EXHIBIT 10.19
WILLOWBROOK HEALTH CARE CENTER, INC.
LEASE AGREEMENT
THIS LEASE, made as of the 20th day of January, 1995, by and between
WILLOWBROOK HEALTH CARE CENTER, INC., a North Carolina corporation ("Landlord")
and TRANSITIONAL HEALTH PARTNERS D/B/A TRANSITIONAL HEALTH SERVICES, a Delaware
general partnership qualified to do business in North Carolina ("Tenant");
INTRODUCTION
A. Landlord is the owner of the premises herein demised;
B. Landlord has received governmental approval for the construction and
operation of a nursing home facility with 80 beds;
C. Landlord has undertaken to construct the facility and, upon licensure
and obtaining of all governmental approvals, desires to lease the facility to
Tenant and Tenant desires to lease the facility from Landlord.
AGREEMENT
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and 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 Yadkinville 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"). (The parties acknowledge that Exhibit B may not be capable of
description at the execution hereof, but agree that such exhibit shall be
attached prior to the commencement date.)
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).
4. Term:
(a) The initial term of this Lease shall be for fifteen (15) years
commencing with the first day of February, 1995 (the " Commencement Date"). The
effectiveness of this lease is specifically contingent upon prior licensure of
the facility and the receipt of all necessary governmental approvals pursuant to
the Certificate of Need authorizing the facility or otherwise required.
(b) Tenant shall have an option to renew the Lease for an additional five
(5) year period at the expiration of the initial term. Such option shall be
exercisable for a six (6) month period beginning with the date which is one (1)
year prior to the expiration of the initial lease term by written notice to
Landlord. The terms of such lease renewal shall be at the mutual agreement of
the parties.
(c) When used herein, the phrases "term of this Lease" or "term hereof" or
like phrases shall be deemed to include both the initial and any renewal terms
of this Lease.
5. Rent:
(a) Tenant shall pay the following rent to Landlord at its offices at 0000
Xxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxxx 00000, or at such other place as Landlord
may advise in writing, in advance, on the 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 $335,800.00.
2. For the next twelve (12) months of the term (Lease Year 2) the sum
of $345,217.00.
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3. For the next twelve (12) months of the term (Lease Year 3) the sum
of $354,634.00.
4. For the next twelve (12) months of the term (Lease Year 4) the sum
of $364,051.00.
5. For the next twelve (12) months of the term (Lease Year 5) the sum
of $373,468.00.
6. For the next-twelve (12) months of the term (Lease Year 6) the sum
of $382,885.00.
7. For the next twelve (12) months of the term (Lease Year 7) the sum
of $392,302.00.
8. For the next twelve (12) months of the term (Lease Year 8) the sum
of $401,719.00.
9. For the next twelve (12) months of the term (Lease Year 9) the sum
of $411,136.00.
10. For the next twelve (12) months of the term (Lease Year 10) the sum
of $420,553.00.
11. For the next twelve (12) months of the term (Lease Year 11) the sum
of $429,970.00.
12. For the next twelve (12) months of the term (Lease Year 12) the sum
of $439,387.00.
13. For the next twelve (12) months of the term (Lease Year 13) the sum
of $448,804.00.
14. For the next twelve (12) months of the term (Lease Year 14) the sum
of $458,221.00.
15. For the next twelve (12) months of the term (Lease Year 15) the sum
of $467,638.00.
(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 5(a) 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 9; and
(E) All premiums for all insurance required by this Lease as
provided in Section 10.
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
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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 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 or licensees, 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.
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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:
(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
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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
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 10(e) below. In addition, the policies shall name as an additional
insured any mortgagee by way of a standard form of mortgagees'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:
(i) 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);
(ii) 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;
(iii) 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;
(iv) Claims arising out of malpractice in an amount not less than
One Million and No/100 Dollars ($1,000,000.00) for each person and for each
occurrence;
(v) 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;
(vi) 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
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described in subsections (i) and (ii) of Paragraph (a) in an amount sufficient
to prevent Landlord from becoming a coinsurer; and
(vii) Worker's compensation.
(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 (f) 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 (f), 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
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by such damage or destruction, and availability of business interest insurance
proceeds to satisfy Tenant's obligations to pay rent.
