Operating Lease
Section 232 / U.S. Department of Housing
and Urban Development
Office of Healthcare ProgramsResidential
Care Facilities / OMB Approval No. 9999-9999
(exp. mm/dd/yyyy)
Public reporting burden for this collection of information is estimated to average 0.5 hours. This includes the time for collecting, reviewing, and reporting the data. The information is being collected to obtain the supportive documentation which must be submitted to HUD for approval, and is necessary to ensure that viable projects are developed and maintained. The Department will use this information to determine if properties meet HUD requirements with respect to development, operation and/or asset management, as well as ensuring the continued marketability of the properties. Response to this request for information is required in order to receive the benefits to be derived. This agency may not collect this information, and you are not required to complete this form unless it displays a currently valid OMB control number. No confidentiality is assured.
Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802)
Warning: Any person who knowingly presents a false, fictitious, or fraudulent statement or claim in a matter within the jurisdiction of the U.S. Department of Housing and Urban Development is subject to criminal penalties, civil liability, and administrative sanctions.
This Addendum to Operating Lease (this “Addendum”) is attached to and made a part of that certain Operating[Operator Lease Agreement]dated ______200______, 20__, entered into by Owner/Lessor and Lessee (the “ OperatingOperator Lease”), and amends and/or supplements the OperatingOperator Lease. For so long as HUD is the holder or insurer of any indebtedness secured by the Healthcare Facility (as defined below), the provisions of this Addendum shall apply to the Operator Lease. In the event of aany conflict between the terms of this Addendum and the OperatingOperator Lease, the terms of this Addendum shall govern and control. Capitalized terms
Covenants. Lessor and Lessee covenant and agree as follows:
I. DEFINITIONS.
- DEFINITIONS. Any capitalized term or word used herein but not defined shall have the meaning given to such term in the Borrower’s Security Instrument. The following terms, when used in this Addendum (including when used in the above recitals), shall have the following meanings, whether capitalized or not and whether singular or plural, unless, in the context, an incongruity results:
“Accounts Receivable” has the meaning set forth in theOperating LeaseBorrower’s Security Instrument.
DEFINITIONS
The following terms shall have the meanings specified below:
"
“Approved Use” has the meaning set forth in the Borrower’s Security Instrument.
“Bed Authority” means the licensed number of beds for a Healthcare Facility as authorized under the Healthcare Requirements.
“Borrower’s Regulatory Agreement” means that certain Healthcare Regulatory Agreement – Borrower relating to the Project and entered into by Lessor for the benefit of HUD.
“Borrower’s Security Instrument” means that certain Healthcare [Mortgage, Deed of Trust, Deed to Secure Debt, Security Deed or Other Designation as appropriate in Jurisdiction], Assignment of Leases, Rents and Revenue and Security Agreement, from Lessor in favor of Lender with respect to the Project securing the Loan, and any amendments and supplements thereto.
“FF&E"” means furnishings, fixtures and equipment of all kindskind used in connection with the Leased Premises,Healthcare Facility including additions, substitutions and replacements thereto.
"FHA" means the Federal Housing Administration.
“Health Care
“Healthcare Facility” means that certain healthcare facility authorized to receive mortgage insurance pursuant to Section 232 of the National Housing Act, as amended, that is the subject of the Operator Lease.
“Healthcare Requirements” shall meanmeans, relating to the Leased PremisesHealthcare Facility, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions or agreements, in each case, pertaining to or concerned with the establishment, construction, ownership, operation, use or occupancy of the Leased PremisesHealthcare Facilityor any part thereof as a health carehealthcare facility, and all material permits, licenses and authorizations and regulations relating thereto, including all material rules, orders, regulations and decrees of and agreements with health carehealthcare authorities pertaining to the Leased PremisesHealthcare Facility.
"
“HUD"” means the U.S. Department of Housing and Urban Development.
"HUD Program Requirements" means all applicable statutes and regulations, including all amendments to such statutes and regulations, as they become effective, and all applicable requirements in HUD handbooks, notices and mortgagee letters that apply to the Leased Premises, including all updates and changes to such handbooks, notices and mortgagee letters that apply to the Leased Premise, except that changes subject to notice and comment rulemaking shall become effective upon completion of the rulemaking process.
