AMENDED AND RESTATED MASTER LEASE
THIS AMENDED AND RESTATED MASTER LEASE (this “Lease”) is entered into as of
November 1, 2016, by and among each entity identified as “Landlord” on
Schedule 1A attached hereto (individually and collectively, “Landlord”), on the
one hand, and each entity identified as “Tenant” on Schedule 1B attached hereto
(individually and collectively, “Tenant”), on the other hand. This Lease amends
and restates that certain Master Lease dated as of October 1, 2016 (the
“Existing Lease”) by and between certain of the entities comprising Landlord and
Tenant, with respect to those Facilities subject to the Existing Lease; provided
however that nothing herein shall limit, terminate or otherwise impair Tenant’s
liabilities and obligations under the Existing Lease arising on or prior to the
Commencement Date under this Lease. Amending and concurrently restating the
Existing Lease in this Lease shall in no way constitute a termination or
novation of the Existing Lease.
INDIVISIBLE MASTER LEASE;
ACKNOWLEDGEMENT AND WAIVER
As a condition precedent to Landlord entering into and continuing to remain
obligated under this Lease, each of Tenant and, by execution of the Guaranty,
Guarantor acknowledges and agrees that this Lease constitutes a single,
indivisible lease of the entire Premises, and the Premises constitutes a single
economic unit. The Base Rent, Additional Rent, other amounts payable hereunder
and all other provisions contained herein have been negotiated and agreed upon
based on the intent to lease the entirety of the Premises as a single and
inseparable transaction, and such Base Rent, Additional Rent, other amounts and
other provisions would have been materially different had the parties intended
to enter into separate leases or a divisible lease. Any Event of Default under
this Lease shall constitute an Event of Default as to the entire Premises.
Notwithstanding the foregoing, however, no Tenant shall, by virtue of this
Lease, have any rights to, or title or interest in, the Facility leased by
another Tenant, or any right or obligation to operate the same, to the extent it
does not have the Authorization necessary or required to do so from the
Governmental Authority of the Situs State for such Facility. Each of Tenant and,
by executing the Guaranty, Guarantor, in order to induce Landlord to enter into,
and as a continuing condition to Landlord’s obligations under, this Lease, to
the extent permitted by law:
(a)    Agrees, acknowledges and is forever estopped from asserting to the
contrary that the statements set forth in the first sentence of this Section are
true, correct and complete;
(b)    Agrees, acknowledges and is forever estopped from asserting to the
contrary that this Lease is a new and de novo lease, separate and distinct from
any other lease between any of the entities comprising Tenant and any of the
entities comprising Landlord that may have existed prior to the date hereof;
(c)    Agrees, acknowledges and is forever estopped from asserting to the
contrary that this Lease is a single lease pursuant to which the collective
Premises are demised as a whole to Tenant;
(d)    Agrees, acknowledges and is forever estopped from asserting to the
contrary that if, notwithstanding the provisions of this Section, this Lease
were to be determined or found to be in any proceeding, action or arbitration
under state or federal bankruptcy, insolvency, debtor-relief or other applicable
laws to constitute multiple leases demising multiple properties, such multiple
leases could not, by the debtor, trustee, or any other party, be selectively or
individually assumed, rejected or assigned; and
(e)    Forever knowingly waives and relinquishes any and all rights under or
benefits of the provisions of the Federal Bankruptcy Code Section 365 (11 U.S.C.
§ 365), or any successor or replacement thereof or any analogous state law, to
selectively or individually assume, reject or assign the multiple leases
comprising this Lease following a determination or finding in the nature of that
described in the foregoing Paragraph (d).
Article I
DEFINITIONS; PREMISES; TERM
1.1    Definitions. Certain initially capitalized terms used in this Lease are
defined in Exhibit A. All accounting terms not otherwise defined in this Lease
have the meanings assigned to them in accordance with GAAP, as applicable.
1.2    Lease of Premises; Ownership.
1.2.1    Upon the terms and subject to the conditions set forth in this Lease,
Landlord leases to Tenant, and Tenant leases from Landlord, all of Landlord’s
right, title and interest in and to the Premises.
1.2.2    Tenant acknowledges that the Premises are the property of Landlord and
that Tenant has only the right to the possession and use of the Premises upon
and subject to the terms and conditions of this Lease. Tenant will not, at any
time during the Term, take any position, whether in any tax return, public
filing, contractual arrangement, financial statement or otherwise, other than
that Landlord is the owner of the Premises for federal, state and local income
tax purposes and that this Lease is a “true lease”.
1.3    Term. The initial term of this Lease (the “Initial Term”) shall be for a
period of ten (10) years commencing as of the Commencement Date and expiring at
11:59 p.m. on the Initial Expiration Date. The term of this Lease may be
extended by Tenant for two (2) separate terms of five (5) years each (each, an
“Extension Term”) if: (a) at least twelve (12), but not more than eighteen (18)
months prior to the end of the then current Term, Tenant delivers to Landlord a
written notice (an “Extension Notice”) that it desires to exercise its right to
extend the Term for one (1) Extension Term; and (b) no Event of Default shall
have occurred and be continuing on the date Landlord receives the Extension
Notice or on the last day of the then current Term. During any such Extension
Term, except as otherwise specifically provided for herein, all of the terms and
conditions of this Lease shall remain in full force and effect. Once delivered
to Landlord, an Extension Notice shall be irrevocable; provided, however, that,
Tenant shall have ten (10) Business Days following Landlord’s notice to Tenant
of the final determination of the Base Rent for the first Lease Year of the
applicable Extension Term to elect to withdraw the applicable Extension Notice,
which election must be in writing and once made, shall be irrevocable.
Notwithstanding the foregoing, Tenant shall have no right to withdraw an
Extension Notice if the Base Rent for the first Lease Year of the applicable
Extension Term was calculated based on the Base Rent payable during the
immediately preceding Lease Year rather than on the Fair Market Rental for the
Premises as determined pursuant to Exhibit E.
1.4    Net Lease. This Lease is intended to be and shall be construed as an
absolutely net lease, commonly referred to as a “net, net, net” or “triple net”
lease, pursuant to which Landlord shall not, under any circumstances or
conditions, whether presently existing or hereafter arising, and whether
foreseen or unforeseen by the parties, be required to make any payment or
expenditure of any kind whatsoever or be under any other obligation or liability
whatsoever, except as expressly set forth herein, in connection with the
Premises. All Rent payments shall be absolutely net to Landlord, free of all
Impositions, utility charges, operating expenses, insurance premiums or any
other charges or expenses in connection with the Premises, all of which shall be
paid by Tenant.
Article II
RENT
2.1    Base Rent.
2.1.1    During the Term, commencing as of the Commencement Date, Tenant will
pay to Landlord as base rent hereunder (the “Base Rent”), an annual amount equal
to Twenty-Four Million Six Hundred Seventy-Five Thousand Dollars ($24,675,000).
Notwithstanding the foregoing, on the first day of the second (2nd) Lease Year
and the first (1st) day of each Lease Year thereafter during the Term
(including, without limitation, any Extension Term), the Base Rent shall
increase to an annual amount equal to the sum of (a) the Base Rent for the
immediately preceding Lease Year, and (b) the Base Rent for the immediately
preceding Lease Year multiplied by the Adjusted CPI Increase. The Base Rent
shall be payable in advance in twelve (12) equal monthly installments on or
before the first (1st) Business Day of each calendar month; provided, however,
the Base Rent attributable to the first (1st) full calendar month of the Term
and the calendar month in which the Commencement Date occurs, which may be a
partial month, shall be payable on the Commencement Date. Base Rent is also
subject to increase from time to time pursuant to Section 7.10.8.
2.1.2    Notwithstanding anything in Section 2.1.1 to the contrary, the Base
Rent for the first Lease Year of each Extension Term shall be reset and
expressed as an annual amount equal to the greater of: (a) the Fair Market
Rental of the Premises, or (b) the sum of (i) the Base Rent payable during the
immediately preceding Lease Year, and (ii) the Base Rent for the immediately
preceding Lease Year multiplied by the Adjusted CPI Increase. Notwithstanding
the foregoing, on the first day of the second (2nd) Lease Year of any Extension
Term, and the first day of each Lease Year thereafter during such Extension
Term, the Base Rent shall increase to an annual amount equal to the sum of
(1) the Base Rent for the immediately preceding Lease Year, and (2) the Base
Rent for the immediately preceding Lease Year multiplied by the Adjusted CPI
Increase.
2.2    Additional Rent. In addition to the Base Rent, commencing as of the
Commencement Date, Tenant shall also pay and discharge as and when due and
payable all other amounts, liabilities and obligations which Tenant assumes or
agrees to pay under this Lease. In the event of any failure on the part of
Tenant to pay any of those items referred to in the previous sentence, Tenant
will also promptly pay and discharge every fine, penalty, interest and cost
which may be added for non-payment or late payment of the same. Collectively,
the items referred to in the first two sentences of this Section 2.2 are
referred to as “Additional Rent.” Except as may otherwise be set forth herein,
any costs or expenses paid or incurred by Landlord on behalf of Tenant that
constitute Additional Rent shall be reimbursed by Tenant to Landlord within ten
(10) days after the presentation by Landlord to Tenant of invoices therefor.
2.3    Method of Payment. All Rent payable hereunder shall be paid in lawful
money of the United States of America. Except as may otherwise be specifically
set forth herein, Rent shall be prorated as to any partial months at the
beginning and end of the Term. Rent to be paid to Landlord shall be paid by
electronic funds transfer and shall be initiated by Tenant for settlement on or
before the Payment Date; provided, however, if the Payment Date is not a
Business Day, then settlement shall be made on the next succeeding day which is
a Business Day. If Landlord directs Tenant to pay any Base Rent to any party
other than Landlord, Tenant shall send to Landlord, simultaneously with such
payment, a copy of the transmittal letter or invoice and a check whereby such
payment is made or such other evidence of payment as Landlord may reasonably
require.
2.4    Late Payment of Rent. Tenant hereby acknowledges that the late payment of
Rent will cause Landlord to incur costs not contemplated hereunder, the exact
amount of which is presently anticipated to be extremely difficult to ascertain.
Accordingly, if any installment of Rent other than Additional Rent payable to a
Person other than Landlord (or a Facility Mortgagee) shall not be paid within
five (5) days of its Payment Date, Tenant shall pay to Landlord, on demand, a
late charge equal to the lesser of (a) five percent (5%) of the amount of such
installment or (b) the maximum amount permitted by law. The parties agree that
this late charge represents a fair and reasonable estimate of the costs that
Landlord will incur by reason of late payment by Tenant. The parties further
agree that such late charge is Rent and not interest and such assessment does
not constitute a lender or borrower/creditor relationship between Landlord and
Tenant. In addition, if any installment of Rent other than Additional Rent
payable to a Person other than Landlord (or a Facility Mortgagee) shall not be
paid within ten (10) days after its Payment Date, the amount unpaid, including
any late charges, shall bear interest at the Agreed Rate compounded monthly from
such Payment Date to the date of payment thereof, and Tenant shall pay such
interest to Landlord on demand. The payment of such late charge or such interest
shall neither constitute waiver of nor excuse or cure any default under this
Lease, nor prevent Landlord from exercising any other rights and remedies
available to Landlord.
2.5    Guaranty. Tenant’s obligations under this Lease are guarantied under that
certain Amended and Restated Guaranty of Master Lease of even date herewith (as
amended, modified or revised, the “Guaranty”). The guarantor or guarantors that
are party to the Guaranty from time to time, together with all successors and
assigns, are referred to in this Lease, individually and collectively, as
“Guarantor”.
Article III
SECURITY DEPOSIT; LETTER OF CREDIT
3.1    Security Deposit. Unless Tenant has made the LC Election pursuant to
Section 3.2, Tenant shall pay to and deposit with Landlord an amount, which,
when added to the “Security Deposit” currently held by Landlord under the
Existing Lease, shall equal to three and (3) monthly payments of Base Rent as of
the Commencement Date (subject to increase as described in this Section 3.1) as
security (the “Security Deposit”) for the full and faithful performance by
Tenant of each and every term, provision, covenant and condition of this Lease.
The Security Deposit shall be paid by Tenant and deposited with Landlord in
three (3) equal monthly installments, with the first (1st) installment due on or
prior to the Commencement Date, the second (2nd) installment due on or prior to
the first (1st) Business Day of the sixth (6th) calendar month of the Term, and
third (3rd) installment due on the first (1st) Business Day of the ninth (9th)
calendar month of the Term.
3.1.1    The Security Deposit shall not be deemed an advance payment of Rent or
a measure of Landlord’s damages for any default under this Lease by Tenant, nor
shall it be a bar or defense to any action that Landlord may at any time
commence against Tenant. The Security Deposit shall be the property of Landlord
and it may commingle the Security Deposit with other assets of Landlord, and
Tenant shall not be entitled to any interest on the Security Deposit.
3.1.2    Upon the occurrence of any Event of Default, Landlord, at its option
and in such order as Landlord in its sole discretion may determine, may apply
the Security Deposit to any (a) obligation of Tenant under this Lease, or
(b) Losses that Landlord may incur in connection with, or related to, this
Lease, or any Event of Default under this Lease, whether such obligation or Loss
accrues before or after the Event of Default.
3.1.3    If Landlord sells or transfers the Premises or Landlord ceases to have
an interest in the Premises, Landlord may remit any unapplied part of the
Security Deposit to the successor owner of the Premises, and from and after such
payment or transfer, Landlord shall be relieved of all liability with respect
thereto. In the case of any partial transfer or cessation, Landlord may transfer
such portion of the Security Deposit as Landlord allocates to such part of the
Premises, in its reasonable discretion, and from and after such partial transfer
or cessation, Landlord shall be relieved of all liability only with respect to
such portion of the Security Deposit so transferred.
3.1.4    If Landlord applies the Security Deposit (or any portion thereof),
Tenant shall replenish the Security Deposit in full within five (5) Business
Days after demand by Landlord, by paying to Landlord the amount of the Security
Deposit as so applied. The amount of the Security Deposit is also subject to
adjustment from time to time pursuant to the provisions of Sections 6.12.1.
3.1.5    If no Event of Default has occurred and is continuing under this Lease
and Tenant has fully performed and satisfied all of its obligations under this
Lease, then Landlord shall pay the Security Deposit, or remaining unapplied
portion thereof, to Tenant within sixty (60) days after the expiration or
earlier termination of this Lease and the surrender of the Premises to Landlord
in accordance with the terms of this Lease.
3.1.6    If the Base Rent is reduced pursuant to Sections 6.15, 6.16, 11.4,
11.5, 12.3 or 12.4 hereof, then the amount of the Security Deposit required
hereunder shall be reduced by the applicable amount of the reduction in monthly
payments of Base Rent as a result of such reduction in the Base Rent payable
hereunder.
3.2    Letter of Credit. In lieu of depositing cash with Landlord as and when
required pursuant to Section 3.1, and upon prior written notice to Landlord,
Tenant may elect (such election, the “LC Election”) and Tenant shall deliver to
Landlord and maintain during the Term and for sixty (60) days after the
Expiration Date, a Letter of Credit in an undrawn face amount equal to three (3)
monthly payments of Base Rent (subject to adjustment as provided herein, the “LC
Amount”) as partial collateral for Tenant’s obligations under this Lease. The
Letter of Credit may be deposited by Tenant with Landlord in three (3) equal
installments in the same manner as the cash Security Deposit under Section 3.1.
During any period in which the LC Election has been made, the following terms
and provisions shall apply:
3.2.1    Upon the occurrence of an Event of Default, Landlord may, but shall not
be required to, draw upon the Letter of Credit (in whole or in part) and apply
the cash proceeds thereof to the obligations due from Tenant under this Lease
and to compensate Landlord for the damages suffered or incurred by it in
connection with such Event of Default (or any other Event of Default). Any
amount drawn by Landlord shall not be deemed: (a) to fix or determine the
amounts to which Landlord is entitled to recover under this Lease or otherwise;
(b) to waive or cure any default under this Lease; or (c) to limit or waive
Landlord’s right to pursue any remedies provided for in this Lease.
3.2.2    Together with any increase in the Base Rent, the LC Amount shall be
increased by the amount necessary to make the LC Amount equal to three (3)
monthly installments of Base Rent. Within five (5) days after such increase in
the LC Amount, Tenant shall deposit with Landlord a replacement or supplementary
Letter of Credit such that at all times during the Term of this Lease and for
sixty (60) days after the Expiration Date, Landlord shall be holding one or more
Letters of Credit totaling, in the aggregate, the LC Amount (as so increased).
Tenant covenants as follows: (a) on or before thirty (30) days prior to the
expiration date of the then issued and outstanding Letter of Credit, Tenant
shall deposit with Landlord a replacement Letter of Credit in the LC Amount;
(b) if all or any portion of the Letter of Credit is drawn against by Landlord,
Tenant shall, within five (5) Business Days after demand by Landlord, deposit
with Landlord a replacement or supplementary Letter of Credit such that at all
times during the term of this Lease and for sixty (60) days after the Expiration
Date, Landlord shall have the ability to draw on one or more Letters of Credit
totaling, in the aggregate, the LC Amount; and (c) following an Issuer
Revocation, Tenant shall obtain a replacement Letter of Credit in the LC Amount
from another Issuer within fifteen (15) days of Landlord’s written demand
therefor. If Tenant fails to timely perform any of the foregoing, then in
addition to any other rights and remedies available under this Lease, Landlord
may immediately draw upon the full amount of the then issued and outstanding
Letter of Credit. The LC Amount is also subject to adjustment from time to time
pursuant to the provisions of Sections 6.12.1. If Landlord has not drawn upon
the then issued and outstanding Letter of Credit, Landlord shall return said
Letter of Credit to Tenant sixty (60) days after the Expiration Date.
3.2.3    Upon the issuance of a replacement Letter of Credit, Landlord shall
have the right to draw solely on such replacement Letter of Credit and Landlord
shall have no right to draw against the Letter of Credit which is replaced by
such replacement Letter of Credit.
3.2.4    Tenant shall have the right to deposit with Landlord one or more
Letters of Credit to satisfy the requirements of this Section 3.2, so long as
the aggregate undrawn face amount of all issued and outstanding Letters of
Credit equal the LC Amount.
3.2.5    Within five (5) Business Days after receipt of any written demand by
Landlord, Tenant shall produce to Landlord (a) evidence satisfactory to
Landlord, in the exercise of its commercially reasonable judgment, that Issuer
is then in compliance with the Issuer Standards, and (b) such other information
concerning Issuer as Landlord may reasonably request.
3.2.6    If Landlord draws on a Letter of Credit, the cash proceeds thereof not
used to compensate Landlord for amounts due to Landlord under this Lease by
reason of an Event of Default shall be held by Landlord as an additional
security deposit under this Lease and Landlord may, from time to time, without
prejudice to any other right or remedy, apply such cash proceeds to the
obligations due from Tenant under this Lease and to compensate Landlord for the
damages suffered or incurred by it in connection with such Event of Default (or
any other Event of Default). The holding of such cash proceeds by Landlord shall
not limit or stay Tenant’s obligation hereunder to cause to be issued a Letter
of Credit in the LC Amount. Provided no Event of Default has occurred and is
then continuing (except an Event a Default that would be fully cured by the
posting of a Letter of Credit in the LC Amount), upon Landlord’s receipt of a
Letter of Credit in the LC Amount, any such cash proceeds then held by Landlord
shall be returned to Tenant. If requested by Tenant, Landlord shall make such
cash proceeds available to collateralize a replacement Letter of Credit or
supplemental Letter of Credit pursuant to a written agreement with the
applicable Issuer, whereby Landlord shall agree to disburse such cash proceeds
to the applicable Issuer upon such Issuer’s irrevocable and unconditional
commitment to issue the applicable replacement Letter of Credit or supplemental
Letter of Credit upon its receipt of such cash proceeds. Notwithstanding the
foregoing, Landlord shall not be required to make such cash proceeds available
if an Event of Default then exists. If no Event of Default exists under this
Lease as of the Expiration Date, any cash proceeds then held by Landlord shall
be returned to Tenant within sixty (60) days following the Expiration Date.
3.2.7    If Landlord sells or transfers the Premises or Landlord ceases to have
an interest in the Premises, Landlord may transfer the Letter of Credit to the
successor owner of the Premises, and from and after such transfer, Landlord
shall be relieved of all liability with respect thereto.
3.2.8    In the event that when the LC Election is made, Landlord is holding the
Security Deposit pursuant to Section 3.1 above, then upon Landlord’s receipt of
(i) written notice from Tenant making the LC Election and (ii) a Letter of
Credit in the LC Amount satisfying the provisions of this Section 3.2, any such
cash Security Deposit then held by Landlord shall be returned to Tenant.
Article IV
IMPOSITIONS AND OTHER CHARGES
4.1    Impositions.
4.1.1    Subject to Section 4.5, Tenant shall pay all Impositions attributable
to a tax period, or portion thereof, occurring during the Term (irrespective of
whether the Impositions for such tax period are due and payable after the Term),
when due and before any fine, penalty, premium, interest or other cost may be
added for non-payment. Where feasible, such payments shall be made directly to
the taxing authorities. 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
same (and any accrued interest on the unpaid balance of such Imposition) in
installments (provided no such installments shall extend beyond the Term) and,
in such event, shall pay such installments during the Term before any fine,
penalty, premium, further interest or cost may be added thereto. Tenant shall
deliver to Landlord, not less than five (5) days prior to the due date of each
Imposition, copies of the invoice for such Imposition, the check delivered for
payment thereof and an original receipt evidencing such payment or other proof
of payment satisfactory to Landlord.
4.1.2    Notwithstanding Section 4.1.1 to the contrary, with respect to those
Impositions, if any, that Landlord is required by Legal Requirements to remit
directly to the applicable taxing authority, Landlord shall pay such Impositions
directly to such taxing authority and within ten (10) Business Days after
Landlord delivering to Tenant notice and evidence of such payment, Tenant shall
reimburse Landlord for such paid Impositions. Landlord and Tenant shall, upon
request of the other, promptly provide such data as is maintained by the party
to whom the request is made with respect to any Facility as may be necessary to
prepare any required returns and reports.
4.1.3    Tenant shall prepare and file all tax returns and reports as may be
required by Legal Requirements with respect to or relating to all Impositions
(other than those Impositions, if any, based on Landlord’s net income, gross
receipts, franchise taxes and taxes on its capital stock).
4.1.4    Tenant may, upon notice to Landlord, at Tenant’s option and at Tenant’s
sole cost and expense, protest, appeal or institute such other proceedings as
Tenant may deem appropriate to effect a reduction of real estate or personal
property assessments and Landlord, at Tenant’s expense, shall reasonably
cooperate with Tenant in such protest, appeal or other action; provided,
however, that upon Landlord’s request in connection with any such protest or
appeal, Tenant shall post an adequate bond or deposit sufficient sums with
Landlord to insure payment of any such real estate or personal property
assessments during the pendency of any such protest or appeal.
4.1.5    Landlord or Landlord’s designee shall use reasonable efforts to give
prompt notice to Tenant of all Impositions payable by Tenant hereunder of which
Landlord at any time has knowledge, provided, however, that any failure by
Landlord to provide such notice to Tenant shall in no way relieve Tenant of its
obligation to timely pay the Impositions, but, with respect to any such
Impositions of which Tenant does not otherwise have knowledge, such failure by
Landlord shall suspend any default by Tenant hereunder for a reasonable time
after Tenant receives notice of any Impositions which it is obligated to pay.
4.1.6    Impositions imposed or assessed in respect of the tax-fiscal period
during which the Term commences or terminates shall be adjusted and prorated
between Landlord and Tenant, whether or not such Imposition is imposed or
assessed before or after such commencement or termination, and Tenant’s
obligation to pay its prorated share thereof shall survive such termination.
4.2    Utilities; CC&Rs. Tenant shall pay any and all charges for electricity,
power, gas, oil, water and other utilities used in connection with each Facility
during the Term. Tenant shall also pay all costs and expenses of any kind
whatsoever which may be imposed against Landlord during the Term by reason of
any of the covenants, conditions and/or restrictions affecting any Facility or
any portion thereof, or with respect to easements, licenses or other rights
over, across or with respect to any adjacent or other property which benefits
any Facility, including any and all costs and expenses associated with any
utility, drainage and parking easements. If Landlord is billed directly for any
of the foregoing costs, Landlord shall send Tenant the bill and Tenant shall pay
the same before it is due.
4.3    Insurance. Tenant shall pay or cause to be paid all premiums for the
insurance coverage required to be maintained by Tenant hereunder.
4.4    Other Charges. Tenant shall pay all other amounts, liabilities,
obligations, costs and expenses paid or incurred with respect to the repair,
replacement, restoration, maintenance and operation of each Facility.
4.5    Real Property Imposition Impounds.
4.5.1    At Landlord’s election and upon written notice to Tenant, Tenant shall
include with each payment of Base Rent a sum equal to one-twelfth (1/12th) of
100% of the amount required to discharge the annual amount of Real Property
Impositions. Landlord may, at its option, from time to time require that any
particular deposit be greater than one-twelfth (1/12th) of 100% of the estimated
annual Real Property Impositions if necessary, in the exercise of Landlord’s
reasonable judgment, to provide a sufficient fund from which to make payment of
such Real Property Impositions on or before the next due date of any installment
thereof. Additionally, Landlord may change its estimate of any Real Property
Imposition for any period on the basis of a change in an assessment or tax rate
or for any other good faith reason. In such event, Tenant shall deposit with
Landlord the amount in excess of the sums previously deposited with Landlord for
the applicable period within ten (10) days after Landlord’s request therefor. If
at any time within thirty (30) days before the due date of any Real Property
Imposition, the deposits are insufficient for the payment in full of the
obligation for which the deposits are being held, Tenant shall remit the amount
of the deficiency to Landlord within ten (10) days after written demand from
Landlord. If Landlord elects to require Tenant to impound Real Property
Impositions hereunder, Tenant shall, as soon as they are received, deliver to
Landlord copies of all notices, demands, claims, bills and receipts in relation
to the Real Property Impositions. To the extent Tenant pays Impositions to
Landlord pursuant to this Section 4.5, Tenant shall be relieved of its
obligation under this Lease to pay such Impositions to the taxing authority to
which such Impositions would otherwise be due. Upon Tenant’s written request,
which may be made within fifteen (15) days after the expiration of each calendar
year, Landlord shall, within thirty (30) days after receipt of Tenant’s request,
provide Tenant with an accounting showing all credits and debits to and from
such impounded funds for Real Estate Impositions received by Landlord from
Tenant for the prior calendar year.
4.5.2    The sums deposited by Tenant under this Section 4.5 shall be held by
Landlord, shall not bear interest nor be held by Landlord in trust or as an
agent of Tenant, and may be commingled with the other assets of Landlord.
Provided no Event of Default then exists under this Lease, and provided that
Tenant has timely delivered to Landlord copies of any bills, claims or notices
that Tenant has received, the sums deposited by Tenant under this Section 4.5
shall be used by Landlord to pay Real Property Impositions as the same become
due. Upon the occurrence of any Event of Default, Landlord may apply any funds
held by it under this Section 4.5 to cure such Event of Default or on account of
any damages suffered or incurred by Landlord in connection therewith or to any
other obligations of Tenant arising under this Lease, in such order as Landlord
in its discretion may determine.
4.5.3    If Landlord transfers this Lease, it shall transfer all amounts then
held by it under this Section 4.5 to the transferee, and Landlord shall
thereafter have no liability of any kind with respect thereto. As of the
Expiration Date, any sums held by Landlord under this Section 4.5 shall be
returned to Tenant, only as and when the conditions of Section 3.1, or if the LC
Election has been made, of Section 3.2, for the return of the Security Deposit
or Letter of Credit, as applicable, have been met and provided that any and all
Real Property Impositions accrued or due and owing hereunder have been paid in
full.
4.5.4    Notwithstanding anything herein which may be construed to the contrary,
if Landlord elects to require Tenant to impound Real Property Impositions
hereunder, Landlord shall have no liability to Tenant for failing to pay any
Real Property Impositions to the extent that: (a) any Event of Default has
occurred and is continuing, (b) insufficient deposits under this Section 4.5 are
held by Landlord at the time such Real Property Impositions become due and
payable, or (c) Tenant has failed to provide Landlord with copies of the bills,
notices, and claims for such Real Property Impositions as required pursuant to
Section 4.5.1.
Article V
ACCEPTANCE OF PREMISES; NO IMPAIRMENT
5.1    Acceptance of Premises. Tenant acknowledges that it or its Affiliates has
expertise in business and industry of operating healthcare facilities for the
Primary Intended Use and, in deciding to enter into this Lease, has not relied
on any representations or warranties, express or implied, of any kind from
Landlord other than as expressly set forth in this Lease. Tenant acknowledges
receipt and delivery of possession of the Premises and confirms that Tenant has
examined and otherwise has knowledge of the condition of the Premises, including
the condition of title thereto, prior to the execution and delivery of this
Lease and has found the same to be in good order and repair, free from Hazardous
Materials not in compliance with applicable Hazardous Materials Laws and
satisfactory for its purposes hereunder, including the operation of the
Facilities for the Primary Intended Use. Regardless, however, of any examination
or inspection made by Tenant and whether or not any patent or latent defect or
condition was revealed or discovered thereby, Tenant is leasing the Premises “as
is” in its present condition. Other than as expressly set forth in this Lease,
Tenant waives any claim or action against Landlord in respect of the condition
of the Premises including any defects or adverse conditions not discovered or
otherwise known by Tenant as of the Commencement Date. LANDLORD MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE PREMISES,
EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR
PURPOSE OR OTHERWISE, OR AS TO THE NATURE OR QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, OR THE EXISTENCE OF ANY HAZARDOUS MATERIALS, IT BEING
AGREED THAT ALL SUCH RISKS, LATENT OR PATENT, ARE TO BE BORNE SOLELY BY TENANT,
OTHER THAN AS EXPRESSLY SET FORTH IN THIS LEASE.
5.2    No Impairment. The respective obligations of Landlord and Tenant shall
not be affected or impaired by reason of (a) any damage to, or destruction of,
any Facility, from whatever cause, or any Condemnation of any Facility (except
as otherwise expressly and specifically provided in Article XI or Article XII);
(b) the interruption or discontinuation of any service or utility servicing any
Facility; (c) the lawful or unlawful prohibition of, or restriction upon,
Tenant’s use of any Facility due to the interference with such use by any Person
or eviction by paramount title (other than Landlord, or those claiming by,
through or under Landlord, in contravention of this Lease); (d) any claim that
Tenant has or might have against Landlord on account of any breach of warranty
or default by Landlord under this Lease or any other agreement by which Landlord
is bound; (e) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceedings
affecting Landlord or any assignee or transferee of Landlord; (f) any Licensing
Impairment; or (g) for any other cause whether similar or dissimilar to any of
the foregoing. Tenant hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law or
equity (x) to modify, surrender or terminate this Lease or quit or surrender any
Facility, or (y) that would entitle Tenant to any abatement, reduction, offset,
suspension or deferment of Rent, except if and to the extent otherwise expressly
provided in this Lease. Nothing herein shall preclude Tenant from bringing a
separate action and Tenant is not waiving other rights or remedies not expressly
waived herein. The obligations of Landlord and Tenant hereunder shall be
separate and independent covenants and agreements and Rent shall continue to be
payable in all events unless, until and to the extent the obligations to pay the
same shall be terminated pursuant to the express provisions of this Lease.
Tenant’s sole right to recover damages against Landlord under this Lease shall
be to prove such damages in a separate action.
Article VI
OPERATING COVENANTS
6.1    Tenant Personal Property. Tenant shall obtain and install all items of
furniture, fixtures, supplies and equipment not included as Landlord Personal
Property as shall be necessary or reasonably appropriate to operate each
Facility in compliance with this Lease (the “Tenant Personal Property”). Except
to the extent expressly provided in this Lease, Landlord shall have no rights to
Tenant Personal Property and, provided no Event of Default shall have occurred
and be continuing at the time, Tenant shall have the right to remove all Tenant
Personal Property from the Premises at the expiration or sooner termination of
this Lease. Tenant may remove items of Tenant Personal Property from time to
time during the Term, provided that any such Tenant Personal Property as is then
required, necessary or appropriate for Tenant’s operation of the Facility from
which such items are removed for its Primary Intended Use shall be replaced by
like items as are then required, necessary or appropriate for the operation of
the Premises in accordance with the terms of this Lease.
6.2    Landlord Personal Property. Tenant may, from time to time, in Tenant’s
reasonable discretion, without notice to or approval of Landlord, sell or
dispose of any item of the Landlord Personal Property; provided, however, that,
unless such item is functionally obsolete, Tenant shall promptly replace such
item with an item of similar or superior quality, use and functionality, and any
such replacement item shall, for all purposes of this Lease, continue to be
treated as part of the “Landlord Personal Property.” Tenant shall, promptly upon
Landlord’s written request from time to time, provide such information as
Landlord may reasonably request relative to any sales, dispositions or
replacements of the Landlord Personal Property pursuant to this Section 6.2 and,
within a reasonable time upon Landlord’s written request from time to time (a)
not to exceed one (1) in any twelve (12) month period and (b) promptly during
the continuance of an Event of Default, shall provide to Landlord with an
updated inventory of the Landlord Personal Property.
6.3    Primary Intended Use. During the entire Term, Tenant shall continually
use each Facility for its Primary Intended Use (subject temporary suspension due
casualty or condemnation as provided in Articles XI and XII) and for no other
use or purposes and shall operate each Facility in a manner consistent with a
good quality healthcare facility, including employing sound reimbursement
principles under all applicable Third Party Payor Programs. Notwithstanding the
foregoing, upon Landlord’s prior written approval (which shall not be
unreasonably withheld), and provided that it is permitted by the applicable
Governmental Authority of the Situs State in which the Facility is located,
Tenant may from time to time remove beds from service at a Facility without
reducing the number of licensed Medicare and Medicaid certified beds that may be
operated at such Facility and while retaining the right to return any such beds
to service at such Facility (so-called “bed banking”) provided further that
(i) such removal shall not exceed more than ten percent (10%) of the number of
beds at the applicable Facility, (ii) not less than thirty (30) days prior to
removing such beds from service, Tenant shall request in writing Landlord’s
approval, which request shall include, or have delivered therewith, (a) detailed
descriptions of the beds being removed, the reasons for such bed removal,
estimates of the cost of implementing such bed changes, and the projected impact
of such bed changes upon such Facility, and (b) evidence reasonably satisfactory
to Landlord that Tenant has obtained all necessary regulatory approvals for the
proposed reduction of beds in service, that such beds continue to be considered
“licensed” and “certified” beds by the applicable governmental authority and
agencies and that Tenant or any successor operator of such Facility retains the
right, at the end of the bed banking period, to return such beds to service at
the applicable Facility as licensed Medicare and Medicaid certified beds.
6.4    Compliance with Legal Requirements and Authorizations.
6.4.1    Tenant, at its sole cost and expense, shall promptly (a) comply with
all Legal Requirements and Insurance Requirements regarding the use, condition
and operation of each Facility, the Landlord Personal Property and the Tenant
Personal Property, and (b) procure, maintain and comply with all Authorizations.
The Authorizations for any Facility shall, to the maximum extent permitted by
Legal Requirements, relate and apply exclusively to such Facility, and Tenant
acknowledges and agrees that, subject to all applicable Legal Requirements, the
Authorizations (other than the Provider Agreements) are appurtenant to the
Facilities to which they apply, both during and following the termination or
expiration of the Term. Landlord will cooperate with Tenant and use commercially
reasonable efforts, where necessary or required of Landlord as owner of the
Premises, to enable Tenant to obtain and maintain the Authorizations necessary
or required to use and operate any Facility for its Primary Intended Use.
6.4.2    Tenant and the Premises shall comply in all respects with all licensing
and other Legal Requirements applicable to the Premises and the business
conducted thereon and, to the extent applicable, all Third Party Payor Program
requirements. Tenant shall not commit any act or omission that would in any way
violate any certificate of occupancy affecting any Facility, result in closure
of any Facility, result in the termination or suspension of Tenant’s ability to
operate any Facility for its Primary Intended Use or result in the termination,
suspension, non-renewal or other limitation of any Authorization, including, but
not limited to, the authority to admit residents to any Facility or right to
receive reimbursement for items or services provided at any Facility from any
Third Party Payor Program.
6.4.3    Tenant shall not transfer any Authorizations to any location operated
by Tenant other than the Facility or as otherwise required by the terms of this
Lease nor pledge any Authorizations as collateral security for any loan or
indebtedness except as required by the terms of this Lease and subject to the
intercreditor agreement with Tenant’s working capital lender as provided in
Section 20.2 to the extent applicable.
6.4.4    Anything herein to the contrary notwithstanding, to the extent that on
the Commencement Date any of the Leased Improvements constitute a legally
permitted non-conforming use or structure, or are the subject of any waiver,
variance or special use permit, under applicable zoning, subdivision or other
land use laws, ordinances or regulations, Landlord acknowledges and agrees that
the terms of this Lease with respect to Tenant’s compliance with all Legal
Requirements in this Section 6.4 and Tenant’s maintenance and repair obligations
under Section 7.1 shall not be deemed to be breached, nor shall Tenant be deemed
to have failed to perform its obligations hereunder, by Tenant maintaining such
Leased Improvements in good order and repair for at least the same use and in at
least the same configuration and condition as exists on the Commencement Date
and in compliance with the applicable waiver, variance, special use permit or
similar exception to the applicable Legal Requirement.
6.5    Preservation of Business. Tenant acknowledges that a fair return to
Landlord on and protection of its investment in the Premises is dependent, in
part, on the concentration of similar businesses of Tenant and its Affiliates in
the geographical area of each Facility. Tenant further acknowledges that the
diversion of staff, residents, or patient care activities from any Facility to
other facilities owned or operated by Tenant, Guarantor, or any of their
respective Affiliates will have a material adverse effect on the value and
utility of such Facility. Therefore, Tenant agrees that none of Tenant,
Guarantor, nor any of their respective Affiliates shall, without the prior
written consent of Landlord (which may be granted or withheld in Landlord’s sole
and absolute discretion): (a) during the Term and for a period of one (1) year
thereafter (i) operate, own, develop, lease, manage, control, invest in,
participate in or otherwise receive revenues from a Competing Facility, (ii)
permit his, her or its name to be used by, or in connection with, any Competing
Facility, (iii) except as is necessary to provide residents or patients with an
alternative level of care, or in connection with a casualty, or as is otherwise
necessary to the health and welfare of any resident or patient, recommend or
solicit directly (as contrasted with a general advertising campaign) the removal
or transfer of any resident or patient from any Facility to any other nursing,
health care, senior housing, or retirement housing facility or divert actual or
potential residents, patients or care activities of any Facility to any other
facilities owned or operated by Tenant, Guarantor, or any of their respective
Affiliates or from which they receive any type of referral fees or other
compensation for transfers, or (b) during the last year of the Term or any
applicable Extension Term (unless Tenant has elected to renew this Lease for the
next applicable Extension Term) employ for any other businesses any
Administrator, Executive Director or Director of Nursing working on or in
connection with any Facility or the operations thereof provided that this clause
shall not preclude the promotion or career development of any Administrator,
Executive Director or Director of Nursing. The obligations of Tenant and
Guarantor under this Section 6.5 shall survive the expiration or earlier
termination of this Lease.
6.6    Maintenance of Books and Records. Tenant shall keep and maintain, or
cause to be kept and maintained, proper and accurate books and records in
accordance with GAAP, and a standard modern system of accounting, in all
material respects reflecting the financial affairs of Tenant and the results
from operations of each Facility, individually and collectively. Landlord shall
have the right, from time to time during normal business hours after three (3)
Business Days’ prior oral or written notice to Tenant, itself or through any of
Landlord’s Representatives, to examine and audit such books and records at the
office of Tenant or other Person maintaining such books and records and to make
such copies or extracts thereof as Landlord or Landlord’s Representatives shall
request and Tenant hereby agrees to reasonably cooperate with any such
examination or audit at Tenant’s cost and expense.
6.7    Financial, Management and Regulatory Reports. Tenant shall provide
Landlord with the reports listed in Exhibit D within the applicable time
specified therein. All financial information provided shall be prepared in
accordance with GAAP and, provided that such template is provide to Tenant
sufficiently in advance for Tenant to review and implement, shall be submitted
electronically using the applicable template approved by Landlord in its
reasonable discretion from time to time or, if no such template is provided by
Landlord, in the form of unrestricted, unlocked “.xls” spreadsheets created
using Microsoft Excel (2003 or newer editions). If Tenant or any Guarantor
becomes subject to any reporting requirements of the Securities and Exchange
Commission during the Term, it shall concurrently deliver to Landlord such
quarterly and annual reports not otherwise provided for on Exhibit D as are
delivered pursuant to applicable securities laws. In addition to, and without
limiting any other remedies which Landlord may have under this Lease, at law, or
in equity, Tenant shall be assessed with a $500 administrative fee for each
instance in which Tenant fails to provide Landlord with the reports listed in
Exhibit D within the applicable time specified therein, which administrative fee
shall be immediately due and payable to Landlord. Notwithstanding the foregoing,
such administrative fee shall not be assessed to Tenant so long as (a) Tenant is
not delinquent in the delivery of such financial reports more than one (1) time
in any consecutive twelve (12) month period, and (b) Tenant remits any
delinquent report to Landlord within five (5) days of Landlord’s written demand
therefor.
6.7.1    In addition to the reports required under Section 6.7 above, upon
Landlord’s request from time to time, Tenant shall provide Landlord with such
additional information and unaudited quarterly financial information concerning
each Facility, the operations thereof and Tenant and Guarantor as Landlord may
reasonably require for purposes of securing financing for the Premises or its
ongoing filings with the Securities and Exchange Commission, under both the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, including, but not limited to, 10-Q Quarterly Reports, 10-K Annual
Reports and registration statements to be filed by Landlord during the Term,
subject to the conditions that neither Tenant nor Guarantor shall be required to
disclose information that is materially non-public information or is subject to
the quality assurance immunity or is subject to attorney-client privilege or the
attorney work product doctrine.
6.7.2    Tenant specifically agrees that Landlord may include financial
information and such information concerning the operation of any Facility which
does not violate the confidentiality of the facility-patient relationship and
the physician-patient privilege under applicable laws, in offering memoranda or
prospectuses, or similar publications in connection with syndications, private
placements or public offerings of Landlord’s securities or interests, and any
other reporting requirements under applicable federal or state laws, including
those of any successor to Landlord.
6.7.3    Landlord acknowledges and agrees that certain of the information
contained in the financial statements and/or in the financials may be non-public
financial or operational information with respect to Guarantor, Tenant and/or
the Facilities. Landlord agrees to maintain the confidentiality of such
non-public information to the extent specifically identified by Tenant or
Guarantor as non-public; provided, however, Landlord shall have the right to
disclose such information with its accountants, attorneys and other consultants
provided such disclosure is not prohibited by applicable Legal Requirements.
6.8    Estoppel Certificates. Tenant shall, at any time upon not less than five
(5) Business Days’ prior written request by Landlord, have an authorized
representative execute, acknowledge and deliver to Landlord or its designee a
written statement certifying, to the extent true at that time (a) that this
Lease, together with any specified modifications, is in full force and effect,
(b) the dates to which Rent and additional charges have been paid, (c) that no
default by either party exists or specifying any such default and (d) as to such
other matters as Landlord may reasonably request.
6.9    Furnish Information. Tenant shall, promptly upon Tenant or Guarantor
obtaining knowledge of the same, notify Landlord of any condition or event that
constitutes a breach of any term, condition, warranty, representation, or
provision of this Lease and of any material adverse change in the financial
condition of any Tenant or Guarantor and of any Event of Default.
6.10    Affiliate Transactions. Tenant shall not enter into, nor be a party to,
any transaction with any Affiliate of Tenant or any of the partners, members or
shareholders of Tenant except in the Ordinary Course of Business and on terms
that are materially no less favorable to Tenant than would be obtained in a
comparable arm’s-length transaction with an unrelated third party in the current
market. As of the Commencement Date, Tenant is a party to certain agreements
identified on Schedule 6.10 attached hereto (collectively, the “Affiliate
Agreements”). Tenant shall provide Landlord annually during the Term, within ten
(10) Business Days after each anniversary of the Commencement Date, with an
updated Schedule 6.10 reflecting any additional Affiliate Agreements that have
been entered into by Tenant or modifications to or terminations of existing
Affiliate Agreements, and, upon request from Landlord, executed copies thereof.
6.11    Waste. Tenant shall not commit or suffer to be committed any waste on
any of the Premises, nor shall Tenant cause or permit any nuisance thereon.
6.12    Additional Covenants. Tenant shall satisfy and comply with the following
performance covenants throughout the Term:
6.12.1    Tenant shall maintain a Portfolio Coverage Ratio equal to or greater
than the Minimum Rent Coverage Ratio. In the event that as of the applicable
Testing Date, the Portfolio Coverage Ratio for the applicable period of
determination is less than the Minimum Rent Coverage Ratio, an Event of Default
shall not be deemed to occur provided that: (a) no other Event of Default shall
have occurred and then be continuing, (b) with respect to any period after
expiration of the third (3rd) Lease Year, the Portfolio Coverage Ratio as of
such Testing Date is greater than 1.00 to 1.00, and (c) Tenant shall immediately
deposit with Landlord an amount equal to the difference between: (i) the amount
equal to four (4) monthly payments of then Base Rent, and (ii) the then amount
of any Security Deposit or Letters of Credit, as applicable, then held by
Landlord pursuant to Section 3.1 or 3.2 (the amount of said difference, the
“Additional Deposit”). The Additional Deposit shall be held by Landlord as an
additional security deposit under this Lease and Landlord may, from time to
time, without prejudice to any other right or remedy, apply such Additional
Deposit to the obligations due from Tenant under this Lease. The Additional
Deposit shall not be deemed an advance payment of Rent or a measure of
Landlord’s damages for any default under this Lease by Tenant, nor shall it be a
bar or defense to any action that Landlord may at any time commence against
Tenant. The Additional Deposit shall be the property of Landlord and it may
commingle the Additional Deposit with other assets of Landlord, and Tenant shall
not be entitled to any interest on the Additional Deposit. Provided that no
Event of Default then exists and is continuing, following the date on which
Landlord determines that the Portfolio Coverage Ratio for two (2) consecutive
Testing Dates is greater than or equal to the Minimum Rent Coverage Ratio,
Landlord will cause the Additional Deposit to be returned to Tenant.
6.12.2    Subject to Section 20.2, Tenant shall not, directly or indirectly,
create, incur, assume, guarantee or otherwise become or remain directly or
indirectly liable with respect to (i) any Debt except for Permitted Debt; or
(ii) any Contingent Obligations except for Permitted Contingent Obligations.
Tenant shall not default on the payment of any Permitted Debt or Permitted
Contingent Obligations that is not cured within any applicable cure period
provided for therein, which default could reasonably be expected to have a
material adverse effect on the ability of Tenant to perform it obligations under
this Lease.
6.12.3    Tenant shall not, directly or indirectly, (i) acquire or enter into
any agreement to acquire any assets other than in the Ordinary Course of
Business, or (ii) engage or enter into any agreement to engage in any joint
venture or partnership with any other Person other than an Affiliate.
6.12.4    Tenant shall not cancel or otherwise forgive or release any material
claim or material debt owed to any Tenant by any Person for goods or services
provided by or rendered at any Facility, except in the Ordinary Course of
Business and consistent with prudent business practices. If any proceedings are
filed seeking to enjoin or otherwise prevent or declare invalid or unlawful
Tenant’s occupancy, maintenance, or operation of a Facility or any portion
thereof for its Primary Intended Use, Tenant shall cause such proceedings to be
vigorously contested in good faith, and shall, without limiting the generality
of the foregoing, use all reasonable commercial efforts to bring about a
favorable and speedy disposition of all such proceedings and any other
proceedings.
6.12.5    After the occurrence of an Event of Default, then until such Event of
Default is cured in accordance with the provisions of this Lease, no Tenant
shall make any payments or distributions of cash or the assets of the Facilities
(including dividends, liquidating distributions, or cash flow distributions) to
any Guarantor or any Affiliate of any Tenant or any Guarantor, or any
shareholder, member, partner or other equity interest holder of any Tenant, any
Guarantor or any Affiliate of any Tenant or any Guarantor. For purposes of this
Section 6.12.5, none of the following shall be deemed to be a payment or
distribution: (i) salaries, bonuses and other compensation paid to employees,
(ii) payments of Permitted Debt, (iii) reimbursement for third party expenses
paid on behalf of or which are fairly allocable to the Facilities, or
(iv) payment of any other fees, costs or expenses necessary or required in the
Ordinary Course of Business for the continued operation and maintenance of the
Facilities, including without limitation payment of the fees permitted under the
Affiliate Agreements necessary or required for the continued operation and
maintenance of the Facilities.
6.13    No Liens. Subject to the provisions of Article VIII relating to
permitted contests and excluding the applicable Permitted Encumbrances, Tenant
will not directly or indirectly create or allow to remain and will promptly, but
in all events within thirty (30) days after written notice of the existence
thereof from Landlord or Tenant otherwise obtaining knowledge of the same,
discharge (which discharge may include the filing or recording of any bond
permitted or required by applicable law) at its expense any lien, encumbrance,
attachment, title retention agreement or claim upon any Facility, this Lease or
Tenant’s interest in any Facility or any attachment, levy, claim or encumbrance
in respect of the Rent. Without Landlord’s prior written consent, Tenant shall
not cause or permit any of Landlord Personal Property to be subject to any lien,
charge, encumbrance, financing statement, contract of sale or the like, except
for (i) equipment leases, if any, that will be assumed by Tenant on or prior to
the Commencement Date with respect to certain equipment located at a Facility on
the Commencement Date, and (ii) equipment leases that constitute Permitted Debt.
6.14    Landlord Trade Names and Marks. Tenant shall not use any trade or
service name or mark of, or any fictitious business name used by, Landlord or
its Affiliates, or any variations thereof, including “Golden Living,” “Aegis,
“AseraCare” or any variation of any of the foregoing.
6.15    [*****] Facility. Promptly following the Commencement Date, Landlord and
Tenant shall use their respective commercially reasonable efforts and cooperate
with each other to locate a buyer or replacement operator, as applicable, for
(i) the sale of the [*****] Facility on such terms and for a purchase price
acceptable to Landlord in its commercially reasonable discretion or (ii) the
lease of the [*****] Facility to a replacement operator acceptable to Landlord
in its commercially reasonable discretion (each a “[*****] Disposition”) within
two (2) calendar years following the Commencement Date (the “[*****] Disposition
Period”). If a buyer or replacement operator has been identified during the
initial two (2)-year period, Landlord shall have the right to extend the [*****]
Disposition Period as may be reasonably necessary for the issuance of all
required Authorizations and completion of an Operational Transfer and all change
of ownership requirements under applicable Legal Requirements to the extent
necessary for the continued operation of the [*****] Facility by such buyer or
replacement operator. Upon consummation of a [*****] Disposition, or, provided
no Event of Default then exists and is continuing, if a buyer or replacement
operator has not been identified during the [*****] Disposition Period, the
[*****] Facility shall be removed from the Premises. As used in this
Section 6.1.5, “[*****] Allocated Rent” shall mean the amount of Base Rent
payable hereunder that is allocable to the [*****] Facility, which shall be
equal to $[*****], as such amount may be increased from time to time pursuant to
application of the second (2nd) sentence of Section 2.1.1, or decreased pursuant
to the next succeeding sentence. Provided that no Event of Default then exists
and is continuing, on the first (1st) anniversary of the Commencement Date (if a
[*****] Disposition has not then been consummated), [*****] Allocated Rent (and,
without duplication, aggregate Base Rent payable under this Lease) shall be
reduced by the sum of $[*****], and such amount shall not be included in the
aggregate amount of Base Rent for purposes of determining the increase in Base
Rent as of the first (1st) anniversary of the Commencement Date pursuant to
second (2nd) sentence of Section 2.1.1. Additionally, upon the earlier to occur
of (a) consummation of a [*****] Disposition, or (b) the second (2nd)
anniversary of the Commencement Date, provided no Event of Default is then
continuing, aggregate Base Rent payable hereunder shall be reduced by the then
amount of [*****] Allocated Rent, and no further Base Rent shall be payable
hereunder with respect to the [*****] Facility. All net proceeds from any sale
of the [*****] Facility shall be paid to, and shall be the property of,
Landlord. Anything elsewhere in this Lease to the contrary notwithstanding, (x)
Tenant shall not be required to make any Capital Expenditures to the [[*****]]
Facility in excess of the Required Per Bed Annual Capital Expenditures Amount,
which for the [*****] Facility shall be an amount equal to Three Hundred Fifty
Dollars ($350.00) per licensed bed, and (y) Tenant’s repair and maintenance
obligations with respect to the [*****] Facility shall be limited to any repair
or maintenance necessary to comply with any life safety requirement, routine
maintenance and repair necessary to maintain the non-structural components of
the Facility and major building systems in their condition as of the
Commencement Date, normal wear and tear excepted. The allocation of a portion of
aggregate Base Rent for purposes of this Section 6.15 shall not affect or
diminish the acknowledgements and waivers made in the Section of this Lease
entitled “INDIVISIBLE MASTER LEASE; ACKNOWLEDGMENT AND WAIVER.”
6.16    Pell City Facility. Landlord and Tenant acknowledge that the Land and
Leased Improvements constituting the Facility located in Pell City, Alabama (the
“Pell City Premises”) are partially leased by Landlord from The Medical Clinic
Board of the City of Pell, Alabama, pursuant to a Lease Agreement originally
dated March 1, 1966, the term of which currently expires February 28, 2026, and
the remainder of the Pell City Premises is leased by Landlord from the Second
Medical Clinic Board of the City of Pell, Alabama, pursuant to a Lease Agreement
originally dated September 1, 1968, the term of which currently expires on
August 31, 2028 (individually and collectively, as amended modified or revised,
the “Pell City Lease”). This Lease constitutes a sublease of the Pell City
Premises by Tenant from Landlord, subject and subordinate to the Pell City
Lease. Tenant shall not do or suffer or permit anything to be done with respect
to the Pell City Premises that would constitute a breach of or default under the
Pell City Lease or would cause the Pell City Lease to be canceled, terminated or
forfeited by virtue of any rights of cancellation, termination, or forfeiture
reserved or vested in the lessor under the Pell City Lease. So long as Tenant
performs its obligations under this Lease, Landlord will maintain the Pell City
Lease in full force and effect for the remainder of its term and that Landlord
will not do or suffer or permit anything to be done with respect to the Pell
City Premises which would constitute an event of default under the Pell City
Lease or would cause the Pell City Lease to be canceled, terminated or forfeited
by virtue of any rights of cancellation, termination, or forfeiture reserved or
vested in the lessor under the Pell City Lease, nor shall Landlord exercise any
right or remedy so as to cause, or voluntarily agree to or elect, any
termination of the Pell City Lease as to the Pell City Premises. If the Initial
Term of this Lease is extended as provided in Section 1.3, but the Pell City
Lease is not extended beyond its current term such that the Tenant’s right to
sublease and occupy the entire Pell City Premises under this Lease expires
during the Initial Term or an Extension Term, then the Pell City Premises shall
be removed from the Premises and the Base Rent shall be reduced by an amount
equal to the amount of Base Rent allocated to the Pell City Premises at the time
of determination of Base Rent for the Extension Term as provided in Section
2.1.2, which shall be confirmed by Landlord and Tenant at the time such
determination is made. For purposes of making such determination and allocation,
if the Base Rent for the applicable Extension Term shall be determined pursuant
to clause (b) of Section 2.1.2, Landlord and Tenant confirm that the Base Rent
allocated to the Pell City Premises as of the Commencement Date is equal to
$900,000.00. The allocation of a portion of aggregate Base Rent for purposes of
this Section 6.16 shall not affect or diminish the acknowledgements and waivers
made in the Section of this Lease entitled “INDIVISIBLE MASTER LEASE;
ACKNOWLEDGMENT AND WAIVER.”
6.17    Montgomery Assisted Living Building. The building, formerly operated as
an assisted living facility, situated on the same parcel of Land on which the
Montgomery, Alabama Facility is situated (the “Closed ALF”) shall not constitute
a “Facility” under this Lease, and Tenant shall have no obligation hereunder to
operate, insure, maintain or, repair, restore or reconstruct the Closed ALF or
to pay any Real Property Impositions applicable to the Closed ALF.
Article VII
MAINTENANCE AND REPAIR
7.1    Tenant’s Maintenance Obligation. Tenant, at Tenant’s expense, shall
(a) keep and maintain each Facility in good appearance, repair and condition,
and maintain proper housekeeping, (b) promptly make all repairs (interior and
exterior, structural and nonstructural, ordinary and extraordinary, foreseen and
unforeseen) necessary to keep each Facility in good and lawful order and
condition and in compliance with all Legal Requirements, Insurance Requirements
and Authorizations and to maintain each Facility in a good quality operating and
structural condition for use for its Primary Intended Use (ordinary wear and
tear excepted subject to Tenant's obligation to maintain, repair and replace the
same in accordance with the terms of this Lease), and (c) keep and maintain all
Landlord Personal Property and Tenant Personal Property in good condition and
repair and replace such property consistent with prudent industry practice,
excepting damage due to casualty or condemnation to the extent provided in
Articles XI and XII respectively. All repairs performed by Tenant shall be done
in a good and workmanlike manner. Landlord shall under no circumstances be
required to repair, replace, build or rebuild any improvements on any Facility,
or to make any repairs, replacements, alterations, restorations or renewals of
any nature or description to any Facility, whether ordinary or extraordinary,
structural or non-structural, foreseen or unforeseen, or to make any expenditure
whatsoever with respect thereto, or to maintain any Facility in any way. Tenant
hereby waives, to the extent permitted by law or any equitable principle, the
right to make repairs at the expense of Landlord pursuant to any law currently
in effect or hereafter enacted.
7.2    Premises Condition Report. Landlord may from time to time cause a
qualified consultant designated by Landlord, in its sole discretion, to inspect
any Facility and issue a report (a “Premises Condition Report”) with respect to
such Facility’s condition. Without limitation of any other obligation of Tenant
under this Lease, Tenant shall, at its own expense, immediately make any and all
