AMENDED AND RESTATED MASTER LEASE AGREEMENT

Lease Agreement

You are currently viewing:

This Lease Agreement involves

DAYTON LLC | HCRI Southern Investments I, Inc | HEALTH CARE REIT, INC | KENNER, LLC | MANOR LLC | SENIOR LIVING PROPERTIES, LLC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: AMENDED AND RESTATED MASTER LEASE AGREEMENT
Governing Law: Ohio Date: 11/9/2007
Industry: Healthcare Facilities Sector: Healthcare

Exhibit 10.25.1

AMENDED AND RESTATED MASTER LEASE AGREEMENT

AMONG

HEALTH CARE REIT, INC.,

HCRI LOUISIANA PROPERTIES, L.P.

AND

SENIOR LIVING PROPERTIES, LLC

March 1, 2007

TABLE OF CONTENTS

SECTION		PAGE
ARTICLE 1: LEASED PROPERTY, TERM AND DEFINITIONS		1
1.1	Leased Property	1
1.2	Indivisible Lease	1
1.3	Term	2
1.4	Definitions	2
1.5	Landlord as Agent	12
ARTICLE 2: RENT		13
2.1	Base Rent	13
2.2	Base Rent Adjustments	13
2.3	2.2.1 Annual Increase of Base Rent	13
	2.2.2 Additional Landlord Payments	13
	Additional Rent	13
2.4	Place of Payment of Rent	14
2.5	Net Lease	14
2.6	No Termination, Abatement, Etc.	14
ARTICLE 3: IMPOSITIONS AND UTILITIES		14
3.1	Payment of Impositions	14
3.2	Definition of Impositions	15
3.3	Escrow of Impositions	16
3.4	Utilities	16
3.5	Discontinuance of utilities	16
3.6	Business Expenses	17
3.7	Permitted Contests	17
ARTICLE 4: INSURANCE		17
4.1	Property Insurance	17
4.2	Liability Insurance	18
4.3	Builder’s Risk Insurance	19
4.4	Insurance Requirements	19
4.5	Replacement Value	20
4.6	Blanket Policy	20
4.7	No Separate Insurance	20
4.8	Waiver of Subrogation	20
4.9	Mortgages.	21
4.10	Escrows	21
ARTICLE 5: INDEMNITY ,		21
5.1	Tenant’s Indemnification,	21
	5.1.1 Notice of Claim	21
	5.1.2 Survival of Covenants	22

SECTION		PAGE


	5.1.3 Reimbursement of Expenses	22
5.2	Environmental Indemnity; Audits	22
5.3	Limitation of Landlord’s Liability	22
ARTICLE 6: USE AND ACCEPTANCE OF PREMISES		23
6.1	Use of Leased Property	23
6.2	Acceptance of Leased Property	23
6.3	Conditions of Use and Occupancy	23
ARTICLE 7: MAINTENANCE AND MECHANICS’ LIENS		24
7.1	Maintenance	24
7.2	Required Alterations	24
7.3	Mechanic’s Liens	24
7.4	Replacements of Fixtures and Landlord’s Personal Property	25
ARTICLE 8: DEFAULTS AND REMEDIES		25
8.1	Events of Default	25
8.2	Remedies	27
8.3	Right of Setoff	30
8.4	Performance of Tenant’s Covenants	30
8.5	Late Payment Charge	30
8.6	Default Rent	31
8.7	Attorneys’ Fees	31
8.8	Escrows and Application of Payments	31
8.9	Remedies Cumulative	31
8.10	Waivers	31
ARTICLE 9: DAMAGE AND DESTRUCTION		32
9.1	Notice of Casualty	32
9.2	Substantial Destruction	32
9.3	Partial Destruction	33
9.4	Restoration	33
9.5	Insufficient Proceeds	34
9.6	Not Trust Funds	34
9.7	Landlord’s Inspection	34
9.8	Landlord’s Costs	35
9.9	No Rent Abatement	35
ARTICLE 10.3: : CONDEMNATION		35
10.1	Total Taking	35
10.2	Partial Taking	35
10.3	Condemnation Proceeds Not Trust Funds	36
ARTICLE 11 : TENANT’S PROPERTY		36
11.1	Tenant’s Property	36
11.2	Requirements for Tenant’s Property	36

iii

ARTICLE 12: RENEWAL OPTIONS		37
12.1	Renewal Options	37
12.2	Effect of Renewal	37
ARTICLE 13: OPTION TO PURCHASE		38
13.1	Option to Purchase	38
13.2	Option Price	39
13.3	Fair Market Value	39
13.4	Closing	40
13.5	Failure to Close Option	41
13.6	Failure to Exercise Option to Purchase and Renewal Option	41
13.7	Early Option to Purchase Dayton Facility	41
ARTICLE 14: NEGATIVE COVENANTS		41
14.1	No Debt	42
14.2	No Liens	42
14.3	No Guaranties	42
14.4	No Transfer	42
14.5	No Dissolution	42
14.6	No Change in Management or Operation	42
14.7	No Investments	42
14.8	Contracts	42
14.9	Subordination of Payments to Affiliates	42
14.10	Change of Location or Name	42
ARTICLE 15: AFFIRMATIVE COVENANTS		43
15.1	Perform Obligations	43
15.2	Proceedings to Enjoin or Prevent Construction	43
15.3	Documents and Information	43
	15.3.1 Furnish Documents	43
	15.3.2 Furnish Information	43
	15.3.3 Further Assurances and Information	44
	15.3.4 Material Communications	44
	15.3.5 Requirements for Financial Statements	44
15.4	Compliance With Laws	44
15.5	Broker’s Commission	44
15.6	Existence and Change in Ownership	45
15.7	Financial Covenants	45
	15.7.1 Definitions	45
	15.7.2 Coverage Ratio	46
	15.7.3 Net Worth	46
	15.7.4 Accounts Payable Days Sales Outstanding	46
15.8	Facility Licensure and Certification	46
15.9	Transfer of License and Facility Operations	46
	15.9.1 Licensure	46
	15.9.2 Facility Operations	46
15.10	Bed Operating Rights	47

SECTION		PAGE


15.11	Power of Attorney	47
ARTICLE 16: ALTERATIONS, CAPITAL IMPROVEMENTS, AND SIGNS		47
16.1	Prohibition on Alterations and Improvements	47
16.2	Approval of Alterations	47
16.3	Permitted Alterations	48
16.4	Requirements for Permitted Alterations	48
16.5	Ownership and Removal of Permitted Alterations	49
16.6	Minimum Qualified Capital Expenditures	49
16.7	Signs	49
ARTICLE 17: RESERVED		49
ARTICLE 18: ASSIGNMENT AND SALE OF LEASED PROPERTY		49
18.1	Prohibition on Assignment and Subletting	49
18.2	Requests for Landlord’s Consent to Assignment, Sublease or Management Agreement	50
18.3	Agreements with Residents	51
18.4	Sale of Leased Property	51
18.5	Assignment by Landlord	51
ARTICLE 19: HOLDOVER AND SURRENDER		51
19.1	Holding Over	51
19.2	Surrender	52
ARTICLE 20: LETTER OF CREDIT		52
20.1	Terms of Letter of Credit	52
20.2	Replacement Letter of Credit	52
20.3	Draws.	53
20.4	Partial Draws	53
20.5	Substitute Letter of Credit	53
20.6	Retention of Letter of Credit	53
ARTICLE 21: : QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND ESTOPPEL CERTIFICATES		54
21.1	Quiet Enjoyment	54
21.2	Subordination	54
21.3	Attornment.....	54
21.4	Estoppel Certificates	55
ARTICLE 22: : CONTINGENT PAYMENTS		55
22.1	Contingent Payments	55
22.2	Contingent Payments for Capital Expenditures	55
	22.2.1 Conditions	55
	22.2.2 No Commitment	55
22.3	Contingent Payments for Project Improvements	56
	22.3.1 Conditions	56

	22.3.2 No Commitment	56
ARTICLE 23: SECURITY INTEREST		56
23.1	Collateral	56
23.2	Additional Documents	57
23.3	Notice of Sale	57
23.4	Recharacterization	57
23.5	Confession of Judgment	57
23.6	Additional Remedies Upon Default.,	57
23.7	Waiver	58
23.8	Appointment of Receiver or Keeper	58
ARTICLE 24: MISCELLANEOUS		58
24.1	Notices	58
24.2	Advertisement of Leased Property	58
24.3	Entire Agreement	59
24.4	Severability	59
24.5	Captions and Headings	59
24.6	Governing Law	59
24.7	Memorandum of Lease	59
24.8	Waiver	59
24.9	Binding Effect	59
24.10	No Offer	59
24.11	Modification	60
24.12	Landlord’s Modification	60
24.13	No Merger	60
24.14	Laches	60
24.15	Limitation on Tenant’s Recourse	60
24.16	Construction of Lease	60
24.17	Counterparts	61
24.18	Landlord’s Consent	61
24.19	Custody of Escrow Funds	61
24.20	Landlord’s Status as a REIT	61
24.21	Exhibits	61
24.22	Waiver of Jury Trial	61
24.23	Consent to Jurisdiction	61
24.24	Attorney’s Fees and Expenses	62
24.25	Survival	62
24.26	Time	62
24.27	Subtenant	62

