LEASE AGREEMENT
THIS LEASE AGREEMENT made and entered into as of March 1, 1996, by and
between TOR ASSOCIATES, an Illinois limited partnership (hereinafter referred to
as "Lessor"), and SUNRISE HEALTHCARE CORPORATION, a New Mexico Corporation
("Lessee").
W I T N E S S E T H:
WHEREAS, Lessor and Lessee, as successor in interest to Xxxxxx
Enterprises, Inc, which in turn was the assignee of Xxxxxxx Enterprises-
Connecticut, Inc. are parties to that certain Lease Agreement dated March 1,
1986, as amended by Amendment to Lease Agreement (the "Lease Amendment")
dated November 1, 1990, and as further amended by that certain Lease
Amendment dated October 31, 1994 (collectively, the "Original Lease"), with
respect to that long-term care facility commonly known as Heritage Heights
located at 00 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx and more particularly
described on EXHIBIT A attached hereto (the "Facility") (the Facility,
together with any improvements now or hereafter located thereon and all
easements, tenements, heridaments and appurtenances thereto are hereinafter
referred to as the "Demised Premises"); and
WHEREAS, the Original Lease provides that if Lessee does not exercise its
option to purchase the Demised Premises as provided for therein, Lessee shall be
obligated to enter into the New Lease with Lessor (as defined in the Original
Lease) at the expiration of the Original Term (as defined in the Original
Lease); and
WHEREAS, the Original Lease, upon execution of this Lease by the parties
hereto, will, subject to Section 34.21, automatically terminate and be of no
further force and effect; and
WHEREAS, Lessor desires to lease the Demised Premises and Personal Property
to the Lessee and the Lessee desires to lease the Demised Premises and Personal
Property (as hereinafter defined) from Lessor; and
WHEREAS, Sun Healthcare Group, Inc., a Delaware corporation (the
"Guarantor") will execute and deliver to Lessor that certain Unconditional
Guaranty of Lease (the "Lease Guaranty") dated of even date herewith,
guarantying the performance of all of the obligations of Lessee under this
Lease; and
WHEREAS, the parties hereto have agreed to the terms and conditions of this
Lease.
NOW THEREFORE, it is agreed that the use and occupancy of the Demised
Premises, and the use of the Personal Property shall be subject to and in
accordance with the terms, conditions and provisions of this Lease.
ARTICLE I - DEFINITIONS
1.1 The terms defined in this Article, for all purposes this Lease and all
agreements supplemental hereto, have the meaning herein specified.
(a) "Demised Premises" shall mean the real estate described in
EXHIBIT A and all improvements located thereon.
(b) "Personal Property" shall mean all furniture, fixtures and
equipment located on the Demised Premises (including, without limitation,
those items set forth on Exhibit B attached hereto and made a part hereof),
other than such furniture, fixtures, equipment and supplies that persons
other than the Lessor may own or that the Lessee may lease from persons
other than the Lessor, or that the Lessee may place on the Demised Premises
other than as replacements for personal property unless such personal
property is required for the operation of the nursing home located on the
Demised Premises, in which case it shall be part of the Personal Property
and be owned by the Lessor.
(c) "Leased Property" shall mean the Demised Premises and the
Personal Property.
(d) "Lease Year" shall mean a twelve (12) month period commencing on
the Commencement Date as hereafter defined, and on each anniversary of the
Commencement Date thereafter, except that if the Commencement Date is other
than the first day of a calendar month, then the first Lease Year shall be
the period from the Commencement Date through the date twelve (12) months
after the last day of the calendar month in which the Commencement Date
occurs, and each subsequent Lease Year shall be the period of twelve (12)
months following the last day of the prior Lease Year.
(e) All other terms shall be as defined in other sections of this
Lease.
ARTICLE II - DEMISED PREMISES AND PERSONAL PROPERTY
2.1 Lessor, for and in consideration of the rents, covenants and
agreements hereinafter reserved, mentioned and contained on the part of the
Lessee, its successors and assigns, to be paid, kept and performed, does
hereby lease unto Lessee the Demised Premises together with the Personal
Property to be used in and upon the Demised Premises for the Term hereinafter
specified, for use and operation therein and thereon of a skilled and/or
intermediate care nursing home, in full compliance with all the rules and
regulations and minimum standards applicable thereto, as
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prescribed by the State of Connecticut and such other governmental
authorities having jurisdiction thereof and having no less than one hundred
fifty (150) beds and for any other purpose authorized by Lessor in writing
and for no other purpose.
ARTICLE III - OF LEASE
3.1 The initial Term of this Lease shall be for a period of ten (10)
years commencing on March 1, 1996 (said date is hereafter referred to is the
"Commencement Date"), and expiring on February 28, 2006 unless sooner
terminated or extended as hereinafter provided (the "Initial Term").
3.2 Lessee shall have and is hereby granted the right and option to extend
the Initial Term of this Lease for a period of five (5) Lease Years (the
"Extended Term") upon and subject to all the terms, provisions and conditions
hereof, except that Rent, as hereinafter defined, payable with respect to each
Lease Year of the Extended Term shall be the amount set forth in SECTION 4.1.
The first Lease Year of the Extended Term shall commence upon the day next
following the expiration of the Initial Term.
The option granted pursuant to this Section 3.2 may be exercised only
if Lessee is not in default under this Lease at the time of exercise and at the
time of expiration of the Initial Term and, further, only if there is not at
either time an event or occurrence which with the passage of time or giving of
notice, or both, would constitute a default hereunder, and said option shall be
exercised by Lessee giving to Lessor written notice of Lessee's election so to
do not less than twelve (12) full calendar months prior to the date of
expiration of the Initial Term.
The Initial Term, as it may be extended by the Extended Term, is
hereinafter collectively known as the "Term".
As used in this Article III, the term default shall mean an "Event of
Default" as defined in Article XIX of this Lease.
ARTICLE IV - RENT
4.1 Throughout the Term of this Lease, Lessee shall pay to Lessor, or as
Lessor shall direct, as fixed annual rental ("Rent") for the Demised Premises
and the Personal Property over and above all other and additional payments to
be made by Lessee as provided in this Lease the following amounts:
(i) For the first Lease Year, an annual rent of $450,000.00,
payable in equal monthly installments of $37,500.00;
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(ii) For the second Lease Year an annual rent of $463,500.00
payable in equal monthly installments of $38,625.00;
(iii) For the third Lease Year an annual rent of $477,405.00,
payable in equal monthly installments of $39,783.75;
(iv) For the fourth lease year an annual rent of $491,727.15,
payable in equal monthly installments of $40,977.26;
(v) For the fifth Lease Year an annual rent of $506,478.96,
payable in equal monthly installments of $42,206.58;
(vi) For the sixth Lease Year an annual rent of $521,673.33,
payable in equal monthly installments of $43,472.78;
(vii) For the seventh Lease Year an annual rent of
$537,323.53, payable in equal monthly installments of $44,776.96;
(viii) For the eighth Lease Year an annual rent of
$553,443.24, payable in equal monthly installments of $46,120.27;
(ix) For the ninth Lease Year an annual rent of $570,046.54,
payable in equal monthly installments of $47,503.88; and
(x) For the tenth Lease Year an annual rent of $587,147.93,
payable in equal monthly installments of $48,928.99.
If Lessee validly exercises the extension option set forth in SECTION
3.2 hereof, during the Extended Term, Lessee shall pay to Lessor, or as Lessor
shall direct, as fixed annual rental for the Demised Premises and Personal
Property over and above all other and additional payments to be made by Lessee
as provided in this Lease the following amounts:
(i) For the first Lease Year of the Extended Term, an annual
rent of $604,762.37 ($50,396.86 monthly);
(ii) For the second Lease Year of the Extended Term, an annual
rent of $622,905.24 ($51,908.77) monthly;
(iii) For the third Lease Year of the Extended Term, an
annual rent of $641,592.40 ($53,466.03 monthly);
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(iv) For the fourth Lease Year of the Extended Term, an annual
rent of $660,840.17 ($55,070.01 monthly); and
(iv) For the fifth Lease Year of the Extended Term, an annual
rent of $680,665.38 ($56,722.11 monthly).
