Document:

Lease Severance and Amendment Agreement

 Exhibit 10.7 
  

  
 LEASE SEVERANCE AND AMENDMENT AGREEMENT 
  
 BY AND
AMONG 
  
 KINDRED HEALTHCARE, INC. 
 (f/k/a Vencor, Inc.), 
  
 KINDRED HEALTHCARE OPERATING, INC. 
 (f/k/a Vencor Operating, Inc.), 
  
 AND 
  
 VENTAS REALTY, LIMITED PARTNERSHIP 
  

 LEASE SEVERANCE AND AMENDMENT AGREEMENT 
  
 THIS LEASE SEVERANCE AND AMENDMENT AGREEMENT (hereinafter this
“Agreement”) is dated as of the 8th day of September, 2004, and is by and among VENTAS REALTY,
LIMITED PARTNERSHIP, a Delaware limited partnership (together with its successors and assigns, “Lessor”) having an office at 10350 Ormsby Park Place, Suite 300, Louisville, Kentucky 40223, and KINDRED HEALTHCARE, INC., a
Delaware corporation (f/k/a Vencor, Inc.) (“Kindred”), and KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation (f/k/a Vencor Operating, Inc.) (“Operator”; Operator, jointly and severally with Kindred
and permitted successors and assignees of Operator and Kindred, “Tenant”), both having an office at 680 South 4th Avenue, Louisville, Kentucky 40202. 
  
 RECITALS

  
 A. Lessor and Tenant have entered into a certain Amended and
Restated Master Lease Agreement No. 1 dated as of April 20, 2001 (as the same may have been or may hereafter be amended, amended and restated, supplemented, modified, renewed, extended or replaced, the “Lease”) demising to Tenant
(i) the real property described on Exhibit A attached hereto and made a part hereof, together with the improvements thereon (the “Severed Properties”), and (ii) multiple other properties (the “Remaining
Properties”). 
  
 B. Pursuant to Section 40.15 of
the Lease, Lessor desires to sever the Lease into two (2) leases, one (1) relating to the Severed Properties and one (1) relating to the Remaining Properties, on the terms set forth in this Agreement. 
  
 C. Lessor and Tenant further desire to amend the Lease as it will continue to
apply to the Remaining Properties after the aforesaid severance in certain other respects, on the terms set forth in this Agreement. 
  
 NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the parties hereby agree as follows: 
  
 1. All capitalized terms used herein and not defined herein shall have the
meaning ascribed thereto in the Lease. 
  
 2. The Lease is hereby
severed into two (2) leases as follows: (a) contemporaneously herewith, Lessor and Tenant shall enter into that certain Master Lease Agreement No. 1A (the “Severed Properties Lease”) dated as of the date hereof relating to the
Severed Properties and (b) the Lease shall continue in full force and effect with respect to the Remaining Properties, and the Severed Properties shall be severed from the Lease, in accordance with Section 40.15(b) and the other provisions of
Section 40.15 of the Lease (as amended by this Agreement), and accordingly, Lessor and Tenant acknowledge and agree that, with respect to the Lease: 
  

	 	(a)	 Relative to the definitions of “Base Rent” and “Current Rent” contained in Section 2.1 of the Lease, Lessor and Tenant agree that the
Base Rent and Current Rent for the Leased Properties remaining under the Lease after the date hereof shall, for the period from the date hereof through April 30, 2005, be equal to Forty-Four Million 

  

	 	 
Five Hundred Five Thousand Six Hundred Forty-Six and 68/100 Dollars ($44,505,646.68) per annum, and, for Rent Calculation Years thereafter, Base Rent and
Current Rent shall be determined as set forth in subsection (d) of the definition of “Base Rent” or subsection (b) of the definition of “Current Rent”, as applicable, contained in such Section 2.1 of the Lease, in each
case subject to the provisions of such definitions relative to the Reset Option and to the provisions of Article XIX relative to the amount of the Base Rent and Current Rent during Extended Terms; 

  

	 	(b)	Effective as of the date hereof, Exhibit C to the Lease shall be amended and restated in its entirety to read as set forth in Attachment 1 to this Agreement;

  

	 	(c)	Effective as of the date hereof, Exhibit D to the Lease is hereby amended and restated in its entirety to read as set forth in Attachment 2 to this Agreement;

  

	 	(d)	Effective as of the date hereof, the number “2,085,946” is deleted from each place that it appears in Section 3.2(e) of the Lease and replaced with the number
“1,054,365”, such that, as of the date hereof, the “Reset Fee” under the terms of the Lease shall be equal to $1,054,365. 

