Exhibit 10.26

 

SECOND AMENDED AND RESTATED LEASE AGREEMENT,

dated as of November 19, 2004,

by and among

CERTAIN AFFILIATES OF SENIOR HOUSING PROPERTIES TRUST,

AS LANDLORD,

AND

FIVE STAR QUALITY CARE TRUST,

AS TENANT

--------------------------------------------------------------------------------

 

ARTICLE 1

 

DEFINITIONS

 

 

1.1

 

“Additional Charges”

 

 

1.2

 

“Additional Properties”

 

 

1.3

 

“Additional Rent”

 

 

1.4

 

“Affiliated Person”

 

 

1.5

 

“Agreement”

 

 

1.6

 

“Applicable Laws”

 

 

1.7

 

“Award”

 

 

1.8

 

“Base Gross Revenues”

 

 

1.9

 

“Base Year”

 

 

1.10

 

“Beverly Manor Property”

 

 

1.11

 

“Business Day”

 

 

1.12

 

“Capital Addition”

 

 

1.13

 

“Capital Expenditure”

 

 

1.14

 

“Change in Control”

 

 

1.15

 

“Claim”

 

 

1.16

 

“Code”

 

 

1.17

 

“Commencement Date”

 

 

1.18

 

“Condemnation”

 

 

1.19

 

“Condemnor”

 

 

1.20

 

“Consolidated Financials”

 

 

1.21

 

“Date of Taking”

 

 

1.22

 

“Default”

 

 

1.23

 

“Disbursement Rate”

 

 

1.24

 

“Distribution”

 

 

1.25

 

“Easement Agreement”

 

 

1.26

 

“Encumbrance”

 

 

1.27

 

“Entity”

 

 

1.28

 

“Environment”

 

 

1.29

 

“Environmental Obligation”

 

 

1.30

 

“Environmental Notice”

 

 

1.31

 

“Event of Default”

 

 

1.32

 

“Excess Gross Revenues”

 

 

1.33

 

“Existing Properties”

 

 

1.34

 

“Extended Term”

 

 

1.35

 

“Facility”

 

 

1.36

 

“Facility Mortgage”

 

 

1.37

 

“Facility Mortgagee”

 

 

1.38

 

“Financial Officer’s Certificate”

 

 

1.39

 

“Fiscal Year”

 

 

1.40

 

“Five Star”

 

 

1.41

 

“Fixed Term”

 

 

1.42

 

“Fixtures”

 

 

1.43

 

“GAAP”

 

 

1.44

 

“Government Agencies”

 

 

1.45

 

“Gross Revenues”

 

 

1.46

 

“Guarantor”

 

 

1.47

 

“Guaranty”

 

 

1.48

 

“Hazardous Substances”

 

 

1.49

 

“Immediate Family”

 

 

1.50

 

“Impositions”

 

 

1.51

 

“Incidental Documents”

 

 

1.52

 

“Indebtedness”

 

 

 

--------------------------------------------------------------------------------

 

1.53

 

“Insurance Requirements”

 

 

1.54

 

“Interest Rate”

 

 

1.55

 

“Land”

 

 

1.56

 

“Landlord”

 

 

1.57

 

“Landlord Default”

 

 

1.58

 

“Landlord Liens”

 

 

1.59

 

“Lease Year”

 

 

1.60

 

“Leased Improvements”

 

 

1.61

 

“Leased Intangible Property”

 

 

1.62

 

“Leased Property”

 

 

1.63

 

“Legal Requirements”

 

 

1.64

 

“Lien”

 

 

1.65

 

“LTA GMAC Leased Property”

 

 

1.66

 

“LTA GMAC Leases”

 

 

1.67

 

“Manager”

 

 

1.68

 

“Management Agreement”

 

 

1.69

 

“Minimum Rent”

 

 

1.70

 

“Notice”

 

 

1.71

 

“Officer’s Certificate”

 

 

1.72

 

“Original Lease”

 

 

1.73

 

“Overdue Rate”

 

 

1.74

 

“Parent”

 

 

1.75

 

“Permitted Encumbrances”

 

 

1.76

 

“Permitted Liens”

 

 

1.77

 

“Permitted Use”

 

 

1.78

 

“Person”

 

 

1.79

 

“Pledge Agreement”

 

 

1.80

 

“Property”

 

 

1.81

 

“Provider Agreements”

 

 

1.82

 

“Records”

 

 

1.83

 

“Regulated Medical Wastes”

 

 

1.84

 

“Rent”

 

 

1.85

 

“SEC”

 

 

1.86

 

“Security Agreement”

 

 

1.87

 

“State”

 

 

1.88

 

“Subordinated Creditor”

 

 

1.89

 

“Subordination Agreement”

 

 

1.90

 

“Subsidiary”

 

 

1.91

 

“Successor Landlord”

 

 

1.92

 

“Tenant”

 

 

1.93

 

“Tenant’s Personal Property”

 

 

1.94

 

“Term”

 

 

1.95

 

“Third Party Payor Programs”

 

 

1.96

 

“Third Party Payors”

 

 

1.97

 

“Unsuitable for Its Permitted Use”

 

 

1.98

 

“Work”

 

 

ARTICLE 2

 

LEASED PROPERTY AND TERM

 

 

2.1

 

Leased Property

 

 

2.2

 

Condition of Leased Property

 

 

2.3

 

Fixed Term

 

 

2.4

 

Extended Terms

 

 

 

2

--------------------------------------------------------------------------------

 

ARTICLE 3

 

RENT

 

 

3.1

 

Rent

 

 

3.2 [a05-2043_1ex10d26.htm#LatePaymentOfRent]

 

Late Payment of Rent, Etc [a05-2043_1ex10d26.htm#LatePaymentOfRent]

 

 

3.3 [a05-2043_1ex10d26.htm#NetLease]

 

Net Lease [a05-2043_1ex10d26.htm#NetLease]

 

 

3.4 [a05-2043_1ex10d26.htm#NoTermination]

 

No Termination, Abatement, Etc [a05-2043_1ex10d26.htm#NoTermination]

 

 

ARTICLE 4 [a05-2043_1ex10d26.htm#Article4UseOfTheLeasedProperty]

 

USE OF THE LEASED PROPERTY
[a05-2043_1ex10d26.htm#Article4UseOfTheLeasedProperty]

 

 

4.1 [a05-2043_1ex10d26.htm#PermittedUse]

 

Permitted Use [a05-2043_1ex10d26.htm#PermittedUse]

 

 

4.2 [a05-2043_1ex10d26.htm#ComplianceWithLegal]

 

Compliance with Legal/Insurance Requirements, Etc
[a05-2043_1ex10d26.htm#ComplianceWithLegal]

 

 

4.3 [a05-2043_1ex10d26.htm#ComplianceWithMedicaidAndMedicareRe]

 

Compliance with Medicaid and Medicare Requirements
[a05-2043_1ex10d26.htm#ComplianceWithMedicaidAndMedicareRe]

 

 

4.4 [a05-2043_1ex10d26.htm#EnvironmentalMatters]

 

Environmental Matters [a05-2043_1ex10d26.htm#EnvironmentalMatters]

 

 

ARTICLE 5 [a05-2043_1ex10d26.htm#Article5MaintenanceAndRepairs]

 

