROSECUTED IN GOOD FAITH IN
ACCORDANCE WITH THE PROVISIONS OF ARTICLE 8, AND IN RESPECT OF WHICH EXECUTION
THEREOF SHALL HAVE BEEN STAYED PENDING SUCH APPEAL OR REVIEW;

 

(D)                                 UNSECURED BORROWINGS OF TENANT FROM ITS
AFFILIATED PERSONS WHICH ARE BY THEIR TERMS EXPRESSLY SUBORDINATE PURSUANT TO A
SUBORDINATION AGREEMENT TO THE PAYMENT AND PERFORMANCE OF TENANT’S OBLIGATIONS
UNDER THIS AGREEMENT;

 

(E)                                  INDEBTEDNESS FOR PURCHASE MONEY FINANCING
IN ACCORDANCE WITH SECTION 21.8(A) AND OTHER OPERATING LIABILITIES INCURRED IN
THE ORDINARY COURSE OF TENANT’S BUSINESS;

 

(F)                                    INDEBTEDNESS OF TENANT AS GUARANTOR OR
BORROWER SECURED BY LIENS PERMITTED UNDER SECTION 21.8(C);

 

(G)                                 INDEBTEDNESS OF TENANT PERMITTED UNDER
MASTER LEASE AGREEMENT NO. 1; OR

 

(H)                                 A GUARANTY OF FIVE STAR’S OBLIGATIONS UNDER
ITS REVOLVING LINE OF CREDIT.

 

21.6                        DISTRIBUTIONS, PAYMENTS TO AFFILIATED PERSONS, ETC.
 TENANT SHALL NOT DECLARE, ORDER, PAY OR MAKE, DIRECTLY OR INDIRECTLY, ANY
DISTRIBUTIONS OR ANY PAYMENT TO ANY AFFILIATED PERSON OF TENANT (INCLUDING
PAYMENTS IN THE ORDINARY COURSE OF BUSINESS) OR SET APART ANY SUM OR PROPERTY
THEREFOR, OR AGREE TO DO SO, IF, AT THE TIME OF SUCH PROPOSED ACTION, OR
IMMEDIATELY AFTER GIVING EFFECT THERETO, ANY EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING.  OTHERWISE, AS LONG AS NO EVENT OF DEFAULT SHALL
HAVE OCCURRED AND BE CONTINUING, TENANT MAY MAKE DISTRIBUTIONS AND PAYMENTS TO
AFFILIATED PERSONS; PROVIDED, HOWEVER, THAT ANY SUCH PAYMENTS SHALL AT ALL TIMES
BE SUBORDINATE TO TENANT’S OBLIGATIONS UNDER THIS AGREEMENT.

 

21.7                        PROHIBITED TRANSACTIONS.  TENANT SHALL NOT PERMIT TO
EXIST OR ENTER INTO ANY AGREEMENT OR ARRANGEMENT WHEREBY IT ENGAGES IN A
TRANSACTION OF ANY KIND WITH ANY AFFILIATED PERSON AS TO TENANT OR ANY
GUARANTOR, EXCEPT ON TERMS AND CONDITIONS WHICH ARE COMMERCIALLY REASONABLE.

 

21.8                        LIENS AND ENCUMBRANCES.  EXCEPT AS PERMITTED BY
SECTION 7.1, SECTION 21.5 AND MASTER LEASE AGREEMENT NO. 1, TENANT SHALL NOT
CREATE OR INCUR OR SUFFER TO BE CREATED OR INCURRED OR TO EXIST ANY LIEN ON THIS
AGREEMENT OR ANY OF TENANT’S ASSETS, PROPERTIES, RIGHTS OR INCOME, OR ANY OF ITS

 

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INTEREST THEREIN, NOW OR AT ANY TIME HEREAFTER OWNED, OTHER THAN:

 