In the event the Commencement Date shall be other than the first day
of the month, Lessee shall pay to Lessor a pro rata portion of the rent for the
month and a pro rata portion of all tax, insurance and other deposits provided
for in this Lease. All fixed annual rental payments shall be made in equal
monthly installments and shall be paid in advance on the first (1st) day of each
month (Together with all tax and insurance deposits required in this Lease).
Unless otherwise notified in writing, all checks shall be made payable to Lessor
and shall be sent c/o Tor Associates, 0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, XX 00000.
Fixed annual rent (as hereinafter defined) shall be referred to herein
as "rent".
4.2 This Lease is and shall be deemed and construed to be a "pure net" or
"triple-net" lease and the rent specified herein shall be net to the Lessor in
each year during the Term of this Lease. The Lessee shall pay all costs,
expenses and obligations of every kind whatsoever relating to the Demised
Premises which may arise or become due during the Term of this Lease, except for
any principal and interest payments and other costs owed by Lessor relating to
any Mortgage (defined below) (collectively, "Additional Rent"). Lessee does
hereby indemnify the Lessor against any and all such costs, expenses and
obligations.
ARTICLE V - LATE CHARGES
5.1 If payment of any sums required to be paid or deposited by Lessee to
Lessor under this Lease, and payments made by Lessor under any provision
hereof for which Lessor is entitled to reimbursement by Lessee, shall become
overdue for a period of ten (10) days beyond the date on which they are due
and payable as in this Lease provided, a late charge of 3% per month on the
sums so overdue shall become immediately due and payable to Lessor as
liquidated damages for Lessee's failure to make prompt payment and said late
charges shall be payable on the first day of the month next succeeding the
month during which such late charges become payable. If non-payment of any
late charges shall occur, Lessor shall have, in addition to all other rights
and remedies, all the rights and remedies provided for herein and by law in
the case of non-payment of Rent. No failure by Lessor to insist upon the
strict performance by Lessee of Lessee's obligations to pay late charges
shall constitute a waiver by Lessor of its rights to enforce the provisions
of this Article in any instance thereafter occurring.
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ARTICLE VI- PAYMENT OF TAXES AND ASSESSMENTS
6.1 Lessee will pay or cause to be paid, as provided herein, as
additional rent, before any fine, penalty, interest or cost may be added
thereto for the non-payment thereof, all taxes, assessments, licenses and
permit fees, charges for public utilities, and all governmental charges,
general and special, ordinary and extraordinary, foreseen and unforeseen, of
any kind and nature whatsoever which during the Term of this Lease may have
been, or may be assessed, levied, confirmed, imposed upon or become due and
payable out of or in respect of, or become a lien on the Demised Premises
and/or Personal Property or any part thereof (hereinafter collectively
referred to as "Taxes and Assessments").
6.2 Lessee shall be solely responsible for any and all Taxes and
Assessments assessed or levied against the Demised Premises or the Personal
Property for the periods prior to the Commencement Date all in accordance with
the terms of the Original Lease. Any Taxes and Assessments relating to a fiscal
period of any authority, a part of which is included within the Term of this
Lease and a part of which is included in a period of time after the Term of this
Lease, shall be adjusted pro rata between Lessor and Lessee and each party shall
be responsible for its pro rata share of any such Taxes and Assessments.
6.3 Nothing herein contained shall require Lessee to pay income taxes
assessed against Lessor, or capital levy, franchise, estate, succession or
inheritance taxes of Lessor.
6.4 Lessee shall have the right to contest the amount or validity, in
whole or in part, of any Taxes and Assessments by appropriate proceedings
diligently conducted in good faith, but only after payment of such Taxes and
Assessments, unless such payment would operate as a bar to such contest or
interfere materially with the prosecution thereof, in which event, Lessee may
postpone or defer such payment only if:
(1) Neither the Demised Premises nor any part thereof would by
reason of such postponement or deferment be in danger of being
forfeited or lost; and
(2) Lessee shall have deposited with Lessor, to be held in
trust, cash or other security satisfactory to Lessor in an amount
equal to not less than the amount of such Taxes and Assessments which
at such time shall be actually due and payable, and such additional
amounts reasonably required by Lessor and any Mortgagee (as
hereinbelow defined) of Lessor from time to time, together with all
interest and penalties in connection therewith and all charges that
may or might be assessed against or become a charge on the Demised
Premises or any part thereof in such proceedings.
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Unless Lessor agrees otherwise, the cash so deposited shall not bear
interest and the cash or securities so deposited shall be held by Lessor until
the Demised Premises or any part thereof shall have been released and discharged
and shall thereupon be returned to the Lessee, less the amount of any loss,
cost, damage and reasonable expense that Lessor or any Mortgagee has sustained
in connection with the Taxes and Assessments so contested.
6.5 Upon the termination of any such proceedings, Lessee shall pay the
amount of such Taxes and Assessments or part thereof as finally determined in
such proceedings, the payment of which may have been deferred during the
prosecution of such proceedings, together with any costs, fees, interest,
penalties or other liabilities in connection therewith, and such payment, at
Lessee's request, shall be made by Lessor out of the amount deposited with
respect to such Taxes and Assessments as aforesaid. In the event such amount
is insufficient, then the balance due shall be paid by Lessee.
6.6 Lessor shall not be required to join in any proceedings referred to
in this Article, unless the provisions of any law, rule or regulation at the
time in effect shall require that such proceedings be brought by and/or in
the name of Lessor, in which event Lessor shall join in such proceedings or
permit the same to be brought in its name. Lessor shall not ultimately be
subjected to any liability for the payment of any costs or expenses in
connection with any such proceedings, and Lessee will indemnify and save
harmless Lessor from any such costs and expenses. Lessee shall be entitled
to any refund of any Taxes and Assessments and penalties or interest thereon
received by Lessor but previously reimbursed in full by Lessee.
6.7 If any income, profits or revenue tax shall be levied, assessed or
imposed upon the income, profits or revenue arising from rents payable
hereunder, whether partially or totally in lieu of or as a substitute for
real estate or personal property taxes imposed upon the Demised Premises or
Personal Property or otherwise, then Lessee shall be responsible for the
payment of such tax.
ARTICLE VII - TAX AND INSURANCE DEPOSITS
7.1 Lessee shall be required to make deposits for annual real estate
taxes and, will make monthly deposits with Lessor, of an amount equal to one
twelfth (1/12) of the annual real estate taxes or such greater amount as may
be required by any mortgagee. Said deposits shall be due and payable on the
first day of each month as additional rent, shall not bear interest and shall
be held by Lessor and/or a mortgagee of the Lessor to pay the real estate
taxes as they become due and payable. If the total of the monthly payments
as made under this Article shall be insufficient to pay the real estate taxes
when due, then Lessee shall on demand pay Lessor the amount necessary to make
up the deficiency, and if appropriate, Lessee shall receive a credit against
the next monthly tax escrow payment coming due in an amount equal to said
deficiency payment.
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ARTICLE VIII - OCCUPANCY
8.1 During the Term of this Lease, the Demised Premises shall be used
and occupied by Lessee for and as a Medicare and Medicaid certified skilled
care and/or intermediate care nursing home and for no other purpose. Lessee
shall at all times maintain in good standing and full force all the licenses,
certifications and provider agreements issued by the State of Connecticut and
any other applicable state or federal governmental agencies, permitting the
operation on the Demised Premises of a Medicare and Medicaid certified
skilled and/or intermediate care nursing home facility with no less than one
hundred fifty (150) licensed beds.