MAINTENANCE AND REPAIRS [a05-2043_1ex10d26.htm#Article5MaintenanceAndRepairs]

 

 

5.1 [a05-2043_1ex10d26.htm#MaintenanceAndRepair]

 

Maintenance and Repair [a05-2043_1ex10d26.htm#MaintenanceAndRepair]

 

 

5.2 [a05-2043_1ex10d26.htm#TenantsPersonalProperty]

 

Tenant’s Personal Property [a05-2043_1ex10d26.htm#TenantsPersonalProperty]

 

 

5.3 [a05-2043_1ex10d26.htm#YieldUp]

 

Yield Up [a05-2043_1ex10d26.htm#YieldUp]

 

 

5.4 [a05-2043_1ex10d26.htm#ManagementAgreement]

 

Management Agreement [a05-2043_1ex10d26.htm#ManagementAgreement]

 

 

ARTICLE 6 [a05-2043_1ex10d26.htm#Article6Improvements]

 

IMPROVEMENTS, ETC [a05-2043_1ex10d26.htm#Article6Improvements]

 

 

6.1 [a05-2043_1ex10d26.htm#ImprovementsToTheLeasedProperty]

 

Improvements to the Leased Property
[a05-2043_1ex10d26.htm#ImprovementsToTheLeasedProperty]

 

 

6.2 [a05-2043_1ex10d26.htm#Salvage]

 

Salvage [a05-2043_1ex10d26.htm#Salvage]

 

 

ARTICLE 7 [a05-2043_1ex10d26.htm#Article7Liens]

 

LIENS [a05-2043_1ex10d26.htm#Article7Liens]

 

 

7.1 [a05-2043_1ex10d26.htm#Liens]

 

Liens [a05-2043_1ex10d26.htm#Liens]

 

 

7.2 [a05-2043_1ex10d26.htm#LandlordsLien]

 

Landlord’s Lien [a05-2043_1ex10d26.htm#LandlordsLien]

 

 

ARTICLE 8 [a05-2043_1ex10d26.htm#Article8PermittedContests]

 

PERMITTED CONTESTS [a05-2043_1ex10d26.htm#Article8PermittedContests]

 

 

ARTICLE 9 [a05-2043_1ex10d26.htm#Article9InsuranceAndIndemnification]

 

INSURANCE AND INDEMNIFICATION
[a05-2043_1ex10d26.htm#Article9InsuranceAndIndemnification]

 

 

9.1 [a05-2043_1ex10d26.htm#GeneralInsuranceRequirements]

 

General Insurance Requirements
[a05-2043_1ex10d26.htm#GeneralInsuranceRequirements]

 

 

9.2 [a05-2043_1ex10d26.htm#WaiverOfSubrogation]

 

Waiver of Subrogation [a05-2043_1ex10d26.htm#WaiverOfSubrogation]

 

 

9.3 [a05-2043_1ex10d26.htm#FormSatisfactory]

 

Form Satisfactory, Etc [a05-2043_1ex10d26.htm#FormSatisfactory]

 

 

9.4 [a05-2043_1ex10d26.htm#NoSeparateInsurance]

 

No Separate Insurance; Self-Insurance
[a05-2043_1ex10d26.htm#NoSeparateInsurance]

 

 

9.5 [a05-2043_1ex10d26.htm#IndemnificationOfLandlord]

 

Indemnification of Landlord [a05-2043_1ex10d26.htm#IndemnificationOfLandlord]

 

 

ARTICLE 10 [a05-2043_1ex10d26.htm#Article10Casualty]

 

CASUALTY [a05-2043_1ex10d26.htm#Article10Casualty]

 

 

10.1 [a05-2043_1ex10d26.htm#InsuranceProceeds]

 

Insurance Proceeds [a05-2043_1ex10d26.htm#InsuranceProceeds]

 

 

10.2 [a05-2043_1ex10d26.htm#DamageOrDestruction]

 

Damage or Destruction [a05-2043_1ex10d26.htm#DamageOrDestruction]

 

 

10.3 [a05-2043_1ex10d26.htm#DamageNearEndOfTerm]

 

Damage Near End of Term [a05-2043_1ex10d26.htm#DamageNearEndOfTerm]

 

 

10.4 [a05-2043_1ex10d26.htm#TenantsProperty]

 

Tenant’s Property [a05-2043_1ex10d26.htm#TenantsProperty]

 

 

10.5 [a05-2043_1ex10d26.htm#RestorationOfTenantsProperty]

 

Restoration of Tenant’s Property
[a05-2043_1ex10d26.htm#RestorationOfTenantsProperty]

 

 

10.6 [a05-2043_1ex10d26.htm#NoAbatementOfRent]

 

No Abatement of Rent [a05-2043_1ex10d26.htm#NoAbatementOfRent]

 

 

10.7 [a05-2043_1ex10d26.htm#Waiver]

 

Waiver [a05-2043_1ex10d26.htm#Waiver]

 

 

ARTICLE 11 [a05-2043_1ex10d26.htm#Article11Condemnation]

 

CONDEMNATION [a05-2043_1ex10d26.htm#Article11Condemnation]

 

 

11.1 [a05-2043_1ex10d26.htm#TotalCondemnation]

 

Total Condemnation, Etc [a05-2043_1ex10d26.htm#TotalCondemnation]

 

 

11.2 [a05-2043_1ex10d26.htm#PartialCondemnation]

 

Partial Condemnation [a05-2043_1ex10d26.htm#PartialCondemnation]

 

 

11.3 [a05-2043_1ex10d26.htm#AbatementOfRent]

 

Abatement of Rent [a05-2043_1ex10d26.htm#AbatementOfRent]

 

 

11.4 [a05-2043_1ex10d26.htm#TemporaryCondemnation]

 

Temporary Condemnation [a05-2043_1ex10d26.htm#TemporaryCondemnation]

 

 

11.5 [a05-2043_1ex10d26.htm#AllocationOfAward]

 

Allocation of Award [a05-2043_1ex10d26.htm#AllocationOfAward]

 

 

ARTICLE 12 [a05-2043_1ex10d26.htm#Article12DefaultsAndRemedies]

 

DEFAULTS AND REMEDIES [a05-2043_1ex10d26.htm#Article12DefaultsAndRemedies]

 

 

12.1 [a05-2043_1ex10d26.htm#EventsOfDefault]

 

Events of Default [a05-2043_1ex10d26.htm#EventsOfDefault]

 

 

12.2 [a05-2043_1ex10d26.htm#Remedies]

 

Remedies [a05-2043_1ex10d26.htm#Remedies]

 

 

12.3 [a05-2043_1ex10d26.htm#a12_3TenantsWaiver_043445]

 

Tenant’s Waiver [a05-2043_1ex10d26.htm#a12_3TenantsWaiver_043445]

 

 

12.4 [a05-2043_1ex10d26.htm#a12_4ApplicationOfFunds_043450]

 

Application of Funds [a05-2043_1ex10d26.htm#a12_4ApplicationOfFunds_043450]

 

 

12.5 [a05-2043_1ex10d26.htm#a12_5LandlordsRightToCureTenantsD_043459]

 

Landlord’s Right to Cure Tenant’s Default
[a05-2043_1ex10d26.htm#a12_5LandlordsRightToCureTenantsD_043459]

 

 

 