(A)                                  SECURITY INTERESTS SECURING THE PURCHASE
PRICE OF EQUIPMENT OR PERSONAL PROPERTY WHETHER ACQUIRED BEFORE OR AFTER THE
APPLICABLE COMMENCEMENT DATE FOR ANY PROPERTY; PROVIDED, HOWEVER, THAT (I) SUCH
LIEN SHALL AT ALL TIMES BE CONFINED SOLELY TO THE ASSET IN QUESTION AND (II) THE
AGGREGATE PRINCIPAL AMOUNT OF INDEBTEDNESS SECURED BY ANY SUCH LIEN SHALL NOT
EXCEED THE COST OF ACQUISITION OR CONSTRUCTION OF THE PROPERTY SUBJECT THERETO;

 

(B)                                 PERMITTED ENCUMBRANCES;

 

(C)                                  SECURITY INTERESTS IN ACCOUNTS OR CHATTEL
PAPER, IN SUPPORT OBLIGATIONS, GENERAL INTANGIBLES OR DEPOSIT ACCOUNTS RELATING
TO SUCH ACCOUNTS OR CHATTEL PAPER, IN ANY INSTRUMENTS OR INVESTMENT PROPERTY
EVIDENCING OR ARISING FROM SUCH ACCOUNTS OR CHATTEL PAPER, IN ANY DOCUMENTS,
BOOKS, RECORDS OR OTHER INFORMATION (INCLUDING, WITHOUT LIMITATION, COMPUTER
PROGRAMS, TAPES, DISCS, PUNCH CARDS, DATA PROCESSING SOFTWARE AND RELATED
PROPERTY AND RIGHTS) MAINTAINED WITH RESPECT TO ANY PROPERTY DESCRIBED IN THIS
SECTION 21.8(C) OR IN ANY PROCEEDS OF ANY OF THE FOREGOING (CAPITALIZED TERMS
USED IN THIS SECTION 21.8(C) WITHOUT DEFINITION BEING USED AS DEFINED IN OR FOR
PURPOSES OF ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE
COMMONWEALTH OF MASSACHUSETTS); AND

 

(D)                                 AS PERMITTED PURSUANT TO SECTION 21.5.

 

21.9                        MERGER; SALE OF ASSETS; ETC.  WITHOUT LANDLORD’S
PRIOR WRITTEN CONSENT (WHICH CONSENT MAY BE GIVEN OR WITHHELD IN LANDLORD’S SOLE
DISCRETION), TENANT SHALL NOT (I) SELL, LEASE (AS LESSOR OR SUBLESSOR), TRANSFER
OR OTHERWISE DISPOSE OF, OR ABANDON, ALL OR ANY MATERIAL PORTION OF ITS ASSETS
(INCLUDING CAPITAL STOCK OR OTHER EQUITY INTERESTS) OR BUSINESS TO ANY PERSON,
(II) MERGE INTO OR WITH OR CONSOLIDATE WITH ANY OTHER ENTITY, OR (III) SELL,
LEASE (AS LESSOR OR SUBLESSOR), TRANSFER OR OTHERWISE DISPOSE OF, OR ABANDON,
ANY PERSONAL PROPERTY OR FIXTURES OR ANY REAL PROPERTY; PROVIDED, HOWEVER, THAT,
NOTWITHSTANDING THE PROVISIONS OF CLAUSE (III) PRECEDING, TENANT MAY DISPOSE OF
EQUIPMENT OR FIXTURES WHICH HAVE BECOME INADEQUATE, OBSOLETE, WORN-OUT,
UNSUITABLE, UNDESIRABLE OR UNNECESSARY, PROVIDED SUBSTITUTE EQUIPMENT OR
FIXTURES HAVING EQUAL OR GREATER VALUE AND UTILITY (BUT NOT NECESSARILY HAVING
THE SAME FUNCTION) HAVE BEEN PROVIDED.

 

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ARTICLE 22

 

ARBITRATION

 

Landlord or Tenant may elect to submit any dispute hereunder that has an amount
in controversy in excess of $250,000 to arbitration hereunder.  Any such
arbitration shall be conducted in Boston, Massachusetts in accordance with the
Commercial Arbitration Rules of the American Association then pertaining and the
decision of the arbitrators with respect to such dispute shall be binding, final
and conclusive on the parties.

