THE MINIMUM RENT BY AN AMOUNT EQUAL TO (A) NINE AND ONE-HALF PERCENT (9.5%) PLUS
THE POSITIVE DIFFERENCE, IF ANY, BETWEEN THE AVERAGE FOR THE LAST FIVE (5)
BUSINESS DAYS PRIOR TO FUNDING OF THE YIELD ON THE U.S. TREASURY 10-YEAR NOTE
MINUS 420 BASIS POINTS (EXPRESSED AS A PERCENTAGE), MULTIPLIED BY (B) THE
AMOUNTS ACTUALLY PAID TO THIRD PARTIES BY OR ON BEHALF OF ALC, AND REIMBURSED BY
LTC, TO COMPLETE THE EXPANSION.
THE FOREGOING ADJUSTMENT TO THE MINIMUM RENT
SHALL OCCUR ON THE FIRST DAY OF THE MONTH DURING WHICH SUCH FUNDING OCCURRED.
SUBJECT TO THE PROVISIONS OF THIS SECTION 1.2.10, LTC'S FUNDING OF ANY EXPANSION
TO THE LEASED PROPERTIES SHALL BE LIMITED TO $5,000,000.00 IN ANY CALENDAR YEAR.
1.3.
WAIVER OF POTENTIAL EVENTS OF DEFAULT.
LTC
ACKNOWLEDGES AND AGREES THAT EHSI REQUIRES LTC'S AGREEMENT TO ALLOW ALC TIME TO
CURE ANY OF THE IDENTIFIED CONCERNS (A) AS INDUCEMENT TO CAUSE ALC TO ENTER INTO
THE MASTER LEASES ON THE TERMS AND CONDITIONS SET FORTH IN THIS MOU, AND (B) TO
FACILITATE THE TIMELY RECEIPT OF ALC, INC.'S SHAREHOLDER APPROVALS AND CLOSING
OF THE MERGER.
LTC FURTHER ACKNOWLEDGES THAT EHSI WILL NOT AGREE TO PROCEED
FURTHER WITH THE NEGOTIATION OF ANY MASTER LEASES OR OTHER RENEWALS OR
EXTENSIONS OF THE LEASES WITH LTC WITHOUT RECEIPT OF SUCH TIME TO CURE FROM LTC
AND WITHOUT THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS PARAGRAPH.
LTC
AGREES AS FOLLOWS:
1.3.1.
EFFECT OF MOU AND LEASES ON PRE-EXISTING DEFAULT.
IT
IS THE PARTIES' INTENTION THAT THE NEW MASTER LEASES CONTEMPLATED HEREBY, WHEN
FULLY EXECUTED, SHALL SUBSTITUTE FOR AND ACT AS A NOVATION OF THE ORIGINAL
LEASES.
ACCORDINGLY, IN THE EVENT AN EVENT OF DEFAULT EXISTS OR EXISTED UNDER
THE ORIGINAL LEASES, LTC AGREES IT SHALL NOT SEEK TO TERMINATE THE LEASES OR THE
MASTER LEASES OR DISTURB ALC'S OCCUPANCY OF THE LEASED PROPERTIES AS A
CONSEQUENCE THEREOF, ALC HAVING, TO THE EXTENT NOT EXPRESSLY WAIVED
13
PURSUANT TO THE TERMS OF THIS MOU, ANY AND ALL RIGHTS TO CURE THE SAME AS WERE
ESTABLISHED UNDER THE TERMS OF THE ORIGINAL MASTER LEASE; PROVIDED, HOWEVER,
THAT NOTHING IN THIS MOU OR ANY OF THE NEW MASTER LEASES SHALL RELIEVE ALC OF
ANY ACCRUED OR UNPAID OBLIGATION TO PAY RENT OR OTHER MONIES TO LTC, WHETHER
UNDER ANY LEASE OR OTHERWISE; AND PROVIDED FURTHER THAT NOTHING HEREIN SHALL
PROHIBIT OR BAR LTC FROM ENFORCING ANY TERM OR PROVISION OF THE NEW MASTER
LEASES OR OF SECTIONS 1.3 AND 2 OF THIS MOU.
1.3.2.
SPECIFIC CURE PERIODS AND WAIVERS.
WITHOUT LIMITING
THE GENERALITY OF THE PROVISIONS OF SECTION 1.3.1 ABOVE, IN ANTICIPATION AND
SUPPORT OF ALC, INC. SEEKING SHAREHOLDER APPROVAL OF THE MERGER, AND EHSI, ALPHA
AND ALC, INC. CLOSING ON THE MERGER, AND IN CONSIDERATION OF ALL OF THE ACTIONS
OF THE PARTIES TAKEN IN GOOD-FAITH FURTHERANCE THEREOF, LTC AGREES AS FOLLOWS:
.
LTC SHALL NOT
ASSERT AN EVENT OF DEFAULT AS A CONSEQUENCE OF A CHANGE OF CONTROL RESULTING
FROM EHSI OR