SECTION

PAGE


SCHEDULE 1:	INITIAL RENT SCHEDULE
EXHIBIT A:	LEGAL DESCRIPTIONS
EXHIBIT B:	PERMITTED EXCEPTIONS
EXHIBIT C:	FACILITY INFORMATION
EXHIBIT D:	WIRE TRANSFER INSTRUCTIONS
EXHIBIT E:	DOCUMENTS TO BE DELIVERED
EXHIBIT F:	FINANCIAL CERTIFICATION
EXHIBIT G:	ANNUAL CAPITAL EXPENDITURE CERTIFICATE
EXHIBIT H:	CONTINGENT PAYMENT REQUEST
EXHIBIT I:	COMMITMENT

vii

AMENDED AND RESTATED MASTER LEASE AGREEMENT

This Amended and Restated Master Lease Agreement ("Lease") is made effective as of March 1, 2007 (the "Effective Date") among HEALTH CARE REIT, INC., a corporation organized under the laws of the State of Delaware ("HCN" and a "Landlord" as further defined in §1.4 below), having its principal office located at One SeaGate, Suite 1500, P. 0. Box 1475, Toledo, Ohio 43603-1475, HCRI LOUISIANA PROPERTIES, L.P., a limited partnership organized under the laws of the State of Delaware ("HCN-LA" and a "Landlord" as further defined in §1.4 below), having its principal office located at One SeaGate, Suite 1500, P. 0. Box 1475, Toledo, Ohio 43603-1475, and SENIOR LIVING PROPERTIES, LLC, a limited liability company organized under the laws of the State of Delaware ("Tenant"), having its chief executive office located at 3000 Executive Parkway, Suite 530, San Ramon, California 94583.

RECITALS

A. HCN-LA entered into a Lease Agreement dated as of July 29, 1998, as amended ("Original Lease") with Summerville at Kenner, L.L.C., a Delaware limited liability company ("Kenner") for a property located in Kenner, Louisiana, as more particularly described therein ("Kenner Property"). As of the Effective Date, Kenner shall assign its interest in the Original Lease to Tenant pursuant to an Assignment of Lease of even date herewith, and Kenner shall enter into a new sublease with Tenant for the Kenner Property.

B. In addition, Tenant has agreed to assume the operation of facilities located in Westerville, Ohio and Dayton, Ohio that are owned by HCN and were previously leased to another tenant (collectively called "Additional Properties").

C. Landlord and Tenant desire to amend and restate the Original Lease to modify certain terms and conditions, to include the Additional Properties, and to add HCN as a Landlord. This Lease amends, restates, and replaces the Original Lease in its_entirety.

D. Landlord desires to lease the Leased Property to Tenant and Tenant desires to lease the Leased Property from Landlord upon the terms set forth in this Lease.

NOW, THEREFORE, Landlord and Tenant agree as follows:

ARTICLE 1: LEASED PROPERTY, TERM AND DEFINITIONS

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Leased Property, subject, however, to the Permitted Exceptions and subject to the terms and conditions of this Lease.

1.2 Indivisible Lease. This Lease constitutes one indivisible lease of the entire Leased Property. The Leased Property constitutes one economic unit and the Base Rent and all other provisions have been negotiated and agreed to based on a lease of all of the Leased Property as a single, composite, inseparable transaction. This Lease would not have been made on these terms if it was not a single indivisible lease. Except as expressly provided herein for specific, isolated purposes (and then only to the extent expressly otherwise stated), all provisions of this Lease shall apply equally and uniformly to all the Leased Property as one unit and any Event of Default under this Lease is an Event of Default as to the entire Leased Property. The parties intend that the provisions of this Lease shall at all times be construed, interpreted and applied so as to carry out their mutual objective to create a single indivisible lease of all the Leased Property and, in particular but without limitation, that for purposes of any assumption, rejection or assignment of this Lease under the Bankruptcy Code, this is one indivisible and nonseverable lease and executory contract dealing with one legal and economic unit which must be assumed, rejected or assigned as a whole with respect to all (and only all) the Leased Property covered hereby. The parties agree that the existence of more than one Landlord under this Lease does not affect the indivisible, nonseverable nature of this Lease. The parties may amend this Lease from time to time to include one or more additional Facility Properties as part of the Leased Property and such future addition to the Leased Property shall not in any way change the indivisible and nonseverable nature of this Lease and all of the foregoing provisions shall continue to apply in full force.

1.3 Term. The initial term ("Initial Term") of this Lease commences on the Effective Date and expires at 12:00 Midnight Eastern Time on February 28, 2018 (the "Expiration Date"); provided, however, that [i] Tenant has one or more options to renew the Lease pursuant to Article 12, and [ii] that any addition to the Leased Property pursuant to amendment of this Lease shall extend the Initial Term so that the Initial Term shall expire on the day before the eleventh anniversary of the Amendment Commencement Date as set forth in such amendment. In addition, if Landlord or any Landlord Affiliate enters into a lease transaction with Tenant or any Affiliate, the Initial Term shall automatically be extended to be coterminous with the most recently closed lease transaction.

1.4 Definitions. Except as otherwise expressly provided, [i] the terms defined in this section have the meanings assigned to them in this section and include the plural as well as the singular; [ii] all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as of the time applicable; and [iii] the words "herein", "hereof' and "hereunder" and similar words refer to this Lease as a whole and not to any particular section.

"Accounts Payable Days Sales Outstanding" has the meaning set forth in § 15.7.1.

"Acquisition Payment" means any payment by Landlord to acquire Leased Property.

"Actual Rate of Return" means, as of any Rent Adjustment Date, the Initial Rate of Return plus the sum of the annual Increaser Rates before that Rent Adjustment Date.

"ADA" means the federal statute entitled Americans with Disabilities Act, 42 U.S.C. §12101, et seq.

"Additional Properties" has the meaning set forth in Recital A. "Additional Rent" has the meaning set forth in §2.3.

"Adjusted Accounts Payable" has the meaning set forth in §15.7.1.

"Affiliate" means any person, corporation, partnership, limited liability company, trust, or other legal entity that, directly or indirectly, controls, or is controlled by, or is under common control with Tenant or Guarantor. "Control" (and the correlative meanings of the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity. "Affiliate" includes, without limitation, each Guarantor.

"Affiliate Facility" means each facility that is leased under an Affiliate Lease, whether now or hereafter existing.

"Affiliate Lease" means each lease now or hereafter made between Landlord or any Landlord Affiliate and Tenant or any Affiliate (except this Lease), as amended, modified, extended or renewed from time to time.

"Affiliate Tenant" means each tenant under an Affiliate Lease.

"Amendment Commencement Date" means the Amendment Effective Date if such date is the first day of a month, and if it is not, the first day of the first month following the Amendment Effective Date.

"Amendment Effective Date" means the Amendment Effective Date set forth in the introductory paragraph of an amendment to this Lease.

"Annual Budget" means such entity's projection of its financial statement for the next fiscal year (or the 12-month rolling forward period, if applicable), which shall include the balance sheet, statement of income, statement of cash flows, statement of shareholders' equity and statement of capital expenditures for the applicable period.

"Annual Facility Budget" means Tenant's projection of the Facility Financial Statement for the next fiscal year (or the 12-month rolling forward period, if applicable).

"Annual Financial Statements" means [1] for Tenant and Subtenant, an unaudited balance sheet and statement of income for the most recent fiscal year on an individual facility and consolidated basis; [ii] for each Facility, an unaudited Facility Financial Statement for the most recent fiscal year; and [iii] for Company, an audited balance sheet and statement of income for the most recent fiscal year.

"Annual Rate Shortfall" means the difference between [i] the Target Rate of Return and [ii] the Actual Rate of Return.

"Annual Rent Increase" means, as of any Rent Adjustment Date, the product of [i] the Investment Amount as of the Rent Adjustment Date times [ii] the applicable Increaser Rate; provided, however, that for any Lease Year in which the Increaser Rate is .27%, the Annual Rent Increase means the foregoing amount plus the product of [a] the Investment Amount as of the Rent Adjustment Date times [ii] the applicable Rate Shortfall up to the amount of the CPI Rate Change as of the Rent Adjustment Date. In no event will the Annual Rent Increase be negative.

"Average Quarterly Accounts Payable" has the meaning set forth in § 15.7.1.

"Bankruptcy Code" means the United States Bankruptcy Code set forth in 11 U.S.C. §101, et seq., as amended from time to time.

"Base Rent" has the meaning set forth in §2.1, as increased from time to time pursuant to §2.2.

"Business Day" means any day other than a Saturday, Sunday, or national

holiday.

"CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time.

"Closing" means the closing of the lease of the Leased Property to Tenant. "Collateral" has the meaning set forth in §23.1.

"Commencement Date" means the Effective Date if such date is the first day of a month, and if it is not, the first day of the first month following the Effective Date.