 

In the event Landlord or Tenant shall elect to submit any such dispute to
arbitration hereunder, Landlord and Tenant shall each appoint and pay all fees
of a fit and impartial person as arbitrator with at least ten (10) years’ recent
professional experience in the general subject matter of the dispute.  Notice of
such appointment shall be sent in writing by each party to the other, and the
arbitrators so appointed, in the event of their failure to agree within thirty
(30) days after the appointment of the second arbitrator upon the matter so
submitted, shall appoint a third arbitrator.  If either Landlord or Tenant shall
fail to appoint an arbitrator, as aforesaid, for a period of twenty (20) days
after written notice from the other party to make such appointment, then the
arbitrator appointed by the party having made such appointment shall appoint a
second arbitrator and the two (2) so appointed shall, in the event of their
failure to agree upon any decision within thirty (30) days thereafter, appoint a
third arbitrator.  If such arbitrators fail to agree upon a third arbitrator
within forty five (45) days after the appointment of the second arbitrator, then
such third arbitrator shall be appointed by the American Arbitration Association
from its qualified panel of arbitrators, and shall be a person having at least
ten (10) years’ recent professional experience as to the subject matter in
question.  The fees of the third arbitrator and the expenses incident to the
proceedings shall be borne equally between Landlord and Tenant, unless the
arbitrators decide otherwise.  The fees of respective counsel engaged by the
parties, and the fees of expert witnesses and other witnesses called for the
parties, shall be paid by the respective party engaging such counsel or calling
or engaging such witnesses.

 

The decision of the arbitrators shall be rendered within thirty (30) days after
appointment of the third arbitrator.  Such decision shall be in writing and in
duplicate, one counterpart thereof to be delivered to Landlord and one to
Tenant.  A judgment of a court of competent jurisdiction may be

 

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entered upon the award of the arbitrators in accordance with the rules and
statutes applicable thereto then obtaining.

 

Landlord and Tenant acknowledge and agree that, to the extent any such dispute
shall involve any Manager and be subject to arbitration pursuant to such
Manager’s Management Agreement, Landlord and Tenant shall cooperate to
consolidate any such arbitration hereunder and under such Management Agreement
into a single proceeding.

 

ARTICLE 23

 

MISCELLANEOUS

 

23.1                        LIMITATION ON PAYMENT OF RENT.  ALL AGREEMENTS
BETWEEN LANDLORD AND TENANT HEREIN ARE HEREBY EXPRESSLY LIMITED SO THAT IN NO
CONTINGENCY OR EVENT WHATSOEVER, WHETHER BY REASON OF ACCELERATION OF RENT, OR
OTHERWISE, SHALL THE RENT OR ANY OTHER AMOUNTS PAYABLE TO LANDLORD UNDER THIS
AGREEMENT EXCEED THE MAXIMUM PERMISSIBLE UNDER APPLICABLE LAW, THE BENEFIT OF
WHICH MAY BE ASSERTED BY TENANT AS A DEFENSE, AND IF, FROM ANY CIRCUMSTANCE
WHATSOEVER, FULFILLMENT OF ANY PROVISION OF THIS AGREEMENT, AT THE TIME
PERFORMANCE OF SUCH PROVISION SHALL BE DUE, SHALL INVOLVE TRANSCENDING THE LIMIT
OF VALIDITY PRESCRIBED BY LAW, OR IF FROM ANY CIRCUMSTANCES LANDLORD SHOULD EVER
RECEIVE AS FULFILLMENT OF SUCH PROVISION SUCH AN EXCESSIVE AMOUNT, THEN, IPSO
FACTO, THE AMOUNT WHICH WOULD BE EXCESSIVE SHALL BE APPLIED TO THE REDUCTION OF
THE INSTALLMENT(S) OF MINIMUM RENT NEXT DUE AND NOT TO THE PAYMENT OF SUCH
EXCESSIVE AMOUNT.  THIS PROVISION SHALL CONTROL EVERY OTHER PROVISION OF THIS
AGREEMENT AND ANY OTHER AGREEMENTS BETWEEN LANDLORD AND TENANT.