8.2 Lessee will not suffer any act to be done or any condition to exist
on the Demised Premises which may be dangerous or which may, in law,
constitute a public or private nuisance or which may void or make voidable
any insurance then in force on the Demised Premises.
8.3 Except as otherwise specifically provided in this Lease, upon
termination of this Lease for any reason, Lessee will return to Lessor the
Demised Premises qualified and sufficient for licensing and certification by
all governmental agencies having jurisdiction over the Demised Premises as a
Medicare and Medicaid certified skilled and/or intermediate care nursing home
having no less than one hundred fifty (150) licensed beds with licenses,
certifications, and provider agreements in full force and good standing.
All the Demised Premises, with the improvements located thereon, and all the
Personal Property shall be surrendered in good order, condition and repair,
ordinary wear and tear excepted.
ARTICLE IX - INSURANCE
9.1 Lessee shall, at its sole cost and expense, during the Term of this
Lease, maintain property insurance provided by a Causes of Loss-Special Form
or similar form. Such insurance shall include an endorsement for increased
cost of construction. Such insurance shall be obtained from a responsible
company or companies approved by Lessor. Such insurance shall, at all times,
be maintained in an amount equal to the full replacement cost of the Demised
Premises and the Personal Property or in such other amount as may be required
by Lessor and any Mortgagee of the Demised Premises but at all times, in an
amount sufficient to prevent Lessor and Lessee from becoming co-insurers
under applicable provisions of the insurance policies. As used herein, the
term "full replacement cost" shall mean coverage for the actual replacement
cost of the Demised Premises and the Personal Property requiring replacement
from time to time which, if not agreed upon by Lessor and Lessee, shall be
determined by an appraiser, engineer, architect or contractor reasonably
selected by Lessor. Such insurance shall at all times be payable to Lessor
and Lessee as their interests may appear, and shall contain a loss-payable
clause to the holder of any Mortgage to which this Lease shall be subject and
subordinate, as said Mortgagee's interest may appear. All such policies of
insurance shall provide that:
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(a) They are carried in favor of the Lessor, Lessee and any
Mortgagee, as their respective interests may appear, and any loss shall be
payable as therein provided, notwithstanding any act or negligence of
Lessor or Lessee, which might otherwise result in forfeiture of insurance;
and
(b) A standard Mortgagee clause in favor of any Mortgagee, and shall
contain, if obtainable, a waiver of the insurer's right of subrogation
against funds paid under the standard Mortgagee endorsement which are to be
used to pay the cost of any repairing, rebuilding, restoring or replacing.
9.2 Lessee shall also, at Lessee's sole cost and expense, cause to be
issued and shall maintain during the Term of this Lease:
(a) Commercial general liability insurance, including the Lessor as
an additional insured, insuring against claims for bodily injury or
property damage occurring upon, in or about the Demised Premises. Such
insurance to have limits of not less than $1,000,000 each occurrence and
$3,000,000 general aggregate and an excess or umbrella liability policy of
not less than $5,000,000 each occurrence and $5,000,000 aggregate; and
(b) Hospital Professional Liability insurance in the amount of
$1,000,000 each occurrence and $3,000,000 aggregate.
Lessor may, from time to time, or any Mortgagee may reasonably require Lessee to
change the amount or type of insurance, or to add or substitute additional
coverages, required to be maintained by Lessee hereunder.
9.3 All policies of insurance shall provide that they shall not be
canceled, terminated, reduced or materially modified without at least twenty
(20) days prior written notice to Lessor and any Mortgagee.
9.4 An original certificate of insurance for all insurance policies
required by this Article shall be delivered to Lessor at least five (5) days
prior to the Commencement Date at any time and from time to time within ten
(10) days after Lessor's request therefore, Lessee shall deliver to Lessor
copies of all insurance policies then being carried by Lessee pursuant to
this Article 9.
9.5 Lessee shall at all times keep in effect business interruption
insurance with a loss of rents endorsement naming Lessor as an insured in an
amount at least sufficient to cover:
(a) The aggregate of the cost of all Taxes and Assessments due during
the period of the business interruption at the Facility (the "Business
Interruption Period");
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(b) The cost of all insurance premiums for insurance required to be
carried by Lessee, with respect to the Demised Premises, for the Business
Interruption Period; and
(c) The aggregate of the amount of the fixed monthly rental for the
Business Interruption Period.
In lieu of the foregoing, Lessee may, at its option, obtain and
maintain a blanket insurance policy in an amount sufficient to provide the
coverage described in this Section 9.5.
All proceeds of any business interruption insurance shall be applied,
first, to the payment of any and all fixed rental payments for the Business
Interruption Period; second, to the payment of any Taxes and Assessments and
insurance deposits required to be deposited for the Business Interruption
Period; and, thereafter, after all necessary repairing, rebuilding, restoring or
replacing has been completed as required by the pertinent Articles of this Lease
and the pertinent sections of any mortgage, any remaining balance of such
proceeds shall be paid over to the Lessee.
ARTICLE X - LESSOR'S RIGHT TO PERFORM
10.1 Should Lessee fail to perform any of its covenants herein agreed
to be performed, subject to applicable cure periods, if any, set forth in
Section 19.1 herein with respect to any such failure to perform, Lessor may
elect, but shall not be required, to make such payment or perform such
covenants, and all sums so expended by Lessor thereon shall immediately be
payable by Lessee to Lessor, with interest thereon at a rate which is the lesser
of fifteen percent (15%) per annum or the maximum rate permitted by law from
date thereof until paid, and in addition, Lessee shall reimburse Lessor for
Lessor's reasonable expenses in enforcing or performing such covenants,
including reasonable attorney's fees. Any such costs or expenses incurred or
payments made by the Lessor shall be deemed to be Additional Rent payable by
Lessee and collectible as such by Lessor.
10.2 Performance of and/or payment to discharge said Lessee's
obligations shall be optional with Lessor and such performance and payment shall
in no way constitute a waiver of, or a limitation upon, Lessor's other rights
hereunder.
10.3 Lessee hereby acknowledges and agrees that any Mortgagee shall have
the right but not the obligation to perform any covenants and pay any amounts
which Lessee has failed to so perform or pay as required under the terms of this
Lease but only to the extent such Mortgagee is entitled under the terms of its
Mortgage.
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ARTICLE XI - REPAIRS AND MAINTENANCE
11.1 Throughout the Term of this Lease, Lessee, at its sole cost and
expense, will keep and maintain, or cause to be kept and maintained, the
Demised Premises (including the grounds, sidewalks and curbs abutting the
same) and the Personal Property in good order and condition without waste and
in suitable state of repair at least comparable to that which existed
immediately prior to the Commencement Date (ordinary wear and tear excepted,
subject to Lessee's obligation to repair and replace the same in accordance
with the terms of this Lease), and will make or cause to be made, as and when
the same shall become necessary, all structural and nonstructural, exterior
and interior, replacing, repairing and restoring necessary to that end. All
replacing, repairing and restoring required of Lessee shall be (in the
reasonable opinion of Lessor) of quality at least equal to the original work
and shall be in compliance with all standards and requirements of law,
licenses and municipal ordinances necessary to operate the Demised Premises
as a Medicare and Medicaid certified skilled and/or intermediate care nursing
home having no less than one hundred fifty (150) licensed beds.
11.2 Any items of Personal Property that are uneconomical to repair shall
be replaced by new items of like kind and all replacement items shall become
part of the Personal Property. No items of Personal Property shall be
removed from the Demised Premises except in connection with repair or
replacement of such items. Lessee may place additional property on the
Demised Premises (not required for the replacement of the Personal Property)
and such additional property shall be and remain the property of Lessee.