3

--------------------------------------------------------------------------------

 

ARTICLE 13 [a05-2043_1ex10d26.htm#Article13HoldingOver_043505]

 

HOLDING OVER [a05-2043_1ex10d26.htm#Article13HoldingOver_043505]

 

 

ARTICLE 14 [a05-2043_1ex10d26.htm#Article14LandlordDefault_043518]

 

LANDLORD DEFAULT [a05-2043_1ex10d26.htm#Article14LandlordDefault_043518]

 

 

ARTICLE 15 [a05-2043_1ex10d26.htm#Article15PurchaseRights_043613]

 

PURCHASE RIGHTS [a05-2043_1ex10d26.htm#Article15PurchaseRights_043613]

 

 

ARTICLE 16 [a05-2043_1ex10d26.htm#Article16SublettingAndAssignment_043733]

 

SUBLETTING AND ASSIGNMENT
[a05-2043_1ex10d26.htm#Article16SublettingAndAssignment_043733]

 

 

16.1 [a05-2043_1ex10d26.htm#a16_1SublettingAndAssignment_043740]

 

Subletting and Assignment
[a05-2043_1ex10d26.htm#a16_1SublettingAndAssignment_043740]

 

 

16.2 [a05-2043_1ex10d26.htm#a16_2RequiredSubleaseProvisions_043912]

 

Required Sublease Provisions
[a05-2043_1ex10d26.htm#a16_2RequiredSubleaseProvisions_043912]

 

 

16.3 [a05-2043_1ex10d26.htm#a16_3PermittedSublease_044006]

 

Permitted Sublease [a05-2043_1ex10d26.htm#a16_3PermittedSublease_044006]

 

 

16.4 [a05-2043_1ex10d26.htm#a16_4SubleaseLimitation_044015]

 

Sublease Limitation [a05-2043_1ex10d26.htm#a16_4SubleaseLimitation_044015]

 

 

ARTICLE 17 [a05-2043_1ex10d26.htm#Article17EstoppelCertificatesAndF_044053]

 

ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
[a05-2043_1ex10d26.htm#Article17EstoppelCertificatesAndF_044053]

 

 

17.1 [a05-2043_1ex10d26.htm#a17_1EstoppelCertificates_044058]

 

Estoppel Certificates [a05-2043_1ex10d26.htm#a17_1EstoppelCertificates_044058]

 

 

17.2 [a05-2043_1ex10d26.htm#a17_2FinancialStatements_044104]

 

Financial Statements [a05-2043_1ex10d26.htm#a17_2FinancialStatements_044104]

 

 

17.3 [a05-2043_1ex10d26.htm#a17_3GeneralOperations_044551]

 

General Operations [a05-2043_1ex10d26.htm#a17_3GeneralOperations_044551]

 

 

ARTICLE 18 [a05-2043_1ex10d26.htm#Article18LandlordsRightToInspect_044635]

 

LANDLORD’S RIGHT TO INSPECT
[a05-2043_1ex10d26.htm#Article18LandlordsRightToInspect_044635]

 

 

ARTICLE 19 [a05-2043_1ex10d26.htm#Article19Easements_044651]

 

EASEMENTS [a05-2043_1ex10d26.htm#Article19Easements_044651]

 

 

19.1 [a05-2043_1ex10d26.htm#a19_1GrantOfEasements_044656]

 

Grant of Easements [a05-2043_1ex10d26.htm#a19_1GrantOfEasements_044656]

 

 

19.2 [a05-2043_1ex10d26.htm#a19_2ExerciseOfRightsByTenant_044725]

 

Exercise of Rights by Tenant
[a05-2043_1ex10d26.htm#a19_2ExerciseOfRightsByTenant_044725]

 

 

19.3 [a05-2043_1ex10d26.htm#a19_3PermittedEncumbrances_044731]

 

Permitted Encumbrances [a05-2043_1ex10d26.htm#a19_3PermittedEncumbrances_044731]

 

 

ARTICLE 20 [a05-2043_1ex10d26.htm#Article20FacilityMortgages_044740]

 

FACILITY MORTGAGES [a05-2043_1ex10d26.htm#Article20FacilityMortgages_044740]

 

 

20.1 [a05-2043_1ex10d26.htm#a20_1LandlordMayGrantLiens_044743]

 

Landlord May Grant Liens
[a05-2043_1ex10d26.htm#a20_1LandlordMayGrantLiens_044743]

 

 

20.2 [a05-2043_1ex10d26.htm#a20_2SubordinationOfLease_044748]

 

Subordination of Lease [a05-2043_1ex10d26.htm#a20_2SubordinationOfLease_044748]

 

 

20.3 [a05-2043_1ex10d26.htm#a20_3NoticeToMortgageeAndSuperior_044858]

 

Notice to Mortgagee and Superior Landlord
[a05-2043_1ex10d26.htm#a20_3NoticeToMortgageeAndSuperior_044858]

 

 

ARTICLE 21 [a05-2043_1ex10d26.htm#Article21AdditionalCovenantsOfTen_044928]

 

ADDITIONAL COVENANTS OF TENANT
[a05-2043_1ex10d26.htm#Article21AdditionalCovenantsOfTen_044928]

 

 

21.1 [a05-2043_1ex10d26.htm#a21_1PromptPaymentOfIndebtedness_044933]

 

Prompt Payment of Indebtedness
[a05-2043_1ex10d26.htm#a21_1PromptPaymentOfIndebtedness_044933]

 

 

21.2 [a05-2043_1ex10d26.htm#a21_2ConductOfBusiness_044941]

 

Conduct of Business [a05-2043_1ex10d26.htm#a21_2ConductOfBusiness_044941]

 

 

21.3 [a05-2043_1ex10d26.htm#a21_3MaintenanceOfAccountsAndReco_044958]

 

Maintenance of Accounts and Records
[a05-2043_1ex10d26.htm#a21_3MaintenanceOfAccountsAndReco_044958]

 

 

21.4 [a05-2043_1ex10d26.htm#a21_4NoticeOfLitigationEtc_045326]

 

Notice of Litigation, Etc
[a05-2043_1ex10d26.htm#a21_4NoticeOfLitigationEtc_045326]

 

 

21.5 [a05-2043_1ex10d26.htm#a21_5IndebtednessOfTenant_045341]

 

Indebtedness of Tenant [a05-2043_1ex10d26.htm#a21_5IndebtednessOfTenant_045341]

 

 

21.6 [a05-2043_1ex10d26.htm#a21_6DistributionsPaymentsToAffil_045424]

 

Distributions, Payments to Affiliated Persons, Etc
[a05-2043_1ex10d26.htm#a21_6DistributionsPaymentsToAffil_045424]

 

 

21.7 [a05-2043_1ex10d26.htm#a21_7ProhibitedTransactions_045433]

 

Prohibited Transactions
[a05-2043_1ex10d26.htm#a21_7ProhibitedTransactions_045433]

 

 

21.8 [a05-2043_1ex10d26.htm#a21_8LiensAndEncumbrances_045439]

 

Liens and Encumbrances [a05-2043_1ex10d26.htm#a21_8LiensAndEncumbrances_045439]

 

 

21.9 [a05-2043_1ex10d26.htm#a21_9MergerSaleOfAssetsEtc_045552]

 