 

23.2                        NO WAIVER.  NO FAILURE BY LANDLORD OR TENANT TO
INSIST UPON THE STRICT PERFORMANCE OF ANY TERM HEREOF OR TO EXERCISE ANY RIGHT,
POWER OR REMEDY CONSEQUENT UPON A BREACH THEREOF, AND NO ACCEPTANCE OF FULL OR
PARTIAL PAYMENT OF RENT DURING THE CONTINUANCE OF ANY SUCH BREACH, SHALL
CONSTITUTE A WAIVER OF ANY SUCH BREACH OR OF ANY SUCH TERM.  TO THE MAXIMUM
EXTENT PERMITTED BY LAW, NO WAIVER OF ANY BREACH SHALL AFFECT OR ALTER THIS
AGREEMENT, WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT WITH RESPECT TO ANY
OTHER THEN EXISTING OR SUBSEQUENT BREACH.

 

23.3                        REMEDIES CUMULATIVE.  TO THE MAXIMUM EXTENT
PERMITTED BY LAW, EACH LEGAL, EQUITABLE OR CONTRACTUAL RIGHT, POWER AND REMEDY
OF LANDLORD OR TENANT, NOW OR HEREAFTER PROVIDED EITHER IN THIS AGREEMENT OR BY
STATUTE OR OTHERWISE, SHALL BE CUMULATIVE AND CONCURRENT AND SHALL BE IN
ADDITION TO EVERY OTHER RIGHT, POWER AND REMEDY AND THE EXERCISE OR BEGINNING OF

 

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THE EXERCISE BY LANDLORD OR TENANT (AS APPLICABLE) OF ANY ONE OR MORE OF SUCH
RIGHTS, POWERS AND REMEDIES SHALL NOT PRECLUDE THE SIMULTANEOUS OR SUBSEQUENT
EXERCISE BY LANDLORD OF ANY OR ALL OF SUCH OTHER RIGHTS, POWERS AND REMEDIES.

 

23.4                        SEVERABILITY.  ANY CLAUSE, SENTENCE, PARAGRAPH,
SECTION OR PROVISION OF THIS AGREEMENT HELD BY A COURT OF COMPETENT JURISDICTION
TO BE INVALID, ILLEGAL OR INEFFECTIVE SHALL NOT IMPAIR, INVALIDATE OR NULLIFY
THE REMAINDER OF THIS AGREEMENT, BUT RATHER THE EFFECT THEREOF SHALL BE CONFINED
TO THE CLAUSE, SENTENCE, PARAGRAPH, SECTION OR PROVISION SO HELD TO BE INVALID,
ILLEGAL OR INEFFECTIVE, AND THIS AGREEMENT SHALL BE CONSTRUED AS IF SUCH
INVALID, ILLEGAL OR INEFFECTIVE PROVISIONS HAD NEVER BEEN CONTAINED THEREIN.

 

23.5                        ACCEPTANCE OF SURRENDER.  NO SURRENDER TO LANDLORD
OF THIS AGREEMENT OR OF THE LEASED PROPERTY OR ANY PART THEREOF, OR OF ANY
INTEREST THEREIN, SHALL BE VALID OR EFFECTIVE UNLESS AGREED TO AND ACCEPTED IN
WRITING BY LANDLORD AND NO ACT BY LANDLORD OR ANY REPRESENTATIVE OR AGENT OF
LANDLORD, OTHER THAN SUCH A WRITTEN ACCEPTANCE BY LANDLORD, SHALL CONSTITUTE AN
ACCEPTANCE OF ANY SUCH SURRENDER.