  
 3. The Severed Properties Lease shall constitute a New Lease (as defined in the Lease) created pursuant to Section 40.15 of the Lease (as amended
by this Agreement). Subject to Section 22.7(g) of the Lease and without limitation of and subject to the provisions of Sections 16.10, 19.1, 25.1.11 and 40.18 of the Severed Properties Lease and the Lease, and
notwithstanding anything to the contrary contained in Section 1.3 of the Severed Properties Lease: 
  
 (a) Tenant under the Severed Properties Lease shall be responsible for the payment, performance and satisfaction of all duties,
obligations and liabilities arising under the Severed Properties Lease, insofar as they relate to the Severed Properties subject to the Severed Properties Lease, that were not paid, performed and satisfied in full prior to the Effective Date (as
defined in the Severed Properties Lease) (and Tenant, in its capacity as the tenant under the Lease, shall also be responsible for the payment, performance and satisfaction of the aforesaid duties, obligations and liabilities not paid, performed and
satisfied in full prior to such Effective Date); and 
  
 (b) The tenant under the Severed Properties Lease, in its capacity as the tenant under the Severed Properties Lease, shall not be responsible for the payment, performance or satisfaction of any duties, obligations and liabilities of the
tenant under the Lease, in its capacity as the tenant under the Lease, arising after such Effective Date (Tenant acknowledges, however, that, because Tenant is both the tenant under the Lease and under the Severed Properties Lease as of the
Effective Date, Tenant, as a legal entity, is responsible for such duties, obligations and liabilities under the Lease). 
  

 2 

 4. The text of the Joinder to the Lease that was executed by Ventas, Inc. is deleted in its entirety and
replaced with the following: 
  
 “The undersigned, VENTAS,
INC., a Delaware corporation, hereby joins in the foregoing Amended and Restated Master Lease Agreement No. 1 solely for the purpose of confirming to the Tenant under the aforesaid Lease that, to the best of its knowledge, title to the Leased
Properties is held in the name of the Lessor under the aforesaid Lease, rather than in the name of the respective entities that were the lessor under the “Original Master Lease” referenced in the aforesaid Lease, and that, if it is
determined that title has not properly been transferred to such Lessor, Ventas, Inc. shall cause the conveyance of such title to Lessor, effective as of the Effective Date referenced in the aforesaid Lease. Notwithstanding anything to the contrary
contained in the aforesaid Lease, the aforesaid Tenant acknowledges and agrees, by the acceptance of this Joinder, that, except as provided in this Joinder, Ventas, Inc. shall have no liability or obligations under the aforesaid Lease, as lessor or
otherwise.” 
  
 5. Section 34.1(b) of the Lease is hereby
deleted and replaced with the following: 
  

	 	(b)	if to Lessor: 

  
 Ventas Realty, Limited Partnership 
 10350
Ormsby Park Place 
 Suite 300 
 Louisville, Kentucky 40223 
 Attention: Lease Administration 
  
 with a copy to: 
  
 Ventas, Inc. 
 Ventas Realty, Limited
Partnership 
 10350 Ormsby Park Place 
 Suite 300 
 Louisville, Kentucky 40223 
 Attention: General Counsel 
  
 6.
Except as provided in this Agreement, the Lease remains in full force and effect without modification. 
  
 7. This Agreement and any amendment to this Agreement may be signed in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto were upon the same instrument. 
  
 [Signature Page Follows] 
  

 3 

 IN WITNESS WHEREOF, the parties hereto have executed these presents the day and year first above
written. 
  

			
	TENANT:
	
	KINDRED HEALTHCARE, INC., a Delaware corporation formerly known as Vencor, Inc.
		
	 By:
	 	/s/    DOUGLAS L.
CURNUTTE        
	 Name:
	 	Douglas L. Curnutte
	 Title:
	 	Vice President of Facilities & Real Estate Development

			
	
	TENANT:
	
	KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation formerly known as Vencor Operating, Inc.
		