Merger; Sale of Assets; Etc
[a05-2043_1ex10d26.htm#a21_9MergerSaleOfAssetsEtc_045552]

 

 

21.10 [a05-2043_1ex10d26.htm#a21_10BankruptcyRemoteEntities_045629]

 

Bankruptcy Remote Entities
[a05-2043_1ex10d26.htm#a21_10BankruptcyRemoteEntities_045629]

 

 

21.11 [a05-2043_1ex10d26.htm#a21_11LtaGmacProperties_045632]

 

LTA GMAC Properties [a05-2043_1ex10d26.htm#a21_11LtaGmacProperties_045632]

 

 

ARTICLE 22 [a05-2043_1ex10d26.htm#Article22Arbitration_045646]

 

ARBITRATION [a05-2043_1ex10d26.htm#Article22Arbitration_045646]

 

 

ARTICLE 23 [a05-2043_1ex10d26.htm#Article23Miscellaneous_050136]

 

 

 

 

23.1 [a05-2043_1ex10d26.htm#a23_1LimitationOnPaymentOfRent_050143]

 

Limitation on Payment of Rent
[a05-2043_1ex10d26.htm#a23_1LimitationOnPaymentOfRent_050143]

 

 

23.2 [a05-2043_1ex10d26.htm#a23_2NoWaiver_050148]

 

No Waiver [a05-2043_1ex10d26.htm#a23_2NoWaiver_050148]

 

 

23.3 [a05-2043_1ex10d26.htm#a23_3RemediesCumulative_050245]

 

Remedies Cumulative [a05-2043_1ex10d26.htm#a23_3RemediesCumulative_050245]

 

 

23.4 [a05-2043_1ex10d26.htm#a23_4Severability_050251]

 

Severability [a05-2043_1ex10d26.htm#a23_4Severability_050251]

 

 

23.5 [a05-2043_1ex10d26.htm#a23_5AcceptanceOfSurrender_050258]

 

Acceptance of Surrender
[a05-2043_1ex10d26.htm#a23_5AcceptanceOfSurrender_050258]

 

 

23.6 [a05-2043_1ex10d26.htm#a23_6NoMergerOfTitle_050303]

 

No Merger of Title [a05-2043_1ex10d26.htm#a23_6NoMergerOfTitle_050303]

 

 

23.7 [a05-2043_1ex10d26.htm#a23_7ConveyanceByLandlord_050318]

 

Conveyance by Landlord [a05-2043_1ex10d26.htm#a23_7ConveyanceByLandlord_050318]

 

 

23.8 [a05-2043_1ex10d26.htm#a23_8QuietEnjoyment_050323]

 

Quiet Enjoyment [a05-2043_1ex10d26.htm#a23_8QuietEnjoyment_050323]

 

 

23.9 [a05-2043_1ex10d26.htm#a23_9NoRecordation_050330]

 

No Recordation [a05-2043_1ex10d26.htm#a23_9NoRecordation_050330]

 

 

23.10 [a05-2043_1ex10d26.htm#a23_10Notices_050341]

 

Notices [a05-2043_1ex10d26.htm#a23_10Notices_050341]

 

 

23.11 [a05-2043_1ex10d26.htm#a23_11Construction_050635]

 

Construction [a05-2043_1ex10d26.htm#a23_11Construction_050635]

 

 

23.12 [a05-2043_1ex10d26.htm#a23_12CounterpartsHeadings_050712]

 

Counterparts; Headings [a05-2043_1ex10d26.htm#a23_12CounterpartsHeadings_050712]

 

 

23.13 [a05-2043_1ex10d26.htm#a23_13ApplicableLawEtc_050720]

 

Applicable Law, Etc [a05-2043_1ex10d26.htm#a23_13ApplicableLawEtc_050720]

 

 

23.14 [a05-2043_1ex10d26.htm#a23_14RightToMakeAgreement_050728]

 

Right to Make Agreement
[a05-2043_1ex10d26.htm#a23_14RightToMakeAgreement_050728]

 

 

23.15 [a05-2043_1ex10d26.htm#a23_15AttorneysFees_050737]

 

Attorneys’ Fees [a05-2043_1ex10d26.htm#a23_15AttorneysFees_050737]

 

 

 

4

--------------------------------------------------------------------------------

 

23.16 [a05-2043_1ex10d26.htm#a23_16PropertySpecificRepresentat_050852]

 

Property Specific Representations and Warranties
[a05-2043_1ex10d26.htm#a23_16PropertySpecificRepresentat_050852]

 

 

23.17 [a05-2043_1ex10d26.htm#a23_17NonliabilityOfTrustees_051055]

 

Nonliability of Trustees
[a05-2043_1ex10d26.htm#a23_17NonliabilityOfTrustees_051055]

 

 

 

5

--------------------------------------------------------------------------------

 

SECOND AMENDED AND RESTATED LEASE AGREEMENT

 

THIS SECOND AMENDED AND RESTATED LEASE AGREEMENT is entered into as of
November 19, 2004 by and among (i) each of the parties identified on the
signature page hereof as landlord (collectively, “Landlord”), and (ii) 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 Amended and Restated
Lease Agreement, dated as of March 1, 2004, as amended by that certain Partial
Termination and Amendment of Lease Agreement, dated as of April 19, 2004 and
that certain First Amendment to Amended and Restated Lease, dated June 23, 2004
(as so amended, the “Original Lease”); and

 

WHEREAS, concurrently herewith, Landlord and certain of its subsidiaries are
acquiring the Additional Properties (this and other capitalized terms used and
not otherwise defined herein having the meanings given such terms in Article 1);
and

 

WHEREAS, Landlord and Tenant wish to amend, restate and expand the Original
Lease to add the certain additional properties effective as of the date hereof
and to make such other modifications 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 the
Original Lease is hereby amended and restated in its entirety, 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

 

6

--------------------------------------------------------------------------------

 

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.

 

1.2                               “ADDITIONAL PROPERTIES”  SHALL MEAN,
COLLECTIVELY, (I)  THE PROPERTIES DESCRIBED IN EXHIBITS A-68 – 79 HEREOF, AND
(II) THE LTA GMAC LEASED PROPERTY.

 

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

 

1.4                               “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).

 

1.5                               “AGREEMENT” SHALL MEAN THIS SECOND AMENDED AND
RESTATED LEASE AGREEMENT, INCLUDING ALL EXHIBITS ATTACHED HERETO, AS IT AND THEY
MAY BE AMENDED FROM TIME TO TIME AS HEREIN PROVIDED.

 

1.6                               “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

 

7

--------------------------------------------------------------------------------

 

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.

 

1.7                               “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).

 

1.8                               “BASE GROSS REVENUES”  SHALL MEAN THE AMOUNT
OF GROSS REVENUES FOR THE LEASED PROPERTY AND THE LTA GMAC 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.

 

1.9                               “BASE YEAR”  SHALL MEAN (I) WITH RESPECT TO
THE EXISTING PROPERTIES, THE 2005 CALENDAR YEAR, AND (II) WITH RESPECT TO THE
ADDITIONAL PROPERTIES, THE 2006 CALENDAR YEAR.

 

8

--------------------------------------------------------------------------------

 

1.10                        “BEVERLY MANOR PROPERTY”  SHALL MEAN THE LEASED
PROPERTY KNOWN AS AND LOCATED AT BEVERLY MANOR, ST. JOSEPH, MISSOURI.