"Commitment" means the Summerville Term Sheet dated February 15, 2007, a copy of which is attached as Exhibit I.

"Company" means Summerville Senior Living, Inc., a corporation organized under the laws of the State of Delaware.

"Contingent Payment" means any payment by Landlord (excluding Acquisition Payments) made pursuant to a Contingent Payment Request from Tenant and the applicable terms of Article 22.

"Contingent Payment Request" means Tenant's written request for a Contingent Payment on the form attached as Exhibit H.

"CPI" means the Consumer Price Index for Urban Wage Earners and Clerical Workers, U.S. Cities Average, All Items (1982-84 = 100) published by the Bureau of Labor Statistics of the U.S. Department of Labor; provided that if compilation of the CPI in its present form and calculated on its present basis is discontinued or transferred to any other governmental department or bureau, then the index most nearly the same as the CPI published by the Bureau of Labor Statistics shall be used. If there is no such similar index, a substitute index which is then generally recognized as being similar to the CPI shall be used, such substitute index to be reasonably selected by Landlord.

"CPI Change" shall be determined by dividing [i] the most recently available CPI as of the applicable Rent Adjustment Date minus the CPI used to calculate the Increaser Rate for the preceding Rent Adjustment Date by [ii] the CPI used for the preceding Rent Adjustment Date. For the second Lease Year, the Commencement Date shall serve as the preceding Rent Adjustment Date.

"CPI Rate Change" means an amount equal to the CPI Change divided by 10 and stated as a percentage. For example, if the CPI Change is .02, the CPI Rate Change is .20% (.02 divided by 10 = .002 = .20%).

"Daily Non-Payroll Operating Expenses" has the meaning set forth in §15.7.1. "Default Rent" has the meaning set forth in §8.6.

"Disbursing Agreement" means any Disbursing Agreement between Landlord and Tenant setting forth the terms and conditions pursuant to which Landlord shall make Contingent Payments to Tenant for certain Project Improvements and any amendments thereto or substitutions and replacements therefor.

"Early Option" has the meaning set forth in § 13.7. "Effective Date" means the date of this Lease.

"Environmental Laws" means all federal, state, and local laws, ordinances and policies the purpose of which is to protect human health and the environment, as amended from time to time, including, but not limited to, [i] CERCLA; [ii] the Resource Conservation and Recovery Act; [iii] the Hazardous Materials Transportation Act; [iv] the Clean Air Act; [v] Clean Water Act; [vi] the Toxic Substances Control Act; [vii] the Occupational Safety and Health Act; [viii] the Safe Drinking Water Act; and [ix] analogous state laws and regulations.

"Event of Default" has the meaning set forth in §8.1. "Expiration Date" has the meaning set forth in § 1.3.

"Facility" means each facility located on a portion of the Land, including the Facility Property associated with such Facility. References in this Lease to "the Facility" shall mean each Facility individually unless expressly stated otherwise.

"Facility Financial Statement" means a financial statement for each Facility which shall include the balance sheet, statement of income, statement of cash flows, statement of shareholders' equity, occupancy census data (including payor mix), statement of capital expenditures and a comparison of the actual financial data versus the Annual Facility Budget for the applicable period.

"Facility Name" means the name under which a Facility has done business during the Term. The Facility Name in use by each Facility on the Effective Date is set forth on the attached Exhibit C.

"Facility Property" means the portion of the Land on which a Facility is located, the legal description of which is set forth beneath the applicable Facility Name on Exhibit A, the Improvements on such portion of the Land, the Related Rights with respect to such portion of the Land, and Landlord's Personal Property with respect to such Facility.

"Facility State" means the State in which a respective Facility is located.

"Facility States" means, collectively, the States in which the Leased Property is located.

"Facility Uses" means the uses relating to the operation of a Facility as a facility of the type and operating the number of beds and units set forth on Exhibit C with respect to such Facility.

"Fair Market Value" has the meaning set forth in §13.3.

"Fixtures" means all permanently affixed equipment, machinery, fixtures and other items of real and/or personal property (excluding Landlord's 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 Improvements, including, without limitation, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air-cooling and air-conditioning systems and apparatus, sprinkler systems and fire and theft protection equipment, built-in oxygen and vacuum systems, towers and other devices for the transmission of radio, television and other signals, all of which, to the greatest extent permitted by law, are hereby deemed by the parties hereto to constitute real estate, together with all replacements, modifications, alterations and additions thereto.

"Government Authorizations" means all permits, licenses, approvals, consents, and authorizations required to comply with all Legal Requirements, including, but not limited to, [i] zoning permits, variances, exceptions, special use permits, conditional use permits, and consents; [ii] the permits, licenses, provider agreements and approvals required for licensure and operation of each Facility in accordance with its respective Facility Uses and certified as a provider under the federal Medicare and state Medicaid programs to the extent applicable;

[iii] environmental, ecological, coastal, wetlands, air, and water permits, licenses, and consents;

[iv] curb cut, subdivision, land use, and planning permits, licenses, approvals and consents;

[v] building, sign, fire, health, and safety permits, licenses, approvals, and consents; and

[vi] architectural reviews, approvals, and consents required under restrictive covenants.

"Guarantor" means Company and Subtenant, individually and collectively.

"Guaranty" means each Unconditional and Continuing Lease Guaranty entered into by a Guarantor to guarantee payment and performance of the Obligor Group Obligations and any amendments thereto or substitutions or replacements therefor.

"Hazardous Materials" means any substance [i] the presence of which poses a hazard to the health or safety of persons on or about the Land, including, but not limited to, asbestos containing materials; [ii] which requires removal or remediation under any Environmental Law, including, without limitation, any substance which is toxic, explosive, flammable, radioactive, or otherwise hazardous; or [iii] which is regulated under or classified under any Environmental Law as hazardous or toxic, including, but not limited to, any substance within the meaning of "hazardous substance", "hazardous material", "hazardous waste", "toxic substance", "regulated substance", "solid waste" or "pollutant" as defined in any Environmental Law.

"HCN" means Health Care REIT, Inc., a corporation organized under the laws of the State of Delaware.

"HCN-LA" means HCRI Louisiana Properties, L.P., a limited partnership organized under the laws of the State of Delaware.

"HIPDB" means the Healthcare Integrity and Protection Data Bank maintained by the Department of Health and Human Services.

"Impositions" has the meaning set forth in §3.2.

"Improvements" means all buildings, structures, Fixtures and other improvements of every kind on any portion of the Land, including, but not limited to, alleys, sidewalks, utility pipes, conduits and lines (on-site and off-site), parking areas and roadways appurtenant to such buildings and structures, now or hereafter situated upon any portion of the Land.

"Increaser Rate" means, as of the applicable Rent Adjustment Date, the lesser of the CPI Rate Change and .27%.

"Initial Rate of Return" means 10.17%.

"Initial Term" has the meaning set forth in § 1.3.

"Investment Amount" is an aggregate concept and means the sum of all Landlord Payments outstanding at the applicable time. On the Effective Date, the Investment Amount is $27,019,834.76.

"Issuer" means a financial institution satisfactory to Landlord issuing the Letter of Credit and such Issuer's successors and assigns. Any "Issuer" shall have a Lace Financial Service Rating of "C+" or higher at all times throughout the Term.

"Kenner" has the meaning set forth in Recital A.

"Kenner Property" has the meaning set forth in Recital A.

"Land" means the real property described in Exhibit A attached hereto.

"Landlord" means HCN and HCN-LA, individually and collectively.

"Landlord Affiliate" means any person, corporation, partnership, limited liability company, trust, or other legal entity that, directly or indirectly, controls, or is controlled by, or is under common control with Landlord. "Control" (and the correlative meanings of the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity.

"Landlord Payment" means any Acquisition Payment or Contingent Payment.

"Landlord's Personal Property" means all Personal Property owned by Landlord on the Effective Date and located at the Facility, including, without limitation, all personal property listed on any bills of sale delivered to Landlord in connection with the Facility, together with any and all replacements thereof, and all Personal Property that pursuant to the terms of this Lease becomes the property of Landlord during the Term.

"LC Proceeds" has the meaning set forth in §20.3.

"Lease" means this Amended and Restated Master Lease Agreement, as amended from time to time.

"Lease Documents" means this Lease and all documents executed by Landlord and Tenant relating to this Lease or the Facility.

"Lease Payments" means the sum of the Base Rent payments (as increased from time to time) for the applicable period.

"Lease Year" means each consecutive period of 365 or 366 days throughout the Term. The first Lease Year commences on the Commencement Date and expires on the day before the first anniversary of the Commencement Date.

"Leased Property" means all of the Land, Improvements, Related Rights and Landlord's Personal Property.

"Legal Requirements" means all laws, regulations, rules, orders, writs, injunctions, decrees, certificates, requirements, agreements, conditions of participation and standards of any federal, state, county, municipal or other governmental entity, administrative agency, insurance underwriting board, architectural control board, private third-party payor, accreditation organization, or any restrictive covenants applicable to the development, construction, condition and operation of the Facility by Tenant, including, but not limited to, [i] zoning, building, fire, health, safety, sign, and subdivision regulations and codes; [ii] certificate of need laws (if applicable); [iii] licensure to operate as each Facility in accordance with its respective Facility Uses; [iv] Medicare and Medicaid certification—requirements (if applicable); [v] the ADA; [vi] any Environmental Laws; and [vii] requirements, conditions and standards for participation in third-party payor insurance programs.