Lessee shall remove such additional property upon termination or expiration
of this Lease provided that Lessee shall make such necessary repairs or
replacements as may be required in order to return the Demised Premises to
the condition which existed prior to the removal of the additional property.
11.3 Provided that Lessee is not in default under the Lease, Lessee shall
have the right, at any time and from time to time, to remove and dispose of
any Personal Property which may have become obsolete or unfit for use, or
which is no longer useful in the operation of the Demised Premises, provided
Lessee promptly replaces any such Personal Property so removed or disposed of
with other personal property free of any security interest, lien or
encumbrance. Said personal property shall be of the same character and shall
be at least equal in usefulness and quality as any such Personal Property so
removed or disposed of, and such replacement property shall automatically
become the property of and shall belong to the Lessor, and Lessee shall
execute such bills of sale or other documents reasonably requested by Lessor
to vest the ownership of such personal property in Lessor. Notwithstanding
the foregoing, Lessee shall have the right to place leased Personal Property
on the Demised Premises provided that the payments due under such leases do
not exceed $4,000 per year. In the event Lessee desires to place leased
personal property on the Demised Premises having annual payments in excess of
the amount provided for herein, Lessee shall advise Lessor in writing and
Lessor shall use its reasonable best efforts to seek the approval of the
Facility Mortgagee or an amendment of the Facility Mortgage with respect
thereto.
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ARTICLE XIA - DAMAGE AND DESTRUCTION
11A.1 In the event that any part of the improvements located on the
Demised Premises or the Personal Property shall be damaged or destroyed by
fire or other casualty (any such event being called a "Casualty"), Lessee
shall promptly replace, repair and restore the same as nearly as possible to
its condition immediately prior to such Casualty, in accordance with all of
the terms, covenants and conditions and other requirements of this Lease and
any applicable mortgage; provided, however, that in the event of a Casualty
occurring during the last six (6) months of the Initial Term or the last six
(6) months of any Extended Term or a Casualty resulting from an earthquake,
flood, nuclear accident or war which is not covered by insurance maintained
by Lessee and which renders the Demised Premises unsuitable for use as a
nursing home, in the reasonable opinion of Lessor and Lessee, then Lessee
shall have the right to terminate this Lease upon forty-five (45) days
written notice to Lessor. If applicable, the Demised Premises and the
Personal Property shall be so replaced, repaired and restored as to be of at
least equal value and substantially the same character as prior to such
Casualty. If the estimated cost of any such restoring, replacing or
repairing is Fifty Thousand Dollars and no/100 ($50,000.00) or more, the
plans and specifications for same shall be first submitted to and approved in
writing by Lessor, which approval shall not be unreasonably withheld, and, if
reasonably required by Lessor, Lessee shall immediately select an independent
architect, approved by Lessor who shall be in charge of such repairing,
restoring or replacing. Lessee covenants that it will give to Lessor prompt
written notice of any Casualty affecting the Demised Premises or the personal
property or any portion thereof.
11A.2 Within thirty (30) days after a casualty or within thirty (30) days
after approval of the plans and specifications whichever is later, Lessee
shall commence to restore the Demised Premises and Lessee shall complete the
same within 180 days thereafter, provided, however, that in the case of
damage or destruction which cannot with due diligence be repaired within said
180 day period, Lessee shall have an additional period of time, not to exceed
180 additional days, to complete the reconstruction, provided Lessee is
proceeding promptly and with due diligence to complete the restoration.
Lessee may utilize all insurance proceeds available for any such repair or
restoration, subject to the terms of Section 11A.3 hereof and any required
approval of any Facility Mortgagee. Lessee's obligation to make rent
payments and to pay all other charges required by this Lease shall not be
abated during the period of the repair or restoration.
11A.3 No sums shall be disbursed by Lessor toward such repairing,
rebuilding, restoring or replacing unless it shall be first made to appear to
the reasonable satisfaction of Lessor that either (i) the amount received
from such insurance proceeds is sufficient to complete such work or (ii) if
there is an amount required in excess of the amount received from such
insurance proceeds, either said excess amount has been expended by Lessee or
that Lessee has deposited such excess funds with Lessor or has satisfied
Lessor that it has such funds available to it so that, in either case, the
total amount available will be sufficient to complete such repairing,
rebuilding, restoring or replacing in accordance with the provisions of any
Mortgage and any plans and specifications submitted in connection therewith,
free from any liens or encumbrances of any kind whatsoever and the funds
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held by Lessor shall be disbursed only upon the presentment of architect's or
general contractor's certificates, waivers of lien, contractor's sworn
statements, and other evidence of cost and payments as may be reasonably
required by Lessor or any Facility Mortgagee.
ARTICLE XII - ALTERATIONS AND DEMOLITION
12.1 Lessee will not remove or demolish any improvement or building
which is part of the Demised Premises or any portion thereof or allow it to
be removed or demolished, without the prior written consent of the Lessor,
which consent shall not be unreasonably withheld. Lessee further agrees that
it will not make, authorize or permit to be made any changes or alterations
in or to the Demised Premises without first obtaining Lessor's written
consent thereto, which consent shall not be unreasonably withheld. All
alterations, improvements and additions to the Demised Premises shall be in
quality and class at least equal to the original work and shall become the
property of the Lessor and shall meet all building and fire codes, and all
other applicable codes, rules, regulations, laws and ordinances. Nothing
herein shall be deemed or construed to require Lessee to obtain Lessor's
consent to non-structural changes or alterations such as painting, the
replacement of wallcoverings or the replacement of floor coverings.
ARTICLE XIII - COMPLIANCE WITH LAWS
AND ORDINANCES/ENVIRONMENTAL COMPLIANCE
13.1 Throughout the Term of this Lease, Lessee, at its sole cost and
expense, will obey, observe and promptly comply with all present and future
laws, ordinances, orders, rules, regulations and requirements of any federal,
state and municipal governmental agency or authority having jurisdiction over
the Demised Premises and the operation thereof as a Medicare and Medicaid
certified skilled and/or intermediate care nursing home having no less than one
hundred fifty (150) licensed beds, which may be applicable to the Personal
Property and the Demised Premises and including, but not limited to, the
sidewalks, alleyways, passageways, vacant land, parking spaces, curb cuts, curbs
adjoining the Demised Premises, which are under Lessee's control, whether or not
such law, ordinance, order, rules, regulation or requirement shall necessitate
structural changes or improvements.
13.2 Lessee shall likewise observe and comply with the requirements of all
policies of public liability and fire insurance and all other policies of
insurance at any time in force with respect to the Demised Premises.
13.3 Lessee shall promptly apply for and procure and keep in good
standing and in full force and effect all necessary licenses, permits and
certifications required by any governmental authority for the purpose of
maintaining and operating on the Demised Premises a Medicare and
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Medicaid certified skilled and/or intermediate care nursing home having no
less than one hundred fifty (150) licensed beds, and the Demised Premises
shall be qualified to participate in the Medicare and Medicaid reimbursement
programs.
13.4 Upon request, Lessee will deliver or mail to Lessor wherever rent
is then paid, in form required for notices, copies of all exit interviews,
inspection reports and surveys, administrative proceedings and/or court actions
from all state, federal and local governmental bodies regarding the Demised
Premises or the nursing home operated thereon. Lessee shall notify Lessor
within twenty-four (24) hours after receipt thereof of any notice from any
governmental agency terminating or suspending or threatening termination or
suspension of any license, permit, provider agreement or certification relating
to the Demised Premises or the nursing home operated thereon.