 

1.11                        “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.

 

1.12                        “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.

 

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

 

1.14                        “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 OTHER PERSON (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) OR (D) OF THIS
DEFINITION), (C) ANY ONE OR MORE SALES OR CONVEYANCES TO ANY PERSON OF ALL OR
ANY MATERIAL PORTION OF ITS ASSETS (INCLUDING CAPITAL STOCK OR OTHER EQUITY
INTERESTS) OR BUSINESS OF TENANT OR ANY GUARANTOR, AS THE CASE MAY BE, OR (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, AS THE CASE MAY BE, 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 ANY GUARANTOR THEN IN OFFICE.

 

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

 

9

--------------------------------------------------------------------------------

 

1.16                        “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.

 

1.17                        “COMMENCEMENT DATE”  SHALL MEAN THE DATE HEREOF.

 

1.18                        “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.

 

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

 

1.20                        “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.

 

1.21                        “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.

 

1.22                        “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.

 

1.23                        “DISBURSEMENT RATE”  SHALL MEAN AN ANNUAL RATE OF
INTEREST, AS OF THE DATE OF DETERMINATION, EQUAL TO THE GREATER OF (I) THE
INTEREST RATE, AND (II) THE PER ANNUM RATE FOR TEN (10) YEAR U.S. TREASURY
OBLIGATIONS AS PUBLISHED IN THE WALL STREET JOURNAL PLUS FOUR HUNDRED (400)
BASIS POINTS; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE DISBURSEMENT RATE
EXCEED ELEVEN AND ONE-HALF PERCENT (11.5%).

 

10

--------------------------------------------------------------------------------

 

1.24                        “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
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.

 

1.25                        “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.

 

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

 

1.27                        “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.

 

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

 

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

 

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

 

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

 

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

 

1.33                        “EXISTING PROPERTIES”  SHALL MEAN THE PROPERTIES
DESCRIBED IN EXHIBITS A-1 – 67 HEREOF.

 

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

 

11

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1.35                        “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.

 

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

 

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

 

1.38                        “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.

 

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

 

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

 

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

 

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

 

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

 

1.44                        “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

 

12

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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.

 

1.45                        “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 ACCORDANCE WITH GAAP) OF EVERY
KIND DERIVED FROM RENTING, USING AND/OR OPERATING THE LEASED PROPERTY AND THE
LTA GMAC 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
THE LTA GMAC 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 OR THE LTA GMAC 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 OR THE LTA GMAC LEASED PROPERTY, SUCH AS HOME HEALTH
CARE, TO PERSONS THAT ARE NOT PATIENTS, CLIENTS OR RESIDENTS AT THE LEASED
PROPERTY OR THE LTA GMAC LEASED

 

13

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PROPERTY; REVENUES ATTRIBUTABLE TO CHILD CARE SERVICES PROVIDED PRIMARILY TO
EMPLOYEES OF THE LEASED PROPERTY OR THE LTA GMAC LEASED PROPERTY; ANY PROCEEDS
FROM ANY SALE OF THE LEASED PROPERTY OR THE LTA GMAC LEASED PROPERTY OR FROM THE
REFINANCING OF ANY DEBT ENCUMBERING THE LEASED PROPERTY OR THE LTA GMAC 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.

 

1.46                        “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.

 

1.47                        “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.

 

1.48                        “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

 

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(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

 

(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.

 

1.49                        “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.

 

1.50                        “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)

 

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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 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.

 

1.51                        “INCIDENTAL DOCUMENTS”  SHALL MEAN THE GUARANTY, THE
SECURITY AGREEMENT, THE PLEDGE AGREEMENT ANY AND OTHER PLEDGE OR SECURITY
AGREEMENT ISSUED OR EXECUTED BY AN ASSIGNEE OR TRANSFEREE PURSUANT TO
SECTION 16.1.

 

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

 

1.53                        “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.

 

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1.54                        “INTEREST RATE”  SHALL MEAN, (I) WITH RESPECT TO THE
ADDITIONAL PROPERTIES, NINE PERCENT (9%) PER ANNUM, AND (II) WITH RESPECT TO THE
EXISTING PROPERTIES, TEN PERCENT (10%) PER ANNUM.

 

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

 

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

 

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

 

1.58                        “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.

 

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

 

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

 

1.61                        “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,

 

17

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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.

 

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

 

1.63                        “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 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.

 

1.64                        “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.

 

1.65                        “LTA GMAC LEASED PROPERTY”  SHALL MEAN THE “LEASED
PROPERTY”, AS DEFINED THEREIN, UNDER THE LTA GMAC LEASES.

 

1.66                        “LTA GMAC LEASES”  SHALL MEAN, COLLECTIVELY, THE
LEASES, DATED AS OF THE DATE HEREOF, BY AND AMONG AFFILIATED PERSONS OF LANDLORD
AND TENANT, TOGETHER WITH ALL MODIFICATIONS, AMENDMENTS AND SUPPLEMENTS THERETO.

 

1.67                        “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.

 

1.68                        “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

 

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accordance with the applicable provisions of this Agreement, together with all
amendments, modifications and supplements thereto.

 

1.69                        “MINIMUM RENT”  SHALL MEAN THE SUM OF TWENTY-FOUR
MILLION ONE HUNDRED FIFTY-EIGHT THOUSAND TWO HUNDRED FIFTY-ONE DOLLARS
($24,158,251) PER ANNUM.

 

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

 

1.71                        “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.

 

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

 

1.73                        “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.

 

1.74                        “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.

 

1.75                        “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.

 

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

 

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

 

1.78                        “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.

 

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1.79                        “PLEDGE AGREEMENT”  SHALL MEAN THE PLEDGE AGREEMENT,
DATED AS OF THE DECEMBER 31, 2002, MADE BY FSQ, INC. IN FAVOR OF LANDLORD WITH
RESPECT TO THE STOCK OR OTHER EQUITY INTERESTS OF TENANT, AS AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME.

 

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

 

1.81                        “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.

 

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

 

1.83                        “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.

 

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

 

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

 

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

 

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

 

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

 

1.89                        “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

 

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the payment and performance of Tenant’s obligations to Landlord under this
Agreement.

 

1.90                        “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).

 

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

 

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

 

1.93                        “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 DATE HEREOF AND LOCATED AT THE LEASED 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.

 

1.94                        “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.

 

1.95                        “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.

 

1.96                        “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.

 

1.97                        “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

 

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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 Condemnation, such Facility cannot be
operated, in the good faith judgment of Tenant, on a commercially practicable
basis for its Permitted Use.

 

1.98                        “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, AS OF THE
COMMENCEMENT DATE, 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-79, 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;

 

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

 

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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 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”) PREVIOUSLY COMMENCED AS PROVIDED IN THE ORIGINAL
LEASE AND SHALL EXPIRE ON DECEMBER 31, 2020.