 

23.6                        NO MERGER OF TITLE.  IT IS EXPRESSLY ACKNOWLEDGED
AND AGREED THAT IT IS THE INTENT OF THE PARTIES THAT THERE SHALL BE NO MERGER OF
THIS AGREEMENT OR OF THE LEASEHOLD ESTATE CREATED HEREBY BY REASON OF THE FACT
THAT THE SAME PERSON MAY ACQUIRE, OWN OR HOLD, DIRECTLY OR INDIRECTLY THIS
AGREEMENT OR THE LEASEHOLD ESTATE CREATED HEREBY AND THE FEE ESTATE OR GROUND
LANDLORD’S INTEREST IN THE LEASED PROPERTY.

 

23.7                        CONVEYANCE BY LANDLORD.  IF LANDLORD OR ANY
SUCCESSOR OWNER OF ALL OR ANY PORTION OF THE LEASED PROPERTY SHALL CONVEY ALL OR
ANY PORTION OF THE LEASED PROPERTY IN ACCORDANCE WITH THE TERMS HEREOF OTHER
THAN AS SECURITY FOR A DEBT, AND THE GRANTEE OR TRANSFEREE OF SUCH OF THE LEASED
PROPERTY SHALL EXPRESSLY ASSUME ALL OBLIGATIONS OF LANDLORD HEREUNDER ARISING OR
ACCRUING FROM AND AFTER THE DATE OF SUCH CONVEYANCE OR TRANSFER, LANDLORD OR
SUCH SUCCESSOR OWNER, AS THE CASE MAY BE, SHALL THEREUPON BE RELEASED FROM ALL
FUTURE LIABILITIES AND OBLIGATIONS OF LANDLORD UNDER THIS AGREEMENT WITH RESPECT
TO SUCH OF THE LEASED PROPERTY ARISING OR ACCRUING FROM AND AFTER THE DATE OF
SUCH CONVEYANCE OR OTHER TRANSFER AND ALL SUCH FUTURE LIABILITIES AND
OBLIGATIONS SHALL THEREUPON BE BINDING UPON THE NEW OWNER.

 

23.8                        QUIET ENJOYMENT.  TENANT SHALL PEACEABLY AND QUIETLY
HAVE, HOLD AND ENJOY THE LEASED PROPERTY FOR THE TERM, FREE OF HINDRANCE OR
MOLESTATION BY LANDLORD OR ANYONE CLAIMING BY, THROUGH OR UNDER LANDLORD, BUT
SUBJECT TO (A) ANY ENCUMBRANCE

 

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PERMITTED UNDER ARTICLE 20 OR OTHERWISE PERMITTED TO BE CREATED BY LANDLORD
HEREUNDER, (B) ALL PERMITTED ENCUMBRANCES, (C) LIENS AS TO OBLIGATIONS OF
LANDLORD THAT ARE EITHER NOT YET DUE OR WHICH ARE BEING CONTESTED IN GOOD FAITH
AND BY PROPER PROCEEDINGS, PROVIDED THE SAME DO NOT MATERIALLY INTERFERE WITH
TENANT’S ABILITY TO OPERATE ANY FACILITY AND (D) LIENS THAT HAVE BEEN CONSENTED
TO IN WRITING BY TENANT.  EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, NO
FAILURE BY LANDLORD TO COMPLY WITH THE FOREGOING COVENANT SHALL GIVE TENANT ANY
RIGHT TO CANCEL OR TERMINATE THIS AGREEMENT OR ABATE, REDUCE OR MAKE A DEDUCTION
FROM OR OFFSET AGAINST THE RENT OR ANY OTHER SUM PAYABLE UNDER THIS AGREEMENT,
OR TO FAIL TO PERFORM ANY OTHER OBLIGATION OF TENANT HEREUNDER.