	 By:
	 	/s/    DOUGLAS L.
CURNUTTE        
	 Name:
	 	Douglas L. Curnutte
	 Title:
	 	Vice President of Facilities & Real Estate Development

					
	
	LESSOR:
	
	VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership
		
	 By:
	 	Ventas, Inc., a Delaware corporation, its general partner
			
	 	 	 By:
	 	/s/    T. RICHARD
RINEY        
	 	 	 	 	 T. Richard Riney,
 Executive Vice President,
 General Counsel and Secretary

  

 JOINDER 
  
 The undersigned, VENTAS, INC., a Delaware corporation, hereby joins in the foregoing Lease Severance and Amendment Agreement solely for the purposes of
(i) confirming to the Tenant under the aforesaid Agreement that, to the best of its knowledge, except as described in subsection (ii) below, title to the Severed Properties is held in the name of the Lessor, and that, if it is determined that title
has not properly been transferred to such Lessor, Ventas, Inc. shall cause the conveyance of such title to Lessor, effective as of April 20, 2001, (ii) confirming to the aforesaid Tenant that, to the best of its knowledge, title to the Severed
Property commonly known as Vencor Hospital – Pittsburgh (Facility No. 4619) is held in the name of Ventas, Inc., and (iii) subject to Section 40.2 of the Severed Properties Lease, joining with Ventas Realty, Limited Partnership, on a
joint and several basis, as Lessor under the aforesaid Severed Properties Lease with respect to, and only with respect to, the aforesaid Vencor Hospital –Pittsburgh Severed Property, and for no other purposes. Notwithstanding anything to the
contrary contained in the aforesaid Severed Properties Lease, the aforesaid Tenant acknowledges and agrees, by the acceptance of this Joinder, that, except as provided in subsection (i) above, Ventas, Inc. shall have no liability or obligations
under the aforesaid Severed Properties Lease, as lessor or otherwise, with respect to any Severed Property other than the aforesaid Vencor Hospital –Pittsburgh Severed Property. 
  

									
	 Witness
	 	 	 	 VENTAS, INC.

					
	 	 	/s/    DEBRA J. PAULSON        	 	 	 	 By:
	 	/s/    T. RICHARD RINEY        
	 Name:
	 	Debra J. Paulson	 	 	 	 Name:
	 	T. Richard Riney
	 	 	 	 	 	 	 Title:
	 	Executive Vice President
					
	 	 	/s/    JEREMY BONNOW        	 	 	 	 	 	 
	 Name:
	 	Jeremy Bonnow	 	 	 	 	 	 

  

 Acknowledgments 
  

			
	STATE OF Kentucky	 	 )

	 	 	 )

	COUNTY OF Jefferson	 	 )

  
 This 7th day of September, 2004, personally came before me Maria Colville, a Notary Public in and for said County and State, Douglas L.
Curnutte, who being by me duly sworn, says that he is the VP of Facilities & Real Estate of KINDRED HEALTHCARE, INC., a Delaware corporation, and that the seal affixed to the foregoing instrument in writing is the corporate seal of said
corporation, and that said writing was signed and sealed by him on behalf of such corporation by its authority duly given. And the said Douglas L. Curnutte acknowledged the said writing to be the act and deed of said corporation. 
  
 WITNESS my hand and notarial stamp/seal this 7th day of September, 2004. 
  

	
	
	/s/    MARIA COLVILLE        
	 Notary Public

  

	
	 My Commission Expires:

	
	 3-22-2008

	 [Notarial Stamp/Seal]

  

			
	STATE OF Kentucky	 	 )

	 	 	 )

	COUNTY OF Jefferson	 	 )

  
 This 7th day of September, 2004, personally came before me Maria Colville, a Notary Public in and for said County and State, Douglas L.
Curnutte, who being by me duly sworn, says that he is the VP of Facilities & Real Estate of KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation, and that the seal affixed to the foregoing instrument in writing is the corporate seal of
said corporation, and that said writing was signed and sealed by him on behalf of such corporation by its authority duly given. And the said Douglas L. Curnutte acknowledged the said writing to be the act and deed of said corporation. 
  
 WITNESS my hand and notarial stamp/seal this 7th day of September, 2004. 
  