 

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, 2018, 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

 

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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 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

 

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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)                                 ALLOWANCE.  PROVIDED THAT NO EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING HEREUNDER AND TENANT SHALL
OTHERWISE COMPLY WITH THE APPLICABLE PROVISIONS OF ARTICLE 6, LANDLORD AGREES TO
PROVIDE TENANT WITH AN ALLOWANCE OF UP TO $200,000 (THE “ALLOWANCE”) TO PAY FOR
CAPITAL REPAIRS AND IMPROVEMENTS TO THE BEVERLY MANOR PROPERTY.  TENANT SHALL
PROVIDE LANDLORD WITH APPROPRIATE INVOICES AND SUCH OTHER DOCUMENTATION AND
INFORMATION AS LANDLORD SHALL REASONABLY REQUEST EACH TIME TENANT REQUESTS A
DISBURSEMENT OF ALL OR ANY PORTION OF THE ALLOWANCE.  THERE SHALL BE NO
ADJUSTMENT OF MINIMUM RENT IN CONNECTION WITH ANY SUCH DISBURSEMENT OF THE
ALLOWANCE TO TENANT.  IF TENANT INCURS ANY AMOUNTS IN EXCESS OF $200,000 IN
CONNECTION WITH ANY CAPITAL REPAIRS OR IMPROVEMENTS TO THE ADDITIONAL PROPERTY,
TENANT SHALL PAY FOR ALL SUCH AMOUNTS IN EXCESS OF $200,000 AT TENANT’S SOLE
COST AND EXPENSE; PROVIDED, HOWEVER, THAT NOTHING CONTAINED IN THIS PARAGRAPH
SHALL IMPAIR OR OTHERWISE LIMIT TENANT’S RIGHT TO REQUIRE LANDLORD TO DISBURSE
SUCH AMOUNTS SUBJECT TO AN ADJUSTMENT IN MINIMUM RENT IN ACCORDANCE WITH THE
TERMS HEREOF.

 

(E)                                  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 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 (I) FOUR PERCENT
(4%) OF EXCESS GROSS REVENUES AT THE LEASED PROPERTY.  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

 

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FORTH THE CALCULATION OF ADDITIONAL RENT DUE AND PAYABLE FOR SUCH QUARTER. 
AMOUNTS PAID UNDER THE LTA GMAC LEASES SHALL BE CREDITED AGAINST AMOUNTS DUE
HEREUNDER.

 

(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, 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 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

 

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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 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.  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

 

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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 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,

 

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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 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.

 

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(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 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

 

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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
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

 

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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 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,

 

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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 (X) TEN PERCENT (10%) OF THE NET PROCEEDS
OF SALE RECEIVED BY LANDLORD IN THE CASE OF AN EXISTING PROPERTY AND (Y) NINE
PERCENT (9%) OF THE NET PROCEEDS OF SALE RECEIVED BY LANDLORD IN THE CASE OF AN
ADDITIONAL PROPERTY.  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 (I) IN THE CASE OF AN OFFER FOR AN EXISTING PROPERTY,
TO TEN PERCENT (10%) OF THE PROJECTED NET PROCEEDS DETERMINED BY REFERENCE TO
SUCH OFFER, AND (II) IN THE CASE OF AN ADDITIONAL PROPERTY, NINE PERCENT (9%) OF
THE PROJECTED NET PROCEEDS DETERMINED BY REFERENCE TO SUCH OFFER.

 

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

 

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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 (I) MAY MATERIALLY AND ADVERSELY IMPAIR LANDLORD’S TITLE THERETO OR TO
ANY PORTION THEREOF, OR (II) MAY REASONABLY ALLOW A CLAIM OR CLAIMS FOR ADVERSE
USAGE OR ADVERSE POSSESSION BY THE PUBLIC, AS SUCH, OR OF IMPLIED DEDICATION OF
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 (I) 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, (II)
PERFORM (OR CAUSE TO BE PERFORMED) IN A TIMELY FASHION ALL OF LANDLORD’S
OBLIGATIONS UNDER ANY GROUND LEASE AFFECTING ANY PROPERTY AND (III) 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 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 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 PRIMARY INTENDED 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

 

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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
incur any and all expenses, as are required by any Government Agency and by
Applicable Law, (i) to clean up and remove from and about such Property all
Hazardous Substances thereon, (ii) to contain and prevent any further release or
threat of release of Hazardous Substances on or about such Property and (iii) 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”

 

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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 DATE
HEREOF.  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.

 

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

 

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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 THERETO 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 OF THE TERM (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 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 THE EXPENSE OF
LANDLORD PURSUANT TO ANY LAW IN EFFECT ON THE DATE HEREOF OR HEREAFTER 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

 

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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 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.

 

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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, 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, TENANT SHALL VACATE AND SURRENDER THE LEASED
PROPERTY TO LANDLORD IN SUBSTANTIALLY THE SAME CONDITION IN WHICH THE LEASED
PROPERTY WAS IN ON THE 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 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

 

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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 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

 

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(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 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

 

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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) 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

 

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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 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

 

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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 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,
UPON NOTICE TO TENANT, BUT NOT THE OBLIGATION, 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

 

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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 THE ANY
PROPERTY OR PORTION THEREOF OR TENANT’S PERSONAL PROPERTY OR SUCH USE, MISUSE,
NON-USE, CONDITION, MANAGEMENT, MAINTENANCE, OR REPAIR THEREOF INCLUDING,
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.

 

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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.

 

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

 

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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, 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

 

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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 (I) THE ABSENCE OF ANY EVENT OF
DEFAULT, (II) ITS APPROVAL OF PLANS AND SPECIFICATIONS OF AN ARCHITECT
SATISFACTORY TO LANDLORD (WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD,
DELAYED OR CONDITIONED), (III) GENERAL CONTRACTORS’ ESTIMATES, (IV) ARCHITECT’S
CERTIFICATES, (V) CONDITIONAL LIEN WAIVERS OF GENERAL CONTRACTORS, IF AVAILABLE,
(VI) EVIDENCE OF APPROVAL BY ALL GOVERNMENTAL AUTHORITIES AND OTHER REGULATORY
BODIES WHOSE APPROVAL IS REQUIRED, (VII), IF TENANT HAS ELECTED TO ADVANCE
DEFICIENCY FUNDS PURSUANT TO SECTION 10.2.3, TENANT DEPOSITING THE AMOUNT
THEREOF WITH LANDLORD AND (VIII) 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 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

 

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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.

 

ARTICLE 11

CONDEMNATION

 

11.1                        TOTAL CONDEMNATION, ETC.  IF EITHER (I) THE WHOLE OF
ANY PROPERTY SHALL BE TAKEN BY CONDEMNATION OR (II) 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

 

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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 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

 

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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 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

 

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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 (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

 

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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

 

(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, EXCEPT AS OTHERWISE
PERMITTED BY ARTICLE 16;

 

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(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;

 

(L)                                     SHOULD THERE OCCUR AN “EVENT OF
DEFAULT”, AS DEFINED THEREIN, UNDER EITHER OF THE LTA GMAC LEASES; OR

 

(M)                               SHOULD THERE OCCUR AN “EVENT OF DEFAULT”, AS
DEFINED THEREIN, UNDER THAT CERTAIN JOINT AND SEVERAL PROMISSORY NOTE, DATED AS
OF NOVEMBER 19, 2004, MADE BY FIVE STAR FOR THE BENEFIT OF SENIOR HOUSING
PROPERTIES TRUST IN THE ORIGINAL PRINCIPAL AMOUNT OF SIXTEEN MILLION EIGHT
HUNDRED FORTY-NINE THOUSAND DOLLARS ($16,849,000).