 

23.9                        NO RECORDATION.  NEITHER LANDLORD NOR TENANT SHALL
RECORD THIS AGREEMENT.

 

23.10                 NOTICES.

 

(A)                                  ANY AND ALL NOTICES, DEMANDS, CONSENTS,
APPROVALS, OFFERS, ELECTIONS AND OTHER COMMUNICATIONS REQUIRED OR PERMITTED
UNDER THIS AGREEMENT SHALL BE DEEMED ADEQUATELY GIVEN IF IN WRITING AND THE SAME
SHALL BE DELIVERED EITHER IN HAND, BY TELECOPIER WITH WRITTEN ACKNOWLEDGMENT OF
RECEIPT, OR BY MAIL OR FEDERAL EXPRESS OR SIMILAR EXPEDITED COMMERCIAL CARRIER,
ADDRESSED TO THE RECIPIENT OF THE NOTICE, POSTPAID AND REGISTERED OR CERTIFIED
WITH RETURN RECEIPT REQUESTED (IF BY MAIL), OR WITH ALL FREIGHT CHARGES PREPAID
(IF BY FEDERAL EXPRESS OR SIMILAR CARRIER).

 

(B)                                 ALL NOTICES REQUIRED OR PERMITTED TO BE SENT
HEREUNDER SHALL BE DEEMED TO HAVE BEEN GIVEN FOR ALL PURPOSES OF THIS AGREEMENT
UPON THE DATE OF ACKNOWLEDGED RECEIPT, IN THE CASE OF A NOTICE BY TELECOPIER,
AND, IN ALL OTHER CASES, UPON THE DATE OF RECEIPT OR REFUSAL, EXCEPT THAT
WHENEVER UNDER THIS AGREEMENT A NOTICE IS EITHER RECEIVED ON A DAY WHICH IS NOT
A BUSINESS DAY OR IS REQUIRED TO BE DELIVERED ON OR BEFORE A SPECIFIC DAY WHICH
IS NOT A BUSINESS DAY, THE DAY OF RECEIPT OR REQUIRED DELIVERY SHALL
AUTOMATICALLY BE EXTENDED TO THE NEXT BUSINESS DAY.

 

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(C)                                  ALL SUCH NOTICES SHALL BE ADDRESSED,

 

if to Landlord:

 

c/o Senior Housing Properties Trust

400 Centre Street

Newton, Massachusetts  02458

Attn:  Mr. David J. Hegarty

[Telecopier No. (617) 796-8349]

 

if to Tenant to:

 

c/o Five Star Quality Care, Inc.

400 Centre Street

Newton, Massachusetts  02458

Attn:  Mr. Bruce J. Mackey Jr.

[Telecopier No. (617) 796-8385]

 

(D)                                 BY NOTICE GIVEN AS HEREIN PROVIDED, THE
PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS SHALL HAVE THE RIGHT
FROM TIME TO TIME AND AT ANY TIME DURING THE TERM OF THIS AGREEMENT TO CHANGE
THEIR RESPECTIVE ADDRESSES EFFECTIVE UPON RECEIPT BY THE OTHER PARTIES OF SUCH
NOTICE AND EACH SHALL HAVE THE RIGHT TO SPECIFY AS ITS ADDRESS ANY OTHER ADDRESS
WITHIN THE UNITED STATES OF AMERICA.

 

23.11                 CONSTRUCTION.  ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, ALL CLAIMS AGAINST, AND LIABILITIES OF, TENANT OR
LANDLORD ARISING PRIOR TO ANY DATE OF TERMINATION OR EXPIRATION OF THIS
AGREEMENT WITH RESPECT TO THE LEASED PROPERTY SHALL SURVIVE SUCH TERMINATION OR
EXPIRATION.  IN NO EVENT SHALL LANDLORD BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES
SUFFERED BY TENANT AS THE RESULT OF A BREACH OF THIS AGREEMENT BY LANDLORD. 
NEITHER THIS AGREEMENT NOR ANY PROVISION HEREOF MAY BE CHANGED, WAIVED,
DISCHARGED OR TERMINATED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY
TO BE CHARGED.  ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT SHALL BE BINDING
UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS.  EACH TERM OR PROVISION OF THIS AGREEMENT TO BE
PERFORMED BY TENANT SHALL BE CONSTRUED AS AN INDEPENDENT COVENANT AND
CONDITION.  TIME IS OF THE ESSENCE WITH RESPECT TO THE PROVISIONS OF THIS
AGREEMENT.  EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, ANY OBLIGATIONS OF
TENANT (INCLUDING WITHOUT LIMITATION, ANY MONETARY, REPAIR AND INDEMNIFICATION
OBLIGATIONS) AND LANDLORD SHALL SURVIVE THE EXPIRATION OR SOONER TERMINATION OF
THIS AGREEMENT.