repairs or replacements that are recommended by such Premises Condition Report
that relate to life safety. Tenant shall pay the cost of any Premises Condition
Report ordered by Landlord (a) during the continuance of and Event of Default,
and (b) at all other times, not to exceed one (1) time per Facility in any
eighteen (18) month period, the cost of which shall not exceed $2,500 per
report, per Facility.
7.3    Notice of Non-Responsibility. Nothing contained in this Lease and no
action or inaction by Landlord shall be construed as (a) constituting the
consent or request of Landlord, expressed or implied, to any contractor,
subcontractor, laborer, materialman or vendor to or for the performance of any
labor or services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to any Facility
or any part thereof; or (b) giving Tenant any right, power or permission to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against Landlord in respect thereof or to make any
agreement that may create, or in any way be the basis for, any right, title,
interest, lien, claim or other encumbrance upon the estate of Landlord in any
Facility or any portion thereof. Landlord may post, at Tenant’s sole cost, such
notices of non-responsibility upon, or of record against, any Facility to
prevent the lien of any contractor, subcontractor, laborer, materialman or
vendor providing work, services or supplies to Tenant from attaching against
such Facility. Tenant agrees to promptly execute and record any such notice of
non-responsibility at Tenant’s sole cost.
7.4    Permitted Alterations. Without Landlord’s prior written consent, which
consent shall not be unreasonably withheld, Tenant shall not make any Capital
Alterations or Material Alterations. Tenant may, without Landlord’s consent,
make any other Alterations provided the same (a) do not decrease the value of
the applicable Facility, (b) do not adversely affect the exterior appearance of
such Facility and (c) are consistent in terms of style, quality and workmanship
to the original Leased Improvements and Fixtures of such Facility, and provided
further that the same are constructed and performed in accordance with the
following:
7.4.1    Such construction shall not commence until Tenant shall have procured
and paid for all municipal and other governmental permits and authorizations
required therefor (as well as any permits or approvals required in connection
with any Permitted Encumbrance of such Facility); provided, however, that any
Plans and Specifications required to be filed in connection with any such
permits or authorizations that require the approval of Landlord shall have been
so approved by Landlord.
7.4.2    During and following completion of such construction, the parking that
is located on the Land of such Facility shall remain adequate for the operation
of such Facility for its Primary Intended Use and in no event shall such parking
be less than what is required by any applicable Legal Requirements or was
located on such Land prior to such construction.
7.4.3    All work done in connection with such construction shall be done
promptly and in a good and workmanlike manner using materials of appropriate
grade and quality consistent with the existing materials and in conformity with
all Legal Requirements and any Plans and Specifications.
7.4.4    If, by reason of the construction of any Alteration, a new or revised
certificate of occupancy for any component of such Facility is required, Tenant
shall obtain such certificate in compliance with all applicable Legal
Requirements and furnish a copy of the same to Landlord promptly upon receipt
thereof.
7.4.5    Upon completion of any Alteration, Tenant shall promptly deliver to
Landlord final lien waivers from each and every general contractor and, with
respect to Alterations costing in excess of $10,000, each and every
subcontractor that provided goods or services costing in excess of $10,000 in
connection with such Alterations indicating that such contractor or
subcontractor has been paid in full for such goods or services, together with
such other evidence as Landlord may reasonably require to satisfy Landlord that
no liens have been or may be created in connection with such Alteration.
7.4.6    Each and every Alteration, renovation or improvement made by Tenant
under this Section 7.4 (or Section 7.5) shall immediately become a part of the
Premises and shall belong to Landlord subject to the terms and conditions of
this Lease.
7.5    Capital and Material Alterations. If Landlord consents to the making of
any Capital Alterations or Material Alterations, Landlord may impose
commercially reasonable conditions thereon in connection with its approval
thereof. In addition to any such imposed conditions, all such Alterations shall
be constructed and performed in accordance with Sections 7.4.1 through 7.4.5
above, together with the following:
7.5.1    Prior to commencing any such Alterations, Tenant shall have submitted
to Landlord a written proposal describing in reasonable detail such proposed
Alteration and shall provide to Landlord for approval such plans and
specifications, permits, licenses, construction budgets and other information
(collectively, the “Plans and Specifications”) as Landlord shall request,
showing in reasonable detail the scope and nature of the proposed Alteration.
7.5.2    Such construction shall not, and prior to commencement of such
construction Tenant’s licensed architect or engineer (to the extent the services
of a licensed architect or engineer are required in connection with such
Alterations) shall certify to Landlord that such construction shall not, impair
the structural strength of such Facility or overburden or impair the operating
efficiency of the electrical, water, plumbing, HVAC or other building systems of
such Facility.
7.5.3    Prior to commencing any such Alterations, Tenant’s licensed architect
or engineer (to the extent the services of a licensed architect or engineer are
required in connection with such Alterations) shall certify to Landlord that the
Plans and Specifications conform to and comply with all applicable Legal
Requirements and Authorizations.
7.5.4    Promptly following the completion of the construction of any such
Alterations, Tenant shall deliver to Landlord: (a) “as built” drawings of any
such Alterations included therein, if applicable, certified as accurate by the
licensed architect or engineer selected by Tenant to supervise such work; and
(b) a certificate from Tenant’s licensed architect or engineer certifying to
Landlord that such Alterations have been completed in compliance with the Plans
and Specifications and all applicable Legal Requirements.
7.6    Capital Expenditures.
7.6.1    With respect to all Facilities in the aggregate, Tenant agrees to
expend, during each Lease Year, an amount (the “Required Capital Expenditures
Amount”) equal to the product of (a) the Required Per Bed Annual Capital
Expenditures Amount (as increased at the end of each Lease Year to reflect the
Adjusted CPI Increase during the immediately preceding Lease Year), times
(b) the weighted average of the number of licensed beds in all Facilities during
such Lease Year, on Capital Expenditures, provided that, with respect to any
Facility individually, such expenditures shall not be less than (x) the Facility
Required Per Bed Annual Capital Expenditures Amount times (y) the weighted
average of the number of licensed beds in such Facility during such Lease Year.
Within thirty (30) days following the end of each Lease Year, Tenant shall
deliver to Landlord a report (a “Capital Expenditures Report”), certified as
true, correct and complete by an officer of Tenant, summarizing and describing
in reasonable detail all of the Capital Expenditures made by Tenant during the
preceding Lease Year on each Facility, and such receipts and other information
as Landlord may reasonably request relative to the Capital Expenditures made by
Tenant during the applicable Lease Year. If, with respect to any Facility
individually or all Facilities in the aggregate, the amount of the Capital
Expenditures so made and reported by Tenant during a particular Lease Year (the
“Actual Capital Expenditures Amount”) is less than the Required Capital
Expenditures Amount applicable to such period, Tenant shall, on or prior to the
due date of the Capital Expenditures Report for such period, deposit (a “Capital
Expenditures Deposit”) with Landlord an amount equal to the amount by which the
Required Capital Expenditures Amount for the applicable period exceeds the
Actual Capital Expenditures Amount for such period. If, with respect to any
Facility individually or all Facilities in the aggregate, the Actual Capital
Expenditures Amount so made and reported by Tenant during a particular Lease
Year is greater than the Required Capital Expenditures Amount applicable to such
period (such difference being referred to herein as the “Excess Capital
Expenditures Amount”), then, (a) provided no Event of Default then exists
hereunder, within ten (10) days after Tenant’s presentation of its Capital
Expenditures Report reflecting such greater expenditure, subject to reasonable
extension if required under the Facility Mortgage Documents, Landlord shall pay
to Tenant the lesser of (x) the Excess Capital Expenditures Amount or (y) the
amount of funds then held by Landlord as Capital Expenditures Deposits with
respect to the applicable Facility or Facilities, and (b) to the extent that the
Excess Capital Expenditures Amount exceeds the amount of funds then held by
Landlord as Capital Expenditures Deposits with respect to such Facility or
Facilities, such excess shall be credited against the Required Capital
Expenditures Amount for up to the next two (2) succeeding Lease Years with
respect to such Facility or Facilities.
7.6.2    Tenant’s obligation to deliver the Capital Expenditures Report
applicable to the last Lease Year, together with Tenant’s obligation to deliver
any Capital Expenditures Deposit associated therewith, shall survive the
expiration or termination of this Lease. If, on the basis of such Capital
Expenditures Report, Tenant is entitled to a payment of any Excess Capital
Expenditures Amount as described in Section 7.6.1 above, then, notwithstanding
anything to the contrary, such payment shall be due and payable to Tenant only
as and when the conditions of Section 3.1 or 3.2 for the return of the Security
Deposit or Letter of Credit, as applicable, have been met. Except as provided in
the preceding sentence, upon the expiration or termination of this Lease, all
Capital Expenditures Deposits held by Landlord (including, without limitation,
any Capital Expenditures Deposits that are required to be deposited by Tenant
with respect to the last Lease Year) shall automatically and without further
action of the parties become the property of Landlord, without any obligation on
Landlord’s part to credit Tenant in any manner therefor.
7.6.3    The Capital Expenditures Deposits held by Landlord shall not bear
interest and may be commingled with the other assets of Landlord. If Landlord
transfers this Lease, it shall transfer all Capital Expenditures Deposits then
held by it to the transferee, and Landlord shall thereafter have no liability of
any kind with respect thereto. Following any Event of Default and at Landlord’s
option, the Capital Expenditures Deposits held by Landlord may, in its sole
discretion, be applied to Tenant’s obligations in the order that Landlord in its
sole discretion may determine.
7.7    Construction Consultant. In connection with any Capital Alterations or
Material Alterations, Landlord may engage a construction consultant (a
“Construction Consultant”) to perform or assist with Landlord’s review and
approval of the Plans and Specifications, periodic inspection of the improvement
work, certification of progress and completion, review of disbursement requests
and lien waivers and such other matters as Landlord may require in connection
with such Alterations. The reasonable costs and expenses of the Construction
Consultant shall be the sole responsibility of Tenant. Tenant shall cooperate
with any Construction Consultant and provide such access to books, records,
information and the Premises as Construction Consultant may reasonably request
in connection with his or her work.
7.8    Encroachments. Except for any such encroachments existing on the
Commencement Date, if any of the Leased Improvements of any Facility shall, at
any time, encroach upon any property, street or right-of-way adjacent to such
Facility, then, promptly upon the request of Landlord, Tenant shall, at its
expense, subject to its right to contest the existence of any encroachment and,
in such case, in the event of any adverse final determination, either (a) obtain
valid waivers or settlements of all claims, liabilities and damages resulting
from each such encroachment, whether the same shall affect Landlord or Tenant,
or (b) make such changes in such Leased Improvements, and take such other
actions, as Tenant, in the good faith exercise of its judgment, deems reasonably
practicable, to remove such encroachment, including, if necessary, the
alteration of any of such Leased Improvements, and in any event take all such
actions as may be necessary to be able to continue the operation of such Leased
Improvements for the Primary Intended Use of such Facility substantially in the
manner and to the extent such Leased Improvements were operated prior to the
assertion of such encroachment. Any such alteration shall be made in conformity
with the applicable requirements of Sections 7.4 and 7.5.
7.9    Capital Alterations Financed by Landlord. From time to time during the
Term, Tenant may request that Landlord provide financing for a Capital
Alteration by providing Landlord such information about the proposed Capital
Alteration as Landlord may reasonably request. Landlord may in its sole and
absolute discretion, but shall be under no obligation to, agree to provide such
financing (“Improvement Funds”) for such Capital Alteration through an
appropriate increase in Base Rent as agreed upon by Landlord and Tenant. Within
thirty (30) days of receipt of a request to finance a proposed Capital
Alteration, Landlord shall notify Tenant as to whether it will finance the
proposed Capital Alteration and, if so, the terms and conditions upon which it
would do so, including the terms of the increase in Base Rent and other required
amendments to this Lease. Tenant shall have ten (10) Business Days to accept or
reject Landlord's financing proposal. In no event shall the portion of the
projected Capital Alteration comprised of land, if any, materials, labor charges
and fixtures be less than ninety percent (90%) of the total amount of the
projected cost of such Capital Alteration. If Landlord agrees to provide
Improvement Funds for a proposed Capital Alteration and Tenant accepts the terms
thereof, Tenant shall provide Landlord with the following prior to any advance
of funds:
7.9.1    any information, certificates, licenses, permits or documents requested
by Landlord which are necessary and obtainable to confirm that Tenant will be
able to use the Capital Alteration upon completion thereof in accordance with
the Primary Intended Use and all Legal Requirements;
7.9.2    an officer’s certificate and, if requested, a certificate from Tenant's
architect, setting forth in reasonable detail the projected or actual Capital
Alteration costs;
7.9.3    an amendment to this Lease, in a form prepared by Landlord and
reasonably agreed to by Tenant, providing for an increase in the Base Rent in
amounts as agreed upon by Landlord and Tenant and other provisions as may be
necessary or appropriate;
7.9.4    a deed conveying title to Landlord to any land acquired for the purpose
of constructing the Capital Alteration free and clear of any liens or
encumbrances except those approved by Landlord, and accompanied by an ALTA
survey thereof satisfactory to Landlord;
7.9.5    for each advance, endorsements to any outstanding policy of title
insurance covering the Premises or commitments therefor satisfactory in form and
substance to Landlord (i) updating the same without any additional exception
except those as may be approved by Landlord, which approval shall not be
unreasonably withheld and (ii) increasing the coverage thereof by an amount
equal to, at a minimum, the aggregate amount of Improvement Funds advanced by
Landlord;
7.9.6    if appropriate, an owner's policy of title insurance insuring fee
simple title to any land conveyed to Landlord free and clear of all liens and
encumbrances except those as may be approved by Landlord, which approval shall
not be unreasonably withheld;
7.9.7    if requested by Landlord, an MAI appraisal of the applicable Facility
indicating that the fair market value of such Facility upon completion of the
Capital Alteration will exceed the fair market value of such Facility
immediately prior thereto by an amount not less than ninety-five percent (95%)
of the cost of the Capital Alteration; and
7.9.8    such other billing statements, invoices, certificates, endorsements,
opinions, site assessments, surveys, resolutions, ratifications, lien releases
and waivers and other instruments and information reasonably required by
Landlord.
7.10    Upgrade Allowance. From and after January 1, 2017, Landlord shall
provide Tenant up to One Million Four Hundred Thousand Dollars ($1,400,000)
minus the sum of all Related Lease Upgrade Disbursements (the “Upgrade
Allowance”) (which is an aggregate amount and shall be allocated among the
Facilities as mutually determined by Landlord and Tenant) as an allowance for
the cost of certain Alterations and other upgrade and capital expenditures
pertaining to the Premises (each an “Upgrade Expenditure”), upon the following
terms and conditions and the other applicable terms and conditions of this
Article VII and this Lease:
7.10.1    The Upgrade Allowance shall be used to pay for the cost of the Upgrade
Expenditures identified by Tenant and approved by Landlord in its reasonable
discretion as provided herein to the extent such identified and approved
expenditures may be capitalized by Landlord in accordance with GAAP. Prior to
commencing any work for which Tenant will request disbursement of the Upgrade
Allowance, Tenant shall provide Landlord with a brief proposal summarizing the
work to be completed together with such written documentation as may be
reasonably requested by Landlord with respect thereto, which may include, to the
extent applicable, plans and specifications, budgets, a work completion
schedule, pro forma operating projections and copies of permits required in
connection with such repairs or improvements, and Landlord shall have a
reasonable period of time, not to exceed forty-five (45) days, to review and
approve the same, which shall not be unreasonably withheld, conditioned or
delayed.
7.10.2    Tenant shall have the right to request disbursements of the Upgrade
Allowance from time to time, but not more frequently than once per calendar
month, in increments of not less than Twenty-Five Thousand Dollars ($25,000).
All such requests shall be in writing and shall be accompanied with such
supporting documentation as may be reasonably requested by Landlord, which may
include, without limitation, (a) an itemized account of expenditures to be paid
or reimbursed from the requested disbursement, certified by Tenant to be true
and correct expenditures which have already been paid or are due and owing and
for which no previous disbursement was made hereunder, and (b) copies of
invoices or purchase orders from each payee with an identifying reference to the
applicable vendor or supplier, which invoices or purchase orders shall support
the full amount of costs contained in the requested disbursement. Landlord
shall, within thirty (30) calendar days of Tenant’s delivery of a request for
disbursement and compliance with the conditions for disbursement set forth in
this Section 7.10.2, make disbursements of the requested Upgrade Allowance funds
to pay or reimburse Tenant for the costs of the applicable capital repairs or
improvements.
7.10.3    All work that has been funded in whole or in part by the Upgrade
Allowance shall be invoiced and completed by July 1, 2018 (without consideration
for any extension thereof).
7.10.4    No Event of Default shall have occurred and be continuing at the time
of (a) any request for Landlord’s approval of the Upgrade Expenditures to be
funded by the Upgrade Allowance or (b) any request for disbursement of the
Upgrade Allowance.
7.10.5    All Alterations, repairs or improvements funded with the Upgrade
Allowance shall be completed in a good, workmanlike and lien-free manner and in
accordance with the other applicable provisions of this Article VII and this
Lease. If any of such Alterations, repairs or improvements are completed in a
manner not in compliance with this Section 7.10 and the other applicable
provisions of this Lease, Tenant shall, promptly after obtaining knowledge
thereof or Landlord’s demand therefor, repair or remediate the applicable work
to the extent necessary to attain such compliance at its sole cost and expense.
7.10.6    Each and every Alteration, renovation or improvement funded by
Landlord under this Section 7.10 shall immediately become a part of the Premises
and shall belong to Landlord subject to the terms and conditions of this Lease.
7.10.7    No disbursement of the Upgrade Allowance shall be used to remedy any
condition which constitutes a default by Tenant under the provisions of this
Lease unless such condition pertains to the Premises and existed as of the
Commencement Date for such portion of the Premises.
7.10.8    From and after the date of disbursement of each advance of the Upgrade
Allowance by Landlord in excess of the Base Upgrade Allowance Amount, the annual
amount of Base Rent then payable under this Lease shall be increased by the
product of: (a) the amount of such Upgrade Allowance disbursed by Landlord in
excess of the Base Upgrade Allowance Amount, and (ii) five percent (5.0%). Such
increased Base Rent shall commence to be payable on the next Payment Date for
Base Rent following disbursement of such Upgrade Allowance (together with any
prorated portion of the increased Base Rent payable with respect to the month in
which such Upgrade Allowance was advanced).
7.10.9    As used in this Section 7.10, (a) “Base Upgrade Allowance Amount”
shall mean the amount of One Million Dollars ($1,000,000) minus the sum of all
Related Lease Upgrade Disbursements (irrespective of when such Related Lease
Upgrade Disbursements are disbursed); and (b) “Related Lease Upgrade
Disbursement” shall mean each advance or disbursement made by any Affiliate of
Landlord (each a “Related Lease Landlord”) to any Affiliate of Guarantor or
Tenant (each a “Related Lease Tenant”) for repair, maintenance or alteration of
the premises demised under a Related Lease pursuant to the assignment and
assumption, operations transfer agreements or similar agreements entered into by
any Related Lease Landlord and any Related Lease Tenant in connection with the
applicable Related Lease.
Article VIII
PERMITTED CONTESTS
Tenant, upon prior written notice to Landlord and at Tenant’s expense, may
contest, by appropriate legal proceedings conducted in good faith and with due
diligence, the amount, validity or application, in whole or in part, of any
licensure or certification decision, Imposition, Legal Requirement, Insurance
Requirement, lien, attachment, levy, encumbrance, charge or claim; provided,
however, that (a) in the case of an unpaid Imposition, lien, attachment, levy,
encumbrance, charge, or claim, the commencement and continuation of such
proceedings shall suspend the collection thereof from Landlord and from the
applicable Facility, (b) neither the applicable Facility nor any Rent therefrom
nor any part thereof or interest therein would be reasonably likely to be in
danger of being sold, forfeited, attached or lost pending the outcome of such
proceedings, (c) in the case of a Legal Requirement, neither Landlord nor Tenant
would be in any danger of civil or criminal liability for failure to comply
therewith pending the outcome of such proceedings; (d) Tenant shall give such
security as may be demanded by Landlord to insure ultimate payment of, or
compliance with, the same and to prevent any sale or forfeiture (or risk
thereof) of the applicable Facility or the Rent by reason of such non-payment or
non-compliance; (e) in the case of the contest of an Insurance Requirement, the
coverage required by Article IX shall be maintained, and (f) if such contest is
resolved against Landlord or Tenant, Tenant shall pay to the appropriate payee
the amount required to be paid, together with all interest and penalties accrued
thereon, and otherwise comply with the applicable Legal Requirement or Insurance
Requirement. Landlord, at Tenant’s expense, shall execute and deliver to Tenant
such authorizations and other documents as may reasonably be required in any
such contest, and, if reasonably requested by Tenant or if Landlord so desires,
shall join as a party therein. The provisions of this Article VIII shall not be
construed to permit Tenant to contest the payment of Rent or any other amount
payable by Tenant to Landlord hereunder. Tenant shall indemnify, defend, protect
and hold harmless Landlord from and against any Losses of any kind that may be
imposed upon Landlord in connection with any such contest and any Losses
resulting therefrom and the provisions of this Article VIII shall survive the
termination or expiration of this Lease.
Article IX
INSURANCE
9.1    Required Policies. During the Term, Tenant shall maintain the following
insurance with respect to each Facility at its sole cost and expense:
9.1.1    With respect to the Premises, Tenant shall maintain commercial,
property insurance on the Premises (including Tenant Personal Property and all
Landlord Personal Property) written on a “special cause of loss form”, including
but not limited to sprinkler leakage, in a per occurrence amount not less than
100% of current replacement cost for all real and business personal property;
and including business income (subject to terms of Section 9.1.2), and providing
or containing, as applicable: (a) an Agreed Amount Endorsement with respect to
the Premises (including all Tenant Personal Property and Landlord Personal
Property) waiving all co-insurance provisions; (b) an “Ordinance or Law
Coverage” (Code Upgrade coverage) which shall provide coverage for the increased
cost of construction, demolition cost, value of the undamaged portion of the
structure and any increased time to rebuild due to the enforcement of building
or zoning laws or requirements; (c) coverage for: (i) flood hazard (if such
Facility is located in whole or in part within a designated 100 year flood plain
area) (ii) earthquake, and (iii) coastal windstorm insurance, if applicable;
provided that the insurance pursuant to the foregoing clauses (i), (ii) and (ii)
shall be required only to the extent it is available at commercially reasonable
rates and terms and is customarily carried for similar properties, as reasonably
determined by Landlord;
9.1.2    Business income insurance covering all risks required to be covered by
the insurance provided for in Section 9.1.1 above, as applicable for a period of
twelve (12) months and including an extended period of indemnity endorsement
which provides that after the physical loss to the Premises (including Tenant
Personal Property and Landlord Personal Property) has been repaired, the
continued loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of six (6) months from
the date that the applicable Facility is repaired or replaced and operations are
resumed, whichever first occurs, and notwithstanding that the policy may expire
prior to the end of such period;
(a)    Deductibles/self-insured retentions for the insurance policies required
under Section 9.1.1 shall not be greater than $100,000; provided, however, that
the deductibles/self-insured retentions for losses sustained from earthquake
(including earth movement), or windstorm (i.e., wind/hail) may be equal to, but
not greater than, five percent (5%) of the replacement cost of the total insured
value of the applicable Facility, or $250,000, whichever is greater. The flood
deductible shall not be greater than $100,000, unless the Facility is in the
designated 100 year flood plain area, in which event the deductible may be
$500,000 or less and the Tenant shall obtain and maintain flood coverage from
the National Flood Insurance Program for the applicable Facility, if required by
Landlord;
(b)    the commercial property and business income insurance required under
Sections 9.1.1 and 9.1.2 above shall cover perils of terrorism and acts of
terrorism defined as certified acts by the Terrorism Risk Insurance Act (TRIA)
and Tenant shall maintain commercial property and business income insurance for
loss resulting from perils and acts of terrorism on terms (including amounts)
consistent with those required under Sections 9.1.1 and 9.1.2 above at all times
during the term of the Lease as long as such coverage is available in the
commercial market at a premium no greater than 300% of the premium for such
coverage paid as of the Commencement Date;
(c)    all times Tenant will provide coverage during which structural
construction, repairs or alterations are being made with respect to the
improvements, under the coverages and terms specified in Sections 9.1.1 and
9.1.2 or alternatively (i) commercial property insurance written on a “special
cause of loss” builder's risk completed value form on a non-reporting basis,
against all risks insured against pursuant to Section 9.1.1 above, including
permission to occupy the Facility; and with an agreed amount endorsement waiving
co-insurance provisions; and (ii) owner's contingent or protective liability
insurance covering claims not covered by or under the terms or provisions of the
commercial general liability insurance policy required sections;
9.1.3    Tenant shall maintain comprehensive boiler and machinery insurance, in
amount of Five Million dollars ($5,000,000) or other such amounts as shall be
reasonably required by Landlord or any Facility Mortgagee on terms consistent
with the commercial property insurance policy required above and any applicable
governmental regulations;
9.1.4    If there is any storage tank, whether above ground or below ground,
located at a Facility, whether or not in use, Pollution Liability Insurance with
limits of at least One Million Dollars ($1,000,000) per occurrence and aggregate
or other such higher amounts if required by regulation. All policies shall
comply with all applicable regulatory requirements and shall insure both the
interest of the Tenant and Landlord;
9.1.5    Commercial General Liability Coverage (“CGL”) (including products and
completed operations liability and broad form coverage, host liquor liability,
broad form property damage, blanket contractual liability, no exclusion for
independent contractors, personal injury and advertising injury coverage against
claims for bodily injury, death or property damage occurring on, in or about
such Facility, affording the parties protection of not less than $1,000,000 per
occurrence and $3,000,000 in the annual aggregate;
9.1.6    Professional Liability Coverage (“PL”) for damages for injury, death,
loss of service or otherwise on account of professional services rendered or
which should have been rendered, in a minimum amount of $1,000,000 per
occurrence and $3,000,000 in the annual aggregate or higher amounts as may be
required by state specific regulations or if participation is required in or
provided by a state professional liability fund, then the state applicable
limits;
(a)    Policies required under Sections 9.1.5 and 9.1.6 shall (i) to the extent
it is available at commercially available rates and terms, contain a cross
liability endorsement or separation of insureds clause; provided that the
separation of insureds shall not apply to the limits of liability; (ii) provide
that any waiver of subrogation rights or release prior to a loss does not void
coverage; and (iii) provide that it is primary to and not contributing with, any
policy of insurance carried by Landlord covering the same loss;
(b)    Tenant shall either (i) require each medical director at each Facility to
carry Professional Liability Coverage with limits of not less than $1,000,000
per occurrence (claim) and $3,000,000 in the aggregate or applicable required
state limits or cover the same, in their capacity as medical director, under the
Policy described in Section 9.1.6;
(c)    Policies required under Sections 9.1.5 and 9.1.6 shall require minimum
limits of CGL and PL insurance to apply on a per Facility basis, subject to an
All Tenant Aggregate Maximum Limited Liability of $5,000,000 per annual policy
period;
(d)    Deductibles/Self Insured Retentions applicable to Sections 9.1.5 and
9.1.6 shall not be greater than $500,000 per claim; and
9.1.7    Worker’s Compensation Coverage for injuries sustained by Tenant’s
employees in the course of their employment and otherwise consistent with all
applicable State regulations and employer’s liability coverage with limits of
not less than $500,000 each accident, $500,000 bodily injury due to disease each
employee and $500,000 bodily injury due to disease.
9.2    General Insurance Requirements.
9.2.1    All of the policies of insurance required to be maintained by Tenant
under this Lease shall (a) be written in form satisfactory to Landlord and any
Facility Mortgage and, with the exception of any policies written by a captive
insurance program pursuant to Section 9.9, issued by insurance companies
(i) with a policyholder and financial rating of not less than A- VII in the most
recent version of Best’s Key Rating Guide and (ii) authorized to do insurance
business in the applicable Situs State; (b) provide that any insurance
maintained by Landlord for or with respect to the Premises shall be excess and
noncontributory with Tenant’s insurance; and (c) include a waiver of all rights
of subrogation and recovery against Landlord.
9.2.2    All liability type policies (with the exception of Tenant’s workers’
compensation/employer’s liability insurance) must name Landlord, agents and
managers, as an “additional insured.” All property policies shall name Landlord
as “loss payee.” All business interruption policies shall name Landlord as “loss
payee” with respect to Rent only. Losses shall be payable to Landlord and/or
Tenant as provided herein. In addition, the policies, as appropriate, shall name
as an “additional insured” or “loss payee” any Facility Mortgagee by way of a
standard form of mortgagee’s loss payable endorsement. Any loss adjustment shall
require the written consent of Landlord, Tenant, and each Facility Mortgagee
unless the amount of the loss is less than $100,000 in which event no consent
shall be required.
9.2.3    Tenant shall provide Landlord a satisfactory ACORD evidencing the
existence of the insurance required by this Lease and showing the interest of
Landlord (and any Facility Mortgagee(s)) prior to the commencement of the Term
or, for a renewal policy, not less than ten (10) days prior to the expiration
date of the policy being renewed. If Landlord is provided with an ACORD
certificate and thereafter requests a complete copy of the applicable policy,
Tenant shall provide a complete copy of such policy within ten (10) days of
Landlord’s request.
9.2.4    Tenant’s obligations to carry the insurance provided for herein may be
brought within the coverage of a so-called “blanket” policy or policies of
insurance carried and maintained by Tenant; provided, however, that the coverage
afforded Landlord will not be reduced or diminished or otherwise be materially
different from that which would exist under a separate policy meeting all other
requirements hereof by reason of the use of the blanket policy, and provided
further that the requirements of this section (including satisfaction of the
Facility Mortgagee’s requirements and the approval of the Facility Mortgagee)
are otherwise satisfied, and provided further that Tenant maintains specific
allocations acceptable to Landlord. For any liability policies covering one or
more other properties in addition to the Premises, Landlord may require excess
limits as Landlord reasonably determines.
9.2.5    Tenant shall provide to Landlord thirty (30) days’ written notice
before the policy or policies in question required under this Article IX shall
be materially altered, non-renewed or cancelled.
9.3    Replacement Costs. The term “replacement cost” shall mean the actual
replacement cost of the insured property from time to time with new materials
and workmanship of like kind and quality (including the cost of compliance with
changes in zoning and building codes and other laws and regulations, demolition
and debris removal and increased cost of construction). If Landlord believes
that the replacement cost has increased at any time during the Term, it shall
have the right to have such replacement cost determined by an impartial
appraiser reasonably acceptable to both parties (the “impartial appraiser”). The
determination of the impartial appraiser shall be final and binding, and, as
necessary, Tenant shall increase, but not decrease, the amount of the insurance
carried pursuant to this section to the amount so determined by the impartial
appraiser. Each party shall pay one-half (1/2) of the fee, if any, of the
impartial appraiser. If Tenant has made Alterations, Landlord may at Tenant’s
expense have the replacement cost redetermined at any time after such
Alterations are made.
9.4    Claims-Made Policies. If Tenant obtains and maintains the commercial
general liability coverage and/or professional liability coverage described in
Sections 9.1.5 and 9.1.6 on a “claims-made” basis, Tenant shall provide
continuous liability coverage for claims arising during the Term providing for
an extended reporting period reasonably acceptable to Landlord for a minimum of
two (2) years after expiration of the Term. If such policy is canceled or not
renewed for any reason whatsoever other than the expiration of the Term, Tenant
must provide evidence of a replacement policy reflecting coverage with
retroactive coverage back to the Commencement Date and maintain such coverage
for a period of at least two (2) years beyond the expiration of the Term or
Tenant must obtain tail coverage for the length of the remaining Term plus an
additional two (2) years beyond the expiration of the Term.
9.5    Non-Renewal. If Tenant fails to cause the insurance required under
Article IX to be issued in the names herein called for, fails to pay the
premiums therefor or fails to deliver such policies or certificates thereof to
Landlord, at the times required, Landlord shall be entitled, but shall have no
obligation, to obtain such insurance and pay the premiums therefor, in which
event the cost thereof, together with interest thereon at the Agreed Rate, shall
be repayable to Landlord upon demand therefor.
9.6    Increase in Limits; Types of Coverages. If Landlord determines in the
exercise of its commercially reasonable judgment that the limits of the
insurance required to be maintained by Tenant hereunder are no longer
commensurate to the limits being regularly required by institutional landlords
of similar properties in the applicable Situs State or their institutional
lenders or that a particular type of insurance coverage is being regularly
required by institutional landlords of similar properties in the applicable
Situs State or their institutional lenders and is not then required hereunder,
Landlord may notify Tenant of the same, indicating the particular limit or type
of coverage that Landlord has determined should be increased or carried by
Tenant, as applicable. Unless Tenant, in the exercise of its commercially
reasonable judgment, objects to Landlord’s determination, then within thirty
(30) days after the receipt of such notice, Tenant shall thereafter increase the
particular limit or obtain the particular coverage, as applicable, unless and
until further modified pursuant to the provisions of this Section 9.6.
Notwithstanding anything herein to the contrary, Landlord shall not request a
modification of the insurance requirements of this Lease more frequently than
once every two (2) years. If Tenant, in the exercise of its commercially
reasonable judgment, objects to Landlord’s determination made under this
Section 9.6 and Landlord and Tenant are unable to agree upon the matter within
fifteen (15) days of Tenant’s receipt of the applicable notice from Landlord,
such determination shall be made by a reputable insurance or risk management
consultant or expert (an “Insurance Arbitrator”) with experience in the
healthcare insurance industry as mutually identified by Landlord and Tenant in
the exercise of their reasonable judgment. As a condition to a determination of
commercial reasonableness with respect to any particular matter, the Insurance
Arbitrator shall be capable of providing, procuring or identifying particular
policies or coverages that would be available to Tenant and would satisfy the
requirement in issue. The determinations made by any such experts shall be
binding on Landlord and Tenant for purposes of this Section 9.6, and the costs,
fees and expenses of the same shall be shared equally by Tenant and Landlord. If
Tenant and Landlord are unable to mutually agree upon an Insurance Arbitrator,
each party shall within ten (10) days after written demand by the other select
one Insurance Arbitrator. Within ten (10) days of such selection, the Insurance
Arbitrators so selected by the parties shall select a third (3rd) Insurance
Arbitrator who shall be solely responsible for rendering a final determination
with respect to the insurance requirement in issue. If either party fails to
select an Insurance Arbitrator within the time period set forth above, the
Insurance Arbitrator selected by the other party shall alone render the final
determination with respect to the insurance requirement in issue in accordance
with the foregoing provisions and such final determination shall be binding upon
the parties. If the Insurance Arbitrators selected by the parties are unable to
agree upon a third (3rd) Insurance Arbitrator within the time period set forth
above, either party shall have the right to apply at Tenant’s and Landlord’s
joint expense to the presiding judge of the court of original trial jurisdiction
in the county in which any Facility is located to name the third (3rd) Insurance
Arbitrator.
9.7    No Separate Insurance. Tenant shall not, on Tenant’s own initiative or
pursuant to the request or requirement of any third party, (a) take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article IX to be furnished by, or which may reasonably be
required to be furnished by, Tenant or (b) increase the amounts of any then
existing insurance by securing an additional policy or additional policies,
unless all parties having an insurable interest in the subject matter of the
insurance, including in all cases 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 Lease.
Notwithstanding the foregoing, nothing herein shall prohibit Tenant from
insuring against risks not required to be insured hereby, and as to such
insurance, Landlord and any Facility Mortgagee need not be included therein as
additional insureds, nor must the loss thereunder be payable in the same manner
as losses are payable hereunder except to the extent required to avoid a default
under the Facility Mortgage.
9.8    Alternate Coverages. In the event that at any time during the Term the
professional liability insurance coverage required under Section 9.1.6 is not
generally available to operators of skilled nursing facilities in the market
area in which the Facilities are located at commercially affordable rates and on
commercially reasonable terms and conditions, Landlord agrees that, the
provisions of Section 9.1.6 to the contrary notwithstanding, Tenant shall not be
required to obtain the coverages required therein and Landlord agrees to accept,
which acceptance shall not be unreasonably withheld or conditioned, in place
thereof to cover the risk either or a combination of (i) a policy or policies of
professional liability insurance limits and coverages that are generally
available to operators of skilled nursing facilities in the market area in which
the Facilities are located at commercially affordable rates and on commercially
reasonable terms and conditions, and/or (ii) an additional security deposit,
self-insurance by Tenant, the establishment of a loss reserve to be funded by
Tenant and held by Landlord, or other alternative insurance containing
commercially reasonable terms and conditions, provided that such alternative
insurance is (a) permitted under all Legal Requirements applicable to Tenant
and/or the Facilities at the time in question and (b) such alternative insurance
is in compliance with all Legal Requirements applicable to such alternative
insurance. Prior to making any such switch, Tenant shall be obligated to provide
Landlord with supporting evidence from its insurance broker or carrier
demonstrating the existence of the conditions set forth herein permitting Tenant
to do so and the sufficiency of such evidence shall be subject to the advance
written approval of Landlord, which shall not be unreasonably withheld,
conditioned or delayed. At such time as the professional liability insurance
coverages required under Section 9.1.6 are available to Tenant at commercially
affordable rates and on commercially reasonable terms and conditions, then
Tenant shall immediately purchase and provide Landlord with evidence of
professional liability insurance coverage necessary to meet the requirements of
Section 9.1.6. In the event that, as a result of the professional liability
coverage required under Section 9.1.6 not being available as provided in
this Section 9.8, the general liability insurance coverage required under
Section 9.1.5 is also not available to Tenant at commercially affordable rates
and on commercially reasonable terms and conditions, then the provisions of this
Section 9.8 shall likewise apply to and include the general liability coverage
required under Section 9.15.
9.9    Captive Insurance Program. Notwithstanding anything to the contrary
contained in this Article 9, so long as Diversicare Healthcare Services, Inc. or
its permitted successor is a Guarantor, Tenant shall have the right to satisfy
its insurance obligations under Sections 9.1.5 and 9.1.6 (the “Specified
Non-Property Insurance”) of this Lease by means of an alternative “captive”
insurance program to the extent of all or part of the Specified Non-Property
Insurance required under this Article 9, provide that (a) such alternative
“captive” insurance program is permitted under all Legal Requirements applicable
to Tenant and/or the Facilities at the time in question and (b) such alternative
“captive” insurance program is in compliance with all Legal Requirements
applicable to such alternative “captive” insurance. To the extent Tenant chooses
to provide any of the Specified Non-Property Insurance otherwise required by
this Lease through an alternative “captive” insurance program, then Tenant and
Guarantor shall have all of the obligations and liabilities of an insurer, and
the protection afforded Landlord, any Facility Mortgagee, and each Facility
shall be the same as if provided by a non-affiliated third-party insurer under
the coverages required under this Lease. Without limiting the generality of the
foregoing, all amounts which a “captive” insurer pays or is required to pay and
all losses or damages resulting from risks for which Tenant has elected to
maintain an alternative “captive” insurance program with respect to shall be
subject to the waiver of subrogation provisions of Section 9.2.1, and shall not
limit any of Tenant’s indemnification obligations pursuant to this Lease. In the
event that Tenant elects to maintain an alternative “captive” insurance program
and an event or claim occurs for which a defense and/or coverage would have been
available from a third-party insurer, Tenant and Guarantor shall undertake to
cause its “captive” insurer to undertake the defense of any such claim,
including a defense of Landlord, at their sole cost and expense, and use their
own funds to pay any claim or replace any property or otherwise provide the
funding which would have been available from insurance proceeds but for such
election by Tenant to maintain an alternative “captive” insurance program. In
the event that Tenant elects to maintain an alternative “captive” insurance
program pursuant to this Section 9.9, Tenant shall provide Lessor and any
Facility Mortgagee with certificates of insurance specifying the extent of such
insurance coverage and Tenant shall provide Landlord with a copy of the
captive’s audited financial statements on an annual basis. Notwithstanding
anything to the contrary in this Section 9.9, Tenant shall not have the right to
satisfy its insurance obligations under Sections 9.1.1, 9.1.2, 9.1.3 and 9.1.4
by means of an alternative “captive” insurance program. In the event that Tenant
converts any insurance provided through an alternative “captive” insurance
program to insurance provided by a non-affiliated third-party insurer, Tenant
shall provide to Landlord evidence of such insurance concurrently with the
effectiveness thereof.
Article X
REPRESENTATIONS AND WARRANTIES
10.1    General. Each party represents and warrants to the other that: (a) this
Lease and all other documents executed or to be executed by it or its respective
Affiliate in connection herewith have been duly authorized and shall be binding
upon it; (b) it is duly organized, validly existing and in good standing under
the laws of the state of its formation and is duly authorized and qualified to
perform this Lease within the applicable Situs State; and (c) neither this Lease
nor any other document executed or to be executed in connection herewith
violates the terms of any other agreement of such party.
10.2    Anti-Terrorism Representations.
10.2.1    Tenant hereby represents and warrants that neither Tenant, nor any
persons or entities holding any legal or beneficial interest whatsoever in
Tenant, are (a) the target of any sanctions program that is established by
Executive Order of the President or published by the Office of Foreign Assets
Control, U.S. Department of the Treasury (“OFAC”); (b) designated by the
President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. §
5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the
Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or
any Executive Order of the President issued pursuant to such statutes; or
(c) named on the following list that is published by OFAC: “List of Specially
Designated Nationals and Blocked Persons” (collectively, “Prohibited Persons”).
Tenant hereby represents and warrants to Landlord that no funds tendered to
Landlord by Tenant under the terms of this Lease are or will be directly or
indirectly derived from activities that may contravene U.S. federal, state or
international laws and regulations, including anti-money laundering laws. If the
foregoing representations are untrue at any time during the Term, an Event of
Default will be deemed to have occurred, without the necessity of notice to
Tenant.
10.2.2    Tenant will not during the Term of this Lease engage in any
transactions or dealings, or be otherwise associated with, any Prohibited
Persons in connection with the use or occupancy of the Premises. A breach of the
representations contained in this Section 10.2 by Tenant shall constitute a
material breach of this Lease and shall entitle Landlord to any and all remedies
available hereunder, or at law or in equity.
10.3    Additional Representations and Warranties. To induce Landlord to execute
this Lease and perform its obligations hereunder, Tenant hereby represents and
warrants to Landlord that the following are true and correct as of the
Commencement Date:
10.3.1    No consent or approval of, or filing, registration or qualification
with any Governmental Authority or any other Person is required to be obtained
or completed by Tenant or any Affiliate in connection with the execution,
delivery, or performance of this Lease that has not already been obtained or
completed.
10.3.2    The identity of the holders of the partnership or membership interests
or shares of stock, as applicable, in Tenant and their respective percentage of
ownership as of the Commencement Date are set forth on Schedule 3. No
partnership or limited liability company interests, or shares of stock, in
Tenant, other than those described above, are issued and outstanding. There are
no preemptive or other outstanding rights, options, warrants, conversion rights
or similar agreements or understandings for the purchase or acquisition from
Tenant of any partnership or limited liability company interest of or shares of
stock in Tenant except as may be set forth in Tenant’s organizational and
formation documents, complete, true and accurate copies of which have been
provided to Landlord.
10.3.3    Neither Tenant nor Guarantor is insolvent and there has been no
Bankruptcy Action by or against any of them. Tenant’s assets do not constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted.
10.3.4    All financial statements and other documents and information
previously furnished by or on behalf of any Tenant or Guarantor to Landlord in
connection with the Facilities and this Lease are true, complete and correct in
all material respects and fairly present on a consistent basis with the
financial conditions of the subjects thereof for the immediately prior periods
as of the respective dates thereof and do not fail to state any material fact
necessary to make such statements or information not misleading, and no material
adverse change with respect to any Facility, Tenant or Guarantor has occurred
since the respective dates of such statements and information. Neither Tenant
nor any Guarantor has any material liability, contingent or otherwise, not
disclosed in such financial statements and which is required to be disclosed in
such financial statements in accordance with GAAP.
10.3.5    As of the Commencement Date, Tenant has each Authorization and other
rights from, and has made all declarations and filings with, all applicable
Governmental Authorities, all self-regulatory authorities and all courts and
other tribunals necessary, to Tenant’s knowledge, to engage in the management
and operation of the Facilities for the Primary Intended Use. As of the
Commencement Date, no Governmental Authority is, to Tenant’s knowledge,
considering limiting, suspending or revoking any such Authorization. As of the
Commencement Date, all such Authorizations are valid and in full force and
effect and Tenant is in material compliance with the terms and conditions of all
such Authorizations.
Article XI
DAMAGE AND DESTRUCTION
11.1    Notice of Damage or Destruction. Tenant shall promptly notify Landlord
of any damage or destruction of any Facility in excess of $50,000. Said
notification shall include: (a) the date of the damage or destruction and the
Facility or Facilities damaged, (b) the nature of the damage or destruction
together with a description of the extent of such damage or destruction, (c) a
preliminary estimate of the cost to repair, rebuild, restore or replace the
Facility, and (d) a preliminary estimate of the schedule to complete the repair,
rebuilding, restoration or replacement of the Facility.
11.2     Restoration. Subject to its receipt of net insurance proceeds to the
extent provided in this Lease, Tenant shall diligently repair or reconstruct any
Facility that has been damaged or destroyed to a like or better condition than
existed prior to such damage or destruction in accordance with Section 7.5. Any
net insurance proceeds payable with respect to such damage or destruction (i) if
$50,000 or less shall be paid directly to Tenant for the repair or
reconstruction of such Facility or (ii) if in excess of $50,000, shall be paid
directly to Landlord and; provided Tenant is diligently performing the
restoration and repair work with respect to such Facility and no Event of
Default has occurred hereunder, shall be used for the repair or reconstruction
of such Facility. Landlord shall disburse any such net insurance proceeds as and
when required by Tenant in accordance with normal and customary practice for the
payment of a general contractor in connection with construction projects similar
in scope and nature to the work being performed by or on behalf of Tenant,
including, without limitation, the withholding of ten percent (10%) of each
disbursement until the required work is completed as evidenced by a certificate
of occupancy or similar evidence issued upon an inspection by the applicable
Governmental Authority and proof has been furnished to Landlord that no lien has
attached or will attach to the applicable Facility in connection with the
restoration and repair work. If the Facility is able to be restored as provided
herein but the applicable laws, rules or regulations of any Governmental
Authority having jurisdiction over the repair or reconstruction then in effect
results in a reduced number of licensed beds at the Facility, then the current
Base Rent shall be proportionally reduced as provided in Section 12.4 in the
case of a Partial Taking.
11.3    Insufficient or Excess Proceeds. If the net insurance proceeds paid to
Landlord in connection with any such damage or destruction are insufficient,
Tenant shall nevertheless remain responsible, at its sole cost and expense, to
repair and reconstruct the applicable Facility as required in this Article XI
and Tenant shall provide the required additional funds. Except as provided in
Section 11.4, and except to the extent such damage or destruction is caused by
the gross negligence or willful misconduct of Landlord or those for whom it may
at law be responsible, Tenant expressly assumes all risk of loss in connection
with any damage or destruction to a Facility, whether or not such damage or
destruction is insurable or insured against. Tenant shall pay any insurance
deductible and any other uninsured Losses, except in the event such damage or
destruction is caused by the gross negligence or willful misconduct of Landlord
or those for whom it may at law be responsible, in which event Landlord shall be
responsible for the deductible and any other uninsured Losses. If the net
insurance proceeds paid to Landlord in connection with any such damage or
destruction are more than sufficient, the surplus shall belong and be paid to
Tenant; provided, however, that any such surplus shall be paid by Landlord to
Tenant only following the disbursement of net insurance proceeds necessary to
complete the repair and restoration work as required pursuant to this Article
XI. Except as provided in Section 11.4, Tenant shall not have any right under
this Lease, and hereby waives all rights under applicable law, to abate, reduce,
or offset rent by reason of any damage or destruction of any Facility by reason
of an insured or uninsured casualty.
11.4    Facility Mortgagee. Notwithstanding anything in this Lease to the
contrary, Tenant hereby acknowledges and agrees that any Facility Mortgagee may
retain and disburse any net insurance proceeds payable in connection with any
damage or destruction to a Facility. In such event, Tenant shall comply with the
requests and requirements of such Facility Mortgagee in connection with the
performance of the repair and restoration work and the disbursement of the net
insurance proceeds in connection therewith. If, in connection with any damage or
destruction to a Facility that results in the loss of fifty percent (50%) or
more of the licensed beds at the affected Facility or that would cost more than
fifty percent (50%) of the value of such Facility to restore, any Facility
Mortgagee elects to require that any net insurance proceeds payable in
connection with such damage or destruction to a Facility be applied by Landlord
to reduce the outstanding principal balance of any Facility Mortgage, Landlord
may elect, in its sole discretion and by notice to Tenant delivered promptly
after the receipt by Landlord of notice of such election from Facility
Mortgagee, to terminate this Lease as to the affected Facility, in which event
the Facility shall be removed from this Lease and the then current Base Rent
shall be equitably abated as of the effective date of such termination based on
the allocable share of Landlord’s investment in the Premises to the affected
Facility. Notwithstanding anything in this Lease to the contrary, Tenant shall
remain liable for any uninsured portion of any damage or destruction if this
Lease is so terminated as to the applicable Facility, except to the extent such
damage or destruction is caused by the gross negligence or willful misconduct of
Landlord or those for whom it may at law be responsible. If Landlord elects not
to terminate this Lease as to the affected Facility (despite the applicable
Facility Mortgagee having made the election to require that any net insurance
proceeds payable in connection with such damage or destruction to a Facility be
applied by Landlord to reduce the outstanding principal balance of such Facility
Mortgage), Landlord’s own funds shall be disbursed to Tenant from time to time
as, when, and subject to the satisfaction of the same terms, conditions and
requirements as would have governed the disbursement of net insurance proceeds
that Landlord’s funds replace.
11.5    Tenant’s Termination Right. Notwithstanding anything in this Lease to
the contrary, if in connection with any damage or destruction to a Facility that
results in the loss of fifty percent (50%) or less of the licensed beds at the
affected Facility or that would cost less than fifty percent (50%) of the value
of such Facility to restore, a Facility Mortgagee elects to apply the insurance
proceeds, or any portion thereof, to the indebtedness secured by the Facility
Mortgage such that the full amount of the net insurance proceeds payable as a
result of the damage or destruction are not made available to Tenant for the
repair or restoration of the Facility, then Tenant may elect to terminate this
Lease as to the affected Facility upon written notice of termination to
Landlord, such termination to be effective as of the first (1st) day of the
calendar month following the later of (a) the date Tenant learns of the action
of the Facility Mortgagee or (b) fifteen (15) days after the date Landlord
learns of the action of the Facility Mortgagee, unless, in either case, within
fifteen (15) Business Days after Landlord’s receipt of the notice from Tenant,
Landlord agrees to make available to Tenant for restoration to or repair of the
Facility cash funds equal to the amount of the net insurance proceeds so applied
to such indebtedness secured by the Facility Mortgagee. Landlord shall disburse
such funds to Tenant as provided in Section 11.2 and upon receipt of such funds
Tenant shall restore the Facility as required by Section 11.2. In the event this
Lease is terminated as to a Facility pursuant to this Section 11.5, the Facility
shall be removed from this Lease and the then current Base Rent shall be
proportionally reduced as provided in Section 11.4. Notwithstanding anything in
this Lease to the contrary, Tenant shall remain liable for any uninsured portion
of any damage or destruction if this Lease is so terminated as to the applicable
Facility, except to the extent such damage or destruction is caused by the gross
negligence or willful misconduct of Landlord or those for whom it may at law be
responsible.
Article XII
CONDEMNATION
12.1    General. Except as provided to the contrary in this Article XII, a
Condemnation of any Facility or any portion thereof shall not terminate this
Lease, which shall remain in full force and effect, and Tenant hereby waives all
rights under applicable law to abate, reduce or offset Rent by reason of any
such Condemnation.
12.2    Notice of Taking. Tenant and Landlord, as the case may be, promptly upon
obtaining knowledge of the institution of any proceeding for a Condemnation,
shall each notify the other and any Facility Mortgagee thereof and Tenant,
Landlord and Facility Mortgagee shall be entitled to participate in any
Condemnation proceeding.
12.3    Complete Taking. In the event of a Complete Taking of any Facility and
as of the effective date of such Complete Taking, this Lease shall automatically
terminate with respect to such Facility, the Facility shall be removed from this
Lease and the then current Base Rent shall be proportionally reduced based on
the ratio of the applicable Facility’s EBITDARM to the EBITDARM of all
Facilities. The applicable calculations of EBITDARM shall be based on Tenant’s
financials for the calendar quarter most recently ended as of the effective date
of such Complete Taking.
12.4    Partial Taking. In the event of a Partial Taking of any Facility, this
Lease shall remain in effect as to such Facility and, except as specifically set
forth herein, Tenant’s obligation to make payments of Rent and to pay all other
charges required under this Lease with respect to such Facility shall remain
unabated during the Term notwithstanding such Partial Taking. If Landlord
determines in its commercially reasonable judgment that the Facility subject to
the Partial Taking is fully or partially restorable, Tenant shall diligently
repair or reconstruct such Facility to a like or better condition than existed
prior to such damage or destruction in accordance with Section 7.5, provided
that any net condemnation award received by Landlord with respect to such
Partial Taking shall be paid directly to Landlord and, provided Tenant is
diligently performing the restoration and repair work with respect to such
Facility and no Event of Default has occurred hereunder, shall be made available
to Tenant to be used by Tenant for costs of the repair or reconstruction of such
Facility. If, after Tenant’s compliance with the restoration obligation in the
foregoing sentence, such Partial Taking results in a reduced number of licensed
beds at such Facility, then the current Base Rent shall be proportionally
reduced based on (a) the ratio of the number of licensed beds reduced at such
Facility to the total number of licensed beds at such Facility (prior to such
Partial Taking) and (b) the ratio of the applicable Facility’s EBITDARM to the
EBITDARM of all Facilities. The applicable calculations of EBITDARM shall be
based on Tenant’s financials for the calendar quarter most recently ended as of
the effective date of such Partial Taking. By way of example only, if (1) a
Facility originally containing 100 licensed beds suffers a casualty and the
number of licensed beds is reduced to 80; (2) the total Base Rent under this
Lease, prior to such casualty, is $1,000,000; (3) the total EBITDARM for all
Facilities is $12,000,000.00; and (4) the EBITDARM for the damaged Facility is
$4,000,000.00, then the Base Rent would be reduced by $66,666.67 (i.e., (20
licensed beds /100 licensed beds) * ($4,000,000/$12,000,000) *($1,000,000).
12.5    Temporary Taking. In the event of a Temporary Taking of any Facility,
this Lease shall remain in effect as to such Facility, Tenant’s obligation to
make payments of Rent and to pay all other charges required under this Lease
with respect to such Facility shall remain unabated during the Term
notwithstanding such Temporary Taking, and Tenant shall be responsible for all
obligations hereunder not affected by such Temporary Taking.
12.6    Award Distribution. Landlord alone shall be entitled to receive and
retain any award for a Condemnation other than a Temporary Taking; provided,
however, Landlord shall make available to Tenant the portion of the award
necessary and specifically identified for restoration of the affected Facility
(pursuant to Landlord’s disbursement requirements); and provided, further, that
Tenant shall be entitled to submit its own claim in the event of any such
Condemnation with respect to the value of Tenant’s leasehold interest in the
applicable Facility, Tenant’s Personal Property, Tenant’s lost profits and/or
the relocation costs incurred by Tenant as a result thereof. In the event of a
Temporary Taking of any Facility, Tenant shall be entitled to receive and retain
any and all awards for the Temporary Taking. If the period of the Temporary
Taking shall extend beyond the Expiration Date, that part of the award for such
Temporary Taking which represents compensation for the use or occupancy of such
Facility (or a part thereof) shall be divided between Landlord and Tenant so
that Tenant shall receive so much thereof as represents the period to and
including the Expiration Date and Landlord shall receive so much as represents
the period subsequent to the Expiration Date and, if applicable, Landlord shall
be entitled to receive that portion which represents reimbursement for the cost
of restoring the Premises as a result of such Temporary Taking.
12.7    Relationship to Facility Mortgage. Notwithstanding anything herein to
the contrary, in the event that any Facility Mortgagee is entitled to any