(h) Tenant's Blanket Policy. Notwithstanding anything to the contrary
contained in this Section, Tenant's obligation to carry the insurance provided
for 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 80 bed nursing home 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
underthe 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
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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.
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 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 this 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
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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 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 hold-over 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 or 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.
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(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. Tenant's Indemnification: 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 this
Lease, or any renewal hereof, or (b) related to any claims, assessments,
chargebacks 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.
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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 excused) 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 the
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.
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.
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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 (1) personal delivery; or (2) by mail (postage prepaid, certified,
return receipt requested) addressed to Landlord at 0000 0xx Xxxxxx, X.X.,
Xxxxxxx, Xxxxxxxx 00000, Attn: Xx. Xxxxx Xxxxxx or if made to Tenant shall be
made by delivery or by mail (postage prepaid, certified, return receipt
requested) addressed to Tenant at the Premises with a copy to: Transitional
Health Services, Inc. 0000 Xxxxxxxxxxx Xx., Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxxx X. Xxxxxxx, or (3) by FAX to Landlord at 703/345-1371
and to Tenant at 502/425- 3662. Notice shall be deemed given when received, if
notice is given by personal delivery, or three (3) days after mailing, if notice
is given by mail, or one (1) day after sending, if notice is given by FAX.
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 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.
35. Assignment: Except as otherwise provided herein, Tenant may not assign
this Lease or sublet the Premises or any part thereof without the Landlord's
written consent (and consent of the Landlord's mortgagee of the Premises, it
being specifically understood that Landlord is not warranting to Tenant that
such consent shall be given by Landlord's mortgagee); provided, that such
consent of Landlord (and mortgagee) shall not be unreasonably withheld if
Tenant's proposed assignee shall furnish Landlord with security for its
obligations hereunder equivalent to Tenant and otherwise demonstrate that it has
sufficient assets and ability to make the Rent payments due hereunder, and
otherwise possesses such skill, experience and licenses as may be reasonably
required to operate the Premises in a manner substantially as operated by
Tenant, in which case Tenant, upon payment to Landlord of a
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$2,500.00 release and processing fee plus all actual fees and expenses which may
be incurred by Landlord in connection with the lease assignment and release,
including, but not limited to costs of Landlord's efforts to obtain mortgagee
permission, shall be released from liability hereunder (except for any
pre-existing, unsatisfied obligations hereunder); and provided further, that
Tenant may assign this Lease to an affiliate of Tenant on the condition that
Tenant shall remain liable hereunder or shall otherwise guarantee such
affiliate's performance of any and all terms of this Lease.
36. Right of First Refusal: In the event Landlord wishes to sell the
Demised Premises, Tenant shall have a right of first refusal to purchase the
Demised Premises upon the same terms and conditions. Such right of first refusal
shall be exercised as follows. Upon Landlord's receipt of a bona fide third
party offer to purchase the Demised Premises, including purchase price and
payment terms, which Landlord desires to accept, Landlord shall give notice of
such offer in writing to Tenant, including a copy of such offer. Tenant shall
have a period of thirty (30) days after notice to exercise its right of first
refusal by written notice to Landlord. If Tenant exercises its right of first
refusal, the closing of the sale shall occur in accordance with the terms of the
third party offer. If Tenant does not exercise its right of first refusal or,
having exercised it, refuses to close, Tenant's right of first refusal shall
forever lapse. Landlord may sell the Demised Premises free and clear of the
right of first refusal.