 

23.12                 COUNTERPARTS; HEADINGS.  THIS AGREEMENT MAY BE EXECUTED IN
TWO OR MORE COUNTERPARTS, EACH OF WHICH SHALL

 

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CONSTITUTE AN ORIGINAL, BUT WHICH, WHEN TAKEN TOGETHER, SHALL CONSTITUTE BUT ONE
INSTRUMENT AND SHALL BECOME EFFECTIVE AS OF THE DATE HEREOF WHEN COPIES HEREOF,
WHICH, WHEN TAKEN TOGETHER, BEAR THE SIGNATURES OF EACH OF THE PARTIES HERETO
SHALL HAVE BEEN SIGNED.  HEADINGS IN THIS AGREEMENT ARE FOR PURPOSES OF
REFERENCE ONLY AND SHALL NOT LIMIT OR AFFECT THE MEANING OF THE PROVISIONS
HEREOF.

 

23.13                 APPLICABLE LAW, ETC.  THIS AGREEMENT SHALL BE INTERPRETED,
CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS APPLICABLE TO CONTRACTS BETWEEN RESIDENTS OF MASSACHUSETTS
WHICH ARE TO BE PERFORMED ENTIRELY WITHIN MASSACHUSETTS, REGARDLESS OF (A) WHERE
THIS AGREEMENT IS EXECUTED OR DELIVERED; OR (B) WHERE ANY PAYMENT OR OTHER
PERFORMANCE REQUIRED BY THIS AGREEMENT IS MADE OR REQUIRED TO BE MADE; OR
(C) WHERE ANY BREACH OF ANY PROVISION OF THIS AGREEMENT OCCURS, OR ANY CAUSE OF
ACTION OTHERWISE ACCRUES; OR (D) WHERE ANY ACTION OR OTHER PROCEEDING IS
INSTITUTED OR PENDING; OR (E) THE NATIONALITY, CITIZENSHIP, DOMICILE, PRINCIPAL
PLACE OF BUSINESS, OR JURISDICTION OF ORGANIZATION OR DOMESTICATION OF ANY
PARTY; OR (F) WHETHER THE LAWS OF THE FORUM JURISDICTION OTHERWISE WOULD APPLY
THE LAWS OF A JURISDICTION OTHER THAN MASSACHUSETTS; OR (G) ANY COMBINATION OF
THE FOREGOING.  NOTWITHSTANDING THE FOREGOING, THE LAWS OF THE STATE SHALL APPLY
TO THE PERFECTION AND PRIORITY OF LIENS UPON AND THE DISPOSITION OF ANY
PROPERTY.

 

23.14                 RIGHT TO MAKE AGREEMENT.  EACH PARTY WARRANTS, WITH
RESPECT TO ITSELF, THAT NEITHER THE EXECUTION OF THIS AGREEMENT, NOR THE
CONSUMMATION OF ANY TRANSACTION CONTEMPLATED HEREBY, SHALL VIOLATE ANY PROVISION
OF ANY LAW, OR ANY JUDGMENT, WRIT, INJUNCTION, ORDER OR DECREE OF ANY COURT OR
GOVERNMENTAL AUTHORITY HAVING JURISDICTION OVER IT; NOR RESULT IN OR CONSTITUTE
A BREACH OR DEFAULT UNDER ANY INDENTURE, CONTRACT, OTHER COMMITMENT OR
RESTRICTION TO WHICH IT IS A PARTY OR BY WHICH IT IS BOUND; NOR REQUIRE ANY
CONSENT, VOTE OR APPROVAL WHICH HAS NOT BEEN GIVEN OR TAKEN, OR AT THE TIME OF
THE TRANSACTION INVOLVED SHALL NOT HAVE BEEN GIVEN OR TAKEN.  EACH PARTY
COVENANTS THAT IT HAS AND WILL CONTINUE TO HAVE THROUGHOUT THE TERM OF THIS
AGREEMENT AND ANY EXTENSIONS THEREOF, THE FULL RIGHT TO ENTER INTO THIS
AGREEMENT AND PERFORM ITS OBLIGATIONS HEREUNDER.