Condemnation award, or any portion thereof, under the terms of any Facility
Mortgage, such award shall be applied, held and/or disbursed in accordance with
the terms of the Facility Mortgage. In the event that the Facility Mortgagee
elects to apply the award to the indebtedness secured by the Facility Mortgage
in the case of a Partial Taking as to which the restoration provisions of this
Article XII apply, Landlord agrees to make available to Tenant for restoration
of such Facility funds equal to the amount applied by the Facility Mortgagee.
Article XIII
DEFAULT
13.1    Events of Default. The occurrence of any of the following shall
constitute an “Event of Default” and there shall be no cure period therefor
except as otherwise expressly provided in this Section 13.1:
13.1.1    Tenant shall fail to pay any installment of Rent, or any installment
of the Security Deposit due pursuant to Section 3.1, within three (3) Business
Days of its Payment Date;
13.1.2    (a) The final and non-appealable (provided that during any period of
appeal Tenant is permitted to continue and continues operation of the affected
Facility in compliance with this Lease) revocation or termination of any
Authorization that would have a material adverse effect on the operation of any
Facility for its Primary Intended Use; (b) except as permitted pursuant to the
terms of Article XI or Article XII in connection with a casualty or
Condemnation, the voluntarily cessation of operations at any Facility; (c) the
sale or transfer of all or any portion of any Authorization; or (d) the use of
any Facility other than for its Primary Intended Use;
13.1.3    Any material suspension, limitation or restriction placed upon Tenant,
any Authorization, any Facility, the operations at any Facility or Tenant’s
ability to admit residents or patients at the Premises (e.g., an admissions ban
or non-payment for new admissions by any Thirty Party Payor Program resulting
from an inspection survey); provided, however, if any such material suspension,
limitation or restriction (each a “Citation”) is curable by Tenant under the
applicable Authorization or Legal Requirement, it shall not constitute an Event
of Default if Tenant promptly commences to cure such Citation and thereafter
diligently pursues such cure to the completion thereof (a) within thirty (30)
days prior to expiration of the time period in which the applicable Governmental
Authority has given Tenant to undertake corrective action or (b) if such period
is sixty (60) days or less, then no later than the number of days ( rounded up
to the next full day in case of a partial day) equal to one-half (1/2) of the
time period within which the applicable Governmental Authority has given Tenant
to undertake corrective action (the “Citation Cure Period”). Landlord shall
extend the Citation Cure Period with respect to any Citation to the extent that
Tenant has received from such Governmental Authority an extension of the time
within which such noncompliance is required to be cured or Tenant is contesting
or appealing such Citation in good faith by appropriate proceedings, timely
filed and diligently prosecuted by Tenant (provided that during any period of
contest appeal Tenant is permitted under all Legal Requirements to continue, and
continues, operation of the affected Facility in compliance with this Lease).
Upon the occurrence of any Citation, Tenant will promptly provide Landlord with
notice of such Citation as required under this Lease and, upon becoming
available, will provide Landlord with a copy of Tenant’s plan of correction for
the cure or abatement of the Citation or, if contested or appealed, a copy of
such contest or appeal. During any cure or appeal period, Tenant will promptly
provide Landlord with any additional notices or documents submitted or received
by Tenant with respect to the progress of such cure or appeal. If during such
cure or appeal period, Landlord reasonably and in good faith determines that the
Citation Cure Period is likely to expire without completion of necessary efforts
to cure the Citation, or Tenant’s contest or appeal period is likely to expire
without removal of the Citation, then Landlord may (but shall not be obligated
to), at its option and regardless of whether Tenant is proceeding to cure or
attempting to cure the Citation, and without waiving or releasing any obligation
on the part of Tenant or waiving or suspending any Event of Default, take and
perform such actions as Landlord, in its reasonable business judgment deems
necessary, required or appropriate to attempt to cure or abate the Citation
within the time period allowed or specified by the governmental agency, or
prevent the Citation from becoming final and non-appealable, and may enter upon
the Facility for such purpose. If Landlord so proceeds to attempt to cure the
Citation, Tenant agrees to reimburse Landlord for the reasonable amount of all
costs and expenses, including attorneys’ fees, incurred by Landlord in curing or
attempting to cure, the Citation;
13.1.4    A default shall occur under any other lease or agreement between
Landlord or an Affiliate of Landlord and Tenant (or Guarantor) or an Affiliate
of Tenant (or Guarantor), or any letter of credit, guaranty, mortgage, deed of
trust, or other instrument executed by Tenant (or Guarantor) or an Affiliate of
Tenant (or Guarantor) in favor of Landlord or an Affiliate of Landlord, in every
case, whether now or hereafter existing, where the default is not cured within
any applicable grace period set forth therein;
13.1.5    (a) A breach of or default by Guarantor of its financial covenants
under Guarantor’s Senior Credit Facility, which breach or default is not cured
within any applicable grace or cure period provided therein, unless a waiver or
amendment addressing such breach or default is obtained from the lenders under
the Senior Credit Facility, (b) a material default or breach by the Affiliate of
Tenant that is the tenant/lessee or subtenant/sublessee under any Related Lease
that is not cured within any applicable cure period provided for therein and
with respect to which a claim is made by the landlord/lessor under such Related
Lease against the Affiliate of Landlord responsible for the obligations of the
tenant/lessee under such Related Lease, or (c) a default by Tenant or Guarantor
shall occur under any lease, guaranty, loan or financing agreement, with any
other party that is not cured within any applicable cure period provided for
therein, which default could reasonably be expected to have a material adverse
effect on the ability of Tenant to perform it obligations under this Lease or of
Guarantor to perform its obligations under the Guaranty;
13.1.6    Tenant, any Guarantor or any Affiliate of either if the same results
in a substantive consolidation affecting Tenant or any Guarantor (each a “Tenant
Party”) shall (a) admit in writing its inability to pay its debts generally as
they become due; (b) file a petition in bankruptcy or a petition to take
advantage of any insolvency act; (c) make an assignment for the benefit of its
creditors; (d) consent to the appointment of a receiver of itself or of the
whole or any substantial part of its property; or (e) file a petition or answer
seeking reorganization or arrangement under the Federal bankruptcy laws or any
other applicable law or statute of the United States of America or any state
thereof;
13.1.7    Any petition is filed by or against any Tenant Party under federal
bankruptcy laws, or any other proceeding is instituted by or against any Tenant
Party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
reorganization, arrangement, adjustment or composition of it or its 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 any Tenant Party, or
for any substantial part of the property of any Tenant Party, and Tenant fails
to notify Landlord of such proceeding within three (3) Business Days of the
institution thereof and such proceeding is not dismissed within sixty (60) days
after institution thereof, or any Tenant Party shall take any action to
authorize or effect any of the actions set forth above in this Section 13.1.7;
13.1.8    Any of the representations or warranties made by Tenant in this Lease
or by Guarantor in the Guaranty proves to be untrue when made in any material
respect;
13.1.9    Tenant fails to observe or perform any term, covenant or other
obligation of Tenant set forth in Section 6.7 and such failure is not cured
within ten (10) days after receipt of written notice of such failure from
Landlord;
13.1.10    Tenant fails to perform or comply with the provisions of Section 3.1
or Section 3.2, as applicable, Section 6.12, Section 6.13, Article IX or Article
XVII within the applicable time periods set forth therein, if any; or
13.1.11    Tenant fails to observe or perform any other term, covenant or
condition of this Lease and such failure is not cured by Tenant within thirty
(30) days after notice thereof from Landlord, unless such failure cannot with
due diligence be cured within a period of thirty (30) days, in which case such
failure shall not be deemed to be an Event of Default if Tenant proceeds
promptly and with due diligence to cure the failure and diligently completes the
curing thereof within sixty (60) days after such notice from Landlord; provided,
however, that such notice shall be in lieu of and not in addition to any notice
required under applicable law. No Event of Default (other than those consisting
of payments and other financial obligations, including, without limitation, the
payment of Rent hereunder) shall be deemed to exist under this Section 13.1.11
during any time the curing thereof is prevented by an “Force Majeure,” provided
that Tenant shall use its reasonable best efforts to remedy the Force Majeure to
the extent Tenant is reasonably or practically able to do so and that, upon the
cessation of the Force Majeure, Tenant immediately shall proceed to diligently
remedy the action or condition giving rise to the Event of Default within the
applicable cure period as extended by the Force Majeure. For purposes of the
foregoing sentence, “Force Majeure” shall mean delays due to power failure, acts
of God, enemy action, civil commotion, extreme weather or, to the extent
approved Landlord in its reasonable discretion, other causes beyond the control
of the party responsible for performing an obligation. Neither lack of funds nor
general economic and or market factors shall not be deemed Force Majeure event
that is beyond the control of Tenant. In the event of any occurrence which
Tenant believes constitutes a cause beyond the reasonable control of Tenant and
which will delay cure of the subject default, Tenant shall promptly notify
Landlord in writing of the occurrence and nature of such cause, the anticipated
period of delay and the steps being taken by Tenant to mitigate the effects of
such delay.
13.2    Remedies. Upon the occurrence of an Event of Default, Landlord may
exercise all rights and remedies under this Lease and the laws of the applicable
Situs State that are available to a lessor of real and personal property in the
event of a default by its lessee, and as to the Lease Collateral, all remedies
granted under the laws of the applicable Situs State to a secured party under
its Uniform Commercial Code. Landlord shall have no duty to mitigate damages
unless required by applicable law and shall not be responsible or liable for any
failure to relet any Facility or to collect any rent due upon any such
reletting. Tenant shall pay Landlord, immediately upon demand, all expenses
incurred by it in obtaining possession and reletting any Facility, including
fees, commissions and costs of attorneys, architects, agents and brokers.
13.2.1    Without limiting the foregoing, Landlord shall have the right (but not
the obligation) to do any of the following upon an Event of Default, in each
case to the extent permitted under applicable law: (a) sue for the specific
performance of any covenant of Tenant as to which it is in breach and/or sue for
summary possession of the Premises; (b) enter upon any Facility, terminate this
Lease, dispossess Tenant from any Facility and/or collect money damages by
reason of Tenant’s breach, including the acceleration of all Rent which would
have accrued after such termination and all obligations and liabilities of
Tenant under this Lease which survive the termination of the Term; (c) elect to
leave this Lease in place and sue for Rent and other money damages as the same
come due; (d) (before or after repossession of a Facility pursuant to clause (b)
above and whether or not this Lease has been terminated) relet such Facility to
such tenant, for such term (which may be greater or less than the remaining
balance of the Term), rent, conditions (which may include concessions or free
rent) and uses as it may determine in its sole discretion and collect and
receive any rents payable by reason of such reletting; (e) sell any Lease
Collateral in a non-judicial foreclosure sale; and (f) sue for distress of
unpaid Rent.
13.2.2    Upon the occurrence of an Event of Default, and upon commencement of
proceedings to enforce the rights of Landlord hereunder, Landlord shall be
entitled, as a matter of right, to appoint a receiver to take possession of the
Premises, pending the outcome of such proceedings, to manage the operation of
the Premises, to collect and disburse all rents, issues, profits and income
generated thereby and to the extent applicable and possible, to preserve or
replace any Authorization or to otherwise substitute the licensee or provider
thereof. If a receiver is appointed pursuant hereto, the receiver shall be paid
a reasonable fee for its services and all such fees and other expenses incurred
by Landlord in connection with the appointment of the receiver shall be paid in
addition to, and not in limitation of, the Rent otherwise due to Landlord
hereunder. Tenant irrevocably consents to the appointment of a receiver
following an Event of Default and thus stipulates to and agrees not to contest
the appointment of a receiver under such circumstances and for such purposes.
13.2.3    If Tenant at any time shall fail to make any payment or perform any
act on its part required to be made or performed under this Lease, then Landlord
may, without waiving or releasing Tenant from any obligations or default
hereunder, make such payment or perform such act for the account and at the
expense of Tenant, and enter upon the applicable Facility for the purpose of
taking all such action as may be reasonably necessary. No such entry shall be
deemed an eviction of Tenant. All sums so paid by Landlord and all necessary and
incidental costs and expenses (including reasonable attorneys’ fees and
expenses) incurred in connection with the performance of any such act by it,
together with interest at the Agreed Rate from the date of the making of such
payment or the incurring of such costs and expenses, shall be payable by Tenant
to Landlord upon Landlord’s written demand therefor.
13.2.4    No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing at law or in equity. Any notice or
cure period provided herein shall run concurrently with any provided by
applicable law.
13.2.5    If Landlord initiates judicial proceedings or if this Lease is
terminated by Landlord pursuant to this Article XIII, Tenant waives, to the
extent permitted by applicable law, (a) any right of redemption, re-entry, or
repossession; and (b) the benefit of any laws now or hereafter in force
exempting property from liability for rent or for debt.
Article XIV
OBLIGATIONS OF TENANT ON EXPIRATION OR TERMINATION OF LEASE
14.1    Surrender. On the Expiration Date or earlier termination or cancellation
of this Lease (or the earlier dispossession of Tenant from any Facility), Tenant
shall deliver to Landlord or Landlord’s designee (a) possession of each Facility
in a neat and clean condition, with each Facility being fully operational as of
such date and in compliance with all Authorizations, and (b) all business
records (other than corporate financial records or proprietary materials), data,
patient and resident records, and patient and resident trust accounts, which may
be necessary, desirable or advisable for the operation of each Facility for its
Primary Intended Use. Tenant shall have no obligation to perform any Alterations
necessitated by, or imposed in connection with, a change of ownership inspection
survey for the transfer of operation of such Facility to Landlord or Landlord’s
designee unless such Alterations were previously required hereunder or by the
applicable licensing authorities to be undertaken by Tenant prior to the
Expiration Date (or earlier termination date or cancellation of this Lease or
earlier dispossession of Tenant from any Facility) and Tenant failed to do so.
From and after the Expiration Date or an earlier dispossession of Tenant not
resulting from an Event of Default, Landlord and Landlord’s designee shall allow
Tenant and its agents and representatives to have reasonable access to (upon
reasonable prior notice and during normal business hours), and to make copies
of, the business records (other than corporate financial records or proprietary
materials), data, patient and resident records, and patient and resident trust
accounts of the Facilities relating to the period of occupancy by Tenant, to the
extent reasonably necessary to enable Tenant to among other things investigate
and defend resident, employee or other claims, to file or defend cost reports
and tax returns, to complete/revise, as needed, any patient assessments which
may be required for Tenant to seek reimbursement for services rendered during
its occupancy of the Facilities, to verify accounts receivable collections due
Tenant, and to enable Tenant to complete post termination, accounting,
reconciliation and closing procedures.
14.2    Transition.
14.2.1    In connection with the expiration or earlier termination of this Lease
with respect to any Facility, or the earlier dispossession of Tenant from any
Facility, Landlord shall have the right to require an Operational Transfer with
respect to such Facility by delivery to Tenant of a Transition Notice (as
defined below). As used in this Lease, “Operational Transfer” shall mean the
transfer and transition, practically and legally, of the day-to-day operations
of a Facility for the Primary Intended Use of such Facility to Landlord and/or
Landlord’s designee without interruption of the business activities therein,
regulatory or otherwise. Landlord may exercise its right to require an
Operational Transfer by delivering written notice to Tenant of Landlord’s
election to require an Operational Transfer (a “Transition Notice”) at any time
in connection with the expiration or earlier termination of this Lease, or the
earlier dispossession of Tenant from any Facility.
14.2.2    In connection with an Operational Transfer, or at the time of Tenant’s
surrender of a Facility to Landlord or its designee, Tenant shall cooperate
fully with Landlord or its designee in transferring (or obtaining) all
Authorizations and Governmental Payors’ certifications and shall take all
necessary actions, including, without limitation, filing such applications,
petitions and transfer notices and making such assignments, conveyances and
transfers as are necessary, desirable or advisable to accomplish an Operational
Transfer and cooperating with Landlord or its designee to obtain new Medicaid
Provider Agreements, Medicaid provider numbers and/or Medicaid certifications.
In connection therewith, Tenant shall transfer, to the extent permitted by
applicable law, to Landlord or Landlord’s designee all contracts, including
contracts with Governmental Authorities, which may be necessary, desirable or
advisable for the operation of each Facility for its Primary Intended Use.
Subject to all applicable Legal Requirements, Tenant hereby assigns, effective
upon the Expiration Date or earlier termination or cancellation of this Lease
(or the earlier dispossession of Tenant from any Facility), all rights to
operate the Facility to Landlord or its designee, including all required
Authorizations, to the extent assignable in accordance with Legal Requirements,
and all rights to apply for or otherwise obtain them; provided that Tenant’s
Medicaid Provider Agreements and provider numbers shall remain the sole and
exclusive property of Tenant and shall not be assigned. Landlord’s designees
shall be responsible for obtaining all new Medicaid Provider Agreements,
Medicaid provider numbers and/or Medicaid certifications as may be necessary for
the continued operation of the Facilities. In furtherance of the foregoing,
Tenant agrees to enter into a commercially reasonable operations transfer
agreement with Landlord or Landlord’s designee, which agreement shall provide,
inter alia, for the proration of operational revenues and liabilities based on
when Landlord or its designee actually takes possession of the applicable
Facility or Facilities.
14.2.3    To the extent permissible under the Legal Requirements, for the period
commencing on the expiration or earlier termination of this Lease, or the
earlier dispossession of Tenant from any Facility, and ending on the earlier to
occur of (i) the date designated by Landlord following Landlord’s or its
designee’s receipt of all required Authorizations that Landlord or its designee
will assume the operation of the Facility or Facilities, as specified in a
written notice from Landlord to Tenant given not less than thirty (30) days
prior to the date of such assumption of operations, or (ii) the date that is one
hundred eighty (180) days after the applicable expiration, termination or
dispossession date, Tenant agrees to (or will cause its Manager to agree to)
enter into reasonable and customary interim sublease agreements an management
agreements as may be necessary to effect a transfer of the operations of the
Facility or Facilities for their Primary Intended Use prior to the time that
Landlord or its designee, as applicable, holds all Authorizations from all
applicable Governmental Authorities necessary to so operate such Facility or
Facilities, and Tenant shall remain as licensee and participating provider in
any payment programs with Governmental Payors or third party payors in which a
Facility participates until such time as Landlord or its designee has received
all Authorizations necessary to operate any Facility. Any such management
agreement with Landlord or its designee, shall be on such customary and
reasonable terms as Landlord, or its designee, shall request (which shall
include an agreement to pay a management fee of five per cent (5%) of gross
operating receipts and to reimburse Manager for its reasonable out-of-pocket
costs and expenses and reasonable and administrative costs). Landlord, or its
designee, shall reimburse Manager for any reasonable operating deficits of the
Facility that Manager may be required to fund out-of-pocket on account of
operating losses and expenses of the Facility incurred by Manager with respect
to such period. Any such reimbursement shall be due from Landlord, or its
designee, to Manager within thirty (30) days after written request by Manager,
provided that Manager shall furnish such documentation of such operating
deficits, losses and expenses as Landlord, or its designee, may reasonably
request. For purposes of determining the amount of any operating deficits, or
operating losses and expenses, incurred by Manager with respect to such period,
Landlord and Tenant agree that there shall be included therein, without
limitation, (a) Rent, which shall continue to be due and payable at the same
rate as is in effect prior to the applicable expiration, termination or
dispossession date, and (ii) any increase in employee severance, and all costs
and liabilities, that may be incurred by Manager in connection with Manager’s
employees’ by virtue of any delayed compliance with the Worker Adjustment and
Retraining Notification Act, or any similar State law, due to Tenant’s
cooperation and other obligations under this Section 14.2.3.
14.2.4    Notwithstanding anything in this Lease which may be construed to the
contrary, if (i) Landlord delivers a Transition Notice as to a particular
Facility or Facilities, (ii) the Term expires prior to the delivery of a
Transition Notice but Landlord has not delivered a Closure Notice, or (iii) this
Lease is terminated as a result of an Event of Default and Landlord has not
delivered a Closure Notice, then in all such cases Tenant shall thereafter
continue to operate the Facility or Facilities in accordance with all of the
requirements of this Lease until the earliest to occur of the following: (a) the
date on which a successor operator assumes operation of such Facility, (b) the
date that is one hundred eighty (180) days after the Expiration Date, or (c) the
date on which such Facility is closed by Tenant in accordance with and pursuant
to the requirements of this Lease and in connection with a Closure Notice
delivered by Landlord.
14.2.5    If Tenant operates one or more Facilities after the Expiration Date or
earlier termination of this Lease (either pursuant to Landlord’s request or
pursuant to Section 14.2.4, then, from and after the expiration of this Lease
and until the earliest to occur of the dates described in Section 14.2.4 (the
“Reimbursement Period”), (a) Landlord shall provide Tenant with an operating
budget, (b) Landlord shall include in the aforesaid operating budget, and Tenant
shall continue to pay during the Reimbursement Period, all Rent that would have
been owing under this Lease if this Lease had not expired (equitably prorated if
Tenant operates less than all of the Facilities), and (c) Landlord shall
reimburse Tenant for any operating deficits that Tenant may be required to fund
out-of-pocket on account of operating losses and expenses incurred by Tenant by
reason of, or arising out of compliance with, such budget with respect to the
Reimbursement Period. Any such reimbursement shall be due from Landlord to
Tenant within thirty (30) days after request by Tenant, provided that Tenant
shall furnish such documentation of any operating deficits, losses and expenses
as Landlord may reasonably request.
14.2.6    Notwithstanding anything to the contrary contained in this Lease,
Tenant shall not, prior to delivery of a Closure Notice by Landlord to Tenant,
commence to wind up and terminate the operations of any Facility or relocate the
patients or occupants of any Facility to any other health care facility (a
“Facility Termination”). Notwithstanding the foregoing, if Landlord has not
delivered a Closure Notice or a Transition Notice to Tenant prior to the day
that is one hundred twenty (120) days following the Expiration Date, then Tenant
may commence the Facility Termination as to such Facility or Facilities and,
upon the closure of such Facility or Facilities in accordance with this Lease
and all applicable Legal Requirements, Tenant shall vacate such Facility or
Facilities and surrender possession thereof to Landlord in accordance with all
applicable requirements of this Lease. If, prior to the day that is one hundred
twenty (120) days following the Expiration Date, Landlord delivers a Transition
Notice to Tenant, Tenant shall not commence or otherwise engage in a Facility
Termination with respect to the applicable Facility or Facilities. If Landlord
delivers a Closure Notice and elects to institute a Facility Termination, Tenant
shall, upon the prior written approval of Landlord, take all commercially
reasonable steps necessary, in compliance with all Legal Requirements and
Authorizations, to timely effectuate the same, all at Tenant’s sole cost and
expense.
14.2.7    The terms of this Section 14.2 shall survive the expiration or sooner
termination of this Lease.
14.3    Tenant Personal Property. Provided that no Event of Default then exists,
in connection with the surrender of the Premises, Tenant may upon at least five
(5) Business Days prior notice to Landlord remove from the Premises in a
workmanlike manner all Tenant Personal Property, leaving the Premises in good
and presentable condition and appearance, including repairing any damage caused
by such removal; provided that Landlord shall have the right and option to
purchase for itself or its designee the Tenant Personal Property (other than the
Excluded Tenant Personal Property) for its then net book value during such five
(5) Business Day notice period, in which case Tenant shall so convey the Tenant
Personal Property to Landlord or its designee by executing a bill of sale in a
form reasonably required by Landlord. If there is any Event of Default then
existing, Tenant will not remove any Tenant Personal Property from the Premises
and instead will, on demand from Landlord, convey it (other than the Excluded
Tenant Personal Property) to Landlord or its designee for no additional
consideration by executing a bill of sale in a form reasonably required by
Landlord. Title to any Tenant Personal Property which is not removed by Tenant
as permitted above upon the expiration of the Term shall, at Landlord’s
election, vest in Landlord or its designee; provided, however, that Landlord may
remove and store or dispose at Tenant’s expense any or all of such Tenant
Personal Property which is not so removed by Tenant without obligation or
accounting to Tenant.
14.4    Facility Trade Name. If this Lease is terminated by reason of an Event
of Default or Landlord exercises its option to purchase or is otherwise entitled
to retain the Tenant Personal Property pursuant to Section 14.3 above, Landlord
or its designee shall be permitted to use the name under which each Facility has
done business during the Term in connection with the continued operation of such
Facility for its Primary Intended Use, but for no other use and not in
connection with any other property or facility, provided that Landlord shall
have no right to retain or use the name “Diversicare” or any derivative thereof.
14.5    Holding Over. Except as provided in Sections 14.2.5 and 14.2.6, if
Tenant shall for any reason remain in possession of any Facility after the
Expiration Date, such possession shall be a month-to-month tenancy during which
time Tenant shall pay as rental on the first (1st) Business Day of each month
one and one-half (1½) times the total of the monthly Base Rent payable with
respect to the last Lease Year, plus all Additional Rent accruing during the
month and all other sums, if any, payable by Tenant pursuant to this Lease.
Nothing contained herein shall constitute the consent, express or implied, of
Landlord to the holding over of Tenant after the Expiration Date, nor shall
anything contained herein be deemed to limit Landlord’s remedies.
Article XV
INDEMNIFICATION
In addition to the other indemnities contained in this Lease, and
notwithstanding the existence of any insurance carried by or for the benefit of
Landlord or Tenant, and without regard to the policy limits of any such
insurance, Tenant shall protect, indemnify, save harmless and defend Landlord
and the Landlord Indemnified Parties from and against all Losses imposed upon or
incurred by or asserted against Landlord or any Landlord Indemnified Parties by
reason of: (a) any accident, injury to or death of Persons or loss of or damage
to property occurring on or about any Facility during the Term; (b) any use,
misuse, non-use, condition, maintenance or repair of any Facility by Tenant;
(c) any failure on the part of Tenant to perform or comply with any of the terms
of this Lease or the breach of any representation or warranty made by Tenant
herein; and (d) any claim for malpractice, negligence or misconduct committed by
any Person on or working from any Facility during the Term. Any amounts which
become payable by Tenant under this Article XV shall be paid within ten (10)
days after demand by Landlord, and if not timely paid, shall bear interest at
the Agreed Rate from the date of such demand until paid. Tenant, at its expense,
shall contest, resist and defend any such claim, action or proceeding asserted
or instituted against Landlord or any Landlord Indemnified Parties with counsel
acceptable to Landlord in its sole discretion and shall not, under any
circumstances, compromise or otherwise dispose of any suit, action or proceeding
without obtaining Landlord’s written consent. Landlord, at its election and sole
cost and expense, shall have the right, but not the obligation, to participate
in the defense of any claim for which Landlord or any Landlord Indemnified
Parties are indemnified hereunder. If Tenant does not act promptly and
completely to satisfy its indemnification obligations hereunder, Landlord may
resist and defend any such claims or causes of action against Landlord or any
Landlord Indemnified Party at Tenant’s sole cost. The terms of this Article XV
shall survive the expiration or sooner termination of this Lease. For purposes
of this Article XV, any acts or omissions of Tenant, or by employees, agents,
assignees, contractors, subcontractors or others acting for or on behalf of
Tenant (whether or not they are negligent, intentional, willful or unlawful),
shall be strictly attributable to Tenant. Nothing herein shall be construed as
indemnifying, saving harmless and defending, or protecting, and Tenant shall not
be required to protect, indemnify, save harmless or defend, Landlord or Landlord
Indemnified Parties from any Losses imposed upon, incurred by or asserted
against Landlord or the Landlord Indemnified Parties to the extent resulting
from the gross negligence or willful misconduct of Landlord or any Landlord
Indemnified Parties.
Article XVI
LANDLORD’S FINANCING
16.1    Grant Lien. Without the consent of Tenant, Landlord may from time to
time, directly or indirectly, create or otherwise cause to exist any Facility
Mortgage upon any Facility or interest therein. This Lease is and at all times
shall be subject and subordinate to any such Facility Mortgage which may now or
hereafter affect any Facility or interest therein and to all renewals,
modifications, consolidations, replacements, restatements and extensions thereof
or any parts or portions thereof; provided, however, so long as no Event of
Default has occurred, no Facility Mortgagee shall have the right to disturb
Tenant’s leasehold interest or possession of any Facility or interfere with any
other rights of Tenant accorded by the terms of this Lease. This provision shall
be self-operative and no further instrument of subordination shall be required
to give it full force and effect; provided, however, that in confirmation of
such subordination, Tenant shall execute promptly any certificate or document
that Landlord or any Facility Mortgagee may request for such purposes so long as
the same contains commercially reasonable non-disturbance and attornment
provisions.
16.2    Attornment. If Landlord’s interest in any Facility or interest therein
is sold, conveyed or terminated upon the exercise of any remedy provided for in
any Facility Mortgage Documents (or in lieu of such exercise), or otherwise by
operation of law: (a) at the request and option of the new owner or superior
lessor, as the case may be, Tenant shall attorn to and recognize the new owner
or superior lessor as Tenant’s “landlord” under this Lease or enter into a new
lease substantially in the form of this Lease with the new owner or superior
lessor, and Tenant shall take such actions to confirm the foregoing within ten
(10) days after request; and (b) the new owner or superior lessor shall not be
(i) liable for any act or omission of Landlord under this Lease occurring prior
to such sale, conveyance or termination; (ii) subject to any offset, abatement
or reduction of rent because of any default of Landlord under this Lease
occurring prior to such sale, conveyance or termination; (iii) bound by any
previous modification or amendment to this Lease or any previous prepayment of
more than one month’s rent, unless such modification, amendment or prepayment
shall have been approved in writing by such Facility Mortgagee or, in the case
of such prepayment, such prepayment of rent has actually been delivered to such
new owner or superior lessor; or (iv) liable for any security deposit or other
collateral deposited or delivered to Landlord pursuant to this Lease unless such
security deposit or other collateral has actually been delivered to such new
owner or superior lessor.
16.3    Cooperation; Modifications. Notwithstanding anything in this Lease to
the contrary, Tenant hereby agrees that in connection with obtaining any
Facility Mortgage for any Facility or interest therein, including, without
limitation, where the Facility Mortgagee is an Agency Lender, Tenant shall:
(i) execute and deliver to such Agency Lender or other Facility Mortgagee (on
the form required by such Agency Lender or other Facility Mortgagee) any tenant
regulatory agreements (including, without limitation, the form of regulatory
agreement typically required by Agency Lenders), subordination agreements
(including, without limitation, the form of subordination, assignment and
security agreement typically required by Agency Lenders), or other similar
agreements customarily required by Agency Lenders and other Facility Mortgagees
in connection with a mortgage relating to a skilled nursing facility or assisted
living facility, (ii) modify this Lease as necessary to incorporate the
provisions and requirements generally imposed by an Agency Lender or other
Facility Mortgagee in connection with a facility lease relating to a skilled
nursing facility or assisted living facility encumbered with a Facility Mortgage
by an Agency Lender or other Facility Mortgagee, including, without limitation,
requirements that: (a) Tenant comply with the operational requirements set forth
in the applicable Facility Mortgage Documents (including, without limitation,
the obligations under any regulatory agreement or subordination agreement with
an Agency Lender or other Facility Mortgagee), and (b) in lieu of any
duplicative impound and/or reserve obligations hereunder, obligate Tenant to
fund reserves with the Agency Lender or other Facility Mortgagee for taxes,
insurance and/or capital improvement and repair obligations as may be required
by said Agency Lender or other Facility Mortgagee and (iii) provide, within ten
(10) days of request therefor from Landlord, such reasonable documents and
materials requested by any Agency Lender or other Facility Mortgagee, including
without limitation, insurance certificates. In connection with the foregoing,
and notwithstanding the provisions of Section 7.6, in the event that any
Facility Mortgagee requires that reserves for capital improvements and repairs
be impounded with Facility Mortgagee in advance of the expenditure thereof,
Tenant agrees to deliver such impound deposits in advance monthly deposits for
impounding directly with Facility Mortgagee; provided, however, that (1) the
aggregate annual amount of such impound requirements shall not exceed the
product of (x) the Required Per Bed Annual Capital Expenditures Amount, times
(y) the weighted average of the number of licensed beds in all Facilities during
the applicable Lease Year, and (2) any amounts which Tenant is required to fund
into a Facility Mortgage Repair Reserve Account to satisfy any repair or
replacement reserve requirements imposed by a Facility Mortgagee shall be
credited on a dollar for dollar basis against the mandatory expenditure
obligations of Tenant for such applicable Facilities under Section 7.6. During
the Term, and provided that no Event of Default shall have occurred and be
continuing hereunder, Tenant shall, subject to the terms and conditions of such
Facility Mortgage Repair Reserve Account and the requirements of the applicable
Facility Mortgagee thereunder, have access to and the right to apply or use
(including for reimbursement) all monies held in each such Facility Mortgage
Repair Reserve Account for the purposes and subject to the limitations for which
such Facility Mortgage Repair Reserve Account is maintained, and Landlord agrees
to reasonably cooperate with Tenant in connection therewith. Landlord hereby
acknowledges that funds deposited by Tenant in any Facility Mortgage Repair
Reserve Account are the property of Tenant and, provided that no Event of
Default shall have occurred and be continuing hereunder, Landlord is obligated
to return the portion of such funds not previously released to Tenant within
sixty (60) days following the earlier of (I) the expiration or earlier
termination of this Lease with respect to the applicable Facilities or (II) the
maturity or earlier prepayment of the applicable Facility Mortgage. In the event
any Agency Lender or other Facility Mortgagee requires, as a condition to making
a Facility Mortgage, an intercreditor agreement with any receivables lender of
Tenant, Tenant shall enter into any such intercreditor agreement and shall take
all commercially reasonable efforts to cause said receivables lender to enter
into such intercreditor agreement with said Agency Lender or other Facility
Mortgagee on terms reasonably acceptable to said Agency Lender or other Facility
Mortgagee and such receivables lender of Tenant.
16.4    Compliance with Facility Mortgage Documents. Tenant acknowledges that
any Facility Mortgage Documents executed by Landlord or any Affiliate of
Landlord may impose certain obligations on the “borrower” or other counterparty
thereunder to comply with or cause the operator and/or lessee of any Facility to
comply with all representations, covenants and warranties contained therein
relating to such Facility and the operator and/or lessee of such Facility,
including, covenants relating to (a) the maintenance and repair of such
Facility; (b) maintenance and submission of financial records and accounts of
the operation of such Facility and related financial and other information
regarding the operator and/or lessee of such Facility and such Facility itself;
(c) the procurement of insurance policies with respect to such Facility;
(d) periodic inspection and access rights in favor of the Facility Mortgagee;
and (e) without limiting the foregoing, compliance with all applicable Legal
Requirements relating to such Facility and the operations thereof. For so long
as any Facility Mortgages encumber any Facility or interest therein, Tenant
covenants and agrees, at its sole cost and expense and for the express benefit
of Landlord, to operate such Facility in strict compliance with the terms and
conditions of the Facility Mortgage Documents (other than payment of any
indebtedness evidenced or secured thereby) and to timely perform all of the
obligations of Landlord relating thereto, or to the extent that any of such
duties and obligations may not properly be performed by Tenant, Tenant shall
cooperate with and assist Landlord in the performance thereof (other than
payment of any indebtedness evidenced or secured thereby); provided, however,
that (i) if the time for performance of any act required of Tenant by the terms
of a Facility Mortgage is shorter than the time allowed by this Lease for
performance of such act by Tenant, then Tenant shall perform such act within the
time limits specified in this Lease and (ii) Tenant shall not be required to
comply with the terms, covenants and conditions of any Facility Mortgage that
(a) increase Tenant’s monetary obligations under this Lease, (b) materially
increase Tenant’s non-monetary obligations under this Lease, or (c) materially
diminish the rights of Tenant under this Lease. If any new Facility Mortgage
Documents to be executed by Landlord or any Affiliate of Landlord would impose
on Tenant any obligations under this Section 16.4, Landlord shall provide copies
of the same to Tenant for informational purposes (but not for Tenant’s approval)
prior to the execution and delivery thereof by Landlord or any Affiliate of
Landlord.
Article XVII
ASSIGNMENT AND SUBLETTING
17.1    Prohibition. Without the prior written consent of Landlord, which may be
withheld or conditioned in its sole and absolute discretion, Tenant shall not
suffer or permit any Transfer (including, without limitation, a Transfer of this
Lease or any interest herein) other than a Transfer that is expressly permitted
pursuant to the terms of this Lease. Any such purported Transfer without
Landlord’s prior written consent (each an “Unapproved Transfer”) shall be void
and shall, at Landlord’s sole option, constitute an Event of Default giving rise
to Landlord’s right, among other things, to terminate this Lease. If Landlord
elects to waive its right to terminate this Lease as a result of any such
Unapproved Transfer, this Lease shall continue in full force and effect;
provided, however, that as of the date of such Unapproved Transfer, the Base
Rent shall be increased by five percent (5%). Notwithstanding the foregoing,
subject to a subordination agreement in form reasonably acceptable to Landlord,
Landlord hereby consents to each Tenant entering into a written management
agreement with Diversicare Management Services, Co., an Affiliate of Tenant
(“Manager”), in form presented to Landlord prior to the Commencement Date, to
provide management services to such Tenant with respect to each Facility (the
“Management Agreement”). The approval by Landlord of the Management Agreement in
the form existing prior to the Commencement Date shall not relieve Tenant’s
compliance with the terms and provisions of this Lease nor shall said approval
be considered a waiver of Tenant’s obligation to obtain Landlord's prior written
consent to any amendment, modification or termination of the Management
Agreement or any further management arrangements for the Premises as required by
this Article XVII.
17.2    Landlord Consent. If Landlord consents to a Transfer, such Transfer
shall not be effective and valid unless and until the applicable transferee
executes and delivers to Landlord any and all documentation reasonably required
by Landlord. Any consent by Landlord to a particular Transfer shall not
constitute consent or approval of any subsequent Transfer, and Landlord’s
written consent shall be required in all such instances. Except and unless
Landlord, in its sole and absolute discretion, specifically agrees to do so in
writing when giving its consent, no consent by Landlord to any Transfer shall be
deemed to release Tenant from its obligations hereunder and Tenant shall remain
fully liable for payment and performance of all obligations under this Lease.
Without limiting the generality of the foregoing, in connection with any
sublease arrangement that has been approved by Landlord, as a condition
precedent to any such approval, any such sublease agreement shall include
provisions required by Landlord pertaining to protecting its status as a real
estate investment trust.
17.3    Transfers to Affiliates. Notwithstanding Section 17.1 to the contrary,
but subject to the rights of any Facility Mortgagee, Tenant may, without
Landlord’s prior written consent, assign this Lease or sublease any Facility to
a Person wholly owned and Controlled by Tenant or any Guarantor if all of the
following are first satisfied: (a) such assignee fully assumes Tenant’s
obligations hereunder; (b) Tenant remains fully liable hereunder and Guarantor
remains fully liable under the Guaranty; (c) the use of such Facility remains
unchanged; (d) Landlord in its reasonable discretion shall have approved the
form and content of all documents for such assignment or sublease and received
an executed counterpart thereof; (e) Tenant delivers evidence to Landlord that
such assignment or subletting is permissible under all applicable Authorizations
or that all necessary consents have been obtained to consummate such assignment
or subletting; and (f) Tenant and/or such assignee executes and delivers such
other documents as may be reasonably required by Landlord to effectuate the
assignment and continue the security interests and other rights of Landlord
pursuant to this Lease or any other documents executed in connection herewith.
17.4    Permitted Occupancy Agreements. Notwithstanding Section 17.1 to the
contrary, Tenant may enter into (i)  occupancy agreements with residents of each
Facility without the prior written consent of Landlord provided that (a) the
agreement does not provide for life care services; (b) the agreement does not
contain any type of rate lock provision or rate guaranty for more than one
calendar year; (c) the agreement does not provide for any rent reduction or
waiver other than for an introductory period not to exceed thirty (30) days;
(d) Tenant may not collect rent for more than one month in advance other than
one month of rent collected as security for the performance of the resident’s
obligations to Tenant, which amount is held in a separate escrow account for the
benefit of such resident; and (e) all residents of each Facility are accurately
shown in accounting records for such Facility, and (ii) commercial occupancy
agreements with any Person for up to an aggregate of five percent (5%) of the
square footage of any Facility in the normal course of the Primary Intended Use
of the Facility for the provision of customary ancillary services to its
residents provided that such Person is duly licensed and possessed of all
Authorizations necessary for the conduct of its activities at the Facility in
accordance with all Legal Requirements. Without the prior written consent of
Landlord, Tenant shall not materially change the form of resident occupancy
agreement that was submitted to Landlord prior to the Commencement Date;
provided, however, no consent will be required for changes required by
applicable law, including applicable licensure laws, but all changes to the form
of resident occupancy agreement will be provided to Landlord as and when such
changes are made.
17.5    Costs. Tenant shall reimburse Landlord for Landlord’s reasonable costs
and expenses incurred in conjunction with the processing and documentation of
any assignment, master subletting or management arrangement, including
reasonable attorneys’ or other consultants’ fees whether or not such assignment,
master sublease or management agreement is ultimately consummated or executed.
17.6    UPL Program Sublease. Notwithstanding Section 17.1 to the contrary, but
subject to the rights of any Facility Mortgagee, and subject to the REIT
protection provisions of Article XXII, Tenant may, if available under the
applicable law of the Situs State in which a Facility is located, with Lessor’s
prior written consent, which consent may be granted or withheld in Landlord’s
commercially reasonable discretion, sublease a Facility to a qualified state,
county or local hospital facility for participation in the Medicaid Upper
Payment Limits Program and equivalent or similar programs in the Situs State (a
“UPL Program”), if all of the following are first satisfied: (a) such hospital
has sufficient operating experience and history and sufficient assets and
income, in Landlord’s reasonable judgment, to bear the financial
responsibilities of Tenant to lease and operate the Facility; (b) such hospital
fully assumes Tenant’s obligations hereunder with respect to such Facility;
(c) Tenant remains fully liable hereunder and Guarantor remains fully liable
under the Guaranty; (d) the use of the Facility remains unchanged; and
(e) Landlord in its reasonable discretion shall have approved the form and
content of all documents entered into in connection with such sublease and
received executed counterparts thereof. For purposes of the foregoing, Landlord
shall not be deemed or construed to have unreasonably withheld its consent by
virtue of the fact that Landlord’s consent is conditioned upon the requirement
that a portion of the excess revenues generated by Tenant in connection with any
such UPL Program be (i) shared with Landlord as Additional Rent payable under
the terms of this Lease, or (ii) applied to make upgrades and improvements to
the applicable Facility that have the effect of maintaining or improving its
competitive position in its respective marketplace.
Article XVIII
CERTAIN RIGHTS OF LANDLORD
18.1    Right of Entry. Landlord and its representatives may enter on any
Facility at any reasonable time after reasonable notice to Tenant to inspect
such Facility for compliance to this Lease, to exhibit such Facility for sale,
lease or mortgaging, or for any other reason; provided, however, that no such
notice shall be required in the event of an emergency, upon an Event of Default
or to post notices of non-responsibility under any mechanic’s or materialman’s
lien law. Provided no Event of Default then exists and is continuing, Tenant
shall have a right to have a representative present during such entry. No such
entry shall unreasonably interfere with residents, patients, patient care or the
operations of such Facility.
18.2    Conveyance by Landlord. If Landlord or any successor owner of any
Facility shall convey such Facility other than as security for a debt, Landlord
or such successor owner, as the case may be, shall thereupon be released from
all future liabilities and obligations of the Landlord under this Lease arising
or accruing from and after the date of such conveyance or other transfer and,
subject to Section 16.2, all such future liabilities and obligations shall
thereupon be binding upon the new owner.
18.3    Granting of Easements, etc. Landlord may, from time to time, with
respect to each Facility: (a) grant easements, covenants and restrictions, and
other rights in the nature of easements, covenants and restrictions, (b) release
existing easements, covenants and restrictions, or other rights in the nature of
easements, covenants or restrictions, that are for the benefit of such Facility,
(c) dedicate or transfer unimproved portions of such Facility for road, highway
or other public purposes, (d) execute petitions to have such Facility annexed to
any municipal corporation or utility district, (e) execute amendments to any
easements, covenants and restrictions affecting such Facility and (f) execute
and deliver to any Person any instrument appropriate to confirm or effect such
grants, releases, dedications and transfers (to the extent of its interests in
such Facility) without the necessity of obtaining Tenant’s consent provided that
such easement or other instrument or action contemplated by this Section 18.3
does not unreasonably interfere with or adversely affect Tenant’s operations at
such Facility. Prior to the execution, delivery or taking of any such easement,
covenant or restriction affecting Tenant’s occupancy or use of any Facility,
Landlord shall provide Tenant with a description of the easement, covenant or
restriction and a survey or reasonably accurate drawing showing its location or
impact on the affected Facility and such other information as Tenant may
reasonably request to determine its impact on the affected Facility.
18.4    Excess Beds. For the avoidance of doubt, Tenant hereby acknowledges and
agrees that all of the bed rights (whether related to a bed that is in service
or not at any given time) associated with the operating licenses and other
Authorizations for each Facility are owned by, and are the property of, Landlord
and are appurtenant to the applicable Facility where located, notwithstanding
that the rights to operate such beds may be held in Tenant’s name under Tenant’s
Authorizations to operate a Facility. Throughout the Term (including any
Extension Term), Tenant shall maintain and preserve all of the bed rights
associated with the Authorizations for each Facility, including without
limitation (i) bed rights that are “banked,” suspended or on similar status, and
(ii) rights to currently or historically unused, non-operational or excess beds.
Tenant shall not commit any act or omission that would reasonably be expected to
result in suspension, revocation, decertification or other material limitation,
or except in connection with a Transfer permitted pursuant to Article XVII the
sale or transfer, of all or any portion of the bed rights associated with the
operating licenses and other Authorizations for each Facility.
Article XIX
ENVIRONMENTAL MATTERS
19.1    Hazardous Materials. Tenant shall not allow any Hazardous Materials to
be located in, on, under or about any Facility or incorporated in any Facility
during the Term; provided, however, that Hazardous Materials may be brought,
kept, used or disposed of in, on or about a Facility in quantities and for
purposes similar to those brought, kept, used or disposed of in, on or about
similar facilities used for purposes similar to such Facility’s Primary Intended
Use and which are brought, kept, used and disposed of in strict compliance with
all Hazardous Materials Laws. This Section 19.1 shall not apply to any Hazardous
Materials in, on, under, about or incorporated in any Facility prior to the
Commencement Date.
19.2    Notices. Tenant shall immediately advise Landlord in writing of (a) any
Environmental Activities in violation of any Hazardous Materials Laws; (b) any
Hazardous Materials Claims against Tenant or any Facility; (c) any remedial
action taken by Tenant in response to any Hazardous Materials Claims or any
Hazardous Materials on, under or about any Facility in violation of any
Hazardous Materials Laws; (d) Tenant’s discovery of any occurrence or condition
on or in the vicinity of any Facility that materially increase the risk that
such Facility will be exposed to Hazardous Materials; and (e) all communications
to or from Tenant, any governmental authority or any other Person relating to
Hazardous Materials Laws or Hazardous Materials Claims with respect to any
Facility, including copies thereof.
19.3    Remediation. If Tenant becomes aware of a violation of any Hazardous
Materials Laws relating to any Hazardous Materials in, on, under or about any
Facility, or if Tenant, Landlord or any Facility becomes subject to any order of
any federal, state or local agency to repair, close, detoxify, decontaminate or
otherwise remediate any Facility, Tenant shall immediately notify Landlord of
such event. To the extent that any such violation or order results from a breach
of Tenant’s obligations under Section 19.1, Tenant, at its sole cost and
expense, shall cure any such violation or effect such repair, closure,
detoxification, decontamination or other remediation in accordance with all
applicable Legal Requirements and subject to Landlord’s prior approval as to
scope, process, content and standard for completion. If Tenant fails to
implement and diligently pursue any such cure, repair, closure, detoxification,
decontamination or other remediation, Landlord shall have the right, but not the
obligation, to carry out such action and to recover from Tenant all of
Landlord’s costs and expenses incurred in connection therewith. Tenant shall
reasonably cooperate with Landlord, at no out-of-pocket expense to Tenant, to
effect any repair, closure, detoxification, decontamination or other remediation
that is not the financial obligation of Tenant pursuant to this Section 19.3.
19.4    Indemnity. Tenant shall indemnify, defend, protect, save, hold harmless
and reimburse Landlord for, from and against any and all Losses (whether or not
arising out of third-party claims and regardless of whether liability without
fault is imposed, or sought to be imposed, on Landlord) incurred in connection
with, arising out of, resulting from or incident to, directly or indirectly,
during (but not before or after) the Term, (a) Environmental Activities,
including the effects of such Environmental Activities on any Person or property
within or outside the boundaries of the Land of any Facility, (b) the presence
of any Hazardous Materials in, on, under or about any Facility, and (c) the
violation of any Hazardous Material Laws. For purposes hereof, Losses include
interest, costs of response, removal, remedial action, containment, cleanup,
investigation, design, engineering and construction, damages (including actual,
consequential and punitive damages) for personal injuries and for injury to,
destruction of or loss of property or natural resources, relocation or
replacement costs, penalties, fines, charges or expenses, attorney’s fees,
expert fees, consultation fees and court costs, and all amounts paid in
investigating, defending or settling any of the foregoing. This Section 19.4
shall not apply to any Hazardous Materials in, on, under, about or incorporated
in any Facility prior to the Commencement Date.
19.5    Environmental Inspections. Landlord shall have the right, from time to
time, during normal business hours and upon not less than five (5) days written
notice to Tenant, except in the case of an emergency in which event no notice
shall be required, to conduct an inspection of any Facility to determine
Tenant’s compliance with this Article XIX. Such inspection may include such
testing, sampling and analyses as Landlord deems reasonably necessary and may be
performed by experts retained by Landlord. All costs and expenses incurred by
Landlord under this 19.5 shall be paid on demand by Tenant; provided, however,
absent reasonable grounds to suspect Tenant’s breach of its obligations under
this Article XIX, Tenant shall not be required to pay for more than one (1) such
inspection in any one (1) year period with respect to each Facility. The
obligations set forth in this Article XIX shall survive the expiration or
earlier termination of this Lease.
Article XX
LANDLORD’S SECURITY INTEREST
20.1    Grant of Security Interest. For the purpose of securing the payment and
performance obligations of Tenant hereunder, Tenant, as debtor, hereby grants to
Landlord, as secured party, a security interest in and an express contractual
lien upon, all of Tenant’s right, title and interest in and to the Property
Collateral, Accounts Collateral and Authorization Collateral (collectively, the
“Lease Collateral”); provided that (i) to the extent the Legal Requirements
prohibit the assignment or granting of a security interest or lien in any of the
Authorization Collateral, then such Authorization Collateral so restricted by
applicable law shall be deemed not to be included as Lease Collateral and (ii)
the Lease Collateral shall not include the Excluded Tenant Personal Property.
This Lease constitutes a security agreement covering all such Lease Collateral.
This security interest and agreement shall survive the termination of this Lease
resulting from an Event of Default. Tenant shall pay all filing and reasonable
record search fees and other costs for such additional security agreements,
financing statements, fixture filings and other documents as Landlord may
reasonably require to perfect or continue the perfection of its security
interest. Additionally, Tenant shall promptly execute such other separate
security agreements with respect to the Lease Collateral as Landlord may request
from time to time to further evidence the security interest in the Lease
Collateral created by this Lease.
20.2    Accounts Receivable Financing. With Landlord’s prior written consent,
which consent shall not be unreasonably withheld, the security interests and
liens granted to Landlord in the Accounts Collateral and the Authorization
Collateral (solely to the extent necessary for billing and collecting any
Accounts Collateral and as provided under the applicable intercreditor
agreement) may be subordinated to any first priority security interest granted
in connection with accounts receivable financing secured by Tenant so long as:
(a) Tenant’s accounts receivable lenders execute an intercreditor agreement with
Landlord in form and substance reasonably acceptable to Landlord, and (b) no
Event of Default exists hereunder.
20.3    Certain Changes. In no way waiving or modifying the provisions of
Article XVII above, Tenant shall give Landlord at least thirty (30) days’ prior
written notice of any change in Tenant’s principal place of business, name,
identity, jurisdiction of organization or corporate structure.
Article XXI
QUIET ENJOYMENT
So long as Tenant shall pay the Rent as the same becomes due and shall fully
comply with all of the terms of this Lease and fully perform its obligations
hereunder, Tenant shall peaceably and quietly have, hold and enjoy each Facility
for the Term, free of any claim or other action by Landlord or anyone claiming
by, through or under Landlord, but subject to all liens and encumbrances of
record as of the Commencement Date or thereafter provided for in this Lease or
consented to by Tenant.
Article XXII
REIT RESTRICTIONS
22.1    Characterization of Rents. The parties hereto intend that Rent and other
amounts paid by Tenant hereunder will qualify as “rents from real property”
within the meaning of Section 856(d) of the Code, or any similar or successor
provision thereto and this Agreement shall be interpreted consistent with this
intent
22.2    General REIT Provisions. Tenant understands that, in order for Landlord,
or any Affiliate of Landlord that is a real estate investment trust, to qualify
as a real estate investment trust, certain requirements must be satisfied,
including the provisions of Section 856 of the Code. Accordingly, Tenant agrees,
and agrees to cause its Affiliates, permitted subtenants, if any, and any other
parties subject to its control by ownership or contract, to reasonably cooperate
with Landlord to ensure that such requirements are satisfied, including
providing Landlord or any of its Affiliates with information about the ownership
of Tenant and its Affiliates. Tenant agrees, and agrees to cause its Affiliates,
upon request by Landlord or any of its Affiliates, to take all action reasonably
necessary to ensure compliance with such requirements.
22.3    Prohibited Transactions. Notwithstanding anything to the contrary
herein, Tenant shall not (a) sublet, assign or enter into a management
arrangement for any Facility on any basis such that the rental or other amounts
to be paid by the subtenant, assignee or manager thereunder would be based, in
whole or in part, on either (x) the income or profits derived by the business
activities of the subtenant, assignee or manager or (y) any other formula such
that any portion of any amount received by Landlord would fail to qualify as
“rents from real property” within the meaning of Section 856(d) of the Code, or
any similar or successor provision thereto; (b) furnish or render any services
to the subtenant, assignee or manager or manage or operate any Facility so
subleased, assigned or managed; (c) sublet, assign or enter into a management
arrangement for any Facility to any Person (other than a taxable REIT subsidiary
of Landlord) in which Tenant or Landlord owns an interest, directly or
indirectly (by applying constructive ownership rules set forth in Section
856(d)(5) of the Code); or (d) sublet, assign or enter into a management
arrangement for any Facility in any other manner which could cause any portion
of the amounts received by Landlord pursuant to this Lease or any sublease to
fail to qualify as “rents from real property” within the meaning of Section
856(d) of the Code, or any similar or successor provision thereto, or which
could cause any other income of Landlord to fail to qualify as income described
in Section 856(c)(2) of the Code. The requirements of this Section 22.3 shall
likewise apply to any further subleasing by any subtenant.
22.4    Personal Property REIT Requirements. Notwithstanding anything to the
contrary herein, upon request of Landlord, Tenant shall cooperate with Landlord
in good faith and provide such documentation and/or information as may be in
Tenant’s possession or under Tenant’s control and otherwise readily available to
Tenant regarding the valuation of the Premises to assist Landlord in its
determination that Rent allocable for purposes of Section 856 of the Code to the
Landlord Personal Property at the beginning and end of a calendar year does not
exceed 15% of the total Rent due hereunder (the “Personal Property REIT
Requirement”). Tenant shall take such reasonable action as may be requested by
Landlord from time to time to ensure compliance with the Personal Property REIT
Requirement as long as such compliance does not (a) increase Tenant’s monetary
obligations under this Lease, (b) materially and adversely increase Tenant’s
non-monetary obligations under this Lease or (c) materially diminish Tenant’s
rights under this Lease. Accordingly, if requested by Landlord and at Landlord’s
expense, Tenant shall cooperate with Landlord as may be necessary from time to
time to more specifically identify and/or value the Landlord Personal Property
in connection with the compliance with the Personal Property REIT Requirement.
Article XXIII
NOTICES
All notices and demands, certificates, requests, consents, approvals and other
similar instruments under this Lease shall be in writing and sent by personal
delivery, U. S. certified or registered mail (return receipt requested, postage
prepaid) or FedEx or similar generally recognized overnight carrier regularly
providing proof of delivery, addressed as follows:
If to Tenant:
If to Landlord:
c/o Diversicare Leasing Company II, LLC
1621 Galleria Blvd.
Brentwood, TN 37027
Facsimile No.: 615-620-7875
Attn: Chief Financial Officer
c/o Golden Living
1000 Fianna Way
Fort Smith, Arkansas 72919
Facsimile: 479-201-4801
Attn: Holly Rasmussen-Jones