"Leased Premises" means all the land located at, and known and identified as ______, said premises being situated in ______, ______County, ______, and more particularly described in Exhibit attached to this Lease, together with any additions thereto and substitutions therefore, and any buildings, improvements, betterments, all FF&E and other property, real or personal, now existing or at any time acquired, constructed or located thereon, and all easements and other rights appurtenant thereto.
"Lender" means [Enter name of FHA Lender],
“Intercreditor Agreement” is defined in Section 12.
“Lender” means ______, a ______organized and existing under the laws of ______, and any future holder of the MortgageBorrower’s Security Instrument.
"Lessee" means [Enter name of Lessee].
"Lessee Regulatory Agreement" means the Regulatory Agreement-Nursing Homes entered into by and between the Lessee and FHA with respect to the Leased Premises and any riders, amendments and supplements thereto.
"Lessee Security Agreement" means that certain Lessee Security Agreement between Lessee and Lender with respect to the Leased Premises and any amendments or supplements thereto.
“Lessee” means ______, a ______organized and existing under the laws of ______, together with any successors, heirs and assigns (jointly and severally). Lessee may sometimes be referred to as a “tenant” under the terms of the Operator Lease.
“Lessor” means ______, a ______organized and existing under the laws of ______, together with any successors, heirs and assigns (jointly and severally). “Lessor” may sometimes be referred to as a “landlord” under the terms of the Operator Lease.
“Loan” means the HUD-insured loan in the original principal amount of $______, made by Lender to Lessor, secured by the Healthcare Facility, as such Loan may be amended, increased or decreased.
“Loan Documents” means the Note, the Borrower’s Security Instrument, the Borrower’s Regulatory Agreement, [the Master Tenant’s Regulatory Agreement,] the Operator’s Regulatory Agreement, the Operator’s Security Agreement, [the Master Tenant’s Security Agreement, the Cross Guaranties,] any subordination agreements, and any and all other documents now or in the future required by and/or assigned to HUD and/or Lender in connection with the Loan(s), whether executed by or on behalf of Lessor, [Master Tenant, ] or Operator, as the same may be amended from time to time, provided that the [Master Lease and] Operator Lease, and any amendments thereto, shall not be considered Loan Documents.
“Master Lease” and “Master Tenant” have the meanings set forth in the Borrower’s Security Instrument.
“Material Term” is a term in a loan or security agreement that:
(a)extends the maturity date of the loan;
(b)adds guarantors to the loan;
(c)releases guarantors from the loan;
(d)adds borrowers to the loan;
(e)adds an interest reserve to the loan;
(f)amends the interest rate payable on the outstanding principal balance of the loan;
(g)increases or decreases the principal amount of the loan;
(h)adds collateral as additional security for the loan; and/or
(i)amends or expands the type of obligations secured by the loan.
“Mortgage"
“Operator’s Regulatory Agreement” means that certain mortgage or deed of trust from the Owner/Lessor in favor of the Lender with respect to the Leased Premises securing the Mortgage Loan, and any amendments and supplements thereto.
"Mortgage Loan" means the FHA-insured mortgage loan in the original maximum principal amount of up to $______made by Lender to the Owner/Lessor, secured, in whole or in part, by the Leased Premises, as the same may be amended, increased or decreased.
"Mortgage Loan Documents" means the Owner/Lessor Regulatory Agreement, the Mortgage, the Promissory Note evidencing the Mortgage Loan executed by the Owner/Lessor in favor of the Lender, the Security Agreement, the Lessee Healthcare Regulatory Agreement, the Lessee Security Agreement, and any and all other documents required by HUD and/or the Lender in connection with the Mortgage Loan.
“Owner/Lessor” means [Enter name of Owner].
"Owner/Lessor Regulatory Agreement" means the Regulatory Agreement – Operator relating to the Project and entered into by and between the Owner/Lessor and HUD with respect to the Leased Premises and any riders, amendments and supplements theretoLessee for the benefit of HUD.