 

23.15                 ATTORNEYS’ FEES.  IF ANY LAWSUIT OR ARBITRATION OR OTHER
LEGAL PROCEEDING ARISES IN CONNECTION WITH THE INTERPRETATION OR ENFORCEMENT OF
THIS AGREEMENT, THE PREVAILING PARTY THEREIN SHALL BE ENTITLED TO RECEIVE FROM
THE OTHER PARTY THE PREVAILING PARTY’S COSTS AND EXPENSES, INCLUDING REASONABLE
ATTORNEYS’ FEES INCURRED IN CONNECTION THEREWITH, IN PREPARATION

 

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THEREFOR AND ON APPEAL THEREFROM, WHICH AMOUNTS SHALL BE INCLUDED IN ANY
JUDGMENT THEREIN.

 

23.16                 NONLIABILITY OF TRUSTEES.  THE DECLARATIONS OF TRUST
ESTABLISHING CERTAIN ENTITIES COMPRISING LANDLORD, COPIES OF WHICH, TOGETHER
WITH ALL AMENDMENTS THERETO (COLLECTIVELY, THE “DECLARATIONS”), ARE DULY FILED
WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND,
PROVIDE THAT THE NAMES OF SUCH ENTITIES REFER TO THE TRUSTEES UNDER SUCH
DECLARATIONS COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND
THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SUCH ENTITIES SHALL
BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF,
OR CLAIM AGAINST, SUCH ENTITIES.  ALL PERSONS DEALING WITH SUCH ENTITIES, IN ANY
WAY, SHALL LOOK ONLY TO THE ASSETS OF SUCH ENTITIES FOR THE PAYMENT OF ANY SUM
OR THE PERFORMANCE OF ANY OBLIGATION.

 

23.17                 ORIGINAL LEASE.  LANDLORD AND TENANT ACKNOWLEDGE AND AGREE
THAT THIS AGREEMENT AMENDS AND RESTATES THE ORIGINAL LEASE IN ITS ENTIRETY WITH
RESPECT TO THE LEASED PROPERTY AS OF THE DATE OF THIS AGREEMENT AND THAT THIS
AGREEMENT SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE PARTIES WITH RESPECT TO
THE LEASED PROPERTY FROM AND AFTER THE DATE OF THIS AGREEMENT.  NOTWITHSTANDING
THE FOREGOING, THE ORIGINAL LEASE SHALL CONTINUE TO GOVERN THE RIGHTS AND
OBLIGATIONS OF THE PARTIES WITH RESPECT TO THE LEASED PROPERTY PRIOR TO THE DATE
OF THIS AGREEMENT.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date above first written.

 

 

 

LANDLORD:

 

 

 

SNH SOMERFORD PROPERTIES TRUST,
SPTIHS PROPERTIES TRUST, and SPTMNR
PROPERTIES TRUST, each a Maryland
real estate investment trust

 

 

 

 

 

By:

  /s/ Richard A. Doyle

 

 

 Richard A. Doyle

 

 

 Treasurer and Chief Financial
 Officer of each of the
 foregoing entities

 

 

 

TENANT:

 

 

 

FIVE STAR QUALITY CARE TRUST, a
Maryland business trust

 

 

 

 

 

By:

  /s/ Travis K. Smith

 

 

Travis K. Smith

 

 

Vice President

 

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The following exhibits have been omitted and will be supplementally furnished to
the Securities and Exchange Commission upon request:

 

EXHIBITS A-1 through A-34 (Land)

 

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