13.5 Lessee shall have the right upon written notice thereof to the
Lessor, to contest by appropriate legal proceedings, diligently conducted in
good faith, the validity or application of any law, regulation or rule mentioned
herein, and to delay compliance therewith pending the prosecution of such
proceedings; provided, however, that no civil or criminal liability would
thereby be incurred by Lessor and no lien or charge would thereby be imposed
upon or satisfied out of the Demised Premises and further provided that the
effectiveness and good standing of any license, certificate or permit affecting
the Demised Premises or the nursing home operated thereon would continue in full
force and effect during the period of such contest.
13.6 Lessee shall not generate, dispose of, release, use, handle,
possess or store any hazardous substances upon the Demised Premises except in
accordance with applicable laws, rules and regulations. Lessee shall at its
sole cost and expense promptly remove or clean up any hazardous substances
introduced onto the Demised Premises by Lessee or with its permission or at its
sufferance. Such removal or cleanup shall be in compliance with all applicable
laws and regulations. Lessee hereby agrees to indemnify and hold Lessor
harmless and agrees to defend Lessor from all losses, damages, claims,
liabilities and fines, including costs and reasonable attorneys' fees, of any
nature whatsoever in connection with the actual or alleged presence upon the
Demised Premises of any hazardous substances introduced by Lessee or with its
permission or at its sufferance.
ARTICLE XIV - DISCHARGE OF LIENS
14.1 Lessee will not create or permit to be created or to remain, and
Lessee will discharge, any lien, encumbrance or charge levied on account of any
mechanic's, laborer's or materialman's lien or, except as provided for in
Section 11.3 any conditional sale, security agreement or chattel mortgage, or
otherwise, which might be or become a lien, encumbrance or charge upon the
Demised Premises or any part thereof or the income therefrom or the Personal
Property, for work or materials or personal property furnished or supplied to,
or claimed to have been supplied to or at the request of Lessee.
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14.2 If any mechanic's, laborer's or materialman's lien caused or
charged to Lessee shall at any time be filed against the Demised Premises or
Personal Property, Lessee shall have the right to contest such lien or
charge, provided, Lessee within thirty (30) days after notice of the filing
thereof, will cause the same to be discharged of record or in lieu thereof to
secure Lessor against said lien by deposit with Lessor of such security as
may be reasonably demanded by Lessor to protect against such lien. If Lessee
shall fail to cause such lien to be discharged within the period aforesaid,
or to otherwise secure Lessor as aforesaid, then in addition to any other
right or remedy, Lessor may, upon ten (10) days notice, but shall not be
obligated to, discharge the same either by paying the amount claimed to be
due or by processing the discharge of such lien by deposit or by bonding
proceedings. Any amount so paid by Lessor and all costs and expenses
incurred by Lessor in connection therewith, together with interest thereon at
a rate which is the lesser of fifteen percent (15%) per annum or the maximum
rate permitted by law, shall constitute Additional Rent payable by Lessee
under this Lease and shall be paid by Lessee to Lessor on demand. Except as
herein provided, nothing contained herein shall in any way empower Lessee to
do or suffer any act which can, may or shall cloud or encumber Lessor's or
any Facility Mortgagee's interest in the Demised Premises.
ARTICLE XV - INSPECTION OF PREMISES BY LESSOR
15.1 At any time, during reasonable business hours and upon reasonable
notice, Lessor and/or its authorized representatives shall have the right to
enter and inspect the Demised Premises and Personal Property.
15.2 Lessor agrees that the person or persons entering and inspecting
the Demised Premises and Personal Property will cause as little inconvenience
to the Lessee and to the residents of the Facility as may reasonably be
possible under the circumstances.
15.3 Lessee hereby acknowledges and agrees that any Mortgagee shall have
the right but not the obligation to enter and inspect the Demised Premises to
the extent such Mortgagee is entitled to do so under the terms of its Mortgage.
ARTICLE XVI - CONDEMNATION
16.1 In case all or substantially all of the Demised Premises leased
hereunder shall be taken or sold under the threat of such taking for any public
use by act of any public authorities, then this Lease shall terminate as of the
date possession is taken by the condemnor. If all or substantially all of the
Demised Premises shall be taken, the net proceeds of any condemnation award,
settlement or compromise for the Demised Premises taken shall belong to Lessor;
provided, however, Lessee shall
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have the right to pursue a separate award for the value of Lessee's interest
in the Demised Premises as long as such separate award does not diminish the
award, settlement or compromise paid to Lessor; and provided, further, that
Lessee shall be solely entitled to any amount awarded for the value of
Lessee's property located on the Demised Premises in accordance with Section
11.1. For the purposes of this paragraph "substantially all of the Demised
Premises leased hereunder" shall be deemed to have been taken if upon the
taking of less than the whole of the Demised Premises that portion of the
Demised Premises not so taken shall not by itself be adequate for the conduct
therein of Lessee's business, in the reasonable judgment of Lessor and
Lessee, subject further to the rights of Lessor's Mortgagee.
In the event of a partial condemnation the result of which shall be a
reduction in the number of licensed beds on the Demised Premises to 75 or less,
Lessee shall have the right to terminate this Lease by written notice to Lessor
within thirty (30) days following the issuance of the condemnation order or
conveyance of the property, whichever is earlier. If Lessee does not elect to
terminate this Lease, Lessor shall hold in trust that portion, if any, of such
award, settlement or compromise which shall be allocable to consequential damage
to buildings and improvements not taken, and Lessor shall pay out such portion
to Lessee to reimburse Lessee for the cost of restoring the Demised Premises as
a complete structural unit, as such restoration work progresses in accordance
with the procedure for making insurance proceeds available for restoration,
repair or rebuilding as set forth in Article XIA hereof. In the event of a
partial condemnation which does not result in a termination of this Lease, the
annual rent rate payable under paragraph 4.1 hereof shall be reduced to such
amount as Lessor and Lessee agree is fair and equitable taking into
consideration the number of operational beds remaining after such taking as
compared to the number of operational beds on the Commencement Date.
ARTICLE XVII - RENT ABSOLUTE
17.1 The Personal Property and the Demised Premises are let and leased
subject to the rights, if any of patients currently residing in the Demised
Premises and the state of the title thereof as of the date the Lessor acquires
title from its seller, to any state of facts which an accurate survey or
physical inspection thereof might show, and to all zoning regulations,
restrictions, rules and ordinances, building restrictions and other laws and
regulations now in effect or hereafter adopted by any governmental authority
having jurisdiction thereover. Lessee has examined the Personal Property and
the Demised Premises and has found the same satisfactory. Lessee acknowledges
that the Personal Property and the Demised Premises are the property of Lessor
and that Lessee has the leasehold rights as set forth in the terms and
conditions of this Lease.
As a material inducement to Lessor in the making of and entry into
this Lease, Lessee hereby expressly agrees as follows:
(a) It is the responsibility of the Lessee to be fully acquainted
with the
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nature, in all respects, of the Demised Premises, including (but not by
way of limitation); the soil and geology thereof, the waters thereof and
thereunder; the drainage thereof; the manner of construction and the
condition and state of repair and lack of repair of all improvements of
every nature; the nature, provisions and effect of all health, fire,
zoning, building, subdivision and all other use and occupancy laws,
ordinances, and regulations applicable thereto; and the nature and extent
of the rights of others with respect thereto, whether by way of
reversion, easement, right of way, prescription, adverse possession,
profit, servitude, lease, tenancy, lien, encumbrance, license, contract,
reservation, condition, right of re-entry, possibility of reverter,
sufferance or otherwise. Lessor makes no representation as to, and has
no duty to be informed with respect to, any of the matters set forth in
the preceding sentence. Lessee hereby accepts the Demised Premises as
suitable and adequate in all respects for the conduct of the business and
the uses of the Demised Premises contemplated under the provisions of the
Lease. Notwithstanding the foregoing, Lessor represents that it has no
actual knowledge of anything related to the foregoing which would cause
the Demised Premises to be materially inadequate for its permitted use
hereunder.