With a copy to:
With a copy to:
Bass, Berry & Sims PLC
150 Third Avenue South
Suite 2800
Nashville, TN 37201
Facsimile No.: 615-742-0466
Attn: Mark Manner
Nicholas R. Finn
Four Embarcadero Center, Suite 710
San Francisco, California 94111

A party may designate a different address by notice as provided above. Any
notice or other instrument so delivered (whether accepted or refused) shall be
deemed to have been given and received on the date of delivery established by
U.S. Post Office return receipt or the carrier’s proof of delivery or, if not so
delivered, upon its receipt. Delivery to any officer, general partner or
principal of a party shall be deemed delivery to such party. Notice to any one
co-Tenant shall be deemed notice to all co-Tenants.
Article XXIV
MISCELLANEOUS
24.1    Memorandum of Lease. Landlord and Tenant shall, promptly upon the
request of either, enter into a short form memorandum of this Lease, in form
suitable for recording under the laws of the applicable Situs State. Tenant
shall pay all costs and expenses of recording any such memorandum and shall
fully cooperate with Landlord in removing from record any such memorandum upon
the expiration or earlier termination of the Term.
24.2    No Merger. There shall be no merger of this Lease or of the leasehold
estate created hereby by reason of the fact that the same Person may acquire,
own or hold, directly or indirectly, (a) this Lease or the leasehold estate
created hereby or any interest in this Lease or such leasehold estate and
(b) the fee estate in the Premises.
24.3    No Waiver. No failure by Landlord to insist upon the strict performance
of any term hereof or to exercise any right, power or remedy hereunder and no
acceptance of full or partial payment of Rent during the continuance of any
Event of Default shall constitute a waiver of any such breach or of any such
term. No waiver of any breach shall affect or alter this Lease, which shall
continue in full force and effect with respect to any other then existing or
subsequent breach.
24.4    Acceptance of Surrender. No surrender to Landlord of this Lease or any
Facility, 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.
24.5    Attorneys’ Fees. If Landlord or Tenant brings an action or other
proceeding against the other to enforce any of the terms, covenants or
conditions hereof or any instrument executed pursuant to this Lease, or by
reason of any breach or default hereunder or thereunder, the party prevailing in
any such action or proceeding and any appeal thereupon shall be paid all of its
costs and reasonable outside attorneys’ fees incurred therein. In addition to
any other amount required to be paid by Tenant to Landlord under this Lease,
Tenant shall pay, on behalf of Landlord, or reimburse Landlord for, all
out-of-pocket costs or expenses paid or incurred by Landlord, including
reasonable attorneys’ fees, in connection with administering this Lease and
related agreements, including any of the following activities undertaken by, or
on behalf of, Landlord under this Lease: (a) the review, execution, negotiation
or delivery of any consent, waiver, estoppel, subordination agreement or
approval requested of Landlord by Tenant under this Lease, including any request
for consent to a Transfer, Alterations, any so-called “landlord’s waiver”, or
any other matter over which Landlord has review or approval rights; (b) the
review by Landlord or its representatives of any Plans and Specifications;
(c) any assistance provided by Landlord in connection with any protest, appeal
or other similar action undertaken by Tenant pursuant to this Lease; (d) the
review, execution, negotiation or delivery of any intercreditor, subordination
or similar agreement (or any amendment or supplement thereto) permitted pursuant
to this Lease; (e) any revisions, extensions, renewals, amendments or “workouts”
of this Lease, (f) the enforcement or satisfaction by Landlord of any of
Tenant’s obligations under this Lease and Guarantor’s obligations under the
Guaranty, including preparation of notices of an Event of Default and the
collection of past due Rent.
24.6    Brokers. Other than Houlihan Lokey (the commissions, fees, costs and
expenses due to shall be paid by Landlord), Landlord and Tenant each warrants to
the other that it has not had any contact or dealings with any Person which
would give rise to the payment of any fee or brokerage commission in connection
with this Lease, and each shall indemnify, protect, hold harmless and defend the
other from and against any liability for any fee or brokerage commission arising
out of any act or omission of such indemnifying party.
24.7    Severability. If any term or provision of this Lease or any application
thereof shall be held invalid or unenforceable, the remainder of this Lease and
any other application of such term or provision shall not be affected thereby.
24.8    Non-Recourse. Tenant specifically agrees to look solely to the Premises
for recovery of any judgment from Landlord; provided, however, the foregoing is
not intended to, and shall not, limit any right that Tenant might otherwise have
to obtain injunctive relief against Landlord, or any action not involving the
personal liability of Landlord. Furthermore, in no event shall Landlord be
liable to Tenant for any indirect or consequential damages suffered by Tenant
from whatever cause.
24.9    Successors and Assigns. This Lease shall be binding upon Landlord and
its successors and assigns and, subject to the provisions of Article XVII, upon
Tenant and its successors and assigns.
24.10    Governing Law; Jury Waiver. This Lease shall be governed by and
construed and enforced in accordance with the internal laws of Delaware, without
regard to the conflict of laws rules thereof; provided that that the law of the
applicable Situs State shall govern procedures for enforcing, in the respective
Situs State, provisional and other remedies directly related to such Facility
and related personal property as may be required pursuant to the law of such
Situs State, including without limitation the appointment of a receiver; and,
further provided that the law of the Situs State also applies to the extent, but
only to the extent, necessary to create, perfect and foreclose the security
interests and liens created under this Lease. This Lease is a commercial rental
agreement under Delaware law EACH PARTY HEREBY WAIVES ANY RIGHTS TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST
THE OTHER IN CONNECTION WITH ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, INCLUDING RELATIONSHIP OF THE PARTIES, TENANT’S USE
AND OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE RELATING TO THE
FOREGOING OR THE ENFORCEMENT OF ANY REMEDY.
24.11    Entire Agreement. This Lease constitutes the entire agreement of the
parties with respect to the subject matter hereof, and may not be changed or
modified except by an agreement in writing signed by the parties. Landlord and
Tenant hereby agree that all prior or contemporaneous oral understandings,
agreements or negotiations relative to the leasing of the Premises are merged
into and revoked by this Lease. All exhibits and schedules to this Lease are
hereby incorporated herein by this reference.
24.12    Headings. All titles and headings to sections, articles or other
subdivisions of this Lease are for convenience of reference only and shall not
in any way affect the meaning or construction of any provision.
24.13    Counterparts. This Lease may be executed in any number of counterparts,
each of which shall be a valid and binding original, but all of which together
shall constitute one and the same instrument. Executed copies hereof may be
delivered by telecopier, email or other electronic means and upon receipt will
be deemed originals and binding upon the parties hereto, regardless of whether
originals are delivered thereafter.
24.14    Joint and Several. If more than one Person is the Tenant under this
Lease, the liability of such Persons under this Lease shall be joint and
several.
24.15    Interpretation. Both Landlord and Tenant have been represented by
counsel and this Lease and every provision hereof has been freely and fairly
negotiated. Consequently, all provisions of this Lease shall be interpreted
according to their fair meaning and shall not be strictly construed against any
party. Whenever the words “including”, “include” or “includes” are used in this
Lease, they shall be interpreted in a non-exclusive manner as though the words
“without limitation” immediately followed. Whenever the words “herein,” “hereof”
and “hereunder” and other words of similar import are used in this Lease, they
shall be interpreted to refer to this Lease as a whole and not to any particular
article, section or other subdivision. Whenever the words “day” or “days” are
used in this Lease, they shall mean “calendar day” or “calendar days” unless
expressly provided to the contrary. All references in this Lease to designated
“Articles,” “Sections” and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Lease.
24.16    Time of Essence. Time is of the essence of this Lease and each
provision hereof in which time of performance is established and whenever action
must be taken (including the giving of notice or the delivery of documents)
hereunder during a certain period of time or by a particular date that ends or
occurs on a day that is not a Business Day, then such period or date shall be
extended until the immediately following Business Day.
24.17    Further Assurances. The parties agree to promptly sign all documents
reasonably requested by the other party to give effect to the provisions of this
Lease.