"Letter of Credit" means an irrevocable and transferable Letter of Credit in an amount required by the Commitment, issued by Issuer in favor of Landlord as security for the Lease and in form acceptable to Landlord, and any amendments thereto or replacements or substitutions therefor. Since no Letter of Credit is required under the Commitment, all references and provisions relating to "Letter of Credit" shall have no force or effect, including without limitation, the provisions of Article 20.

"Loan" means the term loan extended to Tenant by HCN on this date in the Loan

Amount.

"Loan Amount" means $12,864,874.24.

"Louisiana Leased Property" means any Leased Property situated within the State of Louisiana.

"Manager" means Summerville Management, LLC, a limited liability company organized under the laws of the State of Delaware.

"Material Obligation" means [i] any indebtedness secured by a security interest in the accounts receivable of Tenant, Subtenant or Guarantor or any Personal Property; [ii] any indebtedness or lease of Tenant, Subtenant or Guarantor or of any other party that has been guaranteed by Tenant, Subtenant or Guarantor that has an outstanding principal balance or obligation in an amount not less than $500,000.00; [iii] any obligation to or agreement with the Issuer relating to the Letter of Credit, if any; and [iv] any sublease of the Leased Property.

"Net Operating Income" means the pre-tax net income of Tenant or Subtenant plus [i] the amount of the provision for depreciation and amortization; plus [ii] the amount of the provision for interest and lease payments, if any; plus [iii] the amount of the provision for Rent payments; plus [iv] the amount of the provision for management fees.

"Net Worth" has the meaning set forth in § 15.7.1.

"Non-Payroll Operating Expenses" has the meaning set forth in §15.7.1.

"Obligor Group Obligations" means all payment and performance obligations of Tenant, Subtenant and Guarantor to Landlord or any Landlord Affiliate, including, but not limited to, all obligations under this Lease, any loans extended to Tenant, Subtenant or Guarantor by Landlord or any Landlord Affiliate and all documents executed by Tenant, Subtenant or Guarantor in connection with this Lease, any loan or any other obligation.

"Option Price" has the meaning set forth in § 13.2.

"Option to Purchase" has the meaning set forth in § 13.1.

"Organization State" means the State in which an entity is organized.

"Organizational Documents" means [i] for a corporation, its Articles of Incorporation certified by the Secretary of State of the Organization State, as amended to date, and its Bylaws certified by such entity, as amended to date; [ii] for a partnership, its Partnership Agreement certified by such entity, as amended to date, and the Partnership Certificate, certified by the appropriate authority, as amended to date; and [iii] for a limited liability company, its Articles of Organization certified by the Secretary of State of the Organization State, as amended to date, and its Operating Agreement certified by such entity, as amended to date.

"Original Lease" has the meaning set forth in Recital A.

"Payment Amount" means the amount of any Landlord Payment. The first Landlord Payment is the Acquisition Payment made on the Effective Date.

"Payment Date" means the date on which Landlord makes a Landlord Payment.

"Periodic Financial Statements" means [i] for Tenant and Subtenant, an unaudited balance sheet and statement of income for the most recent quarter; [ii] for the Facility, an unaudited Facility Financial Statement for the most recent month; and [iii] for each Guarantor, an unaudited balance sheet and statement of income of Guarantor for the most recent quarter.

"Permitted Exceptions" means all easements, liens, encumbrances, restrictions, agreements set forth on Exhibit B attached hereto and such other matters approved in writing by Landlord and Tenant in the future, and any sublease of any portion of the Leased Property made in complete accordance with Article 18.

"Permitted Liens" means [i] liens granted to Landlord; [ii] liens customarily incurred by Tenant or Subtenant in the ordinary course of business for items not delinquent, including mechanic's liens and deposits and charges under workers' compensation laws; [iii] liens for taxes and assessments not yet due and payable; [iv] any lien, charge, or encumbrance which is being contested in good faith pursuant to this Lease; [v] the Permitted Exceptions; and [vi] purchase money financing and capitalized equipment leases for the acquisition of personal property provided, however, that Landlord obtains a nondisturbance agreement from the purchase money lender or equipment lessor in form and substance as may be satisfactory to Landlord if the original cost of the equipment exceeds $50,000.00.

"Personal Property" means all machinery, equipment, furniture, furnishings, movable walls or partitions, computers (and all associated software), trade fixtures and other personal property (but excluding consumable inventory and supplies owned by Tenant) used in connection with the Leased Property, together with all replacements and alterations thereof and additions thereto, except items, if any, included within the definition of Fixtures or Improvements.

"Portfolio Cash Flow" has the meaning set forth in §15.7.1. "Portfolio Coverage Ratio" has the meaning set forth in § 15.7.1.

"Pro Forma Statement" means a financial forecast for the Facility for the next five-year period prepared in accordance with the standards for forecasts established by the American Institute of Certified Public Accountants.

"Project Improvements" means any addition to or major renovation of a Facility for which Contingent Payments are made by Landlord pursuant to §22.3.

"Purchase Notice" has the meaning set forth in § 13.1.

"Qualified Capital Expenditures" means the expenditures capitalized on the books of Tenant or Subtenant for any of the following: replacement of furniture, fixtures and equipment, including refrigerators, ranges, major appliances, bathroom fixtures, doors (exterior and interior), central air conditioning and heating systems (including cooling towers, water chilling units, furnaces, boilers and fuel storage tanks) and major replacement of siding; major roof replacements, including major replacements of gutters, downspouts, eaves and soffits; major repairs and replacements of plumbing and sanitary systems; overhaul of elevator systems; major repaving, resurfacing and sealcoating of sidewalks, parking lots and driveways; repainting of entire building exterior; but excluding major alterations, renovations, additions and normal maintenance and repairs.

"Rate Shortfall" means, as of the applicable Rent Adjustment Date, a percentage amount equal to the aggregate of the Annual Rate Shortfalls, but excluding any Annual Rate Shortfall (or portion thereof) that was taken into account for the calculation of an Annual Rent Increase for a prior Lease Year.

"Receivables" means [i] all of Tenant's or Subtenant's rights to receive payment for providing resident care and services as set forth in any accounts, contract rights, and instruments, and [ii] those documents, chattel paper, inventory proceeds, provider agreements, participation agreements, ledger sheets, files, records, computer programs, tapes, and agreements relating to Tenant's or Subtenant's rights to receive payment for providing resident care services.

"Related Rights" means all easements, rights (including bed operating rights) and appurtenances relating to the Land and the Improvements.

"Renewal Date" means the first day of each Renewal Term. "Renewal Option" has the meaning set forth in § 12.1. "Renewal Term" has the meaning set forth in §12.1.

"Rent" means Base Rent, Additional Rent and Default Rent.

"Rent Adjustment Date" means November 1, 2007 and November 1 of each year

thereafter.

"Rent Schedule" means the schedule issued by Landlord to Tenant showing the Base Rent to be paid by Tenant pursuant to the terms of this Lease, as such schedule is amended from time to time by Landlord. The initial Rent Schedule is attached to this Lease as Schedule 1 or will be attached within 5 Business Days following Closing if the Rent Schedule cannot be determined until the day of Closing.

"Replacement Operator" has the meaning set forth in §15.9.1.

"Secured Party" has the meaning set forth in §23.1.

"Subtenant" means the entity identified on Exhibit C that subleases the Facility from Tenant and is the licensed operator (or is operating through an interim management agreement with the licensed operator) of its respective Facility as shown on Exhibit C, individually and collectively. References in this Lease to "Subtenant" shall mean each Subtenant individually and shall relate to such Subtenant's respective Facility unless expressly stated otherwise.

"Substitute Facility" has the meaning set forth in § 13.7.

"Target Rate of Return" means, as of the relevant Rent Adjustment Date or measurement date, the Initial Rate of Return plus .27% for each Lease Year after the first Lease Year.

"Tenant" has the meaning set forth in the introductory paragraph of this Lease.

"Tenant's Property" has the meaning set forth in § 11.1.

"Term" means the Initial Term and each Renewal Term.

"Third-Party Sale" has the meaning set forth in §13.7.

1.4.1 Louisiana Leased Property Definitions. When used in connection with the Louisiana Leased Property, the following defined terms shall have the following additional meanings:

"Article 9 of the Uniform Commercial Code" shall also be understood to include, without exclusion, Chapter 9 of the Louisiana Commercial Laws, La. R.S. 10:9-101, et seq.

"Condemnation" includes "expropriation", as that term is used in the Louisiana

Civil Code.

"Easement" includes "servitude", as that term is used in the Louisiana Civil Code.

"Land" whether used in isolation or incorporated into any other defined terms, shall also be understood to mean and refer to "immovable property", as that term is used in the Louisiana Civil Code.