 

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
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

 

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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 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
Commencement Date, the payments required for such lesser period projected to an
annual amount) for what

 

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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) may 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.

 

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

 

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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.

 

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

 

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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
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

 

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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 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 (including
any sublease which is permitted pursuant to the terms of Section 16.3 below)
shall be subject to such

 

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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 ENTERED INTO ON OR AFTER THE DATE HEREOF
SHALL PROVIDE (A) THAT IT IS SUBJECT AND SUBORDINATE TO THIS AGREEMENT AND TO
THE MATTERS TO WHICH THIS AGREEMENT IS OR SHALL BE SUBJECT OR SUBORDINATE; (B)
THAT IN THE EVENT OF TERMINATION OF THIS AGREEMENT OR REENTRY OR DISPOSSESSION
OF 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,

 

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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 (A) 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 (B) IN CASE OF 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.

 

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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 LEASE 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 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

 

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

 

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(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, ANY GUARANTOR, AND/OR ANY AFFILIATED PARTY OF TENANT WHICH IS A PARTY TO
AN LTA GMAC LEASE 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 PRIMARY INTENDED 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);

 

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

 

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(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 SHALL NOT BE UNREASONABLY WITHHELD,
DELAYED OR CONDITIONED);

 

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(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 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

 

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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 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

 

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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 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

 

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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 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 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.

 

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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 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;

 

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(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; OR

 

(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); OR

 

(G)                                 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 AND SECTION 21.5, 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 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
COMMENCEMENT DATE; 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

 

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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.

 

21.10                 BANKRUPTCY REMOTE ENTITIES.  AT LANDLORD’S REQUEST, TENANT
SHALL MAKE SUCH AMENDMENTS, MODIFICATIONS OR OTHER CHANGES TO ITS CHARTER
DOCUMENTS AND GOVERNING BODIES (INCLUDING, WITHOUT LIMITATION, TENANT’S BOARD OF
DIRECTORS), AND TAKE SUCH OTHER ACTIONS, AS MAY FROM TIME TO TIME BE NECESSARY
TO QUALIFY TENANT AS A “BANKRUPTCY REMOTE ENTITY”, PROVIDED THAT LANDLORD SHALL
REIMBURSE TENANT FOR ALL COSTS AND EXPENSES REASONABLY INCURRED BY TENANT IN
CONNECTION WITH THE MAKING OF SUCH AMENDMENTS OR MODIFICATIONS.

 

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21.11                 LTA GMAC PROPERTIES.  LANDLORD AND TENANT EXPRESSLY
ACKNOWLEDGE AND AGREE THAT, EFFECTIVE AUTOMATICALLY UPON THE RELEASE OF ANY LTA
GMAC LEASED PROPERTY FROM THE GMAC FINANCING, SUCH LTA GMAC LEASED PROPERTY
SHALL BE ADDED TO AND DEMISED UNDER THIS AGREEMENT IN ACCORDANCE WITH THE TERMS
AND CONDITIONS HEREOF, THE MINIMUM RENT PAYABLE HEREUNDER SHALL BE RATABLY
INCREASED BY AN AMOUNT DETERMINED BY LANDLORD, AND THE MINIMUM RENT, AS DEFINED
THEREIN, UNDER THE APPLICABLE LTA GMAC LEASE SHALL BE REDUCED BY THE AMOUNT OF
SUCH INCREASE.  THE ADDITION OF ANY SUCH LTA GMAC LEASED PROPERTY IN ACCORDANCE
WITH THE TERMS HEREOF SHALL BE AUTOMATIC WITHOUT ANY REQUIREMENT THAT LANDLORD
OR TENANT TAKE ANY ACTION OR EXECUTE ANY DOCUMENT, INSTRUMENT, AMENDMENT OR
CONFIRMATION WITH RESPECT THERETO.  NOTWITHSTANDING THE FOREGOING, LANDLORD AND
TENANT SHALL EXECUTE AND DELIVER SUCH DOCUMENTS, INSTRUMENTS, AGREEMENTS AND
CONFIRMATIONS AS THE OTHER PARTY SHALL REASONABLY REQUEST WITH RESPECT TO THE
FOREGOING.

 

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)

 

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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 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

 

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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
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.

 

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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 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).

 

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(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.

 

(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:  Evrett W. Benton

[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

 

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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.  WHENEVER IT IS PROVIDED IN THIS AGREEMENT THAT TENANT SHALL
DIRECT ANY MANAGER TO TAKE ANY ACTION, TENANT SHALL NOT BE DEEMED TO HAVE
SATISFIED SUCH OBLIGATION UNLESS TENANT SHALL HAVE EXHAUSTED ALL APPLICABLE
RIGHTS AND REMEDIES OF TENANT AS “OWNER” UNDER SUCH MANAGER’S MANAGEMENT
AGREEMENT.

 

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

 

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 (I) WHERE
THIS AGREEMENT IS EXECUTED OR DELIVERED; OR (II) WHERE ANY PAYMENT OR OTHER
PERFORMANCE REQUIRED BY THIS AGREEMENT IS MADE OR REQUIRED TO BE MADE; OR (III)
WHERE ANY BREACH OF ANY PROVISION OF THIS AGREEMENT OCCURS, OR ANY CAUSE OF
ACTION OTHERWISE ACCRUES; OR (IV) WHERE ANY ACTION OR OTHER PROCEEDING IS
INSTITUTED OR PENDING; OR (V) THE NATIONALITY, CITIZENSHIP, DOMICILE, PRINCIPAL
PLACE OF BUSINESS, OR JURISDICTION OF ORGANIZATION OR DOMESTICATION OF ANY
PARTY; OR (VI) WHETHER THE LAWS OF THE FORUM JURISDICTION OTHERWISE WOULD APPLY
THE LAWS OF A JURISDICTION OTHER THAN MASSACHUSETTS; OR (VII) 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

 

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

 

23.16                 PROPERTY SPECIFIC REPRESENTATIONS AND WARRANTIES.

TENANT REPRESENTS AND WARRANTS TO LANDLORD THAT, WITH RESPECT TO THE PROPERTY
LOCATED IN OVERLAND PARK, KANSAS, AS OF OCTOBER 25, 2002, AND, WITH RESPECT TO
THE PROPERTY LOCATED IN ELLICOTT CITY, MARYLAND, AS OF THE DATE HEREOF:

 

(A)                                  ALL (IF ANY) LEASES, SUBLEASES, LICENSES,
CONCESSIONS, AND SIMILAR AGREEMENTS GRANTING AN INTEREST TO ANY OTHER PERSON OR
ENTITY FOR THE USE AND OCCUPANCY OF ANY PORTION OF THE SUCH PROPERTY, AND ALL
(IF ANY) AGREEMENTS IN PLACE WHEREBY RESIDENTS ARE IN OCCUPANCY AT SUCH
PROPERTY, ARE LEGAL, VALID, BINDING, ENFORCEABLE AND IN FULL FORCE AND EFFECT,
AND TO THE BEST OF TENANT’S KNOWLEDGE, NO PARTY IS IN BREACH OR DEFAULT, AND NO
EVENT HAS OCCURRED WHICH WITH NOTICE OR LAPSE OF TIME, OR BOTH, WOULD CONSTITUTE
A BREACH OF DEFAULT, OR PERMIT TERMINATION, MODIFICATION, OR ACCELERATION UNDER
SUCH AGREEMENTS, AND NO PARTY HAS REPUDIATED ANY PROVISION OF SUCH AGREEMENTS;