[Signature page follows]

IN WITNESS WHEREOF, this Lease has been executed under seal by Landlord and
Tenant as of the Commencement Date.

TENANT:
DIVERSICARE OF AMORY, LLC,
DIVERSICARE OF ARAB, LLC,
DIVERSICARE OF BATESVILLE, LLC,
DIVERSICARE OF BESSEMER, LLC,
DIVERSICARE OF BOAZ, LLC,
DIVERSICARE OF BROOKHAVEN, LLC,
DIVERSICARE OF EUPORA, LLC,
DIVERSICARE OF FOLEY, LLC,
DIVERSICARE OF HUEYTOWN, LLC,
DIVERSICARE OF LANETT, LLC,
DIVERSICARE OF MONTGOMERY, LLC,
DIVERSICARE OF ONEONTA, LLC,
DIVERSICARE OF OXFORD, LLC,
DIVERSICARE OF PELL CITY, LLC,
DIVERSICARE OF RIPLEY, LLC,
DIVERSICARE OF RIVERCHASE, LLC,
DIVERSICARE OF SOUTHAVEN, LLC,
DIVERSICARE OF TUPELO, LLC,
DIVERSICARE OF TYLERTOWN, LLC, and
DIVERSICARE OF WINFIELD, LLC,
each a Delaware limited liability company
By:
DIVERSICARE LEASING COMPANY III, LLC,
a Delaware limited liability company,
its sole member

By:     /s/James R. McKnight, Jr.         (SEAL)
Name:     James R. McKnight, Jr.            
Title:     EVP & CFO                

SEALED AND DELIVERED IN THE PRESENCE OF:

Name:                    
[Signatures continue on next page]

LANDLORD:
GPH AMORY LLC,
GPH ARAB LLC,
GPH BATESVILLE LLC,
GPH BESSEMER LLC,
GPH BIRMINGHAM LLC,
GPH BOAZ LLC,
GPH BROOKHAVEN LLC,
GPH EUPORA LLC,
GPH FOLEY LLC,
GPH HUEYTOWN LLC,
GPH LANETT LLC,
GPH MONTGOMERY LLC,
GPH ONEONTA LLC,
GPH OXFORD LLC,
GPH RIPLEY LLC,
GPH SOUTHAVEN LLC,
GPH TUPELO LLC,
GPH TYLERTOWN LLC, and
GPH WINFIELD LLC,
each a Delaware limited liability company

By:     /s/Holly Rasmussen Jones         (SEAL)
Name:      Holly Rasmussen Jones            
Title:      Secretary                

BEVERLY ENTERPRISES – ALABAMA, INC.,
a California corporation
By:     /s/Holly Rasmussen Jones         (SEAL)
Name:      Holly Rasmussen Jones            
Title:      Secretary                

SEALED AND DELIVERED IN THE PRESENCE OF:

Name:                    