"Landlord" whether used in isolation or incorporated into any other defined terms, shall also be understood to mean and refer to "lessor", as that term is used in the Louisiana Civil Code.

"Liens" shall also be understood to mean and refer to "privileges" created under the Louisiana Civil Code.

"Personal Property" whether used in isolation or incorporated into any other defined terms, shall also be understood to mean and refer to "movable property", as that term is used in the Louisiana Civil Code.

"Tenant" whether used in isolation or incorporated into any other defined terms, shall also be understood to mean and refer to "lessee", as that term is used in the Louisiana Civil Code.

1.5 Landlord as Agent. With respect to its respective Facility, each Landlord appoints HCN as the agent and lawful attorney-in-fact of such Landlord to act for such Landlord for all purposes and actions of Landlord under this Lease and the other Lease Documents. All notices, consents, waivers and all other documents and instruments executed by HCN pursuant to the Lease Documents from time to time and all other actions of HCN as Landlord under the Lease Documents shall be binding upon such Landlord. All Rent payable under this Lease shall be paid to HCN.

ARTICLE 2: RENT

2.1 Base Rent. Tenant shall pay Landlord base rent ("Base Rent") in advance in consecutive monthly installments payable on the first day of each month during the Term commencing on the Commencement Date. If the Effective Date is not the first day of a month, Tenant shall pay Landlord Base Rent on the Effective Date for the partial month, i.e., for the period commencing on the Effective Date and ending on the day before the Commencement Date. The Base Rent payable for the first Lease Year is as shown on the Rent Schedule, subject to adjustment pursuant to §2.2.2 if applicable. For the second and each subsequent Lease Year of the Initial Term, the Base Rent shall be paid in accordance with the most recent revised Rent Schedule provided by Landlord pursuant to §2.2, as applicable. The Base Rent for each Renewal Term will be determined in accordance with § 12.2.

2.2 Base Rent Adjustments.

2.2.1 Annual Increase of Base Rent. Commencing on the first Rent Adjustment Date and on each Rent Adjustment Date thereafter, the annual Base Rent shall increase by the Annual Rent Increase. If the CPI Change is zero or negative as of any Rent Adjustment Date, the Annual Rent Increase for such Lease Year is $28,101.24. Notwithstanding the foregoing, the aggregate Base Rent paid by Tenant for any particular Lease Year and all preceding Lease Years will not exceed the Base Rent that Tenant would have paid if the Landlord had received Base Rent based on the Target Rate of Return during the Lease Year in question and all preceding Lease Years. As of each Rent Adjustment Date, Landlord shall calculate the Annual Rent Increase and shall deliver the revised Rent Schedule to Tenant no later than 30 days after the Rent Adjustment Date. Until the revised Rent Schedule is delivered to Tenant, Tenant shall pay the monthly Base Rent with the Annual Rent Increase (paid in equal monthly installments) calculated based upon an Increaser Rate of .27%. After the revised Rent Schedule is delivered to Tenant, if the actual monthly Base Rent is more or less than the monthly Base Rent paid pursuant to the preceding sentence, the difference shall be added to or deducted from (as applicable) the monthly Base Rent payment made for the following month. Thereafter, Tenant-shall make monthly Base Rent payments in accordance with the revised Rent Schedule.

2.2.2 Additional Landlord Payments. If Landlord makes a Landlord Payment other than the initial Acquisition Payment, the Base Rent will be increased effective on the Payment Date based upon the applicable rate of return to Landlord as set forth in the Commitment. Until Tenant receives a revised Rent Schedule from Landlord, Tenant shall for each month [i] continue to make installments of Base Rent according to the Rent Schedule in effect on the day before the Payment Date; and [ii] within 10 days following Landlord's issuance of an invoice, pay the difference between the installment of Base Rent that Tenant paid to Landlord for such month and the installment of Base Rent actually due to Landlord for such month as a result of the Landlord Payment. On the first day of the month following receipt of the revised Rent Schedule, Tenant shall pay the monthly installment of Base Rent specified in the revised Rent Schedule.

2.3 Additional Rent. In addition to Base Rent, Tenant shall pay all other amounts, liabilities, obligations and Impositions which Tenant assumes or agrees to pay under this Lease including any fine, penalty, interest, charge and cost which may be added for nonpayment or late payment of such items (collectively the "Additional Rent").

2.4 Place of Payment of Rent. Tenant shall make all payments of Rent to Landlord by electronic wire transfer in accordance with the wiring instructions set forth in Exhibit H attached hereto, subject to change in accordance with other written instructions provided by Landlord to Tenant from time to time.

2.5 Net Lease. This Lease shall be deemed and construed to be an "absolute net lease", and Tenant shall pay all Rent and other charges and expenses in connection with the Leased Property throughout the Term, without abatement, deduction, recoupment or setoff. Landlord shall have all legal, equitable and contractual rights, powers and remedies provided either in this Lease or by statute or otherwise in the case of nonpayment of the Rent.

2.6 No Termination, Abatement, Etc. Except as otherwise specifically provided in this Lease, Tenant shall remain bound by this Lease in accordance with its terms. Tenant shall not, without the consent of Landlord, modify, surrender or terminate the Lease, nor seek nor be entitled to any abatement, deduction, deferment or reduction of Rent, or setoff or recoupment against the Rent. Except as expressly provided in this Lease, the obligations of Landlord and Tenant shall not be affected by reason of [i] any damage to, or destruction of, the Leased Property or any part thereof from whatever cause or any Taking (as hereinafter defined) of the Leased Property or any part thereof; [ii] the lawful or unlawful prohibition of, or restriction upon, Tenant's use of the Leased Property, or any part thereof, the interference with such use by any person, corporation, partnership or other entity, or by reason of eviction by paramount title; [iii] any claim which Tenant has or might have against Landlord or by reason of any default or breach of any warranty by Landlord under this Lease or any other agreement between Landlord and Tenant, or to which Landlord and Tenant are parties; [iv] any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding up or other proceeding affecting Landlord or any assignee or transferee of Landlord; or [v] any other cause, whether similar or dissimilar to any of the foregoing, other than a discharge of Tenant from any such obligations as a matter of law. Except as otherwise specifically provided in this Lease, Tenant hereby specifically waives all rights, arising from any occurrence whatsoever, which may now or hereafter be conferred upon it by law [a] to modify, surrender or terminate this Lease or quit or surrender the Leased Property or any portion thereof; or [b] entitling Tenant to any abatement, reduction, suspension or deferment of the Rent or other sums payable by Tenant hereunder. The obligations of Landlord and Tenant hereunder shall be separate and independent covenants and agreements and the Rent and all other sums payable by Tenant hereunder shall continue to be payable in all events unless the obligations to pay the same shall be terminated pursuant to the express provisions of this Lease or by termination of this Lease other than by reason of an Event of Default.

ARTICLE 3: IMPOSITIONS AND UTILITIES

3.1 Payment of Impositions. Tenant shall pay, as Additional Rent, all Impositions that may be levied or become a lien on the Leased Property or any part thereof at any time (whether prior to or during the Term), without regard to prior ownership of said Leased Property, before any fine, penalty, interest, or cost is incurred; provided, however, Tenant may contest any Imposition in accordance with §3.7. Tenant shall deliver to Landlord [i] not more than five days after the due date of each Imposition, copies of the invoice for such Imposition and the check delivered for payment thereof; and [ii] not more than 30 days after the due date of each Imposition, a copy of the official receipt evidencing such payment or other proof of payment satisfactory to Landlord. Tenant's obligation to pay such Impositions shall be deemed absolutely fixed upon the date such Impositions become a lien upon the Leased Property or any part thereof. Tenant, at its expense, shall prepare and file all tax returns and reports in respect of any Imposition as may be required by governmental authorities. Tenant shall be entitled to any refund due from any taxing authority if no Event of Default shall have occurred hereunder and be continuing and if Tenant shall have paid to Escrow Agent all Impositions due and payable to such taxing authority as of the date of the refund. Landlord shall be entitled to any refund from any taxing authority if an Event of Default has occurred and is continuing. Any refunds retained by Landlord due to an Event of Default shall be applied as provided in §8.8. Landlord and Tenant shall, upon request of the other, provide such data as is maintained by the party to whom the request is made with respect to the Leased Property as may be necessary to prepare any required returns and reports. In the event governmental authorities classify any property covered by this Lease as personal property, Tenant shall file all personal property tax returns in such jurisdictions where it may legally so file. Landlord, to the extent it possesses the same, and Tenant, to the extent it possesses the same, will provide the other party, upon request, with cost and depreciation records necessary for filing returns for any property so classified as personal property. Where Landlord is legally required to file personal property tax returns, Tenant will be provided with copies of assessment notices indicating a value in excess of the reported value in sufficient time for Tenant to file a protest. 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 as aforesaid, shall fully cooperate with Tenant in such protest, appeal, or other action. Tenant shall reimburse Landlord for all personal property taxes paid by Landlord within 30 days after receipt of billings accompanied by copies of a bill therefor and payments thereof which identify the personal property with respect to which such payments are made. Impositions imposed in respect to the tax-fiscal period during which the Term terminates shall be adjusted and prorated between Landlord and Tenant, whether or not such Imposition is imposed before or after such termination, and Tenant's obligation to pay its prorated share thereof shall survive such termination.