"
“Operator’s Security Agreement"” means that certain Operator Security Agreement between Owner/Lessor and relating to the Project, and made by Lessee.
“Program Obligations” means (1) All applicable statutes and any regulations issued by HUD pursuant thereto that apply to the Project, including all amendments to such statutes and regulations, as they become effective, except that changes subject to notice and comment rulemaking shall become effective only upon completion of the rulemaking process, and (2) all current requirements in HUD handbooks and guides, notices and mortgagee letters that apply to the Project, and all future updates, changes and amendments thereto, as they become effective, except that changes subject to notice and comment rulemaking shall become effective only upon completion of the rulemaking process, and provided that such future updates, changes and amendments shall be applicable to the Project only to the extent that they interpret, clarify and implement terms in this Addendum rather than add or delete provisions from such document. Handbooks, guides, notices and mortgagee letters are available on HUD’s official website: or a successor location to that site.
“Project” has the meaning set forth in the Borrower’s Security Instrument.
“Subsidiary Transfer” means any transfer of the Operator Lease to any other direct or indirect subsidiary or parent of Lessee, so long as the transferee is one hundred percent (100%) directly or indirectly owned and controlled by the owners which currently own or control, directly or indirectly, Lessee or such other owners approved by HUD subsequent to the date hereof.
“Transfer” means (i) a sale, assignment, mortgage, conveyance, alienation, sublease or other transfer, directly or indirectly, by operation of law or otherwise, of the Operator Lease of all or any portion of Lessee’s estate or interest in the Operator Lease, sublease or the Project, as applicable, (ii) any assignment of the Operator Lease or any estate or interest therein by operation of law, (iii) any grant of any sublease, license, concession, or other right of occupancy of all or any portion of the Project, (iv) permitting the operation of the Healthcare Facility or any part thereof by parties other than Lessee, (v) except as to Lender, the granting of a mortgage, encumbrance, pledge, or grant of a security interest in, collateral assignment of, or conditional transfer of the Operator Lease or a sublease, or in any of the Lessee’s personal property incorporated in or used in connection with respect to the Leased Premises and any amendments and supplements theretothe Project, or (vi) the sale, conveyance or transfer, directly or indirectly, by operation of law or otherwise of any capital stock, membership interests, partnerships interests, trust units, or any other equity interest in Lessee.
II. HUD REQUIREMENTS
1. Precedence of Addendum. For so long as HUD is the holder or insurer of any indebtedness secured by the Leased Premises, the provisions of
- Compliance with Program Obligations.
Lessor and Lessee shall comply with, and agree that the Operator Lease and this Addendum shall apply to this Lease. In the event of any conflict between any provision of this Addendum and any other provision of this Lease, the provision of this Addendum shall be controlling. This Addendum shall not be amended without the prior written consent of HUD and the Lender.
2. Compliance With HUD Program Requirements and Terms of Mortgageconform to, the Loan Documents.
(a)(a)The Lessee agrees to comply with and all applicable HUD Program Requirements and the Mortgage Loan Documents. TheObligations. Lessee further agrees that this lease willthe Operator Lease shall be part of the collateral pledged by Owner/Lessor to Lender and HUD. The as security for the Loan. Accordingly,Lesseeagrees that it willshall not take any action which would violate any applicable HUD Program Requirements or any of the Mortgage Loan Documents. or Program Obligations.
(b)(b)In the event of any conflict between the terms and provisions of thisthe Operator Lease Agreement and any applicable HUD Program Requirements or the Mortgage , the Loan Documents, the HUD or anyProgram Requirements and MortgageObligations, the Loan Documents and Program Obligations shall control in all respects. Owner/Lessor and Lessee agree that noNo provision of thisthe OperatorLease shall modify any obligation of Owner/Lessor or Lessee under theMortgage Loan Documents. Owner/Lessor and Lessee acknowledge that HUD'sHUD’s acceptance of thisthe OperatorLease in connection with the closing of the Mortgage Loan shall in no way constitute HUD'sHUD’s consent to arrangements which are inconsistent with HUD Program Requirements. This Lease is subject to all HUD Program RequirementsObligations.
(c)3. Lessee shall cooperate with Lessor in providing, upon request by Lender or HUD, any and all documents, information, financial reports, and other items as may be required by Lender or HUD. As applicable, Lessee shall execute any subordination agreements, memoranda of leases or subleases, and/or estoppel certificates in form and substance required by Lender or HUD. Lessee shall cooperate with Lessor and any lenders processing additional loans to Lessor.
- Subordination. to the Loan Documents.
(a)This
The OperatorLease is and shall be subject and subordinate to: theMortgageBorrower’s Security Instrument and other
(a)Mortgagethe Loan Documents; toall renewals, modifications, consolidations, replacements andextensions thereof; to all substitutions thereof; and to all future mortgages upon the Leased PremisesHealthcare Facility and/or other security interests in or to the Leased PremisesHealthcare Facilityand any other items which are herein leased to Lessee or which, pursuant to the terms hereof, become a part of the Leased PremisesHealthcare Facilityor are otherwise deemed to become the property of Owner/Lessor or to remain upon the Leased PremisesHealthcare Facilityat the end of the term; and to each advance made or hereafter to bemade under any of the foregoing. This Section shall be self-operative and no further instrument of subordination shall be required. Without limiting the foregoing, the Lessee agrees toshall execute and deliver promptly any and all certificates, agreements and other instruments thatthe Owner/Lessor, Lender or HUD may reasonably request in order to confirm such subordination. Unlessthe Lender shall have agreed agrees otherwise, if the Lender or another person or entity shall succeed to the interest of the Owner/Lessor by reason of foreclosure or other proceedings brought by Lender in lieu of or pursuant to a foreclosure, or by any other manner (Lender or such other person or entity being called a "herein referred to as “Successor"),”), then thisthe Operator Leaseand this Addendum shall terminate, or, at the option of the Successor, thisthe Operator Lease and this Addendum shall nevertheless continue in full force and effect, in which case the Lessee shall and does hereby agree to attorn to the Successor and to recognize the Successor as its landlordand as “Lessor” under the terms of the Operator Lease and this Lease. Addendum.
(b)Agreements
(b)All agreements for the provision of services to the Leased PremisesHealthcare Facility or the granting ofeasements, rights of way, licenses or other allowances of permissions for the use or placement of CATV, cable television, telecommunications, or other utilities or other items are, and shall always be, subordinate to (i) the rightrights of Owner/Lessor,and (ii) the Mortgage and other Mortgage Borrower’s Security Instrument, the Loan Documents and all other mortgages andsecurity agreements or security interests now or hereafter encumbering the Leased PremisesHealthcare Facility and/or the property of which it forms a part.Project, and (iii) Program Obligations. Lessee mustshall obtain HUD written approval from HUD prior to entering into any telecommunications such services agreement and/or granting of anyagreements,easements, rights of way, licenses or other permissions.
4. Ownership of FF&E. Lessee agrees that (a) except leases of FF&E entered into in the ordinary course of business with third-party lessees and property of tenants and residents of the Leased Premises, all FF&E located on the Leased Premises at the date of the Lease is and shall be the property of the Owner/Lessor , and (b) any FF&E acquired by Owner/Lessor or Lessee during the term of this Lease remaining on the Leased Premises at the termination of the Lease shall be and/or become the property of the Owner/Lessor. Lessee agrees, during the term of the Lease, not to remove any FF&E from the Leased Premises, except to replace such FF&E with other similar items of equal or greater quality and value.
- 5. Ownership of FF&E and Transfer of Personal Property.
(a)During the term of the Operator Lease, Lessee shall not remove any FF&E from the Healthcare Facility, except in the ordinary course of business.
(b)At the termination of the Operator Lease, Lessor will have the right to purchase Lessee’s personal property located at the Healthcare Facility at book value. To the extent that any of such personal property is subject to an equipment lease, Lessor shall have the right to cause Lessee to pay in full all obligations under such equipment leases, or to assume some or all of such equipment leases at Lessor’s sole cost and expense and at no additional liability to Lessee. Lessee shall sign or deliver to Lessor any instrument that may be reasonably necessary to transfer any such leased property to Lessor.