EXHIBIT A

DEFINED TERMS
For all purposes of this Lease, except as otherwise expressly provided in the
Lease or unless the context otherwise requires, the following terms have the
meanings assigned to them in this exhibit and include the plural as well as the
singular:
“Accounts Collateral” means, collectively, all of the following: (i) all of the
accounts, accounts receivable, payment intangibles, health-care-insurance
receivables and any other right to the payment of money in whatever form, of any
of the Tenant Sublessees, or any other indebtedness of any Person owing to any
of the Tenant Sublessees (whether constituting an account, chattel paper,
document, instrument or general intangible), whether presently owned or
hereafter acquired, arising from the provision of merchandise, goods or services
by any Tenant Sublessee, or from the operations of any Tenant Sublessee at each
Facility, including, without limitation, the right to payment of any interest or
finance charges and other obligations with respect thereto; (ii) all of the
rights, titles and interests of any of the Tenant Sublessees in, to and under
all supporting obligations and all other liens and property subject thereto from
time to time securing or purporting to secure any such accounts, accounts
receivable, payment intangibles, health-care insurance receivables or other
indebtedness owing to any of the Tenant Sublessees; (iii) all of the rights,
titles and interests of any of the Tenant Sublessees in, to and under all
guarantees, indemnities and warranties, letter-of-credit rights, supporting
obligations, insurance policies, financing statements and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of any such accounts, accounts receivable, payment intangibles,
health-care insurance receivables or other indebtedness owing to any of the
Tenant Sublessees; (iv) all of the now owned or hereafter acquired deposits of
any of the Tenant Sublessees representing proceeds from accounts and any deposit
account into which the same may be deposited, all other cash collections and
other proceeds of the foregoing accounts, accounts receivable, payment
intangibles, health-care insurance receivables or other indebtedness (including,
without limitation, late charges, fees and interest arising thereon, and all
recoveries with respect thereto that have been written off as uncollectible),
and all deposit accounts into which the same are deposited; (v) all proceeds
(whether constituting accounts, chattel paper, documents, instruments or general
intangibles) with respect to the foregoing; and (vi) all books and records with
respect to any of the foregoing.
“Actual Capital Expenditures Amount” has the meaning set forth in Section 7.6.1.
“Additional Deposit” has the meaning set forth in Section 6.12.1.
“Additional Rent” has the meaning set forth in Section 2.2.
“Adjusted CPI Increase” means the actual CPI Increase as of the date of
determination, provided that for purposes of this Lease the Adjusted CPI
Increase shall be deemed to equal two and no/100 percent (2.00%).
“Affiliate” means with respect to any Person, any other Person which Controls,
is Controlled by or is under common Control with the first Person.
“Affiliate Agreements” has the meaning set forth in Section 6.10.
“Agency Lender” means any of: (i) the U.S. Department of Housing and Urban
Development, (ii) the Federal National Mortgage Association (Fannie Mae), or
(iii) the Federal Home Loan Mortgage Corporation (Freddie Mac), or any
designees, agents, originators, or servicers of any of the foregoing.
“Agreed Rate” means, on any date, a rate equal to five percent (5%) per annum
above the Prime Rate, but in no event greater than the maximum rate then
permitted under applicable law. Interest at the aforesaid rates shall be
determined for actual days elapsed based upon a 360 day year.
“Alterations” means, with respect to each Facility, any alteration, improvement,
exchange, replacement, modification or expansion of the Leased Improvements or
Fixtures at such Facility.
“Authorization” means, with respect to each Facility, any and all licenses,
permits, certifications, accreditations, Provider Agreements, CONs, certificates
of exemption, approvals, waivers, variances and other governmental or
“quasi-governmental” authorizations necessary or advisable for the use of such
Facility for its Primary Intended Use and receipt of reimbursement or other
payments under any Third Party Payor Program in which such Facility
participates.
“Authorization Collateral” means any Authorizations issued or licensed to, or
leased or held by, Tenant.
“Bankruptcy Action” means, with respect to any Person, (i) such Person filing a
voluntary petition under the Bankruptcy Code or any other federal or state
bankruptcy or insolvency law; (ii) the filing of an involuntary petition against
such Person under the Bankruptcy Code or any other federal or state bankruptcy
or insolvency law which is not dismissed within sixty (60) days of the filing
thereof, or soliciting or causing to be solicited petitioning creditors for any
involuntary petition against such Person; (iii) such Person filing an answer
consenting to or otherwise acquiescing in or joining in any involuntary petition
filed against it, by any other Person under the Bankruptcy Code or any other
federal or state bankruptcy or insolvency law, or soliciting or causing to be
solicited petitioning creditors for any involuntary petition from any Person;
(iv) such Person seeking, consenting to or acquiescing in or joining in an
application for the appointment of a custodian, receiver, trustee, or examiner
for such Person or any portion of the Facility; (v) such Person making an
assignment for the benefit of creditors; or (vi) such Person taking any action
in furtherance of any of the foregoing.
“Bankruptcy Code” means 11 U.S.C. § 101 et seq., as the same may be amended from
time to time.
“Base Rent” has the meaning set forth in Section 2.1.1.
“Base Upgrade Allowance Amount” shall have the meaning set forth in
Section 7.10.9.
“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which national banks in the City of New York, New York, are
authorized, or obligated, by law or executive order, to close.
“Capital Alterations” means any Alteration to a Facility for which the budgeted
cost exceeds $75,000.
“Capital Expenditures” mean, with respect to each Facility, repairs,
replacements and improvements to such Facility (including repair and replacement
of Landlord Personal Property) that (i) constitute capital expenditures in
accordance with GAAP and (ii) have been completed in a good, workmanlike and
lien-free fashion and in compliance with all Legal Requirements and the terms of
Sections 7.4 and 7.5 applicable to any Alterations and the terms of Section 7.9
and Section 7.10, as applicable, with respect to Alterations financed by
Landlord. Capital Expenditures shall not include (a) expenses related to routine
repairs and maintenance, (b) purchases of office equipment, or (c) any other
expenditures reasonably determined by Landlord to be inappropriately
characterized as a “capital expenditure” in accordance with GAAP.
“Capital Expenditures Deposit” has the meaning set forth in Section 7.6.1.
“Capital Expenditures Report” has the meaning set forth in Section 7.6.1.
“Change in Control” means, as applied to any Person, a change in the Person that
ultimately exerts effective Control over the first Person.
“Citation” has the meaning set forth in Section 13.1.3.
“Closure Notice” means a written notice delivered by Landlord to Tenant pursuant
to which Landlord notifies Tenant that Tenant may commence a Facility
Termination as to a particular Facility or Facilities.
“CMS” means the United States Department of Health, Centers for Medicare and
Medicaid Services or any successor agency thereto.
“Code” means the Internal Revenue Code of 1986 and, to the extent applicable,
the Treasury Regulations promulgated thereunder, each as amended from time to
time.
“Commencement Date” shall mean November 1, 2016.
“Competing Facility” means a skilled nursing facility or other health care
facility providing skilled nursing services similar to those of the Primary
Intended Use of any Facility, licensed or unlicensed, existing or to be
constructed, that (i) competes in any direct or indirect way with, or is
comparable in any way to, any Facility and (ii) is located within a five (5)
mile radius of any Facility.
“Complete Taking” means the Condemnation of all or substantially all of a
Facility or a Condemnation that results in a Facility no longer being capable of
being operated for its Primary Intended Use.
“CON” means, with respect to each Facility, a certificate of need or similar
permit or approval (not including conventional building permits) from a
Governmental Authority related to (i) the construction and/or operation of such
Facility for the use of a specified number of beds in a nursing facility,
assisted living facility, senior independent living facility and/or
rehabilitation hospital, or (ii) the alteration of such Facility or (iii) the
modification of the services provided at such Facility used as a nursing
facility, assisted living facility, senior independent living facility and/or
rehabilitation hospital.
“Condemnation” means the exercise of any governmental power, whether by legal
proceedings or otherwise, by a Condemnor or a voluntary sale or transfer by
Landlord to any Condemnor, either under threat of condemnation or while legal
proceedings for condemnation are pending.
“Condemnor” means any public or quasi-public authority, or private corporation
or individual, having the power of condemnation.
“Construction Consultant” has the meaning set forth in Section 7.7.
“Contingent Obligation” means any direct or indirect liability of Tenant: (i)
with respect to any Debt of another Person; (ii) with respect to any undrawn
portion of any letter of credit issued for the account of Tenant as to which
Tenant is otherwise liable for the reimbursement of any drawing; (iii) to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement; or (iv) for any obligations of another
Person pursuant to any guaranty or pursuant to any agreement to purchase,
repurchase or otherwise acquire any obligation or any property constituting
security therefor, to provide funds for the payment or discharge of such
obligation or to preserve the solvency, financial condition or level of income
of another Person. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guarantied or otherwise supported or, if not a fixed
and determinable amount, the maximum amount so guarantied or otherwise
supported.
“Control”, together with the correlative terms “Controlled” and “Controls,”
means, as applied to any Person, the possession, directly or indirectly, of the
power to direct the management and policies of that Person, whether through
ownership, voting control, by contract or otherwise.
“CPI” means the United States Department of Labor, Bureau of Labor Statistics
Consumer Price Index for All Urban Wage Earners and Clerical Workers, United
States Average, Subgroup “All Items” (1982 - 1984 = 100). If the foregoing index
is discontinued or revised during the Term, the governmental index or
computation with which it is replaced shall be used to obtain substantially the
same result as if such index had not been discontinued or revised.
“CPI Increase” means the percentage increase (but not decrease) in (i) the CPI
published for the beginning of each Lease Year, over (ii) the CPI published for
the beginning of the immediately preceding Lease Year.
“Debt” means, for any Person, without duplication: (i) all indebtedness of such
Person for borrowed money, for amounts drawn under a letter of credit or for the
deferred purchase price of property for which such Person or its assets is
liable; (ii) all unfunded amounts under a loan agreement, letter of credit or
other credit facility for which such Person would be liable if such amounts were
advanced thereunder; (iii) all amounts required to be paid by such Person as a
guaranteed payment to partners or a preferred or special dividend, including any
mandatory redemption of shares or interests; (iv) all indebtedness guaranteed by
such Person, directly or indirectly; (v) all obligations under leases that
constitute capital leases for which such Person is liable; (vi) all obligations
of such Person under interest rate swaps, caps, floors, collars and other
interest hedge agreements, in each case whether such Person is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss; (vii)
off-balance sheet liabilities of such Person; and (viii) obligations arising
under bonus, deferred compensation, incentive compensation or similar
arrangements, other than those arising in the Ordinary Course of Business.
“EBITDARM” means, for any period of determination, the aggregate net operating
income of Tenant for such period to the extent derived from the operation of the
Premises as reflected in financial statements prepared in accordance with GAAP,
adjusted to add thereto, to the extent allocable to the Premises for the
applicable period of determination, without duplication, (1) interest expense,
(2) income tax expense, (3) depreciation and amortization expense, (4) Base
Rent, and (5) management fee expenses, in each case determined in accordance
with GAAP, to the extent applicable.
“Environmental Activities” mean, with respect to each Facility, the use,
generation, transportation, handling, discharge, production, treatment, storage,
release or disposal of any Hazardous Materials at any time to or from such
Facility or located on or present on or under such Facility.
“Event of Default” has the meaning set forth in Section 13.1.
“Excess Beds” has the meaning set forth in Section 18.4.1.
“Excess Capital Expenditures Amount” has the meaning set forth in Section 7.6.
“Excluded Tenant Personal Property” means (i) Tenant’s continuous quality
improvement program, manuals and materials; management information systems;
policy, procedure and educational manuals and materials and similar proprietary
property, (ii) computer hardware and related equipment which is integrated with
the computer system maintained by Tenant’s Affiliates and related computer
software; provided, however, that Tenant shall cause all data that is reasonably
necessary for the continuing operation of the Facilities following the
termination or expiration of this Lease, and which may be accessed, through such
computers or software, to be made available to Landlord in a reasonably
accessible form at a reasonable cost to Landlord, (iii) vehicles, and (iv) all
rights in and to the name “Diversicare” or any derivative thereof.
“Expiration Date” means the Initial Expiration Date, as may be extended pursuant
to Section 1.3.
“Extension Notice” has the meaning set forth in Section 1.3.
“Extension Term” has the meaning set forth in Section 1.3.
“Facility” means each healthcare facility located on the Premises, as identified
on Schedule 2 attached hereto, including, where the context requires, the Land,
Leased Improvements, Intangibles and Landlord Personal Property associated with
such healthcare facility.
“Facility Mortgage” means any mortgage, deed of trust or other security
agreement or lien encumbering any Facility and securing an indebtedness of
Landlord or any Affiliate of Landlord or any ground, building or similar lease
or other title retention agreement to which any Facility are subject from time
to time.
“Facility Mortgage Documents” means with respect to each Facility Mortgage and
Facility Mortgagee, the applicable Facility Mortgage, loan or credit agreement,
lease, note, collateral assignment instruments, guarantees, indemnity agreements
and other documents or instruments evidencing, securing or otherwise relating to
the loan made, credit extended, lease or other financing vehicle pursuant
thereto. Facility Mortgage Documents shall also include, without limitation, any
documents typically required by any Agency Lender in connection with a Facility
Mortgage, including, but not limited to: (i) tenant regulatory agreements, (ii)
intercreditor agreements with any receivables lender of Tenant, and (iii) any
subordination, assignment, and security agreements.
“Facility Mortgagee” means the holder or beneficiary of a Facility Mortgage and
any other rights of the lender, credit party or lessor under the applicable
Facility Mortgage Documents, including, without limitation, any Agency Lender.
“Facility Required Per Bed Annual Capital Expenditures Amount” means, with
respect to any Lease Year, fifty percent (50%) of the Required Per Bed Annual
Capital Expenditures amount for such Lease Year.
“Facility Termination” has the meaning set forth in Section 14.2.6.
“Fair Market Rental” means the fair market rent for the Premises as determined
pursuant to Exhibit E.
“Fixtures” means all equipment, machinery, fixtures and other items of real
and/or personal property, including all components thereof, now and hereafter
located in, on, or used in connection with and permanently affixed to or
incorporated into the Leased Improvements, including 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, apparatus, sprinkler systems, fire and
theft protection equipment and built-in oxygen and vacuum systems, all of which,
to the greatest extent permitted by law, are hereby deemed to constitute real
estate, together with all replacements, modifications, alterations and additions
thereto.
“GAAP” means generally accepted accounting principles, consistently applied.
“Governmental Authority” means any court, board, agency, commission, bureau,
office or authority or any governmental unit (federal, state, county, district,
municipal, city or otherwise) and any regulatory, administrative or other
subdivision, department or branch of the foregoing, whether now or hereafter in
existence, including, without limitation, CMS, the United States Department of
Health and Human Services, any state licensing agency or any accreditation
agency or other quasi-governmental authority.
“Governmental Payor” means any state or federal health care program providing
medical assistance, health care insurance or other coverage of health care items
or services for eligible individuals, including but not limited to the Medicare
program more fully described in Title XVIII of the Social Security Act (42
U.S.C. §§ 1395 et seq.) and the Medicaid program more fully described in
Title XIX of the Social Security Act (42 U.S.C. §§ 1396 et seq.) and the
regulations promulgated thereunder.
“Guarantor” has the meaning set forth in Section 2.5, together with any and all
permitted successors and assigns of the Guarantor originally named herein and
any additional Person that guaranties the obligations of Tenant hereunder, from
time to time.
“Guaranty” has the meaning set forth in Section 2.5.
“Hazardous Materials” mean (i) any petroleum products and/or by-products
(including any fraction thereof), flammable substances, explosives, radioactive
materials, hazardous or toxic wastes, substances or materials, known carcinogens
or any other materials, contaminants or pollutants which pose a hazard to any
Facility or to Persons on or about any Facility or cause any Facility to be in
violation of any Hazardous Materials Laws; (ii) asbestos in any form which is
friable; (iii) urea formaldehyde in foam insulation or any other form;
(iv) transformers or other equipment which contain dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty (50) parts per million or
any other more restrictive standard then prevailing; (v) medical wastes and
biohazards; (vi) radon gas; and (vii) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority or may or could pose a hazard to the health and safety of the
occupants of any Facility or the owners and/or occupants of property adjacent to
or surrounding any Facility, including, without limitation, any materials or
substances that are listed in the United States Department of Transportation
Hazardous Materials Table (49 CFR 172.101) as amended from time to time.
“Hazardous Materials Laws” mean any laws, ordinances, regulations, rules,
orders, guidelines or policies relating to the environment, health and safety,
Environmental Activities, Hazardous Materials, air and water quality, waste
disposal and other environmental matters.
“Hazardous Materials Claims” mean any and all enforcement, clean-up, removal or
other governmental or regulatory actions or orders threatened, instituted or
completed pursuant to any Hazardous Material Laws, together with all claims made
or threatened by any third party against any Facility, Landlord or Tenant
relating to damage, contribution, cost recovery compensation, loss or injury
resulting from any Hazardous Materials.
“[*****] Allocated Rent” has the meaning set forth in Section 6.15.
“[*****] Disposition” has the meaning set forth in Section 6.15.
“[*****] Disposition Period” has the meaning set forth in Section 6.15.
“Impositions” means any property (real and personal) and other taxes and
assessments levied or assessed with respect to this Lease, any portion of the
Premises, any Facility, Tenant’s interest therein, or Landlord with respect to
any Facility, including, without limitation, any state or county occupation tax,
transaction privilege, franchise tax, margin tax, business privilege, sales
and/or use tax, rental tax or other excise tax. Notwithstanding the foregoing,
Impositions shall not include any local, state or federal income tax based upon
the net income of Landlord and any transfer tax or stamps arising from
Landlord’s transfer of any interest in any Facility.
“Initial Expiration Date” means (a) if the Commencement Date is the first (1st)
day of a month, the tenth (10th) anniversary of the day preceding the
Commencement Date, or (b) if the Commencement Date is other than the first (1st)
day of a month, the last day of the calendar month in which the tenth (10th)
anniversary of the Commencement Date occurs.
“Initial Term” has the meaning set forth in Section 1.3.
“Insurance Requirements” mean all terms of any insurance policy required by this
Lease and all requirements of the issuer of any such policy, together with all
fire underwriters’ regulations promulgated from time to time.
“Intangibles” means the interest, if any, of Landlord in and to any of the
following intangible property owned by Landlord in connection with the Land and
the Leased Improvements: (i) the identity or business of each Facility as a
going concern, including, without limitation, any names or trade names by which
each Facility may be known, and all registrations for such names, if any;
(ii) to the extent assignable or transferable, the interest, if any, of Landlord
in and to each and every guaranty and warranty concerning the Leased
Improvements or Fixtures, including, without limitation, any roofing, air
conditioning, heating, elevator and other guaranty or warranty relating to the
construction, maintenance or repair of the Leased Improvements or Fixtures; and
(iii) the interest, if any, of Landlord in and to all Authorizations to the
extent the same can be assigned or transferred in accordance with applicable
law; provided, however, that the foregoing shall not include any CON issued to
or held by Landlord which shall only be licensed to Tenant on a temporary basis,
which license shall be revocable at any time by Landlord.
“Issuer” means the financial institution that, from time to time, has issued a
Letter of Credit.
“Issuer Revocation” means that an Issuer shall fail to be in compliance with all
of the Issuer Standards, or shall admit in writing its inability to pay its
debts generally as they become due, shall file a petition in bankruptcy or a
petition to take advantage of any insolvency statute, shall consent to the
appointment of a receiver or conservator of itself or the whole or any
substantial part of its property, shall file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws, shall have a
receiver, conservator or liquidator appointed for it (including an FDIC
receiver, conservator or liquidator), or shall become subject to operational
supervision by any federal or state regulatory authority.
“Issuer Standards” mean that the Issuer is an FDIC-insured lending institution
that is reasonably satisfactory to Landlord (Tenant’s working capital lender as
of the Commencement Date being deemed reasonably satisfactory to Landlord), and
has a current long-term credit rating from at least two (2) nationally
recognized statistical rating organizations (such as Standard & Poor’s, Moody’s
Investor Services or Fitch Ratings) equivalent to or greater than A-/A3.
“Land” means, individually and collectively, the real property described in
Exhibit B attached to this Lease.
“Landlord” has the meaning set forth in the opening preamble, together with any
and all successors and assigns of the Landlord originally named herein.
“Landlord Personal Property” means the machinery, equipment, furniture and other
personal property described in Exhibit C attached to this Lease, together with
all replacements, modifications, alterations and substitutes thereof (whether or
not constituting an upgrade).
“Landlord Indemnified Parties” means Landlord’s Affiliates and Landlord’s and
its Affiliates’ agents, employees, owners, partners, members, managers,
contractors, representatives, consultants, attorneys, auditors, officers and
directors.
“Landlord’s Representatives” means Landlord’s agents, employees, contractors,
consultants, attorneys, auditors, architects and other representatives.
“LC Amount” has the meaning set forth in Section 3.2.
“Lease” has the meaning set forth in the opening preamble.
“Lease Year” means either (a) if the Commencement Date is the first (1st) day of
a month, each successive period of twelve (12) calendar months during the Term,
commencing as of the same day and month (but not year, except in the case of the
first (1st) Lease Year) as the Commencement Date, or (b) if the Commencement
Date is other than the first (1st) day of a month, each successive period of
twelve (12) calendar months during the Term, ending on the same day and month
(but not year, except in the case of the last Lease Year of the Initial Term) as
the day and month on which the Initial Expiration Date will occur.
“Leased Improvements” means all buildings, structures and other improvements of
every kind now or hereafter located on the Land including, alleyways and
connecting tunnels, sidewalks, utility pipes, conduits, and lines (on-site and
off-site to the extent Landlord has obtained any interest in the same), parking
areas and roadways appurtenant to such buildings and structures.
“Legal Requirements” means all federal, state, county, municipal and other
governmental statutes, laws (including common law and Hazardous Materials Laws),
rules, policies, guidance, codes, orders, regulations, ordinances, permits,
licenses, covenants, conditions, restrictions, judgments, decrees and
injunctions applicable to Tenant or Guarantor or affecting any Facility or the
applicable Tenant Personal Property or the maintenance, construction, use,
condition, operation or alteration thereof, whether now or hereafter enacted and
in force, including, any and all of the foregoing that relate to the use of each
Facility for its Primary Intended Use.
“Letter of Credit” means an unconditional, irrevocable, standby letter of credit
substantially in the form of Exhibit F, naming Landlord as beneficiary, and
issued by an Issuer that satisfies the Issuer Standards and is otherwise
acceptable to Landlord in its commercially reasonable discretion.
“Licensing Impairment” means, with respect to each Facility, (i) the revocation,
suspension or non-renewal of any Authorization, (ii) any withholding,
non-payment, reduction or other adverse change respecting any Provider
Agreement, (iii) any admissions hold under any Provider Agreement, or (iv) any
other act or outcome similar to the foregoing that would impact Tenant’s ability
to continue to operate such Facility for its Primary Intended Use or to receive
any rents or profits therefrom.
“Losses” mean all claims, demands, expenses, actions, judgments, damages,
penalties, fines, liabilities, losses of every kind and nature, suits,
administrative proceedings, costs and fees, including, without limitation,
reasonable attorneys’ and reasonable consultants’ fees and expenses.
“Material Alterations” mean any Alterations that (i) would materially enlarge or
reduce the size of the applicable Facility, (ii) would tie in or connect with
any improvements on property adjacent to the applicable Land, or (iii) would
affect the structural components of the applicable Facility or the main
electrical, mechanical, plumbing, elevator or ventilating and air conditioning
systems for such Facility in any material respect.
“Minimum Rent Coverage Ratio” shall mean a Portfolio Coverage Ratio of:
(i) through the end of the first (1st) Lease Year, .75 to 1.00; (ii) through the
end of the second (2nd) Lease Year, .85 to 1.00; (iii) through the end of the
third (3rd) Lease Year, 1.05 to 1.00; and (iv) through the end of the fourth
(4th) Lease Year and thereafter during the Term, 1.15 to 1.00.
“OFAC” has the meaning set forth in Section 10.2.1.
“Operational Transfer” has the meaning set forth in Section 14.2.1.
“Ordinary Course of Business” means in respect of any transaction involving
Tenant, the ordinary course of business of Tenant, as conducted by Tenant in
accordance with past practices. In respect of any transaction involving a
Facility or the operations thereof, the ordinary course of operations for such
Facility, as conducted by Tenant in accordance with past practices.
“Partial Taking” means any Condemnation of a Facility or any portion thereof
that is not a Complete Taking.
“Payment Date” means any due date for the payment of the installments of Base
Rent or any other sums payable under this Lease.
“Pell City Lease” has the meaning set forth in Section 6.16.
“Pell City Premises” has the meaning set forth in Section 6.16.
“Permitted Contingent Obligations” means each of the following: (i) Contingent
Obligations arising in respect of Tenant’s obligations under this Lease; (ii)
Contingent Obligations resulting from endorsements for collection or deposit in
the Ordinary Course of Business; (iii) Contingent Obligations incurred in the
Ordinary Course of Business with respect to surety and appeal bonds, performance
bonds and other similar obligations not to exceed, with respect to any
particular Tenant, $50,000 in the aggregate at any time outstanding; (iv)
Contingent Obligations arising with respect to customary indemnification
obligations in favor of purchasers in connection with dispositions of personal
property assets permitted under this Lease; (v) Contingent Obligations arising
under the Senior Credit Facility, and (vi) other Contingent Obligations not
permitted by clauses (i) through (v) above, not to exceed, with respect to each
Tenant, $100,000 in the aggregate at any time outstanding.
“Permitted Debt” means the following: (i) the obligations of Tenant under this
Lease, (ii) subject to Section 20.2, accounts receivable financing, (iii) trade
accounts payable arising and paid on a timely basis in the Ordinary Course of
Business, and (iv) obligations for equipment leases or financing secured by
equipment that is customarily leased or financed by operators of similar
properties and is utilized in the operation of the Facilities arising and paid
on a timely basis in the Ordinary Course of Business and not to exceed $75,000
for each Facility.
“Permitted Encumbrances” means, with respect to each Facility, collectively,
(i) all easements, covenants, conditions, restrictions, agreements and other
matters with respect to such Facility that (a) are of record as of the
Commencement Date, (b) Landlord entered into after the Commencement Date
(subject to the terms hereof); or (c) are specifically consented to in writing
by Landlord, (ii) any liens for Impositions that are not yet due and payable;
(iii) occupancy rights of residents and patients of such Facility; and
(iv) liens of mechanics, laborers, materialman, suppliers or vendors for sums
not yet due, provided that such reserve or other appropriate provisions as shall
be required by law or GAAP or pursuant to prudent commercial practices shall
have been made therefor.
“Person” means any individual, partnership, association, corporation, limited
liability company or other entity.
“Plans and Specifications” has the meaning set forth in Section 7.5.1.
“Portfolio Coverage Ratio” means, as determined on a Testing Date based on the
applicable period of determination or measurement, the ratio of (i) EBITDARM for
all of the Facilities for the applicable period to (ii) Base Rent payments
relating to such Facilities payable under this Lease for the applicable period.
“Premises” means, collectively, the Land, Leased Improvements, Related Rights,
Fixtures, Intangibles and Landlord Personal Property.
“Premises Condition Report” has the meaning set forth in Section 7.2.
“Primary Intended Use” means, as to each Facility, the type of healthcare
facility corresponding to such Facility as shown on Schedule 2 attached hereto,
with no less than the number of licensed beds as shown on Schedule 2 and in
connection therewith the provision of food, recreational, rehabilitative and
therapy services and such other ancillary services or incidental services
relating thereto.
“Prime Rate” means, on any date, a rate equal to the annual rate on such date
reported in The Wall Street Journal to be the “prime rate.”
“Prohibited Persons” has the meanings set forth in Section 10.2.1.
“Property Collateral” means all of Tenant’s right, title and interest in and to
the Tenant Personal Property and any and all products, rents, proceeds and
profits thereof in which Tenant now owns or hereafter acquires an interest or
right.
“Provider Agreements” means any agreements issued to or held by Tenant pursuant
to which any Facility is licensed, certified, approved or eligible to receive
reimbursement under any Third Party Payor Program.
“Real Property Impositions” mean any real property Impositions secured by a lien
encumbering any Facility or any portion thereof.
“Reimbursement Period” has the meaning set forth in Section 14.2.5.
“Related Lease” means each lease, sublease or other instrument described on
Schedule 4 attached hereto, as may be amended, modified, revised or restated
from time to time, but only for so long as the Affiliate of Landlord identified
as the tenant/lessee thereunder remains liable for the obligations of the
tenant/lessee following the assignment/sublease of such Related Lease to an
Affiliate of Tenant in connection with this Lease.
“Related Lease Landlord” shall have the meaning set forth in Section 7.10.9.
“Related Lease Tenant” shall have the meaning set forth in Section 7.10.9.
“Related Lease Upgrade Disbursement” shall have the meaning set forth in
Section 7.10.9.
“Related Rights” means all easements, rights and appurtenances relating to the
Land and the Leased Improvements.
“Rent” means, collectively, Base Rent and Additional Rent.
“Required Capital Expenditures Amount” has the meaning set forth in
Section 7.6.1.
“Required Per Bed Annual Capital Expenditures Amount” means an amount equal to
Five Hundred Dollars ($500) per licensed bed per Lease Year, as increased
annually pursuant to Section 7.6.1, that Tenant is required to expend on Capital
Expenditures with respect to each Facility as provided in Section 7.6.
“Security Deposit” shall have the meaning set forth in Section 3.1.
“Senior Credit Facility” means the Third Amended and Restated Revolving Loan and
Security Agreement dated February 26, 2016 between Tenant and certain Affiliates
of Tenant parties thereto, as “Borrowers,” with the Guarantor herein as the
“Guarantor” thereof, and The Private Bank and Trust Company and other lenders
parties thereto, as “Lenders,” as amended, modified, supplemented, replaced or
refinanced from time to time.
“Situs State” means the state or commonwealth where a Facility is located.
“Specified Non-Property Insurance” shall have the meaning set forth in
Section 9.9.
“Temporary Taking” means any Condemnation of a Facility or any portion thereof,
whether the same would constitute a Complete Taking or a Partial Taking, where
the Condemnor or its designee uses or occupies such Facility, or any portion
thereof, for no more than twelve consecutive (12) months.
“Tenant” has the meaning set forth in the opening preamble, together with any
and all permitted successors and assigns of the Tenant originally named herein.
“Tenant Personal Property” shall have the meaning set forth in Section 6.1.
“Tenant Sublessees” mean Tenant, and any direct or indirect subtenants or
operator of any Facility, together with their successors and assigns and any
additions thereto or replacements thereof.
“Term” means the Initial Term, plus any duly authorized Extension Terms.
“Testing Date” means the date as of which the Portfolio Coverage Ratio shall be
determined for the applicable measurement period, which date shall be the last
day of each calendar quarter during the Term. Upon each Testing Date, the
Portfolio Coverage Ratio shall be determined based upon the twelve (12) trailing
calendar months ending on such Testing Date or, with respect to any Testing Date
occurring prior to expiration of the first (1st) Lease Year, the number of full
trailing calendar months then elapsed on an annualized basis.
“Third Party Payor Programs” shall mean any third party payor programs pursuant
to which healthcare facilities qualify for payment or reimbursement for medical
or therapeutic care or other goods or services rendered, supplied or
administered to any admittee, occupant, resident or patient by or from any
Governmental Authority, Governmental Payor, bureau, corporation, agency,
commercial insurer, non-public entity, “HMO,” “PPO” or other comparable party.
“Transfer” means any of the following, whether effectuated directly or
indirectly, through one or more step transactions or tiered transactions,
voluntarily or by operation of law, the (i) assigning, selling, pledging,
mortgaging, hypothecating or otherwise encumbering, transferring or disposing of
all or any part of this Lease or Tenant’s leasehold estate hereunder, or (ii)
subletting of all or any part of any Facility, (iii) engaging the services of
any Person for the management or operation of all of any part of any Facility
(other than the Management Agreement approved by this Lease), or (iv) merger,
consolidation or reorganization of Tenant or Manager (except, for Manager only,
with or into an Affiliate), or the sale, issuance, or transfer, cumulatively or
in one transaction, or the termination, of any ownership interest or voting
rights in Tenant or Manager (except, for Manager only, to an Affiliate), which
results in a Change in Control of Tenant or Manager (except, for Manager only,
to an Affiliate), or (v) sale, issuance or transfer, cumulatively or in one
transaction, of any direct ownership interest or voting rights in Tenant or
Manager if after such transaction(s), Tenant or Manager, as applicable, ceases
to be controlled, directly or indirectly, by Guarantor, or (vi) merger, sale,
consolidation, reorganization or other business combination involving Guarantor
in which Guarantor is not the surviving entity unless the successor entity of
Guarantor executes and delivers to Landlord a Guaranty, in substantially the
form of the Guaranty executed by Guarantor, pursuant to which the successor
entity guarantees to Landlord the payment and performance by Tenant of its
obligations under this Lease. Other than as specifically provided in clause
(vi), none of the foregoing provisions shall be deemed to be violated by
transactions affecting Guarantor.
“Transition Notice” shall have the meaning set forth in Section 14.2.1.
“UPL Program” shall have the meaning set forth in Section 17.6.
“Upgrade Allowance” shall have the meaning set forth in Section 7.10.
“Upgrade Expenditure” shall have the meaning set forth in Section 7.10.

EXHIBIT B

DESCRIPTION OF THE LAND

Golden LivingCenter - Arab, 235 3rd Street SE, Arab, AL 35016
That part of the N ½ of the E ½ of the SW ¼ of the NW ¼ of Section 25 Township 8
S, Range 1 E, in Marshall County, Alabama, and being more particularly described
as follows: Commencing at the NW corner of the above N ½; thence record East a
distance of 15.0 feet to a point on the E margin of a Public Street; thence
record South along said E margin a distance of 257.0 feet to the SW corner of
the Church of God property, according to the deed recorded in Deed Book 312,
Page 477 in the Probate Office of Marshall County, Alabama, the point of
beginning for the property herein described; thence North 89 degrees 30 minutes
E a distance of 419.30 feet (record East, 420.0 feet) to a metal marker; thence
South a distance of 211.4 feet (record 210.0 feet) to a metal marker; thence S
89 degrees 30 minutes W a distance of 419.3 feet (record West, 420.0 feet) to a
metal marker in the above E margin; thence North along said E margin a distance
of 211.4 feet (record 210.0 feet) to the point of beginning.

Golden LivingCenter - Meadowood, 820 Golf Course Road, Bessemer, AL 35022-6024
A parcel of land in the Southeast quarter of the Northeast Quarter, the
Northeast quarter of the Southeast quarter, and the Northwest quarter of the
Southeast quarter, Section 19, Township 19 South, Range 4 West, and part of Lots
4 and 8, Block 4, N. H. Sewell’s Survey, as recorded in Map Book 10, Page 95,
said land situated in the Bessemer Division of Jefferson County, Alabama, more
particularly described as follows:
Begin at the Northwest corner of the Northeast quarter of the Southeast quarter,
Section 19, Township 19 South, Range 4 West, Jefferson County, Alabama; thence
travel east along the north boundary of said quarter-quarter a distance of
354.40 feet to the point of beginning; thence turn right an angle of 135 degrees
53 minutes to the right and travel southwesterly a distance of 589.53 feet to a
point; thence turn right an angle of 85 degrees 32 minutes and travel
northwesterly a distance of 200.92 feet to a point; thence turn right an angle
of 90 degrees 00 minutes and travel northeasterly a distance of 588.0 feet to a
point; thence turn right an angle of 90 degrees 00 minutes and travel
southeasterly a distance of 243.58 feet to the point of beginning; being
situated in Jefferson County, Alabama.
Mineral and mining rights except.
LESS AND EXCEPT THE FOLLOWING DESCRIBED PARCEL:
Begin at the Southwest corner of the Southeast quarter of the Northeast quarter
of Section 19, Township 19 South, Range 4 West, Jefferson County, Alabama;
thence travel easterly along the south boundary of said quarter-quarter 354.40
feet; thence turn left an angle of 138 degrees 35 minutes and travel
northwesterly 193.58 feet for a point of beginning; thence continue along said
course for 50 feet; thence turn left an angle of 90 degrees and travel
southwesterly 108.90 feet; thence turn left an angle of 90 degrees and travel
southeasterly 50 feet; thence turn left an angle of 90 degrees and travel
northeasterly 108.90 feet to the point of beginning.
LESS AND EXCEPT any part of subject property lying within the public road.
The above described property is also known as the as-surveyed legal description
as shown on the survey of Denham Land Surveyors, LLC, dated October 20, 2010,
Project Number 10045-08, as follows:
A parcel of land in the Southeast quarter of the Northeast quarter; the
Northeast quarter of the Southeast quarter and the Northwest quarter of the
Southeast quarter of the Southeast quarter, Section 19, Township 19 South, Range
4 West and part of Lots 4 and 8, in Block 4, N.H. Sewell’s Survey, as recorded
in Map Book 10, page 95, said land situated in the Bessemer Division of
Jefferson County, Alabama, more particularly described as follows: Begin at the
Northwest corner of the Northeast quarter of the Southeast quarter, Section 19,
Township 19 South, Range 4 West, Jefferson County, Alabama; thence travel east
along the north boundary of said quarter-quarter a distance of 354.40 feet to
the Point of Beginning; thence South 45º53’00 West a distance of 589.53 feet;
thence North 48º15’59” West a distance of 200.92 feet; thence North 41º44’01”
East a distance of 479.10 feet; thence South 48º15’45” East a distance of 50.00
feet; thence North 41º44’01” East a distance of 108.90 feet; thence South
48º15’45” East a distance of 193.58 feet to the Point of Beginning, having an
area of 125,236.1± square feet, (2.875± acres).

Golden LivingCenter - Riverchase, 2500 River Haven Drive, Birmingham, AL 35244
Parcel I:
A tract of land located in the Southeast quarter of the Southwest quarter of
Section 18, Township 19 South, Range 2 West, Jefferson County, Alabama, being
more particularly described as follows:
Commence at the Northwest corner of the Southeast quarter of the Southwest
quarter of said Section; thence South 87 degrees 59 minutes 52 seconds East
622.50 feet to the Point of Beginning; thence South 87 degrees 59 minutes 52
seconds East 432.73 feet to an iron pin found; thence South 00 degrees 07
minutes 00 seconds East 451.86 feet to a point on the Northerly right of way of
a road; thence 71 degrees 30 minutes 39 seconds right, tangent to a curve to the
right; thence run along arc of said curve a distance of 171.88 feet, said curve
having a central angle of 97 degrees 01 minutes 21 seconds and a radius of
1,402.39 feet; thence continue along said right of way South 78 degrees 34
minutes 00 seconds West 200.0 feet; thence North 23 degrees 01 minutes 26
seconds West 214.14 feet; thence North 2 degrees 00 minutes 08 seconds East
354.05 feet to the Point of Beginning.
Parcel II:
Non-exclusive access easement over the entrance road as set forth in Easement
Agreement by and between Riverhaven, LLC and Beverly Enterprises-Alabama, Inc.,
dated February 17, 2006 and recorded in March 6, 2006 in Real Volume LR200604,
Page 18677, more particularly described as follows:
Commence at the Northwest corner of the Southeast quarter of the Southwest
quarter, Section 18, Township 19 South, Range 2 West, and run in an Easterly
direction along the North line thereof for a distance of 622.30 feet; thence
turn an interior angle to the left of 89 degrees 59 minutes 19 seconds and run
in a Southerly direction for a distance of 354.22 feet; thence turn an interior
angle to the right of 154 degrees 55 minutes 52 seconds and run in a
Southeasterly direction for a distance of 25.83 feet to the Point of Beginning
of a 40 foot Access Easement; thence continue along the last described course
for a distance of 54.55 feet to a point on a non-tangent curve to the right,
said curve having a radius of 100.00 feet, a central angle of 32 degrees 34
minutes 44 seconds a chord to the left of 104 degrees, 27 minutes 52 seconds and
an angle of 56.10 feet; thence run along the arc of said curve for a distance of
56.86 feet; thence turn an interior angle to the left of 163 degrees 42 minutes
38 seconds from chord of said curve and run in a Southwesterly direction along a
line tangent to said curve for a distance of 350.78 feet to a point on a tangent
curve to the left, said curve having a radius of 30.00 feet, a chord length of
36.66 feet and a central angle of 75 degrees 19 minutes 20 seconds; thence run
along the arc of said curve for a distance of 39.44 feet; thence leaving said
curve run in a Southerly direction along a line tangent to said curve for a
distance of 20.05 feet to a point on the Northern most Right of Way line of
River Haven Drive; thence turn an interior angle to the left of 94 degrees 54
minutes 43 seconds and run in a Southwesterly direction along said Right of Way
for a distance of 40.15 feet; thence leaving said Right of Way turn an interior
angle to the left of 85 degrees 05 minutes 17 seconds and run in a Northerly
direction for a distance of 23.49 feet to a point on a tangent curve to the
right, said curve having a radius of 70.00 feet and a central angle of 75
degrees 19 minutes 20 seconds; thence run along the arc of said curve for a
distance of 92.02 feet; thence run in a Northeasterly direction along a line
tangent to said curve for a distance of 350.78 feet to a point on a tangent
curve to the left, said curve having a radius of 60.00 feet and a central angle
of 60 degrees 16 minutes 57 seconds; thence run along the arc of said curve for
a distance of 62.13 feet to the Point of Beginning.
PARCEL III:
Sign easement as set forth in Easement Agreement by and between Riverhaven, LLC
and Beverly Enterprises-Alabama, Inc., dated February 17, 2006 and recorded in
March 6, 2006 in Real Volume LR200604, Page 18677, more particularly described
as follows:
Commence at the Northwest corner of the Southeast Quarter of the Southwest
Quarter, Section 18, Township 19 South, Range 2 West, and run in an Easterly
direction along the North line thereof for a distance of 622.30 feet; thence
turn an interior angle to the left of 89 degrees 59 minutes 19 seconds and run
in a Southerly direction for a distance of 354.22 feet; thence turn an interior
angle to the right of 154 degrees 55 minutes 52 seconds and run in a
Southeasterly direction for a distance of 214.23 feet to a point on the
Northernmost Right of Way of River Haven Drive; thence turn an interior angle to
the left of 78 degrees 24 minutes 34 seconds and run in a Westerly direction
along said right of way line for a distance of 388.00 feet to the Point of
Beginning of a sign easement; thence continue along last described course for a
distance of 61.50 feet; thence leaving said Right of Way turn an interior angle
to the left of 85 degrees 05 minutes 25 seconds and run in a Northwesterly
direction for a distance of 20.05 feet to the point on a tangent curve to the
right, said curve having a radius of 30.00 feet and a central angle of 75
degrees 19 minutes 20 seconds; thence run along the arc of said curve for a
distance of 39.44 feet; thence leaving said curve run in a Northeasterly
direction along a line tangent to said curve for a distance of 32.02 feet;
thence turn an interior angle to the left of 83 degrees 58 minutes 25 seconds
and run in a Southeasterly direction for a distance of 52.52 feet to the Point
of Beginning.
Situated in Jefferson County, Alabama.
The above described property is also known as the as-surveyed legal description
as shown on the survey of Gonzalez – Strength & Associates, Inc., HUD Project
Number 062-22054, as follows:
Parcel I:
A tract of land located in the Southeast quarter of the Southwest quarter of
Section 18, Township 19 South, Range 2 West, Jefferson County, Alabama being
more particularly described as follows:
Commence at the Northwest corner of the Southeast quarter of the Southwest
quarter of said Section; thence run South 87 degrees 57 minutes 59 seconds East
along the North line thereof for a distance of 622.30 feet to the POINT OF
BEGINNING; thence continue South 87 degrees 57 minutes 59 seconds East 432.83
feet to an iron pin found; thence South 00 degrees 07 minutes 00 seconds East
451.94 feet to a point on the Northerly right of way of River Haven Drive (60’
R.O.W.), said point being on a curve turning to the left, said curve having a
radius of 1402.39 feet, a central angle of 07 degrees 02 minutes 05 seconds, a
chord bearing of South 75 degrees 04 minutes 37 seconds West, and a chord
distance of 172.08 feet; thence run along the arc of said curve and along said
right of way for a distance of 172.19 feet to the point of tangency of said
curve; thence run South 78 degrees 35 minutes 39 seconds West along a line
tangent to said curve and along said right of way for a distance of 200.00 feet;
thence leaving said right of way run North 23 degrees 01 minutes 27 seconds West
214.23 feet; thence North 02 degrees 02 minutes 41 seconds East 354.22 feet to
the POINT OF BEGINNING. Said parcel contains 218,003 square feet or 5.00 acres
more or less.
40’ Drive Easement – Parcel II:
Non-exclusive access easement over the entrance road as set forth in Easement
Agreement by and between Riverhaven, LLC and Beverly Enterprises – Alabama,
Inc., dated February 17, 2006 in Real Volume LR200604, page 18677 more
particularly described as follows:
Commence at the Northwest corner of the Southeast quarter of the Southwest
quarter, Section 18, Township 19 South, Range 2 West and run in an Easterly
direction along the North line thereof for a distance of 622.30; thence turn an
interior angle to the left of 89 degrees 59 minutes 19 seconds and run in a
Southerly direction for a distance of 354.22 feet; thence turn an interior angle
to the right 154 degrees 55 minutes 52 seconds and run in a Southeasterly
direction for a distance of 25.83 feet to the Point of Beginning of a 40 foot
Access Easement; thence continue along the last described course for a distance
of 54.55 feet to a point on a non-tangent curve to the right, said curve having
a radius of 100.00 feet, a central angle of 32 degrees 34 minutes 44 seconds, a
chord angle to the left of 104 degrees 27 minutes 52 seconds and a chord
distance of 56.10 feet; thence run along the arc of said curve for a distance of
56.86 feet; thence turn an interior angle to the left of 163 degrees 42 minutes
38 seconds from chord of said curve and run in a Southwesterly direction along a
line tangent to said curve for a distance of 350.78 feet to a point on a tangent
curve to the left, said curve having a radius of 30.00 feet, a chord length of
36.66 feet and a central angle of 75 degrees 19 minutes 20 seconds; thence run
along the arc of said curve for a distance of 39.44 feet; thence leaving said
curve run in a Southerly direction along a line tangent to said curve for a
distance of 20.05 feet to a point on the Northern most Right of Way line of
River Haven Drive; thence turn an interior angle to the left of 94 degrees 54
minutes 43 seconds and run in a Southwesterly direction along said Right of Way
for a distance of 40.15 feet; thence leaving said Right of Way turn an interior
angle to the left of 85 degrees 05 ,omits 17 seconds and run in a Northerly
direction fro a distance of 23.49 feet to a point on a tangent curve to the
right, said curve having a radius of 70.00 feet and a central angle of 75
degrees 19 minutes 20 seconds; thence run along the arc of said curve for a
distance of 92.02 feet; thence run in a Northeasterly direction along a line
tangent to said curve for a distance of 350.78 feet to a point on a tangent
curve to the left, said curve having a radius of 60.00 feet and a central angle
of 60 degrees 16 minutes 57 seconds; thence run along the arc of said curve for
a distance of 63.13 feet to the Point of Beginning.
Sign Easement – Parcel III:
Non-exclusive access easement over the entrance road as set forth in Easement
Agreement by and between Riverhaven, LLC and Beverly Enterprises – Alabama,
Inc., dated February 17, 2006 in Real Volume LR200604, page 18677 more
particularly described as follows:
Commence at the Northwest corner of the Southeast quarter of the Southwest
quarter, Section 18, Township 19 South, Range 2 West and run in an Easterly
direction along the North line thereof for a distance of 622.30; thence turn an
interior angle to the Left of 89 degrees 59 minutes 19 seconds and run in a
Southerly direction for a distance of 354.22 feet; thence turn an interior angle
to the right of 154 degrees 55 minutes 52 seconds and run in a Southeasterly
direction for a distance of 214.23 feet to a point on the Northernmost Right of
Way of River Haven Drive; thence turn an interior angle to the left of 78
degrees 24 minutes 34 seconds and run in a Westerly direction along said Right
of Way line for a distance of 388.00 feet to the Point of Beginning of a sign
easement; thence continue along last described course for a distance of 61.50
feet; thence leaving said Right of Way turn an interior angle to the left of 85
degrees 05 minutes 25 seconds and run in a Northwesterly direction for a
distance of 20.05 feet to the point on a tangent curve to the right, said curve
having a radius of 30.00 feet and a central angle of 75 degrees 19 minutes 20
seconds; thence run along the arc of said curve for a distance of 39.44 feet;
thence leaving said curve run in a Northeasterly direction along a line tangent
to said curve for a distance of 32.02 feet; thence turn an interior angle to the
left of 83 degrees 58 minutes 25 seconds and run in a Southeasterly direction
for a distance of 52.52 feet to the Point of Beginning.
Emergency Access Easement:
Commence at the Northwest corner of the Southeast quarter of the Southwest
quarter of said Section; thence run South 87 degrees 57 minutes 59 seconds East
622.30 feet; thence run South 02 degrees 02 minutes 41 seconds West for a
distance of 260.05 feet to the POINT OF BEGINNING of an Emergency Access
Easement; thence run South 88 degrees 03 minutes 35 seconds East for a distance
of 63.92 feet; thence run South 04 degrees 04 minutes 56 seconds West for a
distance of 214.76 feet; thence run North 23 degrees 01 minutes 27 seconds West
for a distance of 132.85 feet; thence run North 02 degrees 02 minutes 41 seconds
East for a distance of 94.17 feet to the Point of Beginning.