3.2 Definition of Impositions. "Impositions" means, collectively, [i] taxes (including, without limitation, all capital stock and franchise taxes of Landlord imposed by the Facility State or any governmental entity in the Facility State due to this lease transaction or Landlord's ownership of the Leased Property and the income arising therefrom, or due to Landlord being considered as doing business in the Facility State because of Landlord's ownership of the Leased Property or lease thereof to Tenant), all real estate and personal property ad valorem, sales and use, business or occupation, single business, gross receipts, commercial activity, transaction privilege, rent or similar taxes; [ii] assessments (including, without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term); [iii] ground rents, water, sewer or other rents and charges, excises, tax levies, and fees (including, without limitation, license, permit, inspection, authorization and similar fees); [iv] all taxes imposed on Tenant's operations of the Leased Property, including, without limitation, employee withholding taxes, income taxes and intangible taxes; [v] all taxes imposed by the Facility State or any governmental entity in the Facility State with respect to the conveyance of the Leased Property by Landlord to Tenant or Tenant's designee, including, without limitation, conveyance taxes, capital gains taxes, and commercial activity taxes; and [vi] all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Leased Property or any part thereof and/or the Rent (including all interest and penalties thereon due to any failure in payment by Tenant), which at any time prior to, during or in respect of the Term hereof may be assessed or imposed on or in respect of or be a lien upon [a] Landlord or Landlord's interest in the Leased Property or any part thereof; [b] the Leased Property or any part thereof or any rent therefrom or any estate, right, title or interest therein; or [c] any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in connection with the Leased Property or the leasing or use of the Leased Property or any part thereof. Tenant shall not, however, be required to pay any tax based on net income imposed on Landlord by any governmental entity other than the capital stock and franchise taxes described in clause [i] above.

3.3 Escrow of Impositions. Tenant shall deposit with Landlord on the first day of each month a sum equal to 1/12th of the Impositions assessed against the Leased Property for the preceding tax year for real estate taxes, which sums shall be used by Landlord toward payment of such real estate taxes. In addition, if an Event of Default occurs and while it remains uncured, Tenant shall, at Landlord's election, deposit with Landlord on the first day of each month a sum equal to 1/12th of the Impositions assessed against the Leased Property for the preceding tax year other than for real estate taxes, which sums shall be used by Landlord toward payment of such Impositions. Tenant, on demand, shall pay to Landlord any additional funds necessary to pay and discharge the obligations of Tenant pursuant to the provisions of this section. The receipt by Landlord of the payment of such Impositions by and from Tenant shall only be as an accommodation to Tenant, the mortgagees, and the taxing authorities, and shall not be construed as rent or income to Landlord, Landlord serving, if at all, only as a conduit for delivery purposes.

3.4 Utilities. Tenant shall pay, as Additional Rent, all taxes, assessments, charges, deposits, and bills for utilities, including, without limitation, charges for water, gas, oil, sanitary and storm sewer, electricity, telephone service, and trash collection, which may be charged against the occupant of the Improvements during the Term. If an Event of Default occurs and while it remains uncured, Tenant shall, at Landlord's election, deposit with Landlord on the first day of each month a sum equal to 1/12th of the amount of the annual utility expenses for the preceding Lease Year, which sums shall be used by Landlord to pay such utilities. Tenant shall, on demand, pay to Landlord any additional amount needed to pay such utilities. Landlord's receipt of such payments shall only be an accommodation to Tenant and the utility companies and shall not constitute rent or income to Landlord. Tenant shall at all times maintain that amount of heat necessary to ensure against the freezing of water lines. Tenant hereby agrees to indemnify and hold Landlord harmless from and against any liability or damages to the utility systems and the Leased Property that may result from Tenant's failure to maintain sufficient heat in the Improvements.

3.5 Discontinuance of Utilities. Landlord will not be liable for damages to person or property or for injury to, or interruption of, business for any discontinuance of utilities nor will such discontinuance in any way be construed as an eviction of Tenant or cause an abatement of rent or operate to release Tenant from any of Tenant's obligations under this Lease.

3.6 Business Expenses. Tenant acknowledges that it is solely responsible for all expenses and costs incurred in connection with the operation of the Facility on the Leased Property, including, without limitation, employee benefits, employee vacation and sick pay, consulting fees, and expenses for inventory and supplies.

3.7 Permitted Contests. Tenant, on its own or on Landlord's behalf (or in Landlord's name), but at Tenant's expense, may contest, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any Imposition or any Legal Requirement or insurance requirement or any lien, attachment, levy, encumbrance, charge or claim provided that [i] 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 Leased Property; [ii] neither the Leased Property nor any Rent therefrom nor any part thereof or interest therein would be in any immediate danger of being sold, forfeited, attached or lost; [iii] in the case of a Legal Requirement, Landlord would not be in any immediate danger of civil or criminal liability for failure to comply therewith pending the outcome of such proceedings; [iv] in the event that any such contest shall involve a sum of money or potential loss in excess of $75,000.00, Tenant shall deliver to Landlord and its counsel an opinion of Tenant's counsel to the effect set forth in clauses [i], [ii] and [iii], to the extent applicable; [v] in the case of a Legal Requirement and/or an Imposition, lien, encumbrance or charge, Tenant shall give such reasonable security as may be demanded by Landlord to insure ultimate payment of the same and to prevent any sale or forfeiture of the affected Leased Property or the Rent by reason of such nonpayment or noncompliance; provided, however, the provisions of this section shall not be construed to permit Tenant to contest the payment of Rent (except as to contests concerning the method of computation or the basis of levy of any Imposition or the basis for the assertion of any other claim) or any other sums payable by Tenant to Landlord hereunder; [vi] in the case of an insurance requirement, the coverage required by Article 4 shall be maintained; and [vii] if such contest be finally resolved against Landlord or Tenant, Tenant shall, as Additional Rent due hereunder, promptly pay the amount required to be paid, together with all interest and penalties accrued thereon, or 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 be reasonably required in any such contest, and, if reasonably requested by Tenant or if Landlord so desires, Landlord shall join as a party therein. Tenant hereby agrees to indemnify and save Landlord harmless from and against any liability, cost or expense of any kind that may be imposed upon Landlord in connection with any such contest and any loss resulting therefrom.

ARTICLE 4: INSURANCE

4.1 Property Insurance. At Tenant's expense, Tenant shall maintain in full force and effect a property insurance policy or policies insuring the Leased Property against the following:

(a) Loss or damage commonly covered by a "Special Form" policy insuring against physical loss or damage to the Improvements and Personal Property, including, but not limited to, risk of loss from fire, windstorm and other hazards, collapse, transit coverage, vandalism, malicious mischief, theft, earthquake (if the Leased Property is in a higher risk earthquake zone as determined by Landlord) and sinkholes (if usually recommended in the area of the Leased Property). The policy shall be in the amount of the full replacement value (as defined in §4.5) of the Improvements and Personal Property and shall contain a deductible amount acceptable to Landlord. Landlord shall be named as an additional insured. The policy shall include a stipulated value endorsement or agreed amount endorsement and endorsements for ordinance or law including demolition costs and increased cost of construction.

(b) If applicable, loss or damage by explosion of steam boilers, pressure vessels, or similar apparatus, now or hereafter installed on the Leased Property, in commercially reasonable amounts acceptable to Landlord.

(c) Consequential loss of rents and income coverage insuring against all "Special Form" risk of physical loss or damage with limits and deductible amounts acceptable to Landlord covering risk of loss during the first nine months of reconstruction, and containing an endorsement for extended period of indemnity of at least six months, and shall be written with a stipulated amount of coverage if available at a reasonable premium.

(d) If the Leased Property is located, in whole or in part, in a federally designated 100-year flood plain area, flood insurance for the Improvements in an amount equal to the lesser of [i] the full replacement value of the Improvements; or [ii] the maximum amount of insurance available for the Improvements under all federal and private flood insurance programs.

(e) Loss or damage caused by the breakage of plate glass in commercially reasonable amounts acceptable to Landlord.

(f) Loss or damage commonly covered by blanket crime insurance, including employee dishonesty, loss of money orders or paper currency, depositor's forgery, and loss of property of patients accepted by Tenant for safekeeping, in commercially reasonable amounts acceptable to Landlord.

4.2 Liability Insurance. At Tenant's expense, Tenant shall maintain liability insurance against the following:

(a) Claims for personal injury or property damage commonly covered by comprehensive general liability insurance with endorsements for incidental malpractice, contractual, personal injury, voluntary medical payments, products and completed operations, broad form property damage, and extended bodily injury, with commercially reasonable amounts for bodily injury, property damage, and voluntary medical payments acceptable to Landlord, but with a combined single limit of not less than $3,000,000.00 per occurrence.

(b) Claims for personal injury and property damage commonly covered by comprehensive automobile liability insurance, covering all owned and non-owned automobiles, with commercially reasonable amounts for bodily injury, property damage, and for automobile medical payments acceptable to Landlord, but with a combined single limit of not less than $3,000,000.00 per occurrence.