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:
WILLOWBROOK HEALTH CARE CENTER, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: (Vice) President
Attest:
/s/ Xxxxxxxxx X. Free
---------------------------------
Name: Xxxxxxxxx X. Free
Title: (Asst) Secretary
[Corporate Seal]
15
TENANT:
TRANSITIONAL HEALTH PARTNERS D/B/A
TRANSITIONAL HEALTH SERVICES, a
Delaware general partnership
By: THS PARTNERS I, INC., a
Delaware corporation and General
Partner
By: /s/ Xxxxx X. XxxXxxxx
---------------------------------
Xxxxx X. XxxXxxxx
Attest: Executive Vice President/CFO
/s/ Xxxx X. Xxxxxxx
---------------------------------
(Assistant) Secretary
[Corporate Seal]
By: THS PARTNERS II, INC., a
Delaware corporation and
General Partner
By: /s/ Xxxxx X. XxxXxxxx
---------------------------------
Xxxxx X. XxxXxxxx
Attest: Executive Vice President /CFO
/s/ Xxxx X. Xxxxxxx
---------------------------------
(Assistant) Secretary
[Corporate Seal]
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The undersigned corporate parent of Tenant's corporate general partners, THS
partners I, Inc., and THS Partners II, Inc., hereby guarantees to Landlord the
Tenant's full and faithful performance of all of Tenant's obligations under the
foregoing Lease:
TRANSITIONAL HEALTH SERVICES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. XxxXxxxx
---------------------------------
Exec. (Vice) President
Date: 1/19/95
Attest:
/s/ Xxxx X. Xxxxxxx
---------------------------------
(Assistant) Secretary
[Corporate Seal]
17
STATE OF Virginia )
) ss:
City of Roanoke )
I, Xxxxx X. Xxxxxxx , Notary Public for said County and State, certify
that Xxxxxxxxx X. Free personally came before me this day and acknowledged that
he [she] is Asst. Secretary of Willowbrook Health Care Center, Inc., a
corporation, and that by authority duly given and as the act of the corporation,
the foregoing instrument was signed in its name by its ___________ President,
sealed with its corporate seal, and attested by him [her] as its Asst.
Secretary.
Witness my hand and official seal, this the 19th day of January, 1995.
[OFFICIAL SEAL] /s/ Xxxxx X. Xxxxxxx
---------------------------
Notary Public
My commission expires: 9-30-98
18
STATE OF KENTUCKY )
) ss:
COUNTY OF JEFFERSON )
I, Xxxxxxxx X. Xxxx , a Notary Public for said County and State, certify
that Xxxx X. Xxxxxxx personally came before me this day and acknowledged that he
[she] is Assistant Secretary of THS Partners I, Inc., a corporation, and that by
authority duly given and as the act of the corporation acting as general partner
of Transitional Health Partners d/b/a Transitional Health Services, a general
partnership, the foregoing instrument was signed in its name by its Executive
vice President/CFO sealed with its corporate seal, and attested by him [her] as
its Assistant Secretary.
Witness my hand and official seal, this the 19th day of January , 1995 .
/s/ Xxxxxxxx X. Xxxx
----------------------------
Notary Public
[Official Seal]
My commission expires: 9-26-96
19
STATE OF KENTUCKY )
) ss:
COUNTY OF JEFFERSON )
I, Xxxxxxxx X. Xxxx , a Notary Public for said County and State, certify
that Xxxx X. Xxxxxxx personally came before me this day and acknowledged that he
[she] is Assistant Secretary of THS Partners I, Inc., a corporation, and that by
authority duly given and as the act of the corporation acting as general partner
of Transitional Health Partners d/b/a Transitional Health Services, a general
partnership, the foregoing instrument was signed in its name by its Executive
Vice President/CFO sealed with its corporate seal, and attested by him [her] as
its Assistant Secretary.
Witness my hand and official seal, this the 19th day of January , 1995 .
/s/ Xxxxxxxx X. Xxxx
----------------------------
Notary Public
[Official Seal]
My commission expires: 9-26-96
20
STATE OF KENTUCKY )
) ss:
COUNTY OF JEFFERSON )
I, Xxxxxxxx X. Xxxx , a Notary Public for said County and State, certify
that Xxxx X. Xxxxxxx personally came before me this day and acknowledged that he
[she] is Assistant Secretary of THS Partners I, Inc., a corporation, and that by
authority duly given and as the act of the corporation acting as general partner
of Transitional Health Partners d/b/a Transitional Health Services, a general
partnership, the foregoing instrument was signed in its name by its Executive
Vice President sealed with its corporate seal, and attested by him [her] as its
Secretary.
Witness my hand and official seal, this the 19th day of January, 1995.
/s/ Xxxxxxxx X. Xxxx
----------------------------
Notary Public
[Official Seal]
My commission expires: 9-26-96
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