(b) Lessee expressly covenants and agrees that it hereby takes this
Lease and the leasehold estate hereby established upon and subject to
Lessor's title as it was acquired from its seller, including all rights,
rights of way, easements, profits, servitudes, reservations, restrictions,
conditions, exceptions, reversions, possibilities of reverter, liens,
encumbrances, occupancies, tenancies, licenses, clouds, claims and defects,
known and unknown and whether of record or not. In the event of any defect
in Lessor's title to the Demised Premises which shall require that Lessee
vacate the Demised Premises, then in such event this Lease shall be
terminated.
(c) Lessee hereby expressly waives any and all rights which it might
otherwise have against Lessor by reason of any of the foregoing, including
(but not limited to) the requirements of any inspection or examination by
Lessee of the Demised Premises.
Except as otherwise expressly provided in this Lease, this Lease shall
continue in full force and effect, and the obligations of Lessee hereunder
shall not be released, discharged or otherwise affected, by reason of: (i) any
damage to or destruction of the Demised Premises or any part thereof or the
taking of the Demised Premises or any part thereof by condemnation, requisition
or otherwise for any reason; (ii) any restriction or prevention of or
interference with any use of the Demised Premises or any part thereof including
any restriction or interference with or circumstance which prevents the use of
the Demised Premises as contemplated by Paragraph 8.1; (iii) any frustration of
Lessee's purposes hereunder, for any claim which Lessee has or might have
against Lessor; or (iv) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing. However, nothing shall preclude Lessee from
bringing a separate action and Lessee is not waiving other rights and remedies
not waived herein.
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ARTICLE XVIII - ASSIGNMENT AND SUBLETTING
18.1 During the Term of the Lease, Lessee shall not assign this Lease or
in any manner whatsoever sublet, assign or transfer all or any part of the
Demised Premises or in any manner whatsoever transfer or assign an interest
in the Demised Premises or any interest in the Lessee or sell or assign a
controlling number of the outstanding shares in Lessee, other than to Xxxxxx
X. Xxxxxx or an entity controlled by Xxxxxx X. Xxxxxx or a wholly owned
subsidiary of Lessee or of Lessee's parent corporation Sun Healthcare Group,
Inc. without the prior written consent of the Lessor, which consent shall not
be unreasonably withheld. Any violation or breach or attempted violation or
breach of the provisions of this Article by Lessee, or any acts inconsistent
herewith shall vest no right, title or interest herein or hereunder or in the
Demised Premises, in any such transferee or assignee; and Lessor may, at its
exclusive option, terminate this Lease and invoke the provisions of this
Lease relating to default. Lessor acknowledges and agrees that the sale of
equity or debt securities in Lessee or Lessee's parent corporation shall in
no event constitute an assignment or transfer of this Lease or of an interest
hereunder provided Lessee remains a wholly owed subsidiary of Sun Healthcare
Group, Inc.
ARTICLE XIX - ACTS OF DEFAULT
19.1 The following acts or events shall be deemed to be an Event of
Default (herein an "Event of Default") on the part of the Lessee:
(1) The failure of Lessee to pay when due any Rent, or any part
thereof, or any other sum or sums of money due or payable to the
Lessor under the provisions of this Lease, when such failure shall
continue for a period of ten (10) days;
(2) The failure of Lessee to perform, or the violation by Lessee
of, any of the other covenants, terms, conditions or provisions of
this Lease (other than as set forth in Sections 19.1(3) and 19.1(4),
if such failure or violation shall not be cured within thirty (30)
days after notice thereof by Lessor to Lessee, subject, however, to
the provisions of Section 19.2 hereof;
(3) The removal by any local, state or federal agency having
jurisdiction over the operation of the nursing home located on the
Demised Premises of fifty percent (50%) or more of the patients
located in the nursing home;
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(4) The failure of Lessee to comply, or the violation by Lessee
of, any of the terms, conditions or provisions of any Mortgage
relating to the Demised Premises of which Lessee has been made aware
and with which Lessee has agreed to comply if such failure or
violation shall not be cured within twenty (20) days (or such lesser
period as may be provided in the mortgage) after notice thereof by
Lessor to Lessee, subject, however, to the provisions of Section 19.2
hereof;
(5) The voluntary transfer by Lessee of 10 or more patients
located in the Demised Premises if such transfer is not for reasons
relating to the health and well being of the patients that were
transferred or such other reasons as may be permitted by state or
federal law, such as nonpayment of stay or the welfare of other
residents of the Facility;
(6) The failure of Lessee to replace, within thirty (30) days
after notice by Lessor to Lessee, a substantial portion of the
Personal Property previously removed by Lessee;
(7) The making by Lessee of an assignment for the benefit of
creditors;
(8) The levying of a writ of execution or attachment on or
against the property of Lessee which is not discharged or stayed by
action of Lessee contesting same, within ninety (90) days after such
levy or attachment (provided if the stay is vacated or ended, this
paragraph shall again apply);
(9) If proceedings are instituted in a court of competent
jurisdiction for the reorganization, liquidation or involuntary
dissolution of the Lessee or for its adjudication as a bankrupt or
insolvent, or for the appointment of a receiver of the property of
Lessee, and said proceedings are not dismissed and any receiver,
trustee or liquidator appointed therein is not discharged within
ninety (90) days after the institution of said proceedings;
(10) The sale of the interest of Lessee in the Demised Premises
or any portion thereof under execution or other legal process;
(11) The failure of Lessee to give notice to Lessor not less than
ten (10) days after receipt by Lessee of any notice, claim or
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demand from any governmental authority, or any officer acting on
behalf thereof, of any violation of any law, order, ordinance, rule
or regulation with respect to the operation of the nursing home
located on the Demised Premises;
(12) The failure on the part of Lessee during the Term of this
Lease to cure or xxxxx any violation claimed by any governmental
authority, or any officer acting on behalf thereof, of any law, order,
ordinance, rule or regulation pertaining to the operation of the
nursing home located on Demised Premises, and within ten (10) days
prior to the expiration of any time permitted by such authority for
such cure or abatement;
(13) institution of any proceedings against Lessee by any
governmental authority either (i) to revoke any license granted to
Lessee for the operation of a skilled and/or intermediate care nursing
home within the Demised Premises, having no less than one hundred
fifty (150) licensed beds, or (ii) decertify the nursing home operated
in the Demised Premises from participation in the Medicaid
reimbursement program, which is not either appealed by Lessee and
stayed while Lessee's appeal thereof is pending, or revoked or
rescinded by the applicable governmental authority;
(14) The abandonment of the Demised Premises by Lessee, other
than as a result of the damage or destruction or taking thereof; and
(15) The failure of the Guarantor to perform, or the violation by
the Guarantor of, any of the covenants set forth in the Lease Guaranty
or the untruth of any representations or warranties made therein.
19.2 Except for default by Lessee in the payment of Rent or any
additional payment required hereunder, in any case where Lessor shall have
given to Lessee a written notice specifying a situation which, as
hereinbefore provided, must be remedied by Lessee within a certain time
period, and, if for causes beyond Lessee's control, it would not reasonably
be possible for Lessee to remedy such situation within such period, then,
provided Lessee immediately upon receipt of such notice shall advise Lessor
in writing of Lessee's intention to institute, and shall, as soon as
reasonably possible thereafter, duly institute, and thereafter diligently
prosecute to completion, all steps necessary to remedy such situation and
shall remedy the same, and provided that any license or certification
necessary for the operation of the Demised Premises, as a nursing facility is
not affected thereby, this Lease and the Term and estate hereby granted shall
not expire and terminate at the expiration of such time period as otherwise
hereinbefore provided, except that in no event shall Lessee have more than
sixty (60) additional days to remedy any such situation in the manner set
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forth herein, or such longer period of time granted by any governmental
agency having jurisdiction over the Facility.