(c) Claims for personal injury commonly covered by medical malpractice and professional liability insurance in commercially reasonable amounts acceptable to Landlord.

(d) Claims commonly covered by workers' compensation insurance for all persons employed by Tenant on the Leased Property. Such workers' compensation insurance shall be in accordance with the requirements of all applicable local, state, and federal law.

4.3 Builder's Risk Insurance. In connection with any construction, Tenant shall maintain in full force and effect a builder's completed value risk policy ("Builder's Risk Policy") of insurance in a nonreporting form insuring against all "Special Form" risk of physical loss or damage to the Improvements, including, but not limited to, risk of loss from fire, windstorm and other hazards, collapse, transit coverage, vandalism, malicious mischief, theft, earthquake (if Leased Property is in a higher risk earthquake zone as determined by Landlord) and sinkholes (if usually recommended in the area of the Leased Property). The Builder's Risk Policy shall include endorsements providing coverage for building materials and supplies and temporary premises. The Builder's Risk Policy shall be in the amount of the full replacement value of the Improvements and shall contain a deductible amount acceptable to Landlord. Landlord shall be named as an additional insured. The Builder's Risk Policy shall include an endorsement permitting initial occupancy.

4.4 Insurance Requirements. The following provisions shall apply to all insurance coverages required hereunder:

(a) The form and substance of all policies shall be subject to the approval of Landlord, which approval will not be unreasonably withheld.

(b) The carriers of all policies shall have a Best's Rating of "A" or better and a Best's Financial Category of X or higher and shall be authorized to do insurance business in the Facility State.

(d) Tenant shall deliver to Landlord certificates or policies showing the required coverages and endorsements. The policies of insurance shall provide that the policy may not be canceled or not renewed, and no material change or reduction in coverage may be made, without at least 30 days' prior written notice to Landlord.

(e) The policies shall contain a severability of interest and/or cross-liability endorsement, provide that the acts or omissions of Tenant or Landlord will not invalidate the coverage of the other party, and provide that Landlord shall not be responsible for payment of premiums.

(1) All loss adjustment shall require the written consent of Landlord and Tenant, as their interests may appear.

(g) At least 30 days prior to the expiration of each insurance policy, Tenant shall deliver to Landlord a certificate showing renewal of such policy and payment of the annual premium therefor and a current Certificate of Compliance (in the form delivered at the time of Closing) completed and signed by Tenant's insurance agent.

4.5 Replacement Value. The term "full replacement value" means the actual replacement cost thereof from time to time, including increased cost of construction endorsement, with no reductions or deductions. Tenant shall, in connection with each annual policy renewal, deliver to Landlord a redetermination of the full replacement value by the insurer or an endorsement indicating that the Leased Property is insured for its full replacement value. If Tenant makes any Permitted Alterations (as hereinafter defined) to the Leased Property, Landlord may have such full replacement value redetermined at any time after such Permitted Alterations are made, regardless of when the full replacement value was last determined.

4.6 Blanket Policy. Notwithstanding anything to the contrary contained in this Article 4, Tenant may carry the insurance required by this Article under a blanket policy of insurance, provided that the coverage afforded Tenant will not be reduced or diminished or otherwise be different from that which would exist under a separate policy meeting all of the requirements of this Lease.

4.7 No Separate Insurance. Tenant shall not take out separate insurance concurrent in form or contributing in the event of loss with that required in this Article, or 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 Landlord and any mortgagees, are included therein as additional insureds or loss payees, the loss is payable under said insurance in the same manner as losses are payable under this Lease, and such additional insurance is not prohibited by the existing policies of insurance. Tenant shall immediately notify Landlord of the taking out of such separate insurance or the increasing of any of the amounts of the existing insurance by securing an additional policy or additional policies.

4.8 Waiver of Subrogation. Each party hereto hereby waives any and every claim which arises or may arise in its favor and against the other party hereto during the Term for any and all loss of, or damage to, any of its property located within or upon, or constituting a part of the Leased Property, which loss or damage is covered by valid and collectible insurance policies, to the extent that such loss or damage is recoverable under such policies. Said mutual waiver shall be in addition to, and not in limitation or derogation of, any other waiver or release contained in this Lease with respect to any loss or damage to property of the parties hereto. Inasmuch as the said waivers will preclude the assignment of any aforesaid claim by way of subrogation (or otherwise) to an insurance company (or any other person), each party hereto agrees immediately to give each insurance company which has issued to it policies of insurance, written notice of the terms of said mutual waivers, and to have such insurance policies properly endorsed, if necessary, to prevent the invalidation of said insurance coverage by reason of said waivers, so long as such endorsement is available at a reasonable cost.

4.9 Mortgages. The following provisions shall apply if Landlord now or hereafter places a mortgage on the Leased Property or any part thereof: [i] Tenant shall obtain a standard form of lender's loss payable clause insuring the interest of the mortgagee; [ii] Tenant shall deliver evidence of insurance to such mortgagee; [iii] loss adjustment shall require the consent of the mortgagee; and [iv] Tenant shall provide such other information and documents as may be required by the mortgagee.

4.10 Escrows. After an Event of Default occurs hereunder, Tenant shall make such periodic payments of insurance premiums in accordance with Landlord's requirements after receipt of notice thereof from Landlord.

ARTICLE 5: INDEMNITY

5.1 Tenant's Indemnification. Tenant hereby indemnifies and agrees to hold harmless Landlord, any successors or assigns of Landlord, and Landlord's and such successor's and assign's directors, officers, employees and agents from and against any and all demands, claims, causes of action, fines, penalties, damages (including consequential damages), losses, liabilities (including strict liability), judgments, and expenses (including, without limitation, reasonable attorneys' fees, court costs, and the costs set forth in §8.7) incurred in connection with or arising from: [i] the use or occupancy of the Leased Property by Tenant or any persons claiming under Tenant; [ii] any activity, work, or thing done, or permitted or suffered by Tenant in or about the Leased Property; [iii] any acts, omissions, or negligence of Tenant or any person claiming under Tenant, or the contractors, agents, employees, invitees, or visitors of Tenant or any such person; [iv] any breach, violation, or nonperformance by Tenant or any person claiming under Tenant or the employees, agents, contractors, invitees, or visitors of Tenant or of any such person, of any term, covenant, or provision of this Lease or any law, ordinance, or governmental requirement of any kind, including, without limitation, any failure to comply with any applicable requirements under the ADA; [v] any injury or damage to the person, property or business of Tenant, its employees, agents, contractors, invitees, visitors, or any other person entering upon the Leased Property; [vi] any construction, alterations, changes or demolition of the Facility performed by or contracted for by Tenant or its employees, agents or contractors; and [vii] any obligations, costs or expenses arising under any matters shown on Exhibit B or any other Permitted Encumbrances consented to in writing by Landlord and Tenant but excluding obligations, costs or expenses arising from [a] Landlord's gross negligence or willful misconduct, or [b] matters covered by Landlord's title insurance policy. If any action or proceeding is brought against Landlord, its employees, or agents by reason of any such claim, Tenant, upon notice from Landlord, will defend the claim at Tenant's expense with counsel reasonably satisfactory to Landlord. All amounts payable to Landlord under this section shall be payable on written demand and any such amounts which are not paid within 10 days after demand therefor by Landlord shall bear interest at Landlord's rate of return as provided in the Commitment. In case any action, suit or proceeding is brought against Tenant by reason of any such occurrence, Tenant shall use its commercially reasonable efforts to defend such action, suit or proceeding.

5.1.1 Notice of Claim. Landlord shall notify Tenant in writing of any claim or action brought against Landlord in which indemnity may be sought against Tenant pursuant to this section. Such notice shall be given in sufficient time to allow Tenant to defend or participate in such claim or action, but the failure to give-such notice in sufficient time shall not constitute a defense hereunder nor in any way impair the obligations of Tenant under this section unless the failure to give such notice precludes Tenant's defense of any such action.

5.1.2 Survival of Covenants. The covenants of Tenant contained in this section shall remain in full force and effect after the termination of this Lease until the expiration of the period stated in the applicable statute of limitations during which a claim or cause of action may be brought and payment in full or the satisfaction of such claim or cause of action and of all expenses and charges incurred by Landlord relating to the enforcement of the provisions herein specified.

5.1.3 Reimbursement of Expenses. Unless prohibited by law, Tenant hereby agrees to pay to Landlord all of the reasonable fees, charges and reasonable out-of-pocket expenses related to the Facility and required hereby, or incurred by Landlord in enforcing the provisions of this Lease.