Golden LivingCenter - Boaz, 600 Corley Avenue, Boaz, AL 35957-5952
All that tract or parcel of land lying in and being a portion of the Southwest
Quarter of Section 30, Township 9 South, Range 5 East, Boaz, Marshall County,
Alabama, and being more particularly described as follows: To establish the true
point of beginning, commence at the Southwest corner of Section 30, Township 9
South, Range 5 East in Marshall County, Alabama, and run in an easterly
direction along the South line of said Section 30 a distance of 2,671.4 feet to
the Southeast corner of the Southeast Quarter of the Southwest Quarter of
Section 30, Township 9 South, Range 5 East; thence deflect to the left 89
degrees 04 minutes and run in a Northerly direction along the East line of the
Southwest Quarter of Section 30 a distance of 974.3 feet to a point; thence
deflect to the left 90 degrees 56 minutes and run in a Westerly direction a
distance of 1,337.7 feet to a point; thence deflect to the right 90 degrees 56
minutes and run in a Northerly direction, parallel to the said East line of the
Southwest Quarter a distance of 506.6 feet to a point on the South line of the
Boaz-Albertville Hospital property (said point being 383.55 feet measured along
said South line from the Westerly right of way line of U.S. Highway 431); thence
deflect to the left 92 degrees 34 minutes and run along the said South line of
the Boaz-Albertville Hospital property a distance of 186.55 feet to the true
point of beginning of the herein described property; from said true point of
beginning, deflect to the right 89 degrees 42 minutes and run North 1 degree 32
minutes West along the West line of said Boaz-Albertville Hospital property a
distance of 193.46 feet (192.69 meas. feet) to a point; thence deflect to the
left so as to form an interior angle of 92 degrees 02 minutes and run in a
Westerly direction a distance of 326.3 feet to a point; thence deflect to the
left so as to form an interior angle of 87 degrees 38 minutes and run in a
Southerly direction a distance of 394.65 feet (393.85 meas. feet) to a point on
the North side of Corley Avenue (a 40-foot right-of-way); thence deflect to the
left so as to form an interior angle of 93 degrees 10 minutes and run along the
said North right-of-way line of Corley Avenue a distance of 324.2 feet to a
point; thence deflect to the left so as to form an interior angle of 87 degrees
10 minutes and run in a Northerly direction a distance of 205.6 feet to the true
point of beginning.

Golden LivingCenter - Foley, 1701 North Alston Street, Foley, AL 36535-2246
Lots 1 through 60, inclusive, Block E, in the Wilson Addition to the Town of
Foley, According to the Plat thereof recorded in Map Book 3, Pages 6 and 7, in
the Judge of Probate’s Office, Baldwin County, Alabama. Less and except a 7
foot, more or less, strip of land presently in use for Peachtree Avenue more
particularly described as follows: Beginning at an iron pin being the Southwest
corner of Peachtree Avenue and Alston Street in the Town of Foley, Alabama, run
S 0 degrees 15 minutes W, along the West right of way line of Alston Street, a
distance of 742.52 feet to an “x” marked in concrete at the intersection of the
West right of way line of Alston Street and the North right of way line of
Wilson Boulevard; thence run S 90 degrees 57 minutes 36 seconds W, along said
North right of way line a distance of 285.89 feet to an iron pin at the
intersection of said North right of way line and the East right of way line of
Sinclair Street; thence run N 00 degrees 14 minutes 53 seconds East along said
East right of way line a distance of 743.34 feet to an iron pin at the
intersection of said East right of way line and the South right of way line of
Peachtree Avenue; thence run South 89 degrees 52 minutes 31 seconds E, along
said South right of way line a distance of 284.91 feet to the point of
beginning.

Golden LivingCenter - Hueytown, 190 Brooklane Drive, Hueytown, AL 35023
Lots 1 thru 12, in Block 2, also the vacated alley lying between Lots 6 and 7,
in Block 2, according to the Map of W.D. Bush Addition to Industrial City, as
recorded in Map Book 3, Page 51, in the Office of the Judge of Probate of
Jefferson County, Alabama, Bessemer Division.
Golden LivingCenter - Lanett, 702 South 13th Street, Lanett, AL 36863
Lots 1, 2, 3, 4, 5, 14, and 15, in Block “A” of the First Addition to J. N.
Barrow Subdivision as shown on Subdivision Plat prepared by Grady A. Fuller,
dated April 22, 1969, and recorded in Map Book 4, Page 134, in the Office of the
Probate Judge of Chambers County, Alabama. Said property is more particularly
described as follows: BEGIN at an iron pin located at the intersection of the
North Section line of Section 35, Township 22 North, Range 28 East, Chambers
County, Alabama, and the West margin of South 8th Avenue in the City of Lanett,
Alabama; thence Southwesterly along the West margin of South 8th Avenue for
1093.4 feet to an iron pin for a corner; thence South 80 degrees 27 minutes East
for 50 feet across South 8th Avenue to the point of intersection of the East
margin of South 8th Avenue and the North margin of 13th Street South; thence
continue South 80 degrees 27 minutes East along the North margin of 13th Street
South for 810.0 feet to an iron pin for a corner and the starting point of the
parcel herein described, said point being the Southwest corner of Lot 5, Block
“A” of the First Addition to the J. N. Barrow Subdivision. FROM THIS POINT OF
BEGINNING, continue South 80 degrees 27 minutes East along the North margin of
13th Street South for 300 feet to a point for a corner; thence in a
Northeasterly direction along a curve to the left connecting 13th Street and
South 5th Avenue, said curve having a radius of 37.3 feet, a tangent of 34.4
feet and a length of curve 55.57 feet to a point for a corner located on the
West margin of South 5th Avenue; thence North 14 degrees 11 minutes East for
195.6 feet to a point; thence along a curve to the left, said curve having a
radius of 121.69 feet, and a length of curve of 39.64 feet to an iron pin for a
point; thence North 04 degrees 29 minutes West for 100 feet to an iron pin for a
corner; thence along a curve to the left, said curve having a radius of 45.52
feet, a tangent of 35.55 feet and a length of curve of 60.35 feet, to an iron
pin for a point located on the South margin of 12th Street South; thence North
80 degrees 27 minutes West for 281.45 feet to the Northwest corner of Lot 14,
Block “A” of said subdivision for a corner; thence South 09 degrees 33 minutes
West for 400 feet along the West margin of Lots 14 and 5 to the original
beginning point located on the North margin of 13th Street South.
The above described property is located in the City of Lanett, in Chambers
County, Alabama.

Golden LivingCenter - Montgomery, 2020 North Country Club Drive, Montgomery, AL
36106
PARCEL 1
Begin at an iron pin located at the intersection of the South Rights of way
(50’) of Sixth Street and the West Rights of Way of (53’) of Country Club Drive,
Montgomery County, Alabama; thence along said West rights of way S 03 degrees 00
minutes 33 seconds East 372.80 feet to an iron pin located at the beginning of a
curve; thence Southwesterly along said curve (Chord bearding South 06 degrees 54
minutes 31 seconds West chord distance 35.37 feet Radius 76.50 feet) to an iron
pin and end of curve; thence continue along said West Rights of Way South 23
degrees 50 minutes 51 seconds West 262.70 feet to an iron pin and beginning of a
rights of way jog; thence go along said jog North 65 degrees 55 minutes 21
seconds West 3.00 feet to an iron pin and end of jog; thence continue along said
West Rights of Way South 24 degrees 07 minutes 36 seconds West 193.92 feet to an
iron pin; thence South 29 degrees 28 minutes 43 seconds West 15.83 feet to an
iron pin; thence leaving said West Rights of Way North 66 degrees 11 minutes 09
seconds West 198.15 feet to an iron pin; thence North 59 degrees 34 minutes 24
seconds West 140.23 feet to an iron pin; thence North 67 degrees 40 minutes 34
seconds West 60.33 feet to an iron pin; thence North 03 degrees 13 minutes 31
seconds West 450.69 feet to an iron pin; thence North 87 degrees 07 minutes 33
seconds East 36.02 feet to an iron pin; thence North 02 degrees 53 minutes 20
seconds West 58.17 feet to an iron pin; thence North 03 degrees 14 minutes 46
seconds West 125.15 feet to an iron pin located on the South Rights of Way (50’)
of Sixth Street; thence along said South Rights of Way North 86 degrees 58
minutes 00 seconds East 538.51 feet to the point of beginning.
Above described parcel if and is intended to be Lot “DD” according to
Subdivision of Lot X of Correction Map of Resubdivision of Lot A of the Tyson
Property on Carter Hill Road and Additional Property of the Southwest being in
the NE ¼ of Section 20 and the SE ¼ of Section 17, T- 16-N, R- 18-E, Montgomery,
Alabama, as recorded in Plat Book 22 at Page 295 in the Office of the Judge of
Probate, Montgomery County, Alabama.
PARCEL 2
Commence at an iron pin located on the South Rights of Way (50’) of Sixth Street
and the West Rights of Way (53’) of Country Club Drive; thence North 86 degrees
23 minutes 57 seconds East 44.00 feet to a point located in the Rights of Way of
Country Club Drive and the point of beginning for the herein described parcel of
land; thence continue North 86 degrees 23 minutes 57 seconds East 7.00 feet to
an iron pin; thence South 03 degrees 36 minutes 03 seconds East 363.00 feet to a
point; thence South 66 degrees 40 minutes 03 seconds East 15.80 feet to a point;
thence South 23 degrees 24 minutes 57 seconds West 330.00 feet to a point;
thence North 66 degrees 35 minutes 03 seconds West 3.00 feet to a point; thence
North 23 degrees 24 minutes 57 seconds East 262.75 feet to a point; thence North
09 degrees 54 minutes 27 seconds East 58.89 feet to a point; thence North 03
degrees 51 minutes 03 seconds West 371.45 feet to the point of beginning.
Above described parcel is and is intended to be a part of the West side of Lot
“FF” and a part of the West side of Lot “EE” and a part of the East Rights of
Way of Country Club Drive according to Subdivision of Lot X of Correction Map of
Resubdivision of Lot A of the Tyson Property on Carter Hill Road and Addition
Property on the Southwest being in the NE ¼ of Section 20, and the SE ¼ of
Section 17, T- 16-N, Range 18 E, Montgomery, Alabama, as recorded in Plat Book
22 at Page 295 in the Office of the Judge of Probate , Montgomery County,
Alabama.

Golden LivingCenter - Oneonta, 215 Valley Road, Oneonta, AL 35121
A part of the NE ¼ of the NE ¼ of Section 31, Township 12 South, Range 2 East,
Blount County, Alabama, more particularly described as follows: From the NE
corner of said NE ¼ of the NE ¼; thence South 0 degrees 31’ West 400.53 feet;
thence South 54 degrees 19’ West, 635.1 feet to the NW right of way line of
Alabama Highway No. 132 and the Point of Beginning; thence continue S 54 degrees
19’ W along said right of way line; 553.9 feet; thence N 35 degrees 35’ W,
214.46 feet; thence N 41 degrees 49’ East, 31.40 feet; thence North 56 degrees
35’ West, 144.64 feet to the SE right of way of Alabama Highway No. 75; thence
North 33 degrees 09’ East,587.25 feet along said ROW; thence South 52 degrees 04
minutes 25 seconds East, 171.99 feet; thence South 32 degrees 37’ 30” East, 404
feet to the Point of Beginning.
The above described property is also known as the as-surveyed legal description
as shown on the survey of Frank Hollis & Associates, Inc., HUD Project Number
062-22053, as follows:
A part of the NE ¼ of the NE ¼ of Section 31, Township 12 South, Range 2 East,
Blount County, Alabama more particularly described as follows: Commence at the
Northeast corner of said NE ¼ of the NE ¼; thence S 00º31’00” W 400.53 feet
along the Section line to a point on the northwesterly right of way line of
Alabama Highway No. 132; thence along said right of way line S 54º19’00” W
635.10 feet to the Point of Beginning; thence continue along said right of way
line S 54º19’00” W 554.04 feet; thence N 35º35’00” W 214.46 feet; thence N
41º49’00” E 31.40 feet; thence N 56º35’00” W 144.64 feet to a point on the
southerly right of way line of Alabama Highway No. 75; thence along said right
of way line N 33º09’00” E 587.25 feet; thence S 52º04’25” E 171.99 feet; thence
S 32º37’30” E 404.00 feet to the Point of Beginning. Containing 6.07 acres more
or less.

Golden LivingCenter - Oxford, 1130 South Hale Street, Oxford, AL 36203-2444
All that tract or parcel of land lying and being in Calhoun County, Alabama, and
being more particularly described as follows:
(a)    Beginning at the Southwest corner of the intersection of Hale Street and
Morton Street, thence South 87 degrees 49 minutes West along the South right of
way line of Morton Street 295 feet; thence South 2 degrees, 50 minutes East 415
feet; thence North 89 degrees 47 minutes East 236 feet (Measures North 87
degrees, 52 minutes East 237.57 feet) to the West right of way of Hale Street;
thence North 19 degrees 31 minutes East along the West right of way of Hale
Street 165 feet (Measures North 20 degrees 12 minutes 03 seconds East, 168.35
feet); thence North 4 degrees 22 minutes West along the West right of way of
Hale Street 259.20 feet (Measures North 4 degrees 41 minutes 48 seconds West
along the right of way of Hale Street, 259.76 feet) to the point of beginning.
Situated, lying and being in the City of Oxford, Calhoun County, Alabama.
(b)     Beginning at a point on the present Northwest right of way line Project
F-272(2) that is 180 feet Northwesterly of and at right angles to the center
line of said Project at Station 1018+45; thence Northeasterly along said present
Northwest right of way line a distance of 150 feet, more or less, to a point
that is approximately 156 feet Northwesterly of and at right angles to the
centerline of said Project at Station 1020+00; thence Southeasterly along a
straight line a distance of 31 feet, more or less, to a point that is 125 feet
Northwesterly of and at right angles to the center line of said Project at
Station 1020+00; thence Southwesterly along a straight line a distance of 315
feet, more or less, to a point where the present Northwest right of way line of
said project intersects the South property line; thence Northeasterly along said
present Northwest right of way line a distance of 165 feet, more or less, to the
point of beginning.
(c)    Part of Lots #7-8, Block #B, as shown on the map of Higginbotham-Wilkins
Addition to Oxford, Alabama, recorded in the Office of the Probate Judge of
Calhoun County, Alabama, in Plat Book G, Page No. 29, and being more
particularly described as follows: Beginning at the Southwest corner of said Lot
#8; thence North along the West line of said Lot #8 155 feet to the Northwest
corner thereof; thence East along the North lines of said Lots No. 8 & 7- 118
feet (Measures 117.11) to the Westerly side of Highway No. F-272(4); thence
Southwesterly along the West side of said Highway 166.8 feet (Measures 167.06)
to the North side of Nina Street; thence West along the North side of Nina
Street 55 feet (measures 52.26) to the point of beginning, Situated at 304 Nina
Street, Oxford, Alabama.
(d)    Lot 9, Block #B, Nina Street, Higginbotham-Wilkins Addition to Oxford,
Alabama, same being that certain part of Lot No. 4 of Gunnello Estate in the
Northeast One-Quarter of the Southeast One-Quarter of Section 30, Township 16,
Range 8, as recorded in Plat Book G, Page 29, Calhoun County, Alabama, situated
in Calhoun County, Alabama.
The above described property is collectively described as follows:
Begin at the intersection of the South right of way line of Morton Street and
the West right of way line of Hale Street; thence run South 87 degrees 49
minutes West along the South right of way line of Morton Street for a distance
of 295.00 feet; thence run South 2 degrees 50 minutes East along the East line
of Deason Sarvella Subdivision for a distance of 415.00 feet; thence run North
87 degrees 52 minutes East for a distance of 60.46 feet; thence run South 2
degrees 37 minutes 41 seconds East for a distance of 155.28 feet to a point on
the North right of way line of Nina Street; thence run North 87 degrees 40
minutes 49 seconds East along the North right of way line of Nina Street for a
distance of 60.03 feet thence run North 87 degrees 15 minutes 48 seconds East
along the North right of way line of Nina Street for a distance of 52.26 feet;
thence run North 20 degrees 12 minutes 03 seconds East along the Northwest right
of way line of Alabama Highway No. 21 for a distance of 167.06 feet; thence run
North 33 degrees 08 minutes 17 seconds East along the Northwest right of way
line of Alabama Highway No. 21 for a distance of 319.37 feet; thence run North
64 degrees 16 minutes 43 seconds West for a distance of 40.61 feet; thence run
South 32 degrees 09 minutes 07 seconds West for a distance of 150.07 feet;
thence run North 4 degrees 41 minutes 48 seconds West along the West right of
way line of Hale Street for a distance of 259.76 feet to the point of beginning.

Golden LivingCenter - Pell City, 510 Wolf Creek Road North, Pell City, AL
35125-2477
PARCEL I
Beginning at an iron corner which is the Northwest corner of the intersection of
the right of way lines of Fifth Avenue and the Wolf Creek Road in the Eden
Section of the Town of Pell City, Alabama; thence continue north 30 degrees 00
minutes east along the west right of way line of the Wolf Creek Road for a
distance of 46.0 feet; thence continue south 59 degrees 10 minutes east for a
distance of 40.0 feet to the east right of way line of the Wolf Creek Road which
is the point of beginning for the herein described tract; thence continue north
30 degrees 00 minutes east along the east right of way of the Wolf Creek Road
for a distance of 336.0 feet to a stake; thence continue south 50 degrees 44
minutes east for a distance of 254.2 feet to a stake; thence continue north 64
degrees 15 minutes east for a distance of 90 feet to a stake; thence continue
north 83 degrees 45 minutes east for a distance of 95.0 feet to a stake; thence
continue south 85 degrees 45 minutes east for a distance of 100.0 feet to a
stake; thence continue south 82 degrees 45 minutes east for a distance of 235.0
feet to a stake; thence continue south 34 degrees 15 minutes west for a distance
of 535.0 feet to a stake; thence continue north 18 degrees 15 minutes west for a
distance of 197.0 feet to a stake; thence continue north 87 degrees 45 minutes
west for a distance of 58.0 feet to a stake; thence continue south 50 degrees 15
minutes west for a distance of 68.0 feet to a stake; thence continue north 82
degrees 45 minutes west for a distance of 25.0 feet to a stake; thence continue
south 27 degrees 15 minutes west for a distance of 144.0 feet to a stake on the
north right of way line of Fifth Avenue; thence continue north 59 degrees 10
minutes west along the north right of way line of Fifth Avenue for a distance of
204.0 feet to a stake; thence continue north 30 degrees 00 minutes east for a
distance 138.0 feet to a stake; thence continue north 56 degrees 54 minutes west
for a distance of 136.9 feet to a stake; thence continue south 80 degrees 00
minutes west for a distance of 83.0 feet to the point of beginning. All of the
above described tract lying in and being a portion of the Northeast 1/4 of the
Southeast 1/4, Section 34, Township 16 South, Range 3 East, situated in St.
Clair County, Alabama and lying within the city limits of Pell City, Alabama.
LESS AND EXCEPT: A parcel of property described as follows: from the northeast
corner of 5th Avenue North and Wolf Creek Road North run north 30 degrees 00
minutes east along southeasterly right of way boundary of said Wolf Creek Road
89.0 feet to point of beginning of land herein described; thence continue north
30 degrees 00 minutes east along said southeasterly right of way boundary of
said Wolf Creek Road 62.8 feet; thence south 59 degrees 51 minutes east 290.60
feet; thence south 42 degrees 16 minutes west 158.38 feet to northeasterly right
of way boundary of said 5th Avenue North; thence north 59 degrees 10 minutes
west along northeasterly right of way boundary of said 5th Avenue North 57.0
feet; thence north 30 degrees 00 minutes east 138.0 feet; thence north 56
degrees 54 minutes west 136.9 feet; thence south 80 degrees 00 minutes west 83.0
feet to point of beginning located in the NE 1/4 of SE 1/4 of Section 34,
Township 16 South, Range 3 East in the Eden Section of Pell City, St. Clair
County, Alabama.
LESS AND EXCEPT: From the NE corner of 5th Avenue North and Wolf Creek Road
north run south 59 degrees 10 minutes east along the northeasterly right of way
boundary of said 5th Avenue north 257.0 feet to point of beginning of land
herein described; thence north 42 degrees 16 minutes east 200.0 feet; thence
north 3 degrees 39 minutes east 100.0 feet; thence north 13 degrees 33 minutes
west 100.0 feet; thence north 58 degrees 04 minutes west 46.0 feet; north 36
degrees 49 seconds east 47.0 feet: thence south 50 degrees 44 minutes east 107.2
feet; thence north 64 degrees 15 minutes east 90.0 feet; thence north 83 degrees
45 minutes east 95.0 feet; thence south 85 degrees 45 minutes east 100.0 feet;
thence south 82 degrees 45 minutes east 235.0 feet; thence south 34 degrees 15
minutes west 535.0 feet; thence north 18 degrees 15 minutes west 197.0 feet;
thence north 87 degrees 45 minutes west 58.0 feet; thence south 50 degrees 15
minutes west 68.0 feet; thence north 82 degrees 45 minutes west 25.0 feet;
thence south 27 degrees 15 minutes west 144.0 feet to northeasterly right of way
boundary of said 5th Avenue North; thence follow said northeasterly right of way
boundary of said 5th Avenue North, north 59 degrees 10 minutes west 150.8 feet
to point of beginning; being a part of the NE 1/4 of SE 1/4 of Section 34,
Township 16 South, Range 3 East, in the Eden Section of Pell City, St. Clair
County, Alabama.
PARCEL II
A parcel of property described as follows: from the Northeast corner of 5th
Avenue North and Wolf Creek Road North, the point of beginning of land herein
described, run north 30 degrees 00 minutes east along southeasterly right of way
boundary of said Wolf Creek Road north 89.0 feet; thence north 80 degrees 00
minutes east 83.0 feet; thence south 56 degrees 54 minutes east 136.9 feet;
thence south 30 degrees 00 minutes west 138.0 feet to northeasterly right of way
boundary of said 5th Avenue North; thence north 59 degrees 10 minutes west along
said right of way boundary of 5th Avenue North 200.0 feet to point of beginning;
being a part of the NE 1/4 of SE 1/4 of Section 34, Township 16 South, Range 3
East, in the Eden Section in Pell City, St. Clair County, Alabama.
PARCEL Ill
A parcel of property described as follows: from the northeast corner of 5th
Avenue North and Wolf Creek Rood North run north 30 degrees 00 minutes east
along southeasterly right of way boundary of said Wolf Creek Road 89.0 feet to
point of beginning of land herein described; thence continue north 30 degrees 00
minutes east along said southeasterly right of way boundary of said Wolf Creek
Road 62.8 feet; thence south 59 degrees 51 minutes east 290.60 feet; thence
south 42 degrees 16 minutes west 158.38 feet to northeasterly right of way
boundary of said 5th Avenue North; thence north 59 degrees 10 minutes west along
northeasterly right of way boundary of said 5th Avenue North 57.0 feet; thence
north 30 degrees 00 minutes east 138.0 feet; thence north 56 degrees 54 minutes
west 136.9 feet; thence south 80 degrees 00 minutes west 83.0 feet to point of
beginning located in the NE 1/4 of SE 1/4 of Section 34, Township 16 South,
Range 3 East in the Eden Section of Pell City, St. Clair County, Alabama.
Golden LivingCenter - Winfield, 144 County Highway 14, Winfield, AL 35594
TRACT I:
Block “B” in the McDonald Addition to the City of Winfield, Alabama and recorded
in Probate Records of Marion County, Alabama, in Plat Book No. 1, on Pages No.
32 and 33 on the 12th day of July, 1957, the above said addition being situated
in the NE 1/4 of SW 1/4 of Section 8, Township 13 South, Range 12 West. LESS AND
EXCEPT THE FOLLOWING PARCEL OF LAND: A triangular tract of land off of Lot 1, 7,
8, 10 and 11 of Block “B” of the McDonald Addition to the town of Winfield, as
recorded in the Judge of Probate’s Office in Book 82, Page 689, more
particularly described as: Beginning at the Northwest corner of Lot 1; thence
North 88 degrees 00 minutes East and along the North side of said lot to the
Northeast corner of Lot 11; thence South and along the East side of Lot 11 a
distance of 16 feet; thence South 85 degrees 00 minutes East a distance of 508
feet; thence Southwesterly a distance of 35 feet to the West side of Lot 1;
thence Northerly and along the West side of Lot 1 a distance of 70 feet to the
point of beginning, as described in Right of Way deed for public road recorded
in Book 122, Page 221.
ALSO DESCRIBED AS FOLLOWS: That part of Block “B” in McDonald Addition to the
City of Winfield, Alabama, and recorded in Probate records of Marion County,
Alabama, in Plat Book No. 1 on Pages 32 and 33 on the 12th day of July, 1957,
the above said Addition being situated in the NE ¼ of the SW ¼ of Section 8,
Township 13 South, Range 12 West, described as follows: Commence at the
Southwest corner of said Block “B” for a point of beginning, thence N 24 degrees
04 minutes 49 seconds W, along the West line of Block “B” and the East right of
way of North Main Street, 230.00 feet to an iron pin set at the intersection of
the South right of way of County Highway 14; thence N 46 degrees 42 minutes 43
seconds E, along the South right of way of County Highway 14, 33.77 feet to an
iron pin set; thence North 85 degrees 00 minutes 00 seconds E, along said right
of way, 508.00 feet to an iron pin set on the East line of Block “B”, thence
South 2 degrees 53 minutes 43 seconds East along the East line of Block “B” and
the West right of way of a paved city street, 80.00 feet to an iron pin set at
the Southeast corner of Block “B”, thence S 65 degrees 51 minutes 57 seconds W,
along the South line of said Block “B” and the North right of way of Etta
Street, 488.07 feet to the point of beginning.
TRACT II:
Lot No. 2 and that part of Lots No. 3 and 4 of Block “D” of the McDonald
Addition to the Town of Winfield, Alabama, as recorded in the Office of the
Judge of Probate of Marion County, Alabama, in Map Cabinet 1 on Slide 4,
described as follows: Commence at the Southeast corner of Lot No. 3 of said
Block D” for a point of beginning; thence S 89 degrees 37 minutes 34 seconds W,
along the South line of Lot 3, 80.00 feet to an iron pin; thence N 0 degrees 30
minutes 00 seconds W 30.00 feet to an iron pin; thence N 89 degrees 37 minutes
34 seconds East 42.00 feet to an iron pin; thence North 0 degrees 30 minutes 00
seconds West 30.00 feet to an iron pin on the South line of said Lot 4; thence,
along said South line, S 89 degrees 37 minutes 34 seconds W 122.00 feet to an
iron pin at the Southwest corner of said Lot No. 4; thence N 0 degrees 30
minutes 00 seconds West along the East right of way of Perry Street, 50.00 feet
to an iron pin; thence N 89 degrees 37 minutes 34 seconds E 160.00 feet to an
iron pin on the East line of said Lot 4; thence S 0 degrees 30 minutes 00
seconds E, along the East lines of Lots 3 and No. 4, 110.00 feet to the point of
beginning.
TRACT III:
All those portions of Block B of the McDonald Addition to the Town of Winfield,
as recorded in Map Book 1, on Pages 32 and 33 in the Office of the Judge of
Probate of Marion County, Alabama, on which Winfield Nursing Home, Inc., its
predecessors, agents and officers have constructed improvements which lands are
a portion of the lands conveyed by Winfield Hospital, Inc. to Marion County by
right of way deed which is recorded in Deed Book 122, Page 221 for use as a
nursing home or other health facility and uses incidental thereto during the
term of thirty (30) years beginning on the 1st day of March, 2006, and ending on
the 28th day of February 2036.
Being the same land demised by that certain Lease Agreement by and between the
County Commission of Marion County, Alabama, and Beverly Enterprises-Alabama,
Inc., d/b/a Beverly Healthcare-Winfield, dated March 13, 2006 and filed April
12, 2006 in Volume 543, Page 205; and Assignment and Assumption of Lease
Agreement by and between Beverly Enterprise-Alabama, Inc. d/b/a Beverly
Healthcare-Winfield, as assignor, and CPH Winfield LLC, as assignee, filed April
12, 2006 in Volume 543, Page 211, in the Probate Office of Marion County,
Alabama.

Golden LivingCenter - Amory, 1215 Earl Frye Drive, Amory, MS 38821
Beginning at the Southwest Quarter of Section 31, Township 12 South, Range 18
West, Monroe County, Mississippi, and run thence East along the South boundary
of said Section 31 for 59 feet to an iron pin on the East right of way of
existing Boulevard Drive for the point of beginning, run thence East along the
said section line 443 feet to an iron pin, run thence North parallel with
Boulevard Drive 410 feet to an iron pin; run thence West parallel with South
boundary line of said Section 31 for 443 feet to an iron pin on the East right
of way of Boulevard; run thence South along the East right of way of said
Boulevard Drive 410 feet to the point of beginning, all lying in the Southwest
Quarter of Section 31, Township 12 South, Range 18 West, City of Amory, Monroe
County, Mississippi.
Also a perpetual easement and right of way for road purposes on, over and across
the following described property: Commencing at the Southwest corner of Section
31, Township 12 South, Range 18 West, Monroe County, Mississippi; thence run
East for 378 feet to the point of beginning; thence run East for 51.8 to a
point; thence run South 12 degrees 25 minutes West for 157.4 feet to a point;
thence run North 70 degrees 13 minutes west for 50.4 feet to a point; thence run
North 12 degrees 25 minutes East for 137.8 feet to the point of beginning
The above described property is also known as the as-surveyed legal description
as shown on the survey of Barge Waggoner Sumner & Cannon, Inc., Job No.
065-22041, as follows:
A tract of land located in the southwest quarter of Section 31, Township 12
South, Range 18 West in Monroe County, Mississippi being the GPH Amory LLC
property as recorded in Instrument Number 20062551 in the Chancery Clerk’s
Office in Monroe County, Mississippi and being more particularly described as
follows:
Commencing at the southwest corner of said Section 31; thence North 88 degrees
42 minutes 10 seconds East along the south line of said Section 31 a distance of
59.00 feet to a found iron pin in the east line of Earl Fry Boulevard (60’ ROW)
being the POINT OF BEGINNING; thence North 00 degrees 00 minutes 00 seconds East
along said east line a distance of 410.00 feet to a found iron pin being the
southwest corner of the Dan West property as recorded in Book 2003, Page 8539 in
said Chancery Clerk’s Office; thence North 88 degrees 42 minutes 10 seconds East
along the south line of said West property a distance of 443.00 feet to a found
iron pin in the west line of the Hollis Family Limited Partnership property as
recorded in Book 420, Page 33 in said Chancery Clerk’s Office; thence South 00
degrees 00 minutes 00 seconds East along said west line a distance of 410.00
feet to a found iron pin in the south line of said Section 31 being in the north
line of the Charles Kennedy Parchman property as recorded in Book 446, Page 664
in said Chancery Clerk’s Office; thence South 88 degrees 42 minutes 10 seconds
West along said north line and along the north line and along the north line of
the F.B. Jones et ux property as recorded in Book 451, Page 395 in said Chancery
Clerk’s Office a distance of 443.00 fee to the POINT OF BEGINNING and containing
181,583 square feet of 4,169 acres of land, more or less.
Also, a perpetual easement and right-of-way for road purposes on, over and
across the following described property: Commencing at the southwest corner of
said Section 31; thence North 88 degrees 42 minutes 10 Seconds East along the
south line of said Section 31 a distance of 378.00 feet to the POINT OF
BEGINNING; thence North 88 degrees 42 minutes 10 seconds East along said south
line a distance of 51.20 feet to a point; thence South 11 degrees 07 minutes 10
seconds a distance of 157.40 feet to a point; thence North 71 degrees 39 minutes
26 seconds West a distance of 50.40 feet to a point; thence North 11 degrees 07
minutes 10 seconds East a distance of 140.05 feet to the POINT OF BEGINNING.

Golden LivingCenter - Batesville, 154 Woodland Road, Batesville, MS 38606-7300
Tract I:
Laud lying and being in the City of Batesville; Second Judicial District of
Panola County, Mississippi, and :further described as: That fractional part of
the Northwest Quarter of Section 15, Township 9 South, Range 7 West, in the City
of Batesville, Mississippi. more particularly described as: Beginning at the
point that is 609.5 feet South of and 513.6 feet East of the Northwest corner of
the said Section 15, running North 89 degrees 53 minutes East for a distance of
420 feet; thence South 0 degrees 07 minutes East for a distance of 210 feet;
thence South 89 degrees 53 minutes West fur a distance of 420 feet; thence North
0 degrees 07 minutes West fur a distance of 210 feet to the point of beginning.
LESS AND EXCEPT: a strip measuring 20 feet North and South and 150 feet East and
West, said strip lying situate in the Southwest corner of the above described
premises.
Tract II:
A part of the Northwest Quarter of section 15, Township 9 South, Range 7 West,
City of Batesville, in second judicial District of Panola County, Mississippi,
and being particularly described as: Beginning at a point in the East right of
way line or a public road known as "The Hospital Road'' The said point of
beginning being 790.00 feet South from the center line of Mississippi Highway
No. 6 and 40.00 feet East from the ceuter line of the Hospital Road; run thence
South 0 degrees 17 minutes West along the East right of way line of the said
Hospital Road a distance of l20.00 feet; thence North 89 degrees 53 minutes East
of a distance 471.46 feet; thence North 0 degrees 07 minutes West a distance of
112.97 feet; thence South 01 degrees 55 minutes East a distance of 31.00 feet;
thence South 49 degrees 14 minutes West a distance of 410.60 feet; thence South
89 degrees 53 minutes West a distance of 47.10 feet to the point of beginning.
The above described property is also known as the as-surveyed legal description
as shown on the survey of Barge Waggoner Sumner & Cannon, Inc., Job No.
065-22095, as follows:
A tract of &and located in the northwest quarter of Section 15, Township 9
South, Range 7 West in Panola County, Mississippi being the GPH Batesville LLC
property as recorded in Book 2006, Page 1169 in the Chancery Clerk's Office in
Panola County, Mississippi and being more particularly described as follows:
BEGINNING at a point in the east line of Woodland Road (80' R.O.W.) being 790.00
feet south of the centerline of Mississippi Highway No. 6, said point being the
southwest corner of the Dr. Andy Garrott property as recorded in book H-9, Page
560; thence North 89 degrees 53 minutes 07 seconds East along the south line of
said Garrott property a distance of 47.10 feet to a point; thence North 49
degrees 14 minutes 00 seconds East along said south line a distance of 410.60
feet to a point; thence North 01 degrees 55 minutes 00 seconds West along said
south line a distance of 31.00 feet to a point; thence North 89 degrees 53
minutes 00 seconds East along said south line a distance of 112.97 feet to a
point in the west line of the JIJI, Inc. property as recorded in Book 2007, Page
717; thence South 00 degrees 07 minutes 00 seconds East along said west line a
distance of 88.57 feet to a point being the southwest corner of said JIJI
property; thence North 89 degrees 53 minutes 00 seconds East along the south
line of said JIJI property and the south line of the First Security Bank
property as recorded in Book E-5, Page 271 a distance of 420.00 feet to a point
in the west line of the Frank West property as recorded in Book X-8, Page 5;
thence South 00 degrees 07 minutes 00 seconds East along said west line a
distance of 210.00 feet to a point in the north line of the John Fowler property
as recorded in Book 2007, Page 426; thence South 89 degrees 53 minutes 00
seconds West along the north tine of said Fowler property a distance of 270.00
feet to a point; thence North 00 degrees 07 minutes 00 seconds West a distance
of 20.00 feet to a point; thence South 89 degrees 53 minutes 00 seconds West a
distance of 150.00 feet to a point; thence South 00 degrees 07 minutes 00
seconds East and along the west line of said Fowler property a distance of
139.89 feet to a point being the corner of the Carol B. Ingram et al property as
recorded in Book P-8, Page 617; thence South 89 degrees 53 minutes 00 seconds
West along the north line of aid Ingram property a distance of 471.46 feet to a
point in the east line of said Woodland Road; thence North 00 degrees 17 minutes
00 seconds East along said east line a distance of 120.00 feet to the POINT OF
BEGINNING and containing 216,.828 square feet or 4.978 acres of land, more or
less.