ARTICLE XX - (INTENTIONALLY OMITTED)
ARTICLE XXI - LESSOR'S REMEDIES UPON DEFAULT
21.1 In the event of any Event of Default on the part of Lessee, Lessor
may, if it so elects, upon ten (10) days prior written notice to Lessee of
such election, and with or without any demand whatsoever upon Lessee,
forthwith terminate this Lease and Lessee's right to possession of the
Demised Premises, or, at the option of the Lessor, terminate Lessee's right
to possession of the Demised Premises without terminating this Lease. Upon
any such termination of this Lease, or upon any such termination of Lessee's
right to possession without termination of this Lease, Lessee shall vacate
the Demised Premises immediately, and shall quietly and peaceably deliver
possession thereof to the Lessor, and Lessee hereby grants to the Lessor full
and free license to enter into and upon the Demised Premises in such event
with or without process of law and to repossess the Demised Premises and
Personal Property as the Lessor's former estate. In the event of any such
termination of this Lease, the Lessor shall again have possession and
enjoyment of the Demised Premises and Personal Property to the extent as if
this Lease had not been made, and thereupon this Lease and everything herein
contained on the part of Lessee to be done and performed shall cease and
terminate, all, however, without prejudice to and without relinquishing the
rights of the Lessor to Rent (which, upon such termination of this Lease and
entry of Lessor upon the Demised Premises, shall, in any event, be the right
to receive Rent due up to the time of such entry) or any other right given to
the Lessor hereunder or by operation of law.
21.2 In the event of any Event of Default and Lessor's election either
to terminate this Lease or to terminate Lessee's right to possession of the
Demised Premises, then all licenses, certifications, permits and
authorizations issued by any governmental agency, body or authority in
connection with or relating to the Demised Premises and the nursing home
operated thereon shall be deemed to be assigned to Lessor, to the extent
permitted by law. Lessor shall also have the right to continue to utilize
the telephone number and name (other than the name "Sunrise Healthcare") used
by Lessee in connection with the operation of the nursing home located on the
Demised Premises. This Lease shall be deemed and construed as an assignment
for purposes of vesting in Lessor, all right, title and interest in and to:
(i) all licenses, certifications, permits and authorizations obtained in
connection with the operation of the nursing home located on the Demised
Premises; and (ii) the name and telephone number used in connection with the
operation of the nursing home located on the Demised Premises. Lessee
hereby agrees to take such other action and execute such other documents as
may be necessary in order to vest in Lessor all right, title and interest to
the items specified herein, to the extent permitted by law.
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21.3 If Lessee abandons the Demised Premises or otherwise entitles
Lessor so to elect, and the Lessor elects to terminate Lessee's right to
possession only, without terminating this Lease, Lessor may, at its option,
enter into the Demised Premises, remove Lessee's signs and other evidences of
tenancy and take and hold possession thereof as in the foregoing paragraph
21.2 of this Article provided, without such entry and possession terminating
this Lease or releasing Lessee, in whole or in part, from Lessee's obligation
to pay the Rent hereunder for the full remaining Term of this Lease, and in
any such case, Lessee shall pay to Lessor a sum equal to the entire amount of
the Rent reserved hereunder and required to be paid by Lessee up to the time
of such termination of the right of possession plus any other sums then due
hereunder. Upon and after entry into possession without termination of this
Lease, Lessor may attempt to relet the Demised Premises or any part thereof
for the account of Lessee for such rent, or shall operate the nursing home
located on the Demised Premises for such time and upon such terms as Lessor
in its sole discretion shall determine. In any such case, Lessor may make
repairs, alterations and additions in or to the Demised Premises, and
redecorate the same to the extent deemed desirable by Lessor, and Lessee
shall, upon demand, pay the reasonable cost thereof, together with Lessor's
reasonable expenses of reletting. If the consideration collected by Lessor
upon any such reletting is not sufficient to pay monthly the full amount of
rent reserved in this Lease, together with the reasonable costs of repairs,
alterations, additions, redecorating and Lessor's expenses, Lessee shall pay
to the Lessor the amount of each monthly deficiency upon demand.
21.4 Lessee's liability to Lessor for damages for default in payment of
rent or otherwise hereunder shall in all events survive the termination by
Lessor of the Lease or the termination by Lessor of Lessee's right to
possession only, as hereinabove provided. Upon such termination of the Lease
or at any time after such termination of Lessee's right to possession, Lessor
may recover from Lessee and Lessee shall pay to Lessor as damages, whether or
not Lessor shall have collected any current monthly deficiencies under the
foregoing paragraph, and in lieu of such current deficiencies after the date
of demand for such damages, the amount thereof found to be due by a court of
competent jurisdiction, which amount thus found may be equal to:
(a) the remainder, if any, of rent and charges due from Lessee for
the period up to and including the date of the termination of the Lease or
Lessee's right to possession;
(b) the amount of any current monthly deficiencies accruing and
unpaid by Lessee up to and including the date of Lessor's demand for final
damages hereunder; and
(c) the excess, if any, of:
(i) the present value, discounted at the rate of 10% per annum,
of the rent reserved for what would have been the remainder of the
Term of this Lease together with charges to be paid by Lessee under
the Lease; over
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(ii) the present value, discounted at the rate of 10% per annum
of the then fair rental value of the Demised Premises and the Personal
Property.
If any statute or rule governing a proceeding in which such damages
are to be proved shall validly limit the amount thereof to an amount less than
the amount above agreed upon, Lessor shall be entitled to the maximum amount
allowable under such statute or rule of law.
ARTICLE XXII - LIABILITY OF LESSOR
22.1 It is expressly agreed by the parties that in no case shall Lessor,
any partners, officers, directors, managers, members, directors, agents or
employees of Lessor be liable under any express or implied covenant, agreement
or provisions of this Lease, for any damages whatsoever to Lessee beyond
Lessor's interest in the Demised Premises.
ARTICLE XXIII - CUMULATIVE REMEDIES OF LESSOR
23.1 The specific remedies to which Lessor may resort under the terms
of this Lease are cumulative and are not intended to be exclusive of any other
remedies or means of redress to which Lessor may be lawfully entitled in case of
any breach or threatened breach by Lessee of any provision or provisions of this
Lease. The failure of Lessor to insist, in any one or more cases, upon the
strict performance of any of the terms, covenants, conditions, provisions or
agreements of this Lease, or to exercise any option herein contained, shall not
be construed as a waiver or relinquishment for the future of any such term,
covenant, condition, provisions, agreement or option.
ARTICLE XXIV - SECURITY FOR RENT
24.1 Lessor shall have a first lien paramount to all others on every
right and interest of Lessee in and to this Lease, and on any furnishings,
equipment, fixtures, accounts receivable or other property of any kind belonging
to Lessee and located at or related to the Demised Premises. Such lien is
granted for the purpose of securing the payments of rents, charges, penalties,
and damages herein covenanted to be paid by Lessee, and for the purpose of
securing the performance of all of Lessee's obligations under this Lease. Such
lien shall be in addition to all rights to Lessor given and provided by law but
shall only be exercised by Lessor after the occurrence of an Event of Default
which is not cured within any applicable cure period. This Lease shall
constitute a security agreement under the Uniform Commercial Code granting
Lessor a security interest in any furnishings, equipment, fixtures, accounts
receivable or other personal property of any kind
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belonging to Lessee and located at or related to the Demised Premises. If
required by Lessor, Lessee shall execute financing statements for filing
under the Uniform Commercial Code reflecting the security interest granted
under this section. Upon Lessee's written request, Lessor shall
subordinate its lien under this Section 24.1, solely as to accounts
receivable, to a lien granted by Lessee to a third party lender securing a
loan made by such lender to Lessee to provide working capital for the
operation of the Leased Property as a nursing home in accordance with this
Lease.