	
	
	/s/    MARIA COLVILLE        
	 Notary Public

  

	
	My Commission Expires:
	
	 3-22-2008

	[Notarial Stamp/Seal]

  

			
	STATE OF Illinois	 	 )

	 	 	 )

	COUNTY OF Cook	 	 )

  
 This
         day of                     , 2004, personally came before me Giuseppina Maria Fricano,
a Notary Public in and for said County and State, T. Richard Riney, who being by me duly sworn, says that he is the Executive Vice President, General Counsel and Secretary of VENTAS, INC., a Delaware corporation, in its capacity as the general
partner of VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership, and that the seal affixed to the foregoing instrument in writing is the corporate seal of said corporation, and that said writing was signed and sealed by him on behalf
of such corporation by its authority duly given, in its aforesaid general partner capacity on behalf of the aforesaid limited partnership. And the said Executive Vice President, General Counsel and Secretary acknowledged the said writing to be the
act and deed of said corporation. 
  
 WITNESS my hand and notarial
stamp/seal this          day of                     , 2004. 
  

	
	
	/s/    GIUSEPPINA MARIA
FRICANO        
	 Notary Public

  

	
	My Commission Expires:
	
	 12/20/2006

	[Notarial Stamp/Seal]

  

			
	STATE OF Illinois	 	 )

	 	 	 )

	COUNTY OF Cook	 	 )

  
 This
         day of                     , 2004, personally came before me Giuseppina Maria Fricano,
a Notary Public in and for said County and State, T. Richard Riney, who being by me duly sworn, says that he is the Executive Vice President, General Counsel and Secretary of VENTAS, INC., a Delaware corporation, and that the seal affixed to the
foregoing instrument in writing is the corporate seal of said corporation, and that said writing was signed and sealed by him on behalf of such corporation by its authority duly given. And the said Executive Vice President, General Counsel and
Secretary acknowledged the said writing to be the act and deed of said corporation. 
  
 WITNESS my hand and notarial stamp/seal this          day of
                    , 2004. 
  

	
	
	/s/    GIUSEPPINA MARIA
FRICANO        
	 Notary Public

  

	
	My Commission Expires:
	
	 12/20/2006

	[Notarial Stamp/Seal]Amendment to Employment Terms by and between the Company and Joshua Pace

 Exhibit 10.26 
 

 
  
 July 27, 2004 
  
 Mr. Josh Pace 
 1400 Seaport Boulevard 
 Redwood City, CA 94063 
  
 Re: Amendment to Employment Terms 
  
 Dear Josh: 
  
 This letter amends that certain Amended and Restated Employment Terms Letter Agreement dated April 24, 2003 (the “the 2003 Employment Letter”), between you and Openwave Systems Inc. 
  
 Effective today, your title will be Chief Financial Officer. You will report to the President
and Chief Executive Officer. Your monthly base salary is $22,916.67 per month or $275,000 on an annualized basis, effective as of July 16, 2004. In addition, based upon achievement of financial and other performance objectives by the Corporation
under the Corporation’s “Corporate Incentive Plan”, the Company shall pay to you an annual incentive cash award based upon a target, which shall be fifty percent (50%) of your base salary, with the actual annual incentive cash award
determined to be below, at, or above target, based upon the Company’s achievement level against the financial and performance objectives. Notwithstanding the foregoing, the Corporate Incentive Plan does not currently permit any payments
throughout the remainder of calendar year 2004. 
  
 You should be aware that your
employment with the Company is for no specified period and constitutes “at will” employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment
relationship with you at any time, with or without cause, subject to the severance obligations under or referred to in the 2003 Employment Letter. 
  
 In consideration of the foregoing, you hereby reconfirm your obligations under the Confidentiality and Invention Assignment Agreement, dated April 24, 2003, between you
and the Company, 
  
 Except as modified by this letter, all terms of your
employment shall remain unchanged and as set forth in the 2003 Employment Letter. 
  
 Please review these terms to make sure they are consistent with your understanding. If so, please send an original signed copy to the VP, Human Resources no later than two days after your receipt of this letter. 
  
  

			
	 	  	Accepted by:
		
	 /s/    DON
LISTWIN        

	  	 /s/    JOSH PACE        

	 Don Listwin
 President and CEO
	  	Josh Pace

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