 

(B)                                 TENANT HAS NOT RECEIVED WRITTEN NOTICE OF
ANY PENDING OR THREATENED CONDEMNATION ACTIONS WITH RESPECT TO SUCH PROPERTY OR
ANY PART THEREOF;

 

(C)                                  THERE ARE NO ACTIONS, SUITS OR PROCEEDINGS
PENDING AGAINST SUCH PROPERTY IN ANY COURT OF LAW, OR IN EQUITY OR BEFORE ANY
COURT, ADMINISTRATIVE AGENCY, COMMISSION OR OTHER PUBLIC GOVERNMENTAL AUTHORITY;

 

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(D)                                 TO TENANT’S KNOWLEDGE, EACH PROPERTY IS DULY
LICENSED AND CURRENTLY COMPLIES WITH LICENSING UNDER APPLICABLE STATE AND LOCAL
LAWS TO OPERATE SUCH PROPERTY IN THE MANNER THAT IT IS PRESENTLY BEING OPERATED,
AND TENANT HAS NOT RECEIVED ANY NOTICES OF VIOLATIONS OF ANY LAWS OR
REGULATIONS, OTHER THAN THOSE VIOLATIONS OF LAW, RULES, REGULATIONS, ORDINANCES,
ORDERS OR REQUIREMENTS NOTED IN OR ISSUED BY ANY FEDERAL, STATE, COUNTY,
MUNICIPAL OR OTHER DEPARTMENT OR GOVERNMENTAL AGENCY HAVING JURISDICTION AGAINST
OR AFFECTING EITHER PROPERTY WHENEVER NOTED OR ISSUED;

 

(E)                                  TO TENANT’S KNOWLEDGE, TENANT HAS NOT
VIOLATED ANY REQUIREMENTS OF LAW CURRENTLY APPLICABLE TO EITHER PROPERTY OR ANY
PART THEREOF WITH RESPECT TO:  (I) THE INSTALLATION, EXISTENCE OR REMOVAL OF OR
EXPOSURE TO ASBESTOS OR ASBESTOS-CONTAINING MATERIALS; (II) THE EXISTENCE,
DISCHARGE OR REMOVAL OF OR EXPOSURE TO HAZARDOUS MATERIALS; (III) AIR EMISSIONS,
WATER DISCHARGES, NOISE EMISSIONS AND ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
MATTER; AND (IV) EFFECTS ON THE ENVIRONMENT OF SUCH PROPERTY OR ANY PART THEREOF
OR OF ANY ACTIVITY HERETOFORE, NOW OR HEREAFTER CONDUCTED ON SUCH PROPERTY
(COLLECTIVELY, THE “RELEVANT ENVIRONMENTAL LAWS”);

 

(F)                                    TENANT HAS NOT RECEIVED ANY NOTICE OF ANY
CLAIM OR CITATION OF NONCOMPLIANCE WITH RESPECT TO ANY VIOLATION OF RELEVANT
ENVIRONMENTAL LAWS AND, TO TENANT’S KNOWLEDGE, THERE ARE NO FACTS,
CIRCUMSTANCES, CONDITIONS OR OCCURRENCES ON EITHER PROPERTY THAT COULD
REASONABLY BE EXPECTED TO RESULT IN THE VIOLATION OF ANY SUCH RELEVANT
ENVIRONMENTAL LAWS OR CAUSE SUCH PROPERTY TO BE SUBJECT TO ANY RESTRICTIONS ON
THE EXISTING OR CONTEMPLATED DEVELOPMENT, USE OR TRANSFERABILITY THEREOF UNDER
ANY RELEVANT ENVIRONMENTAL LAWS.

 

(G)                                 TO TENANT’S KNOWLEDGE, EACH PROPERTY AND THE
USES THEREOF COMPLY IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE BUILDING AND
ZONING ORDINANCES AND CODES;

 

(H)                                 NO GOVERNMENTAL AUTHORITY HAVING
JURISDICTION OVER EITHER PROPERTY HAS ISSUED ANY CITATIONS WITH RESPECT TO ANY
MATERIAL DEFICIENCIES OR OTHER MATTERS THAT FAIL TO CONFORM TO APPLICABLE
STATUTES, REGULATIONS OR ORDINANCES THAT HAVE NOT BEEN CORRECTED AS OF THE DATE
HEREOF; TENANT HAS NOT RECEIVED WRITTEN OR ORAL NOTICE FROM ANY AGENCY
SUPERVISING OR HAVING AUTHORITY OVER EITHER PROPERTY REQUIRING SUCH PROPERTY OR
ANY SERVICE, STAFF, OR PRACTICE PROVIDED AT SUCH PROPERTY TO BE MODIFIED,
RESTRICTED OR

 

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CONDITIONED AS TO SERVICE OR ELIGIBILITY OR BE REWORKED OR REDESIGNED OR
ADDITIONAL FURNITURE, FIXTURES, EQUIPMENT OR INVENTORY TO BE PROVIDED AT SUCH
PROPERTY SO AS TO CONFORM OR COMPLY WITH ANY EXISTING IN ANY APPLICABLE LAW,
CODE OR STANDARD; AND

 

(I)                                     THERE HAS BEEN NO MATERIAL ADVERSE
CHANGE WITH RESPECT TO THE PHYSICAL CONDITION OF THE OVERLAND PARK PROPERTY OR
THE OPERATIONS AT THE OVERLAND PARK PROPERTY SINCE APRIL 1, 2002 AND THERE HAS
BEEN NO MATERIAL ADVERSE CHANGE WITH RESPECT TO THE PHYSICAL CONDITION OF THE
ELLICOTT CITY PROPERTY OR THE OPERATIONS AT THE ELLICOTT CITY PROPERTY SINCE
NOVEMBER 2, 2002.

 

23.17                 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.

 

 

[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:

 

 

 

ELLICOTT CITY LAND I LLC, ELLICOTT
CITY LAND II LLC, HRES2 PROPERTIES
TRUST, SNH CHS PROPERTIES TRUST,
SPTIHS PROPERTIES TRUST, SPT-
MICHIGAN TRUST, SPTMNR PROPERTIES
TRUST, SNH/LTA PROPERTIES TRUST,
SNH/LTA PROPERTIES GA LLC

 

 

 

 

 

By:

/s/ John R. Hoadley

 

 

 

John R. Hoadley, Treasurer of
each of the foregoing entities

 

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TENANT:

 

 

 

FIVE STAR QUALITY CARE TRUST

 

 

 

 

 

By:

/s/ Bruce J. Mackey Jr.

 

 

 

Bruce J. Mackey Jr.

 

 

Treasurer

 

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EXHIBITS A-1 through A-79

 

Land

 

[See attached copies.]

 

OMITTED EXHIBITS

 

The following exhibits to the Second Amended and Restated Lease Agreement have
been omitted:

 

Exhibits

 

Exhibit Title

 

 

 

A-1 through A-79

 

Land

 

The Registrant agrees to furnish supplementally a copy of the foregoing omitted
exhibits to the Securities and Exchange Commission upon request.

 

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