5.2 Environmental Indemnity; Audits. Tenant hereby indemnifies and agrees to hold harmless Landlord, any successors to Landlord's interest in this Lease, and Landlord's and such successors' directors, officers, employees and agents from and against any losses, claims, damages (including consequential damages), penalties, fines, liabilities (including strict liability), costs (including cleanup and recovery costs), and expenses (including expenses of litigation and reasonable consultants' and attorneys' fees) incurred by Landlord or any other indemnitee or assessed against any portion of the Leased Property by virtue of any claim or lien by any governmental or quasi-governmental unit, body, or agency, or any third party, for cleanup costs or other costs pursuant to any Environmental Law. Tenant's indemnity shall survive the termination of this Lease. Provided, however, Tenant shall have no indemnity obligation with respect to [i] Hazardous Materials first introduced to the Leased Property subsequent to the date that Tenant's occupancy of the Leased Property shall have fully terminated; or [ii] Hazardous Materials introduced to the Leased Property by Landlord, its agent, employees, successors or assigns. If at any time during the Term of this Lease any governmental authority notifies Landlord or Tenant of a violation of any Environmental Law or Landlord reasonably believes that a Facility may violate any Environmental Law, Landlord may require one or more environmental audits of such portion of the Leased Property, in such form, scope and substance as specified by Landlord, at Tenant's expense. Tenant shall, within 30 days after receipt of an invoice from Landlord, reimburse Landlord for all reasonable out of pocket costs and expenses incurred in reviewing any environmental audit, including, without limitation, reasonable attorneys' fees and costs.

5.3 Limitation of Landlord's Liability. Except for Landlord's gross negligence or willful misconduct, Landlord, its agents, and employees, will not be liable for any loss, injury, death, or damage (including consequential damages) to persons, property, or Tenant's business occasioned by theft, act of God, public enemy, injunction, riot, strike, insurrection, war, court order, requisition, order of governmental body or authority, fire, explosion, falling objects, steam, water, rain or snow, leak or flow of water (including water from the elevator system), rain or snow from the Leased Property or into the Leased Property or from the roof, street, subsurface or from any other place, or by dampness or from the breakage, leakage, obstruction, or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting fixtures of the Leased Property, or from construction, repair, or alteration of the Leased Property or from any acts or omissions of any other occupant or visitor of the Leased Property, or from any other cause beyond Landlord's control.

ARTICLE 6: USE AND ACCEPTANCE OF PREMISES

6.1 Use of Leased Property. Tenant shall use and occupy the Leased Property exclusively for the Facility Uses specified for each Facility and for all lawful and licensed ancillary uses, and for no other purpose without the prior written consent of Landlord. Tenant shall obtain and maintain all approvals, licenses, and consents needed to use and operate the Leased Property as herein permitted. Tenant shall deliver to Landlord complete copies of surveys, examinations, certification and licensure inspections, compliance certificates, and other similar reports issued to Tenant by any governmental agency within 10 days after Tenant's receipt of each item.

6.2 Acceptance of Leased Property. Tenant acknowledges that [i] Tenant and its agents have had an opportunity to inspect the Leased Property; [ii] Tenant has found the Leased Property fit for Tenant's use; [iii] Landlord will deliver the Leased Property to Tenant in "as-is" condition; [iv] Landlord is not obligated to make any improvements or repairs to the Leased Property; and [v] the roof, walls, foundation, heating, ventilating, air conditioning, telephone, sewer, electrical, mechanical, elevator, utility, plumbing, and other portions of the Leased Property are in good working order. Tenant waives any claim or action against Landlord with respect to the condition of the Leased Property. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.

6.3 Conditions of Use and Occupancy. Tenant agrees that during the Term it shall use and keep the Leased Property in a careful, safe and proper manner; not commit or suffer waste thereon; not use or occupy the Leased Property for any unlawful purposes; not use or occupy the Leased Property or permit the same to be used or occupied, for any purpose or business deemed extra-hazardous on account of fire or otherwise; keep the Leased Property in such repair and condition as may be required by the Board of Health, or other city, state or federal authorities, free of all cost to Landlord; not permit any acts to be done which will cause the cancellation, invalidation, or suspension of any insurance policy; and permit Landlord and its agents to enter upon the Leased Property at all reasonable times to examine the condition thereof. Landlord shall have the right to have an annual inspection of the Leased Property performed and Tenant shall pay an inspection fee of $1,500.00 per Facility plus Landlord's reasonable out-of-pocket expenses within 30 days after receipt of Landlord's invoice.

6.4 Tenant Solely Responsible. Tenant specifically acknowledges that it is solely responsible for the operation and maintenance of the Louisiana Leased Property, and that Landlord, its agents and employees, have no responsibility therefore.

6.5 Opportunity to Inspect. TENANT ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY TO INSPECT THE PREMISES OF ALL LOUISIANA LEASED PROPERTY AND, IN ACCORDANCE WITH THE PROVISIONS OF LA. C.C. ARTICLE 2699, HEREBY SPECIFICALLY WAIVES ANY AND ALL WARRANTIES PROVIDED BY THE PROVISIONS OF THE LOUISIANA CIVIL CODE TO THE FULLEST EXTENT PERMITTED BY LAW.

ARTICLE 7: MAINTENANCE AND MECHANICS' LIENS

7.1 Maintenance. Tenant shall maintain, repair, and replace the Leased Property, including, without limitation, all structural and nonstructural repairs and replacements to the roof, foundations, exterior walls, HVAC systems, equipment, parking areas, sidewalks, water, sewer and gas connections, pipes and mains. Tenant shall pay, as Additional Rent, the full cost of maintenance, repairs, and replacements. Tenant shall maintain all drives, sidewalks, parking areas, and lawns on or about the Leased Property in a clean and orderly condition, free of accumulations of dirt, rubbish, snow and ice. Tenant shall at all times maintain, operate and otherwise manage the Leased Property on a basis and in a manner consistent with the standards of the highest quality competing facilities in the market areas served by the Leased Property. All repairs shall, to the extent reasonably achievable, be at least equivalent in quality to the original work or the property to be repaired shall be replaced. Tenant will not take or omit to take any action the taking or omission of which might materially impair the value or the usefulness of the Leased Property or any parts thereof for the Facility Uses. Tenant shall permit Landlord to inspect the Leased Property at all reasonable times, and if Landlord gives Tenant notice of maintenance problem areas, Tenant shall deliver to Landlord a plan of correction within 20 Business Days after receipt of the notice. Tenant shall diligently pursue correction of all problem areas within 75 days after receipt of the notice and, upon expiration of the 75-day period, shall deliver evidence of completion to Landlord or an interim report evidencing Tenant's diligent progress towards completion and, at the end of the next 75-day period, evidence of satisfactory completion. Upon completion, Landlord shall have the right to re-inspect the Facility and Tenant shall pay a re-inspection fee of $750.00 per Facility plus Landlord's reasonable out-of-pocket expenses within 30 days after receipt of Landlord's invoice. At each inspection of the Leased Property by Landlord, made upon at least 2 Business Days notice to Tenant, the Facility employee in charge of maintenance shall be available to tour the Facility with Landlord and answer questions.

7.2 Required Alterations. Tenant shall, at Tenant's sole cost and expense, make any additions, changes, improvements or alterations to the Leased Property, including structural alterations, which may be required by any governmental authorities, including those required to maintain licensure or certification under the Medicare and Medicaid programs (if so certified), whether such changes are required by Tenant's use, changes in the law, ordinances, or governmental regulations, defects existing as of the date of this Lease, or any other cause whatsoever. All such additions, changes, improvements or alterations shall be deemed to be Permitted Alterations and shall comply with all laws requiring such alterations and with the provisions of § 16.4.

7.3 Mechanic's Liens. Tenant shall have no authority to permit or create a lien against Landlord's interest in the Leased Property, and Tenant shall post notices or file such documents as may be required to protect Landlord's interest in the Leased Property against liens. Tenant hereby agrees to defend, indemnify, and hold Landlord harmless from and against any mechanic's liens against the Leased Property by reason of work, labor, services or materials supplied or claimed to have been supplied on or to the Leased Property. Tenant shall remove, bond-off, or otherwise obtain the release of any mechanic's lien filed against the Leased Property within 10 days after notice of the filing thereof. Tenant shall pay all expenses in connection therewith, including, without limitation, damages, interest, court costs and reasonable attorneys' fees.

7.4 Replacements of Fixtures and Landlord's Personal Property. Tenant shall not remove Fixtures and Landlord's Personal Property from the Leased Property except to replace the Fixtures and Landlord's Personal Property by other similar items of equal quality and value. Items being replaced by Tenant may be removed and shall become the property of Tenant and items replacing the same shall be and remain the property of Landlord. Tenant shall execute, upon written request from Landlord, any and all documents necessary to evidence Landlord's ownership of Landlord's Personal Property and replacements therefor. Tenant may finance replacements for the Fixtures and Landlord's Personal Property by equipment lease or by a security agreement and financing statement if [i] Landlord has consented to the terms and conditions of the equipment lease or security agreement; and [ii] the equipment lessor or lender has entered into a nondisturbance agreement with Landlord upon terms and conditions reasonably acceptable to Landlord, including, without limitation, the following: [a] Landlord shall have the right (but not the obligation) to assume such security agreement or equipment lease upon the occurrence of an Event of Default under this Lease; [b] the equipment lessor or lender shall notify Landlord of any default by Tenant under the equipment lease or security agreement and give Landlord a reaso

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates