EXHIBIT 10.23
LEASE AGREEMENT
THIS LEASE, made as of the 5th day of October, 1995, by and between XXXXX
INVESTORS I, LIMITED PARTNERSHIP, a North Carolina limited partnership
("Landlord") and TRANSITIONAL HEALTH PARTNERS d/b/a TRANSITIONAL HEALTH
SERVICES, a Delaware general partnership authorized to do business in North
Carolina (hereinafter referred to as "Tenant");
W I T N E S S E T H:
In consideration of the mutual covenants and obligations herein contained,
it is agreed:
1. Lease: Landlord does hereby demise and lease unto Tenant, and Tenant
does hereby take, hire and let from Landlord that certain tract or parcel of
real estate, together with the buildings, improvements and all fixtures
constructed thereon, and the privileges and appurtenances thereunto pertaining,
situate, lying and being in or around Concord, North Carolina and being more
particularly described on EXHIBIT A attached hereto (hereinafter referred to as
"Premises" and "Demised Premises"), including but not limited to the nursing
facility located at Demised Premises ("Facility"), together with all furniture,
equipment and other items listed on EXHIBIT B attached hereto (the "Personal
Property").
2. Covenant of Title and Quiet Enjoyment. Landlord covenants and warrants
that at the commencement date of this Lease it alone shall have full right and
lawful authority to enter into this Lease for the full term hereof; that it is
lawfully seized of the Premises in fee simple and has good title thereto, free
and clear of all tenancies, restrictions and encumbrances (with the exception of
liens securing Lenders providing financing for the Facility, and other matters
not adversely affecting the intended use of the Premises or merchantability of
title, or other matters agreed to between the parties, as specified on EXHIBIT C
attached hereto) and that at all times during the term of this Lease and any
extensions of said term, Tenant's quiet and peaceful enjoyment of the Premises
shall not be disturbed or interfered with by anyone.
3. Governmental Authorizations and Use of Premises: Landlord hereby
represents and warrants to Tenant, that the use of the Premises as a nursing
home facility will be a permitted use by right under all applicable zoning or
other use restrictions or federal or state regulations. In particular, Landlord
represents and warrants to Tenant that the Facility, as designed, will meet all
standards presently required for federal Medicare and Medicaid certification.
Landlord further represents and warrants to Tenant that the Facility, as
designed, will be in compliance with all applicable municipal, county, state and
federal laws and regulations (including, without limitation, health care laws,
building codes and the fire safety code).
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4. Term:
a. The initial term of this Lease shall be for fifteen (15) (the
"Initial Term"). For purposes of computing the term of the Lease and
calculating the rent due under paragraph 5, the Commencement Date of the
Lease shall be December 1, 1994.
b. Provided (i) Lessee shall not be in default in performance of its
obligations under this Lease, and (ii) this Lease shall not have
previously been terminated, Lessee shall have the option upon the
expiration of the Initial Term to extend the Lease for an additional term
of five (5) years (the "Renewal Term"). Should Lessee elect to exercise
such option, it shall do so by written notice to Lessor at least one (1)
year prior to the expiration of the Initial Term. During the Renewal Term,
this Lease shall continue in effect upon the same terms and rent schedule
(i.e., rental increases of three percent (3%) per year, noncompounded: for
Lease Year 16 the sum of $52,071.63 per month; for Lease Year 17 the sum
of $53,395.49 per month; for Lease Year 18 the sum of $54,719.34 per
month; for Lease Year 19 the sum of $56,043.20 per month; for Lease Year
20 the sum of $57,367.05 per month and subject to the same conditions
applicable to the Initial Term. The Initial Term and Renewal Term are
collectively referred to herein as the "Term."
5. Rent:
a. Tenant shall pay the following rent to Landlord at its offices at
0000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place as
Landlord may advise in writing, in advance, on the first (1st) day of each
calendar month, without notice, demand, offset or deduction, in lawful
money of the United States of America, during and throughout the term of
this Lease:
(1) For the first twelve (12) months of the term (Lease Year
1) the sum of Thirty-Six Thousand One Hundred Twenty-One and 31/100
Dollars ($26,121.31) ($10.15 per bed per day) per month.
(2) For the next twelve (12) months of the term (Lease Year 2)
the sum of Thirty-Seven Thousand Eleven and No/100 Dollars
($37,011.00) ($10.40 per bed per day) per month.
(3) For the next twelve (12) months of the term (Lease Year 3)
the sum of Thirty-Seven Thousand Nine Hundred and 69/100 Dollars
($37,900.69) ($10.65 per bed per day) per month.
(4) For the next twelve (12) months of the term (Lease Year 4)
the sum of Thirty-Eight Thousand Seven Hundred Ninety and 38/100
Dollars ($38,790.38) ($10.90 per bed per day) per month.
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(5) For the next twelve (12) months of the term (Lease Year 5)
the sum of Thirty-Nine Thousand Six Hundred Eighty and 06/100
Dollars ($39,680.06) ($11.15 per bed per day) per month.
(6) For the next twelve (12) months of the term (Lease Year 6)
the sum of Forty Thousand Five Hundred Sixty-Nine and 79/100 Dollars
($40,589.79) ($11.40 per bed per day) per month.
(7) For the next twelve (12) months of the term (Lease Year 7)
the sum of Forty-One Thousand Four Hundred Fifty-Nine and 44/100
Dollars ($41,459.44) ($11.65 per bed per day) per month.
(8) For the next twelve (12) months of the term (Lease Year 8)
the sum of Forty-Two Thousand Three Hundred Forty-Nine and 13/100
Dollars ($42,349.13) ($11.90 per bed per day) per month.
(9) For the next twelve (12) months of the term (Lease Year 9)
the sum of Forty-Three Thousand Two Hundred Thirty-Eight and 81/100
Dollars ($43,238.81) ($12.15 per bed per day) per month.
(10) For the next twelve (12) months of the term (Lease Year
10) the sum of Forty-Four Thousand One Hundred Twenty-Eight and
50/100 Dollars $44,128.50) ($12.40 per bed per day) per month.
(11) For the next five (5) twelve- (12-) month periods of the
term (Lease Years 11 through 15), the sum of one hundred three
percent (103%) of Lease Year 10's monthly rent, or Forty-Five
Thousand Four Hundred FiftyTwo and 36/100 ($45,452.36) per month,
and increasing three percent (3%) a year thereafter (noncompounded)
(for example, Lease Year 15's monthly rent will be $50,747.78 per
month).
b. If Landlord does not receive from Tenant any monthly rental
payment within fifteen (15) days after such payment is due, Landlord, at
its option, may charge Tenant a late charge and handling fee equal to five
percent (5%) of the monthly rental payment. Such fee shall be considered
additional rent and shall be due and payable by Tenant to Landlord
immediately upon delivery of written notice to Tenant. In addition, if any
check of Tenant is returned to Landlord unpaid, Tenant shall reimburse
Landlord for all charges associated with such returned check and Landlord,
at its option, may thereafter require that Tenant pay the rent and any
other charges payable hereunder by a certified or cashier's check.
c. All additional sums payable by Tenant to Landlord under the
provisions of this Lease shall constitute additional rent.
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d. (1) Except as otherwise expressly provided in this Lease, this
Lease is a "net lease" pursuant to which the parties intend to yield "net"
to Landlord the rental provided for in Section 5a. above.
(2) To further ensure that the rent to Landlord is absolutely
"net" to Landlord, Tenant further agrees to timely pay during the
term of this Lease, all costs and expenses, including but not
limited to the following:
(a) All occupational licenses and other permits
necessary in the operation of the business to be conducted on
the Demised Premises;
(b) All utility charges for water, sewer, electricity,
gas, telephone or any other services provided to or consumed
on the Demised Premises;
(c) All sales and use taxes due as a result of the
business conducted on the Demised Premises and any real and
personal property taxes assessed against any property located
on or used in connection with the Demised Premises;
(d) All real property taxes and assessments levied on
the Demised Premises as provided in Section 10; and
(e) All premiums for all insurance required by this
Lease as provided in Section 11,
and Tenant agrees to hold Landlord harmless from any such cost or expense
related thereto.
6. Use of Premises: The Tenant shall use the Premises for a federal
Medicare (Title XVIII) or Medicaid (Title XIX) certified facility and home for
adults which shall be operated in full compliance with all laws and regulations
applicable thereto. Tenant covenants that no part of the Premises shall be used
for any unlawful purpose, nor will any unlawful condition or nuisance be
permitted to exist thereon. Tenant further warrants and represents that the
Premises will be certified for participation in the Medicare and Medicaid
programs and that it will maintain such certifications at all times during the
term of this lease or any extensions thereof.
7. Reports: Tenant agrees to provide Landlord quarterly unaudited
financial statements and yearly audited financial statements of the Tenant
including balance sheets and income statements certified by an officer of Tenant
to have been prepared in accordance with generally accepted accounting
principles and to fairly present the financial condition and the results of
operations of Tenant on the dates and for the periods indicated, subject in the
case of the quarterly financial statements, to normally recurring year-end
adjustments. Such statements shall be delivered promptly upon their completion
and in no event later than thirty (30) days after the close of each of the
Tenant's quarters and no later than one hundred twenty (120) days after the
close of each of Tenant's fiscal years. Tenant will also provide
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such other financial information as Landlord or its mortgagee may require after
notice. Tenant further will provide Landlord as the same are filed with the
State of North Carolina, copies of all Medicaid Cost Reports and further will
immediately provide Landlord, to the extent reasonably required, copies of all
communications received from the State of North Carolina or any agency thereof
regarding violations or alleged violations of applicable laws, rules, codes or
regulations.
8. Repair and Maintenance of Improvements: Landlord warrants that the
entire Premises and the building and improvements thereon shall be in good, safe
condition and repair on the Commencement Date of this Lease. Landlord shall be
responsible for the structural integrity of the building and repair of exterior
walls, excluding windows and glass panels, and except for damages caused or
suffered to be caused by Tenant, or Tenant's invitees and licenses, during the
term of this Lease. Tenant shall promptly notify Landlord of any condition known
to Tenant that Landlord is required to repair. Landlord shall not be liable to
Tenant for any damages arising in connection with Landlord's responsibility as
provided above unless Landlord fails to pursue the applicable repair within a
reasonable time after receipt of written notice from Tenant. Except for such
responsibility undertaken by Landlord, Tenant shall be responsible, during the
term of this Lease, for maintaining the Premises in good repair, including
without limitation, the roof, all interior surfaces, electrical, plumbing,
heating, air conditioning, generator and other systems, as well as the exterior
grounds, and shall at the end of the term, return the same to Landlord in good
repair and condition, with the exception of casualties insured against and
ordinary wear and tear. If Tenant fails to make any repairs, and/or perform any
maintenance for which it is responsible, within thirty (30) days after written
notice thereof, Landlord may, at its sole option, make the repairs and/or
perform the maintenance and the reasonable expense thereof shall be paid by
Tenant, together with interest at a rate equal to one and one-half percent (1
1/2% above the prime rate then in effect at the financial institution financing
the Facility if such expense is not paid within thirty (30) days. Tenant shall
not make or construct any parking areas, driveways, additions, buildings,
structures or other improvements without the prior written consent of Landlord,
which consent shall not be unreasonably withheld after review of all applicable
architectural plans and building permits and, if applicable, obtaining approval
of Landlord's mortgagee. All improvements shall be at Tenant's sole cost and
expense and shall become the property of Landlord at the termination of this
Lease. Tenant agrees to indemnify Landlord against all claims by laborers and
materialmen for any improvements constructed by Tenant. Tenant shall cause any
mechanic's lien filed against the Premises as a result of any act or interest of
Tenant or any party claiming through Tenant to be removed within thirty (30)
days of the filing thereof.
9. Taxes and Assessments: Tenant agrees to pay when due all taxes (as
hereinafter defined) on or with respect to the Premises. Landlord will promptly
send Tenant copies of all bills for taxes received by Landlord and Tenant will
pay the same to the appropriate governmental authority. Tenant shall promptly
send Landlord reasonable evidence of payment of such xxxx after such payment.
Such payments shall be further in accordance with the following provisions:
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a. Definitions: The term "Taxes" shall mean all taxes payable with
respect to the Premises or any property located on or used in connection
with the Premises, or any activity conducted on the Premises, including
but not limited to, real estate, personal property, and sales and use
taxes. Tenant may be required to make escrow payments of taxes. In such
event Tenant agrees to timely make such payments to Landlord's mortgagee,
or as otherwise directed, in accordance with the escrow requirements.
Tenant shall in no event be liable for Taxes with respect to any time
Tenant is not entitled to the Demised Premises, and Landlord shall in no
event be liable for Taxes with respect to any time Landlord is not
entitled to the Demised Premises. If, at any time during the term of this
Lease, any tax or excise on rents or other Taxes, however described, are
levied or assessed upon, or against, or measured by the rent payable to
Landlord hereunder, either wholly or partially in substitution for, or in
addition to, Taxes, such tax or excise in respect of rents shall be
included in Taxes. Taxes shall not include franchise, estate, inheritance,
succession, capital levy, transfer, income, or excess profit taxes
assessed on Landlord.
b. Reimbursement of Taxes:
(1) If, after Tenant shall have paid any Taxes pursuant to
this Section, Landlord shall receive a refund of any portion of
Taxes paid by Tenant with respect to any tax year during the term
hereof as a result of an abatement of such Taxes by legal
proceedings, the net refund will be paid over to Tenant.
(2) At the request of Tenant, Landlord will execute any and
all proper documents to permit the Tenant, in the name of the
Landlord, and at Tenant's sole cost and expense, to protest,
institute and pursue any and all legal proceedings necessary or
appropriate to obtain reduction in any Tax assessment or refund of
any Taxes. In the event Landlord elects to undertake any such
protest or legal proceedings for such purpose, Landlord will permit
Tenant to participate therein at Tenant's sole cost and expense in
order that Tenant may assure itself that all appropriate steps are
being taken to reduce the tax obligations for which Tenant is liable
hereunder.
(3) In the event this Lease shall commence, or shall end (by
reason of expiration of the term or earlier termination pursuant to
the provisions hereof), on any date other than the first or last day
of the year, or should the year or period of assessment of real
estate taxes be changed to more or less than one year, as the case
may be, then the amount of Taxes payable by Tenant as provided
hereunder shall be appropriately apportioned.
10. Insurance Indemnity:
a. During the original term of this Lease, Tenant shall at all times
keep the Demised Premises insured with the kinds and amounts of insurance
described below. This insurance shall be written by companies authorized
to do insurance
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business in the State of North Carolina. The policies must name Landlord
as additional insured. Losses shall be payable to Landlord and Tenant as
provided in Section 11e. below. In addition, the policies shall name as an
additional insured any mortgagee by way of a standard form of mortgagee's
loss payable endorsement. Any loss adjustment shall require the written
consent of Landlord, Tenant, and each mortgagee. Evidence of insurance
shall be deposited with Landlord and, if requested, with any mortgagee(s).
The policies on the Demised Premises shall insure against the following
risks:
(1) Loss or damage by fire and such other risks as may be
included in the broadest form of extended coverage insurance from
time to time available, including but not limited to loss or damage
from leakage of any sprinkler system now or hereafter installed in
the Facility or on the Premises, in amounts sufficient to prevent
Landlord or Tenant from becoming a coinsurer within the terms of the
applicable policies and in any event in an amount not less than one
hundred percent (100%) of the then full replacement value thereof
(as defined below in paragraph b.);
(2) Loss or damage by explosion of steam boilers, pressure
vessels or similar apparatus, now or hereafter installed in the
Facility, in such limits with respect to any one accident as may be
reasonably agreed by Landlord and Tenant from time to time;
(3) Claims for personal injury or property damage under a
policy of general public liability insurance with amounts not less
than One Million and No/100 Dollars ($1,000,000.00) per occurrence
in respect of bodily injury, Two Million and No/100 Dollars
($2,000,000.00) aggregate per occurrence, and Three Hundred Thousand
and No/100 Dollars ($300,000.00) for property damage;
(4) Claims arising out of malpractice in an amount not less
than One Million and No/100 Dollars ($1,000,000.00) for each persons
and for each occurrence;
(5) Such other hazards and in such amounts as may be customary
for comparable properties in the area and is available from
insurance companies authorized to do business in the State of North
Carolina;
(6) Loss of rental under a rental value insurance policy
covering a risk of loss during the first six (6) months of
reconstruction resulting from the occurrence of any of the hazards
described in subsections (i) and (ii) of paragraph a. in an amount
sufficient to prevent Landlord from becoming a cinsurer; and
(7) Worker's compensation.
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b. Replacement Cost. The term "full replacement value" of
improvements as used herein, shall mean the actual replacement cost
thereof from time to time, less exclusions provided in the normal fire
insurance policy.
c. Additional Insurance. In addition to the insurance described
above, Tenant shall maintain such additional insurance as may be
reasonably required from time to time by any mortgagee.
d. Insurance Proceeds. All proceeds payable by reason of any loss or
damage to any of the Improvements comprising the Demised Premises and
insured under any policy of insurance required by (a) above of this Lease
shall be paid to Landlord and held by Landlord in trust (subject to the
provisions of paragraph e. below and the rights of the holders of the
Facility mortgages) and shall be made available for reconstruction or
repair, as the case may be, of any damage to or destruction of the Demised
Premises, and shall be paid out by Landlord from time to time for the
reasonable costs of such work. Any excess proceeds of insurance remaining
after the completion of the restoration or reconstruction of the Demised
Premises shall be retained by landlord and shall be credited against
future rental payments due from Tenant under this Lease. All salvage
resulting from any such loss covered by insurance shall belong to
Landlord.
e. Damage or Destruction. If, during the Term, the Premises are
totally or partially destroyed from a risk covered by the insurance
described in paragraph a., Landlord shall, as soon as practicable, restore
the Demised Premises to substantially the same condition as existed
immediately before the destruction. If the costs of the restoration exceed
the amount of proceeds received by Landlord from the insurance required
under paragraph a., Tenant shall be solely responsible for paying the
difference between the amount of insurance proceeds and such cost of
restoration.
f. Restoration of Tenant's Property. If Landlord is required to
restore the Facility as provided in paragraph e., Landlord shall not be
required to restore alterations made by Tenant, or Tenant's improvements,
trade fixtures or personal property, such excluded items being the sole
responsibility of Tenant to restore, Landlord shall be required to restore
tangible personal property owned by Landlord and leased to Tenant pursuant
to this Lease (and scheduled on EXHIBIT B hereto) or otherwise.
g. Abatement of Rent. During the period required for repair and
restoration, payments of rent provided for in Section a. shall be abated
in the manner and to the extent that is fair, just and equitable to both
Tenant and Landlord, taking into consideration, among other relevant
factors, the number of useable beds affected by such damage or
destruction, and availability of business interest insurance proceeds to
satisfy Tenant's obligations to pay rent.
h. Tenant Blanket Policy. Notwithstanding anything to the contrary
contained in this Section, Tenant's obligation to carry the insurance
provided for
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herein may be brought within the coverage of a so-called blanket policy,
carried and maintained by Tenant; provided, however, that the coverage
afforded Landlord will not be reduced or diminished or otherwise be
different from that which would exist under a separate policy meeting all
other requirements of this Lease.
11. Signs: Tenant shall have the right, upon Landlord's prior written
consent, which consent shall not be unreasonably withheld, to install, maintain
and replace in, on or over, or in front of, the Premises or any part thereof,
such signs and advertising matter as Tenant may desire. Tenant shall comply with
all applicable requirements of governmental authorities having jurisdiction and
shall obtain any necessary permits for such purpose. As used in this paragraph,
the word "sign" shall be construed to include any placard, light or other
advertising symbol or object, irrespective of whether same be temporary or
permanent.
12. Eminent Domain: If the whole or substantially all of the Premises, or
all or substantially all of the means of access thereto, be acquired by eminent
domain or by purchase in lieu thereof, so that the Premises cannot be licensed
as a 117-bed nursing home and home for the aged facility, or as otherwise
amended by the approval of an amendment to the CON, this Lease shall terminate
as of the date of the actual taking. Should, however, only a portion of the
Premises be so condemned or taken, so as not to materially and adversely affect
the usefulness of the Premises for the purposes for which it is leased
hereunder, this Lease shall continue in full force and effect; provided,
however, that the rent payable under the unexpired portion of this Lease shall
be adjusted to such extent as may be fair and reasonable under the
circumstances. Landlord shall, in such event, promptly restore the Demised
Premises as nearly as feasible to the condition of such Premises immediately
prior to the taking, subject to reasonable delays, but Landlord shall not be
required to restore or rebuild the Demised Premises during the last year of the
lease term or to restore Tenant's fixtures, furnishings, floor coverings,
equipment, stock or other personalty; provided, however, that if Landlord elects
not to restore or rebuild the Demised Premises or to restore Tenant's fixtures,
furnishings, floor coverings, equipment, stock or other personalty, Tenant shall
have the option of terminating this Lease. Tenant shall not be entitled to any
part of the condemnation proceeds arising from any partial taking, except that
Tenant shall be entitled to make a claim for any of Tenant's property which is
condemned other than Tenant's interest in the Lease. Notwithstanding the
foregoing, this Lease shall terminate if, as the result of only a portion of the
Premises being condemned or taken, Tenant is prevented from operating or using
the Premises under the then existing governmental and quasi-governmental
licenses, permits, approvals and certifications. In such case, Landlord and
Tenant shall have such rights to condemnation awards as are set forth above for
a total or substantial taking.
13. Utility Easements: Landlord agrees, without expense to it, to execute
all necessary documents for utility easements required to service the buildings
constructed on the Premises.
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14. Default:
a. Any one or more of the following events shall constitute an event
of default:
(1) Tenant's failure to make any payment of rent (whether
monthly or additional rent) when the same is due and payable, or
certify the Premises for participation in the Medicare (Title XVIII)
and Medicaid (Title XIX) programs and to further ensure that the
Premises maintains such certifications at all times during the term
of this lease or any extensions thereof, or license the Premises for
the operation as a Nursing and Home for the Aged Facility pursuant
to the laws of the State of North Carolina and maintain such license
in good order at all times during the term of this lease or any
extensions thereof, and the continuance of such failure for a period
of ten (10) days after written notice to Tenant by Landlord.
(2) Tenant's failure to perform any of the other covenants,
conditions and agreements imposed by it under the Lease and the
continuance of such failure without the curing of same for a period
of thirty (30) days after receipt of notice in writing from Landlord
specifying in detail the nature of such failure and provided Tenant
shall not cure said failure as provided in paragraph b. below.
(3) The adjudication of Tenant as a bankrupt, or the
appointment of a receiver or trustee for Tenant's property and
affairs, or the making by Tenant of any assignment for the benefit
of its creditors or the filing by or against Tenant of a petition in
bankruptcy which is not vacated or set aside within fifteen (15)
days of such filing.
b. In the event Landlord gives notice of a default of such a nature
(other than a default which may be cured by a payment of money) that it
cannot be cured within the applicable cure period, and Tenant initiates
and proceeds to cure or mitigate the default, then such default shall not
be deemed to exist for so long as Tenant proceeds to cure the same with
reasonable diligence or is delayed in or prevented from curing the same by
Force Majeure (as hereinafter defined).
c. After the applicable cure periods have elapsed, pursuant to the
respective provision hereinbefore set forth and in the event of default,
Landlord, in addition to any other right or remedy it may have with
respect to default, may terminate this Lease immediately, and re-enter the
Premises and take possession of the Premises and the Personal Property, or
in such event Landlord may, at its option, without declaring this Lease
terminated, re-enter the Premises and occupy or lease the whole or any
part of the Premises and the Personal Property, for and on account of
Tenant and on such terms and conditions and for such rental as Landlord
may deem proper, and Landlord shall in such event collect such rent and
apply the same upon the rents due from Tenant and upon the expenses of
such subletting, and any and all
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other damages sustained by Landlord. In the event of default, Landlord
shall exercise reasonable efforts to mitigate damages hereunder and to
re-let the Premises and the Personal Property, but Landlord's failure to
so re-let shall not prevent or delay the exercise by Landlord, at its
option, of its right to accelerate and recover as damages rents due and
owing for the remainder of the term, together with all costs, expenses of
collecting the same, subject to Landlord's obligation to repay or credit
Tenant with all recoveries made by Landlord.
15. Holding Over: In the event Tenant remains in possession of the
Premises after the expiration of the term hereof, including any extensions of
the term, and without the execution of a new lease, Tenant shall occupy the
Premises as a tenant from month to month, subject to all of the conditions of
this Lease insofar as consistent with such a tenancy, and rent shall increase by
fifty percent (50%) during any such holdover period.
16. Attornment and Subordination:
a. In the event of the exercise of any power of sale under the
provisions of any mortgage or deed of trust now or hereafter encumbering
the premises, Tenant agrees that it shall attorn to the purchaser at such
sale and that it shall recognize such purchaser as Landlord under the
terms and provisions of this Lease and shall continue this Lease in full
force and effect regardless of whether such mortgage or deed of trust was
superior or subordinate to this Lease, provided such purchaser recognizes
Tenant hereunder; and provided further that in the event Landlord shall
default in any payment due in respect of such mortgage, Tenant shall have
the right under Landlord's mortgage, but not the obligation, upon ten (10)
days' written notice from either Landlord's mortgagee to pay such amount
due and thereby cure such default. Landlord further agrees that it shall
execute and deliver no mortgage on the Demised Premises purporting to
limit and prohibit Tenant from collaterally assigning this Lease or its
leasehold interest arising hereunder as security for Tenant's financing.
b. Tenant agrees that this Lease shall be and is subordinate to any
deeds of trust or mortgages now or hereafter encumbering the land and
buildings of which the Demised Premises are a part or against any
buildings hereafter placed upon the land on which the Demised Premises is
situated.
c. Upon request by Landlord, Tenant agrees to promptly enter into
and deliver to Landlord such written instruments in form reasonably
acceptable to Landlord and its mortgagee which confirm the above
subordination and effect the above attornment.
17. Attornment and Subordination: Tenant agrees to indemnify, protect and
hold harmless Landlord from and against all liabilities and damages (a) arising
from or out of any occurrence in, upon or at the Demised Premises or any part
thereof, or the occupancy or use by Tenant of the Demised Premises, the Personal
Property or any part thereof, or occasioned wholly or in part by any act or
omission of Tenant, its agents, contractors, employees or invitees in connection
with the Demised Premises or the Personal Property during the term of
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this Lease, or any renewal hereof, or (b) related to any claims, assessments,
charge backs or other expenses (whether owed to or assessed by a private or
governmental party) arising in connection with the operation or other use of the
Demised Premises or the Personal Property during the term of this Lease, or any
renewal hereof.
18. Landlord's Indemnification: Landlord agrees to indemnify, protect and
hold harmless Tenant from and against any and all liabilities and damages
arising from or occasioned wholly or in part by any act or omission of Landlord,
its agents, contractors, employees or invitees in connection with the Demised
Premises or the Personal Property during the term of this Lease, or any renewal
hereof.
19. Compliance with Governmental Programs: Landlord covenants that the
Premises will, during the term hereof, meet all standards required for Federal
Medicare (Title XVIII) or Medicaid (Title XIX) certified nursing programs and
that it will make any alterations necessary to remain in compliance with same.
Any alterations, changes or expansions required to bring the Leased Premises
into compliance with such standards as in effect on the date of execution of
this Lease shall, unless otherwise agreed, be paid for by Landlord. Any
alterations, changes or expansions required by subsequent changes in such
standards will be negotiated at the then-current cost of construction, which
cost, together with interest at the rate of interest at which such construction
is financed, shall be amortized in level monthly additional rent payments over
the agreed-upon remaining lease period.
20. Waivers: Failure of Landlord or Tenant to complain of any act or
omission on the part of either other party, no matter how long the same may
continue, shall not be deemed to be a waiver by said party of any of its rights
hereunder. No waiver by Landlord or Tenant at any time, expressed or implied, of
any breach of any provisions of this Lease, shall be deemed a consent to any
subsequent breach of the same or any other provision. No acceptance by landlord
of any partial payment shall constitute an accord or satisfaction but shall only
be deemed a part payment on account.
21. Force Majeure: In the event that Landlord or Tenant shall be delayed,
hindered in or prevented from the performance of any act required hereunder by
reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, restrictive governmental laws or regulations, riots,
insurrection, the act, failure to act or default of the other party, war or
other reason beyond their control, then performance of such act (except the
payment of rent which shall not in any case be executed) shall be excused for
the period of the delay and the period for the performance of any such act shall
be extended for a period equivalent to the period of such delay.
22. Surrender of Premises: Upon the expiration or other termination of
this Lease, Tenant covenants and agrees that it will peaceably leave and
surrender possession of the Premises and the Personal Property to Landlord. Upon
such surrender, the Premises and the Personal Property shall be in good repair,
ordinary wear and tear and alterations, additions and improvements herein
permitted, excepted.
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23. Inspection: Landlord reserves the right to inspect the Demised
Premises and all buildings situated thereon at all reasonable times and show the
property through agents or otherwise to bona fide purchasers or prospective
tenants.
24. Further Assurances: Tenant agrees to execute and deliver to landlord
any additional or supplemental instruments or documents as may be reasonably
requested by Landlord or its mortgagee in connection with this Lease, including
any memorandum of lease.
25. No Joint Venture: The relationship between Landlord and Tenant shall
always and only be that of Lessor and Lessee. Tenant is not the agent of
Landlord. Landlord shall not be responsible for the acts or omissions of Tenant
or its agents. This Agreement is, and is intended to be, a lease. Tenant does
not acquire hereby any right, title or interest whatsoever, legal or equitable,
in the Premises, except as the Lessee hereunder.
26. Personal Liability: In no event shall any partners, principals or
stockholders of Landlord ever be personally liable for any judgment of Tenant
against Landlord.
27. No Representation: It is understood and agreed by the parties hereto
that this Lease contains all of the covenants, agreements, terms, provisions,
and conditions relating to the leasing of the Premises and the Personal
Property, and that Landlord has not made and is not making, and Tenant in
executing and delivering this Lease is not relying upon any warranties,
representations, promises or statements, except to the extent that the same may
expressly be set forth in this Lease.
28. Validity: In the event that any provisions of this Lease shall be held
invalid, the same shall not affect in any respect whatsoever the validity of the
remainder of this Lease.
29. Applicable Law: This Lease and the rights of the parties hereunder
shall be interpreted in accordance with the laws of the State of North Carolina.
30. Notices: Until notice to the contrary to the other party has been
given, all notices and payments of money if made to Landlord shall be made or
given by delivery or by mail (postage prepaid) addressed to Landlord at 0000
Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxxx 00000, Attn: Xx. Xxxxxxx X. Xxxxxxxx,
Xx., or if made to Tenant shall be made by delivery or by certified mail
(postage prepaid) addressed to Tenant at the Premises with a copy to:
Transitional Health Services, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx.
31. Short Form Lease: The parties hereto shall forthwith execute a
memorandum or short form lease agreement, in recordable form, including such
provisions hereof as either party may desire to incorporate therein.
32. Entire Agreement: No oral statement or prior written matter shall have
any force or effect. Tenant agrees that it is not relying on any representations
or agreements
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other than those contained in this Lease. This Lease shall not be modified or
canceled except by writing subscribed to by all parties.
33. Brokerage: Each of the parties covenants and represents to the other
that neither has incurred brokerage fees with respect to the transactions herein
set forth.
34. Parties: The covenants, conditions, obligations and agreements
contained in this Lease shall bind and inure to the benefit of Landlord and
Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease to be
executed under seal in its name and on its behalf, each by its duly authorized
officer or general partner, all as of this day and year first above written.
LANDLORD:
XXXXX INVESTORS I, LIMITED
PARTNERSHIP, a North Carolina Limited
Partnership
By:/s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx, General Partner
TENANT:
TRANSITIONAL HEALTH PARTNERS d/b/a
TRANSITIONAL HEALTH SERVICES, a
Delaware General Partnership
By: THS PARTNERS I, INC., a Delaware
Corporation, a General partner
By:/s/ Xxxxx X. XxxXxxxx
----------------------------------
Title:Exec. V.P. / CEO
ATTEST:
/s/ Xxxx X. Xxxxxxx
--------------------------
(Assistant) Secretary
[CORPORATE SEAL]
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By: THS PARTNERS II, INC., a Delaware
Corporation, a General partner
By:/s/ Xxxxx X. XxxXxxxx
----------------------------------
Title:Exec. V.P. / CEO
ATTEST:
/s/ Xxxx X. Xxxxxxx
--------------------------
(Assistant) Secretary
[CORPORATE SEAL]
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STATE OF Virginia )
)
COUNTY OF Roanoke )
I, Xxxxx Xxxxxxx , a Notary Public for said County and State, do hereby
certify that XXXXX X. XXXXX, a general partner in XXXXX INVESTORS I LIMITED
PARTNERSHIP, a North Carolina limited partnership, personally appeared before me
this day and acknowledged the due execution of the foregoing instrument on
behalf of such partnership.
WITNESS my hand and official seal, this the 5th day of October , 1995.
/s/ Xxxxx Xxxxxxx
-------------------------
Notary Public
My Commission Expires:
May 31 1999
[SEAL]
-00-
XXXXX XX Xxxxxxxx )
)
COUNTY OF Jefferson )
I, XxXxx Xxxx , a Notary Public for said County and State, do hereby
certify that Xxxx X. Xxxxxxx personally came before me this day and acknowledged
that he/she is (Assistant) Secretary of THS PARTNERS I, INC. and THS PARTNERS
II, INC., Delaware corporations, and general partners in TRANSITIONAL HEALTH
PARTNERS d/b/a TRANSITIONAL HEALTH SERVICES, a Delaware general partnership, and
that by authority duly given and as the act of the corporation, the foregoing
instrument was signed in its name by its Exec. V.P. / CEO , sealed with its
corporate seal, and attested by him/her as its (Assistant) Secretary).
WITNESS my hand and official seal, this the 18 day of September , 1995.
/s/ XxXxx Xxxx
-------------------------
Notary Public
My Commission Expires:
October 13, 1998
[SEAL]
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