Golden LivingCenter - Brook Manor, 519 Brookman Drive, Brookhaven, MS 39601-2326
Five acres, more or less in the Northeast corner of the Northwest Quarter of
Southwest Quarter of Section 12, Township 7 North, Range 7 East, more
particularly described as beginning at the Northeast corner of said Northwest
Quarter of Southwest Quarter and run thence South along the East line of said
forty 700 feet; run thence Westwardly at right angles 310 feet; run thence North
700 feet to the North line of the said forty; run thence East 310 feet to the
point of the beginning; said property being further described as:
Beginning at the Northeast corner of the Northwest Quarter of Southwest Quarter
of said Section 12, and run thence along the East line of said Northwest Quarter
of the Southwest Quarter South 00 degrees 26 minutes East 700 feet; thence South
89 degrees 34 minutes West 310 feet; thence North 00 degrees 28 minutes West 700
feet to the North line of said Northwest Quarter of Southwest Quarter; thence
North 89 degrees 34 minutes East 310 feet, along said North line of Northwest
Quarter of Southwest Quarter to the point of beginning, being situated in
Lincoln County, Mississippi.
The above described property is also known as the as-surveyed legal description
as shown on the survey of T.E. McDonald, Inc.

Golden LivingCenter - Eupora, 156 E Walnut Avenue, Eupora, MS 39744-2027
The Eupora Health Care Center as located in the City of Eupora, Mississippi, and
being further described as being located in a part of the Northeast Quarter of
the Northeast Quarter, of Section 8, Township 19 North, Range 10 East, Webster
County, Mississippi.
Beginning at the iron pin that is 190.09 feet South and 1274.74 feet West of the
Northeast comer of section 8, said point being at the intersection of South
right of way of East Walnut Ave and the East right of way of Water Works Road
(Deed called Water Well Road); thence from said point of beginning, North 87
degrees 07 minutes 00 seconds East along the South right of way of Walnut Ave, a
distance of 134.32 feet to a point; thence North 86 degrees 09 minutes 00
seconds East along the said right of way a distance of 270.68 feet to an iron
pin; thence South 27 degrees 45 minutes 01 seconds East a distance of 300.00
feet to an iron pin; thence South a distance of 182.65 feet to an iron pin;
thence West a distance of 534.45 feet to an iron pin on the East right of way of
Water Works Road; thence along said East said right of way, North 00 degrees 54
minutes 02 seconds West a distance of 102.00 feet to a point; thence along said
right of way, North 01 degrees 24 minutes 00 seconds West a distance of 321.32
feet to the POINT OF BEGINNING.
The above described property is also known as the as-surveyed legal description
as shown on the survey of Maptech, Inc., Job No. MD-10126.000.

Golden LivingCenter - Ripley, 101 Cunningham Drive, Ripley, MS 38663-1302
Tract 1
Part of the Northeast Quarter of section 14, Township 4 South, Range 3 East, and
being more particularly described as follows:
Beginning at the Northwest corner of the Northeast Quarter of section 14,
Township 4 South, Range 3 East, Tippah County, Mississippi, and run East along
the North boundary of said quarter Section for a distance of 1649 feet, thence
run South. for a distance 621 feet to an iron pipe which is the point of
beginning for the survey. From the point of beginning run North 89 degrees 20
minutes West for a distance of 428 feet 1o a stake; thence run South for a
distance of 407 feet to a stake, thence run South 89 degrees 20 minutes East for
a distance of 428 feet to an iron stake; thence run North a distance 407 feet to
the point of beginning.
Tract2
Beginning at the Northwest corner of the Northeast Quarter of Section 14,
Township 4, South range 3 East, of Tippah County, Mississippi, and nm thence due
East along the North boundary of the said Quarter Section for a distance of 1649
feet; thence run due South for a distance of 621 feet to an iron pipe, thence
run North 89 degrees 20 minutes West for a distance of 428 feet to a stake which
is the point of beginning of this survey. From the point of beginning run North
89 degrees 20 minutes West for a distance of 107 feet to an iron pin in the
ground; thence nm due South a distance of 407 feet to an iron pin in the ground;
thence run South 89 degrees 20 minutes East a distance of 107 feet; thence run
due North a distance of 407 feet to the point of beginning. Said tract being
located in the Northeast quarter of section 14, Township 4 South, Range 3 East
of Tippah County, Mississippi.

Golden LivingCenter - Southaven, 1730 Dorchester Drive, Southaven, MS 38671-5723
A part of the Cobb Estate located in section 26, Township 1 South, Range 8 West,
DeSoto County, Mississippi, and being more specifically described as follows:
Begin at the stake at the Southeast corner of lot 2937, Section "N", Southaven
West Subdivision, as recorded in Plat Book 5, Pages 8 & 9, Registers office,
Hernando, DeSoto County, Mississippi; thence North 00 degrees 29' West 165.00
feet to a stake; thence South 89 degrees 10' East 337.64 feet to a stake; thence
South 03 degrees East 653.24 feet to the stake in the South line of a 200 foot
Power Line Easement; thence South 81 degrees 03' West 517 .13 feet to a stake in
the East line of Dorchester Drive; thence North 03 degrees 09' West 568. 08 feet
to a stake in the South line of the said Southaven West Subdivision; thence
North 88 degrees 10' East 171.74 feet to the point of beginning.
Being located in part of the Northwest Quarter of said Section 26.

Golden LivingCenter - Eason Blvd, 2273 South Eason Boulevard, Tupelo, MS
38804-5900
Commencing at the Northeast corner of the Northwest Quarter of Section 9,
Township 10 South, Range 6 East, City of Tupelo, Lee County, Mississippi, and
run thence South 40 feet to a point of the South right of way line of Eason
Boulevard; thence West along the South line of Eason Boulevard 674.5 feet to an
iron pin for point of beginning; thence South 524.21 feet to an iron pin, thence
West 349.1 feet to iron pin; thence North 524.21 feet to a point on the South
line of Eason Boulevard; thence East along the South line of Eason Boulevard
349.1 feet to the point of beginning being in the Northwest Quarter of Section
9, Township 10 South, Range 6 East, City of Tupelo, Lee County, Mississippi.
Indexing Instructions: Part of NW1/4 Section 9, T-10-S, R-6-E, Lee County, MS

Golden LivingCenter - Tylertown, 200 Medical Circle, Tylertown, MS 39667-2069
Parcel I:
From the Southwest corner of Section 24, Township 2 North, Range 10 East.
Walthall County, Mississippi, run North along the Section line a distance 1320
feet; thence run East a distance of 942.51 feet; thence run North 31 degrees 03
minutes East a distance of 92.70 feet for a point beginning; thence continue
North 31 degrees 03 minutes East a distance of 350.00 feet; thence run South 58
degrees 57 minutes West a distance of 377.00 feet; thence run South 31 degrees
03 minutes West a distance of 350.00 feet; thence run North 58 degrees 57
minutes West a distance of 377.00 feet to the point of beginning, being situated
in the Southwest Quarter of Section 24, Township 2 North, Range10 East, Walthall
County. Mississippi.
Parcel II:
Starting at the Southwest corner of Section 24, Township 2 North, Range 10 East
and run North along section line 1,320 feet; thence East 942.51 feet; thence
North 31 03' East 92.70 feet for a place of beginning; thence North 31 03' East
350 feet; thence South 58' 57’ East 377 feet; thence South 31' 03 West 350 feet
to North margin of street; thence South 58'57 East 20 feet; thence North 31’ 03
East 396 feet; thence North 58' 57 West 443 feet; thence South 31' 03 West 396
feet to North margin of street; thence South 58' 57 East along North margin of
street 46 feet to place of beginning, situated in the Southwest Quarter of
Section 24, Township 2 North, Range 10 East, Walthall County, Mississippi.
The above described property is also known as the as-surveyed legal description
as shown on the survey of T.E. McDonald, Inc., Job No. 065-22040.

EXHIBIT C

LANDLORD PERSONAL PROPERTY
All machinery, equipment, furniture and other personal property located at or
about any Facility and used in connection with the ownership, operation, or
maintenance of any Facility, together with all replacements, modifications,
alterations and substitutes thereof (whether or not constituting an upgrade) but
excluding the following:
(a) all vehicles (including any leasehold interests therein);
(b) all office supplies, medical supplies, food supplies, housekeeping supplies,
laundry supplies, and inventories and supplies physically on hand at the
Facility;
(c) all customer lists, patient files, and records related to patients (subject
to patient confidentiality privileges) and all books and records with respect to
the operation of the Facility;
(d) all employee time recording devices, proprietary software and data used in
connection with the operation of the Facility by Tenant or any Person who
manages the operations of any Facility, all employee communication devices,
employee manuals, training materials, policies, procedures, and materials
related thereto with respect to the operation of the Facilities; and
(e) all telephone numbers, brochures, pamphlets, flyers, mailers, and other
promotional materials related to the marketing and advertising of the Tenant’s
business at the Facility.

EXHIBIT D

FINANCIAL, MANAGEMENT AND REGULATORY REPORTS
REPORT
DUE DATE
Monthly financial reports concerning the operations of each Facility and the
combined Facilities or such other combination of this and related leases as
reasonably requested by Landlord 
reported using a template provided by Landlord (which template may change from
time to time as reasonably required by Landlord). Landlord may require Tenant to
provide similar financial reports, utilizing the same or a similar template, for
periods prior to the Commencement Date.
(Via e-mail to farallonreporting@goldenliving.com, or such other e-mail address
as Landlord may designate from time to time)
Thirty (30) days after the end of each calendar month, or, with respect to
reports for periods prior to the Commencement Date, within (30) days after
Landlord’s demand therefor
Quarterly consolidated or combined financial statements  
of Tenant and any Guarantor
(Via e-mail to farallonreporting@goldenliving.com, or such other e-mail address
as Landlord may designate from time to time)
Forty-Five (45) days after the end of each of the first three quarters of the
fiscal year of Tenant and such Guarantor
Annual consolidated or combined financial statements  
of Tenant and any Guarantor audited by a reputable certified public accounting
firm
(Via e-mail to farallonreporting@goldenliving.com, or such other e-mail address
as Landlord may designate from time to time)
Ninety (90) days after the fiscal year end of Tenant and such Guarantor
Quarterly Certified Compliance Certificates, in form reasonably acceptable to
Landlord, certified by appropriate officers of Tenant and Guarantor, as
applicable, demonstrating (with supporting calculations) compliance with all
financial covenants contained in Section 6.12 of this Lease and in the Guaranty
Together and concurrently with each Quarterly and Annual financial statement
described above
Regulatory reports with respect to each Facility, as follows:
(1) all federal, state and local licensing and reimbursement certification
surveys, inspection and other reports received by Tenant as to any Facility and
its operations, including state department of health licensing surveys and
reports relating to complaint surveys;
(2) Medicare and Medicaid certification surveys; and
(3) life safety code survey reports and/or fire marshal survey reports.
(Via e-mail to farallonreporting@goldenliving.com, or such other e-mail address
as Landlord may designate from time to time)
Five (5) Business Days after receipt
Reports of regulatory violations,
by written notice of the following:
(1) any violation of any federal, state or local licensing or reimbursement
certification statute or regulation, including Medicare or Medicaid Level G or
above;
(2) any suspension, termination or restriction (including immediate jeopardy)
placed upon Tenant or any Facility, the operation of any Facility or the ability
to admit residents or patients;
(3) the inclusion of any Facility on the “Special Focus List” maintained by CMS;
or
(4) any violation of any other permit, approval or certification in connection
with any Facility or the operations thereof, by any federal, state or local
authority, including Medicare or Medicaid.
Three (3) Business Days after receipt
Written evidence of payment of all Impositions to be paid by Tenant under the
Lease as and when required under the Lease.
Not later than thirty (30) days after the applicable due date under this Lease
for each Imposition.
Annual operating and capital budget  
covering the operations and reasonable estimate of capital repairs, replacements
and improvements for each Facility for the forthcoming calendar year (which
annual budget shall include month-to-month projections), reported using a
template provided by Landlord (which template may change from time to time as
reasonably required by Landlord).
(Via e-mail to farallonreporting@goldenliving.com or such other e-mail address
as Landlord may designate from time to time)
Thirty (30) days prior to beginning of each calendar year for the annual capital
budget and prior to the commencement of each calendar year for the annual
operating budget.
Updated Schedule 6.10 / Affiliate Agreements  
as provided in Section 6.10
Not later than ten (10) Business Days after each anniversary of the Commencement
Date

EXHIBIT E

FAIR MARKET RENTAL
If it becomes necessary to determine the Fair Market Rental of the Premises or
any individual Facility for any purpose under this Lease, Landlord and Tenant
shall first attempt to agree on such Fair Market Rental, as the case may be. If
Landlord and Tenant are unable to so agree within a reasonable period of time
not to exceed thirty (30) days, then Landlord and Tenant shall have twenty (20)
days to attempt to agree upon a single Appraiser to make such determination. If
the parties so agree upon a single Appraiser, such Appraiser shall, within
forty-five (45) days of being engaged, determine the Fair Market Rental, as the
case may be, as of the relevant date (giving effect to the impact, if any, of
inflation from the date of its decision to the relevant date), and such
determination shall be final and binding upon the parties.
If Landlord and Tenant are unable to agree upon a single Appraiser within such
twenty (20) days, then each party shall have ten (10) days in which to provide
the other with the name of a person selected to act as Appraiser on its behalf.
Each such Appraiser shall, within forty-five (45) days of being engaged,
determine the Fair Market Rental, as the case may be, as of the relevant date
(giving effect to the impact, if any, of inflation from the date of its decision
to the relevant date). If the difference between the amounts so determined does
not exceed ten percent (10%) of the lesser of such amounts, then the Fair Market
Rental, as the case may be, shall be the average of the amounts so determined,
and such average shall be final and binding upon the parties. If the difference
between the amounts so determined exceeds ten percent (10%) of the lesser of
such amounts, then such two Appraisers shall have twenty (20) days to appoint a
third Appraiser. If the first Appraisers fail to appoint a third Appraiser
within such twenty (20) days, either Landlord or Tenant may apply to any court
having jurisdiction to have such appointment made by such court. Such third
Appraiser, shall, within forty-five (45) days of being selected or appointed,
determine the Fair Market Rental, as the case may be, as of the relevant date
(giving effect to the impact, if any, of inflation from the date of its decision
to the relevant date). The determination of the Appraiser which differs most in
terms of dollar amount from the determinations of the other two Appraisers shall
be excluded, and the Fair Market Rental, as the case may be, shall be the
average of the amounts of the two remaining determinations, and such average
shall be final and binding upon the parties.
If either party fails to select an Appraiser within such ten (10) days or a
selected Appraiser fails to make its determination within such forty-five (45)
days, the Appraiser selected by the other party or the Appraiser that makes its
determination with such forty-five (45) days, as applicable, shall alone
determine the Fair Market Rental, as the case may be, as of the relevant date
(giving effect to the impact, if any, of inflation from the date of its decision
to the relevant date) and such determination shall be final and binding upon the
parties.
Landlord and Tenant shall each pay the fees and expenses of the Appraiser
appointed by it and each shall pay one-half (½) of the fees and expenses of the
third Appraiser.
For purposes of determining the Fair Market Rental, as the case may be, the
Premises or the applicable Facility, as applicable, shall be valued at its
highest and best use which shall be presumed to be as a fully-permitted facility
operated in accordance with the provisions of this Lease. In addition, the
following specific matters shall be factored in or out, as appropriate, in
determining the Fair Market Rental, as the case may be:
1.The negative value of (a) any deferred maintenance or other items of repair or
replacement of the Premises or the applicable Facility, (b) any then current or
prior licensure or certification violations and/or admissions holds and (c) any
other breach or failure of Tenant to perform or observe its obligations
hereunder shall not be taken into account; rather, the Premises or the
applicable Facility, and every part thereof shall be deemed to be in the
condition required by this Lease (i.e., in good order and repair and fully
licensed) and Tenant shall at all times be deemed to have operated the same in
compliance with and to have performed all obligations of the Tenant under this
Lease.
2.The occupancy level of the Premises shall be deemed to be the average
occupancy during the period commencing on that date which is eighteen (18)
months prior to the date of the initial request for the determination of the
Fair Market Rental, as the case may be, and ending on the date which is six (6)
months prior to the date of the initial request for the determination of the
Fair Market Rental, as the case may be.
As used herein, “Appraiser” means an appraiser licensed or otherwise qualified
to do business in the applicable Situs State and who has substantial experience
in performing appraisals of facilities similar to the Premises and holds the
Appraisal Institute’s MAI designation, or, if such organization no longer exists
or certifies appraisers, such successor organization or such other organization
as is approved by Landlord.

EXHIBIT F
FORM OF APPROVED LETTER OF CREDIT
[NAME] BANK
IRREVOCABLE LETTER OF CREDIT NO. __________
DATE: __________________
EXPIRATION DATE: __________________

BEVERLY ENTERPRISES – ALABAMA, INC.,
GPH AMORY LLC,
GPH ARAB LLC,
GPH BATESVILLE LLC,
GPH BESSEMER LLC,
GPH BIRMINGHAM LLC,
GPH BOAZ LLC,
GPH BROOKHAVEN LLC,
GPH EUPORA LLC,
GPH FOLEY LLC,
GPH HUEYTOWN LLC,
GPH LANETT LLC,
GPH MONTGOMERY LLC,
GPH ONEONTA LLC,
GPH OXFORD LLC,
GPH RIPLEY LLC,
GPH SOUTHAVEN LLC,
GPH TUPELO LLC,
GPH TYLERTOWN LLC, and
GPH WINFIELD LLC
c/o Golden Living
1000 Fianna Way
Fort Smith, Arkansas 72919

Ladies and Gentlemen:
We hereby establish our Irrevocable Letter of Credit in your favor for the
account of ___________________________________ (“Customer”) available by your
draft(s) on us payable at sight in an amount not to exceed a total of
______________________ Dollars ($__________) when accompanied by the following
documents:
1.    A certificate which on its face appears to have been executed by an
officer of any of BEVERLY GPH AMORY LLC, GPH ARAB LLC, GPH BATESVILLE LLC, GPH
BESSEMER LLC, GPH BIRMINGHAM LLC, GPH BOAZ LLC, GPH BROOKHAVEN LLC, GPH EUPORA
LLC, GPH FOLEY LLC, GPH HUEYTOWN LLC, GPH LANETT LLC, GPH MONTGOMERY LLC, GPH
ONEONTA LLC, GPH OXFORD LLC, GPH RIPLEY LLC, GPH SOUTHAVEN LLC, GPH TUPELO LLC,
GPH TYLERTOWN LLC, or GPH WINFIELD LLC, each a Delaware limited liability
company, or ENTERPRISES – ALABAMA, INC.,, a California corporation, or any
successor entity by operation of law (“Beneficiary”), stating the amount which
Beneficiary is drawing and that one or more of the following events has
occurred:

(a)    an Event of Default has occurred under that certain Master Lease dated as
of November 1, 2016 between Beneficiary and DIVERSICARE OF AMORY, LLC,
DIVERSICARE OF ARAB, LLC, DIVERSICARE OF BATESVILLE, LLC, DIVERSICARE OF
BESSEMER, LLC, DIVERSICARE OF BOAZ, LLC, DIVERSICARE OF BROOKHAVEN, LLC,
DIVERSICARE OF EUPORA, LLC, DIVERSICARE OF FOLEY, LLC, DIVERSICARE OF HUEYTOWN,
LLC, DIVERSICARE OF LANETT, LLC, DIVERSICARE OF MONTGOMERY, LLC, DIVERSICARE OF
ONEONTA, LLC, DIVERSICARE OF OXFORD, LLC, DIVERSICARE OF PELL CITY, LLC,
DIVERSICARE OF RIPLEY, LLC, DIVERSICARE OF RIVERCHASE, LLC, DIVERSICARE OF
SOUTHAVEN, LLC, DIVERSICARE OF TUPELO, LLC, DIVERSICARE OF TYLERTOWN, LLC, and
DIVERSICARE OF WINFIELD, LLC, each a Delaware limited liability company (the
“Lease”);
(b)    a default under that certain Amended and Restated Guaranty of Master
Lease dated November 1, 2016, executed by DIVERSICARE HEALTHCARE SERVICES, INC.,
a Delaware corporation, for the benefit of Beneficiary; or
(c)    either (i) an FDIC receiver or conservator has been appointed for the
Issuer (as defined in the Lease)) or (ii) the Issuer has become subject to
operational supervision by any federal or state regulatory authority.
2.    The original Letter of Credit must accompany all drafts unless a partial
draw is presented, in which case the original must accompany final draft.
This Letter of Credit will be duly honored by us at sight upon delivery of the
statement set forth above without inquiry as to the accuracy of such statement
and regardless of whether Customer disputes the content of such statement.
This Letter of Credit may be transferred or assigned by Beneficiary to any
successor or assign of Beneficiary’s interests under the Lease or to any lender
obtaining a lien or security interest in the property covered by the Lease. Each
draft hereunder by any assignee or successor shall be accompanied by a copy of
the fully executed documents or judicial orders evidencing such encumbrance,
assignment or transfer.
Any draft drawn hereunder shall be in the form attached hereto as Schedule 1.
Partial drawings are permitted with the amount of the Letter of Credit being
reduced, without amendment, by the amount(s) drawn hereunder.
This Letter of Credit shall expire at 5:00 p.m., Pacific Time, on the expiration
date set forth above. Notwithstanding the foregoing, this Letter of Credit shall
be automatically extended for additional periods of one year from the present or
each future expiration date unless we have notified you in writing, not less
than ninety (90) days before any such expiration date, that we elect not to
renew this Letter of Credit. Our notice of any such election shall be sent by
express, registered or certified mail to the address shown above.
Except so far as otherwise expressly stated, this Letter of Credit is subject to
the “Uniform Customs and Practices for Documentary Credits (2007 Revision),
International Chamber of Commerce Publication No. 600.” We hereby agree with you
and all persons negotiating such drafts that all drafts drawn and negotiated in
compliance with the terms of this Letter of Credit will be duly honored upon
presentment and delivery of the documents specified above by express, certified
or registered mail, overnight or other delivery by national courier service or
personal delivery to , , if negotiated on or before the expiration date shown
above.
Very truly yours,
_______________________________
Authorized Signature
_______________________________
Authorized Signature
SCHEDULE 1
SIGHT DRAFT
TO:    ______________________________
______________________________
______________________________
Attention:                 
PAY TO THE ORDER OF:
[NAME OF BENEFICIARY]
c/o [NAME OF BANK]
[ADDRESS OF BANK]
ABA No. [INSERT ABA NO.]
for the benefit of [NAME OF BENEFICIARY]
Account No. [INSERT ACCOUNT NO.]
THE SUM OF:
____________________________ Dollars ($_____________)
DRAWN ON:
Irrevocable Letter of Credit No. ________
dated ______________, 20___ issued by
________________________ Bank

[BENEFICIARY]

By:                        
Name:                        
Title:                        

SCHEDULE 1A

LANDLORD ENTITIES

BEVERLY ENTERPRISES – ALABAMA, INC., a California corporation
GPH AMORY LLC, a Delaware limited liability company
GPH ARAB LLC, a Delaware limited liability company
GPH BATESVILLE LLC, a Delaware limited liability company
GPH BESSEMER LLC, a Delaware limited liability company
GPH BIRMINGHAM LLC, a Delaware limited liability company
GPH BOAZ LLC, a Delaware limited liability company
GPH BROOKHAVEN LLC, a Delaware limited liability company
GPH EUPORA LLC, a Delaware limited liability company
GPH FOLEY LLC, a Delaware limited liability company
GPH HUEYTOWN LLC, a Delaware limited liability company
GPH LANETT LLC, a Delaware limited liability company
GPH MONTGOMERY LLC, a Delaware limited liability company
GPH ONEONTA LLC, a Delaware limited liability company
GPH OXFORD LLC, a Delaware limited liability company
GPH RIPLEY LLC, a Delaware limited liability company
GPH SOUTHAVEN LLC, a Delaware limited liability company
GPH TUPELO LLC, a Delaware limited liability company
GPH TYLERTOWN LLC, a Delaware limited liability company
GPH WINFIELD LLC, a Delaware limited liability company

SCHEDULE 1B

TENANT ENTITIES

DIVERSICARE OF AMORY, LLC, a Delaware limited liability company
DIVERSICARE OF ARAB, LLC, a Delaware limited liability company
DIVERSICARE OF BATESVILLE, LLC, a Delaware limited liability company
DIVERSICARE OF BESSEMER, LLC, a Delaware limited liability company
DIVERSICARE OF BOAZ, LLC, a Delaware limited liability company
DIVERSICARE OF BROOKHAVEN, LLC, a Delaware limited liability company
DIVERSICARE OF EUPORA, LLC, a Delaware limited liability company
DIVERSICARE OF FOLEY, LLC, a Delaware limited liability company
DIVERSICARE OF HUEYTOWN, LLC, a Delaware limited liability company
DIVERSICARE OF LANETT, LLC, a Delaware limited liability company
DIVERSICARE OF MONTGOMERY, LLC, a Delaware limited liability company
DIVERSICARE OF ONEONTA, LLC, a Delaware limited liability company
DIVERSICARE OF OXFORD, LLC, a Delaware limited liability company
DIVERSICARE OF PELL CITY, LLC, a Delaware limited liability company
DIVERSICARE OF RIPLEY, LLC, a Delaware limited liability company
DIVERSICARE OF RIVERCHASE, LLC, a Delaware limited liability company
DIVERSICARE OF SOUTHAVEN, LLC, a Delaware limited liability company
DIVERSICARE OF TUPELO, LLC, a Delaware limited liability company
DIVERSICARE OF TYLERTOWN, LLC, a Delaware limited liability company
DIVERSICARE OF WINFIELD, LLC, a Delaware limited liability company

SCHEDULE 2

FACILITY LIST

Facility Name
Facility Address
Primary Intended Use
No. of Beds/Units
Golden LivingCenter - Arab
235 3rd Street SE
Arab, AL 35016
SNF
87
Golden LivingCenter - Meadowood
820 Golf Course Road
Bessemer, AL 35022-6024
SNF
180
Golden LivingCenter - Riverchase
2500 River Haven Drive
Birmingham, AL 35244
SNF
132
Golden LivingCenter - Boaz
600 Corley Avenue
Boaz, AL 35957-5952
SNF
100
Golden LivingCenter - Foley
1701 North Alston Street
Foley, AL 36535-2246
SNF
154
Golden LivingCenter - Hueytown
190 Brooklane Drive
Hueytown, AL 35023
SNF
50
Golden LivingCenter - Lanett
702 South 13th Street
Lanett, AL 36863
SNF
85
Golden LivingCenter - Montgomery
2020 North Country Club Drive
Montgomery, AL 36106
SNF
138
Golden LivingCenter - Oneonta
215 Valley Road
Oneonta, AL 35121
SNF
120
Golden LivingCenter - Oxford
1130 South Hale Street
Oxford, AL 36203-2444
SNF
173
Golden LivingCenter - Pell City
510 Wolf Creek Road North
Pell City, AL 35125-2477
SNF
94
Golden LivingCenter - Winfield
144 County Highway 14
Winfield, AL 35594
SNF
123
Golden LivingCenter - Amory
1215 Earl Frye Drive
Amory, MS 38821
SNF
152
Golden LivingCenter - Batesville
154 Woodland Road
Batesville, MS 38606-7300
SNF
130
Golden LivingCenter - Brook Manor
519 Brookman Drive
Brookhaven, MS 39601-2326
SNF
58
Golden LivingCenter - Eupora
156 E Walnut Avenue
Eupora, MS 39744-2027
SNF
119
Golden LivingCenter - Ripley
101 Cunningham Drive
Ripley, MS 38663-1302
SNF
140
Golden LivingCenter - Southaven
1730 Dorchester Drive
Southaven, MS 38671-5723
SNF
140
Golden LivingCenter - Eason Blvd
2273 South Eason Boulevard
Tupelo, MS 38804-5900
SNF
120
Golden LivingCenter - Tylertown
200 Medical Circle
Tylertown, MS 39667-2069
SNF
60

Defined Terms
“SNF”
Skilled Nursing Facility
 
 

SCHEDULE 3

TENANT OWNERSHIP STRUCTURE
Diversicare Leasing Company III, LLC, a Delaware limited liability company, is
the sole member of and owns 100% of the limited liability company interests in
each Tenant.

SCHEDULE 4

RELATED LEASES

1.     Lease Agreement between Broadmoor Nursing Home Ltd., as Lessor, and
Broadmoor Nursing Home, Inc., as Lessee, with respect to the nursing home
facility located in Meridian, Mississippi, originally dated October 1, 1977, the
leasehold interest of the Lessee thereunder being assigned to Beverly
Enterprises-Mississippi, Inc. by Assignment of Lease dated as of July 13, 1982,
and further assigned to Diversicare of Meridian, LLC by Assignment and
Assumption Agreement dated as of October 1, 2016, and amended by First Amendment
to Lease Agreement dated as of October 1, 2016.
2.     Lease Agreement between Leake County Nursing Home Ltd., as Lessor, and
Carthage Health Care Center, Inc., as Lessee, with respect to the nursing home
facility located in Carthage , Mississippi, originally dated October 1, 1977,
the leasehold interest of the Lessee thereunder being assigned to Beverly
Enterprises-Mississippi, Inc. by Assignment of Lease dated as of July 13, 1982,
and further assigned to Diversicare of Carthage , LLC by Assignment and
Assumption Agreement dated as of October 1, 2016, and amended by First Amendment
to Lease Agreement dated as of October 1, 2016.

SCHEDULE 6.10

AFFILIATE AGREEMENTS

1.     Management Agreements each dated as of October 1, 2016 by and between
Diversicare Management Services Co., as Manger, and each Tenant with respect to
the management of each Facility that is located in the State of Mississippi.
2.     Therapy Services Agreements each dated as of October 1, 2016 by and
between Diversicare Therapy and each Tenant with respect to each Facility for
the provision of physical and occupational therapy and speech-language pathology
rehabilitation services and related services at each Facility that is located in
the State of Mississippi.
3.     Management Agreements each dated as of November 1, 2016 by and between
Diversicare Management Services Co., as Manger, and each Tenant with respect to
the management of each Facility that is located in the State of Alabama.
4.     Therapy Services Agreements each dated as of November 1, 2016 by and
between Diversicare Therapy and each Tenant with respect to each Facility for
the provision of physical and occupational therapy and speech-language pathology
rehabilitation services and related services at each Facility that is located in
the State of Alabama.

AMENDED AND RESTATED MASTER LEASE

Between

Each entity identified as “Landlord” on Schedule 1A attached hereto,
individually and collectively as “Landlord”

and

Each entity identified as “Tenant” on Schedule 1B attached hereto
individually and collectively as “Tenant”

Dated: November 1, 2016

Article I DEFINITIONS; PREMISES; TERM    2
1.1    Definitions    2
1.2    Lease of Premises; Ownership    2
1.3    Term    2
1.4    Net Lease    2
Article II RENT    3
2.1    Base Rent    3
2.2    Additional Rent    3
2.3    Method of Payment    3
2.4    Late Payment of Rent    4
2.5    Guaranty    4
Article III SECURITY DEPOSIT; LETTER OF CREDIT    4
3.1    Security Deposit    4
3.2    Letter of Credit    5
Article IV IMPOSITIONS AND OTHER CHARGES    7
4.1    Impositions    7
4.2    Utilities; CC&Rs    8
4.3    Insurance    8
4.4    Other Charges    8
4.5    Real Property Imposition Impounds    8
Article V ACCEPTANCE OF PREMISES; NO IMPAIRMENT    9
5.1    Acceptance of Premises    9
5.2    No Impairment    9
Article VI OPERATING COVENANTS    10
6.1    Tenant Personal Property.    10
6.2    Landlord Personal Property    10
6.3    Primary Intended Use    10
6.4    Compliance with Legal Requirements and Authorizations    11
6.5    Preservation of Business    11
6.6    Maintenance of Books and Records    12
6.7    Financial, Management and Regulatory Reports    12
6.8    Estoppel Certificates    13
6.9    Furnish Information    13
6.10    Affiliate Transactions    13
6.11    Waste    13
6.12    Additional Covenants    14
6.13    No Liens    15
6.14    Landlord Trade Names and Marks    15
6.15    [*****] Facility    15
6.16    Pell City Facility    16
6.17    Montgomery Assisted Living Building    16
Article VII MAINTENANCE AND REPAIR    17
7.1    Tenant’s Maintenance Obligation    17
7.2    Premises Condition Report    17
7.3    Notice of Non-Responsibility    17
7.4    Permitted Alterations    17
7.5    Capital and Material Alterations    18
7.6    Capital Expenditures    19
7.7    Construction Consultant    20
7.8    Encroachments    20
7.9    Capital Alterations Financed by Landlord    20
7.10    Upgrade Allowance    21
Article VIII PERMITTED CONTESTS    23
Article IX INSURANCE    23
9.1    Required Policies    23
9.2    General Insurance Requirements    25
9.3    Replacement Costs    26
9.4    Claims-Made Policies    26
9.5    Non-Renewal    27
9.6    Increase in Limits; Types of Coverages    27
9.7    No Separate Insurance    27
9.8    Alternate Coverages    28
9.9    Captive Insurance Program    28
Article X REPRESENTATIONS AND WARRANTIES    29
10.1    General    29
10.2    Anti-Terrorism Representations    29
10.3    Additional Representations and Warranties    30
Article XI DAMAGE AND DESTRUCTION    30
11.1    Notice of Damage or Destruction    30
11.2    Restoration    31
11.3    Insufficient or Excess Proceeds    31
11.4    Facility Mortgagee    31
11.5    Tenant’s Termination Right    32
Article XII CONDEMNATION    32
12.1    General    32
12.2    Notice of Taking    32
12.3    Complete Taking    32
12.4    Partial Taking    33
12.5    Temporary Taking    33
12.6    Award Distribution    33
12.7    Relationship to Facility Mortgage    33
Article XIII DEFAULT    34
13.1    Events of Default    34
13.2    Remedies    36
Article XIV OBLIGATIONS OF TENANT ON EXPIRATION OR TERMINATION OF LEASE    37
14.1    Surrender    37
14.2    Transition    38
14.3    Tenant Personal Property    40
14.4    Facility Trade Name    40
14.5    Holding Over    40
Article XV INDEMNIFICATION    41
Article XVI LANDLORD’S FINANCING    41
16.1    Grant Lien    41
16.2    Attornment    41
16.3    Cooperation; Modifications    42
16.4    Compliance with Facility Mortgage Documents    43
Article XVII ASSIGNMENT AND SUBLETTING    43
17.1    Prohibition    43
17.2    Landlord Consent    44
17.3    Transfers to Affiliates    44
17.4    Permitted Occupancy Agreements    44
17.5    Costs    45
17.6    UPL Program Sublease    45
Article XVIII CERTAIN RIGHTS OF LANDLORD    45
18.1    Right of Entry    45
18.2    Conveyance by Landlord    45
18.3    Granting of Easements, etc    45
18.4    Excess Beds    46
Article XIX ENVIRONMENTAL MATTERS    46
19.1    Hazardous Materials    46
19.2    Notices    46
19.3    Remediation    46
19.4    Indemnity    47
19.5    Environmental Inspections    47
Article XX LANDLORD’S SECURITY INTEREST    47
20.1    Grant of Security Interest    47
20.2    Accounts Receivable Financing    48
20.3    Certain Changes    48
Article XXI QUIET ENJOYMENT    48
Article XXII REIT RESTRICTIONS    48
22.1    Characterization of Rents    48
22.2    General REIT Provisions    48
22.3    Prohibited Transactions    48
22.4    Personal Property REIT Requirements    49
Article XXIII NOTICES    49
Article XXIV MISCELLANEOUS    50
24.1    Memorandum of Lease    50
24.2    No Merger    50
24.3    No Waiver    50
24.4    Acceptance of Surrender    50
24.5    Attorneys’ Fees    50
24.6    Brokers    51
24.7    Severability    51
24.8    Non-Recourse    51
24.9    Successors and Assigns    51
24.10    Governing Law; Jury Waiver    51
24.11    Entire Agreement    51
24.12    Headings    52
24.13    Counterparts    52
24.14    Joint and Several    52
24.15    Interpretation    52
24.16    Time of Essence    52
24.17    Further Assurances    52

EXHIBITS/SCHEDULES
Exhibit A Defined Terms
Exhibit B Description of the Land
Exhibit C Landlord Personal Property
Exhibit D Financial, Management and Regulatory Reports
Exhibit E Fair Market Rental
Exhibit F Form of Approved Letter of Credit
Schedule 1A Landlord Entities
Schedule 1B Tenant Entities
Schedule 2 Facility List
Schedule 3 Tenant Ownership Structure
Schedule 4 Related Leases
Schedule 6.10 Affiliate Agreements

70595.3    1
A request for confidential treatment has been made with respect to portions of
this document that are marked ‘[*****]’. The redacted portions have been filed
separately with the SEC.