ARTICLE XXV - INDEMNIFICATION
25.1 To the extent insurance proceeds do not cover same, Lessee. agrees
to protect, indemnify, defend and save harmless the Lessor from and against
any and all claims, demands and causes of action of any nature whatsoever for
injury to or death of persons or loss of or damage to property, occurring
during the Term on the Demised Premises or, to the extent the same are under
Lessee's control, any adjoining sidewalks, streets or ways, or in any manner
growing out of or connected with the use and occupation of the Demised
Premises by Lessee, its officers, agents, employees or invitees, or Lessee's
maintenance of the condition thereof, or the use of any existing or future
sewer system, or the use of any adjoining sidewalks, streets or ways which
are under Lessee's control during the Term of this Lease, and Lessee further
agrees to pay any reasonable attorneys' fees and expenses incident to the
defense by Lessor of any such claims, demands or causes of action.
ARTICLE XXVI - SUBORDINATION PROVISIONS
26.1 This Lease (and Lessee's interest in the Demised Premises and
Personal Property) shall be subject and subordinate to any and all mortgages
or deeds of trust now or hereafter in force and affecting the Demised
Premises (or any portion thereof) and/or the Personal Property, and to all
renewals, modifications, consolidations, replacements and extensions thereof
(any such Mortgage or deed of trust, as it may be renewed, modified,
consolidated, replaced or extended is hereinafter referred to as a
"Mortgage", and the holder or beneficiary of a Mortgage is hereinafter
referred to as a "Mortgagee". Lessee agrees to execute, acknowledge and
deliver upon demand such further instruments subordinating this Lease to any
such Mortgage, or other liens or encumbrances as shall be desired by Lessor;
provided, that Lessor shall use all due diligence to deliver to Lessee a
nondisturbance agreement from any such Mortgagee, in form reasonably
satisfactory to such Mortgagee. Lessee further agrees that promptly after
receipt of a request from any Mortgagee made at any time prior to foreclosure
of its Mortgage, Lessee shall execute, acknowledge and deliver to such
Mortgagee any instrument as such Mortgagee may reasonably request whereby
Lessee agrees to subordinate and attorn to such Mortgagee, at such
Mortgagee's election, after the foreclosure of its Mortgage or its acceptance
of a deed in lieu of foreclosure. Lessee agrees further that any Mortgagee
shall have the right to subordinate its Mortgage and its rights thereunder to
this Lease,
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except that such Mortgagee shall be entitled to expressly exclude
from such subordination the Mortgagee's rights, if any, to insurance proceeds
and eminent domain awards in the event of a loss or casualty or eminent
domain taking of the Demised Premises or any portion thereof. If such
Mortgagee executes and records an instrument which purports to effect a
partial or complete subordination of its Mortgage to this Lease, any rights
of such Mortgagee to insurance proceeds or eminent domain awards which are
expressly excluded from such subordination shall remain superior to the
rights of Lessee.
ARTICLE XXVII - LESSEE'S FAITHFUL COMPLIANCE WITH MORTGAGES
27.1 Anything in this Lease contained to the contrary notwithstanding,
Lessee shall at all times and in all respects fully, timely and faithfully
comply with and observe each and all of the conditions, covenants, and
provisions required on the part of the Lessor and of which Lessee has
received notice under any Mortgage (and to any renewals, modifications,
extensions, replacements and/or consolidations thereof) to which this Lease
is subordinate or to which it later may become subordinate, including,
without limitation, such conditions, covenants and provisions thereof as
relate to the care, maintenance, repair, insurance, restoration, preservation
and condemnation of the Demised Premises, notwithstanding that such
conditions, covenants and provisions may require compliance and observance to
a standard or degree in excess of that required by the provisions of this
Lease, or may require performance not required by the provisions of this
Lease, and shall not do or permit to be done anything which would constitute
a breach of or default under any obligation of the Lessor under any such
mortgage, it being the intention hereof that Lessee shall so comply with and
observe each and all of such covenants, conditions and provisions of any such
Mortgage affecting the Demised Premises so that it will at all times be in
good standing and there will not be any default on the part of the Lessor
thereunder. However, nothing in this Article contained shall be construed to
obligate Lessee to pay any part of the principal or interest secured by any
Mortgage or to perform any obligation imposed on Lessor thereunder which is
not delegable by Lessor by the terms thereof. Lessee further covenants and
agrees that Lessee shall give any Mortgagee notice of any Lessor default
under this Lease, and if Lessor fails to cure such default, such Mortgagee
shall have an additional reasonable time to cure any such default on Lessor's
behalf.
ARTICLE XXVIII - MORTGAGE RESERVES
28.1 Any tax, insurance or other reserve required by the holder of any
Mortgage against the Demised Premises during the Term of this Lease, and not
otherwise paid by Lessee to Lessor pursuant to Section 7.1, shall be paid by the
Lessee or as directed by Lessor.
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ARTICLE XXIX - LESSEE'S ATTORNMENT
29.1 Lessee covenants and agrees that, if by reason of a default upon
the part of the Lessor herein in the performance of any of the terms and
conditions of any Mortgage which results in the estate of the Lessor thereunder
being terminated by summary dispossession proceedings or otherwise, Lessee will
attorn to the then holder of such Mortgage or the purchaser in such foreclosure
proceedings, as the case may be, and will recognize such holder of the Mortgage
or such purchaser as the Lessor under this Lease. Lessee covenants and agrees to
execute and deliver, at any time and from time to time, upon the request of
Lessor or of the holder of such Mortgage or the purchaser in foreclosure
proceedings, any instrument which may be necessary or appropriate to evidence
such attornment. Lessee further waives the provisions of any statute or rule of
law now or hereafter in effect which may terminate this Lease or give or purport
to give Lessee any right of election to terminate this Lease or to surrender
possession of the Demised Premises in the event any such proceedings are brought
against the Lessor under such Mortgage or the holder of any such Mortgage, and
agrees that this Lease shall not be affected in any way whatsoever by any such
proceedings.
29.2 If Lessor shall default in the performance of any of the terms,
provisions, covenants or conditions under any Mortgage, or fails to pay the
amounts due thereunder when due, then immediately upon notice of such default or
failure on the part of Lessor, Lessee shall have the right to cure such
defaults, and to make such payments as are due from Lessor, directly to the
holder of the Mortgage, as the case may be, and to the extent such payments are
accepted by the holder of the Mortgage, to deduct the amounts expended by Lessee
to cure such defaults, together with interest thereon from the date of payment
by Lessee at a rate which is the lesser of fifteen percent (15%) per annum or
the maximum rate permitted by law, from the next succeeding rental payment or
payments due under this Lease, and such deductions shall not constitute a
default under this Lease.
ARTICLE XXX - REPRESENTATIONS AND WARRANTIES
30.1 Lessee represents, warrants and covenants to Lessor as follows:
(a) Lessee is a corporation organized and validly existing under the
laws of the State of New Mexico, and is authorized to transact business in
the State of Connecticut; and
(b) Lessee has full corporate right and power to enter into, or
perform its obligations under this Lease and has taken all requisite
corporate action to authorize the execution, delivery and performance of
this Lease.
30.2 Lessor represents, warrants and covenants to Lessee as follows:
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(a) Lessor is a limited partnership duly organized and validly
existing under the laws of the State of Illinois; and
(b) Subject to the conditions set forth in Section 34.1, Lessor has
full power and authority to enter into this Lease and to carry out the
transactions contemplated herein.
ARTICLE XXXI - SECURITY DEPOSIT
31.1 As additional security for the faithful and prompt performance of
its obligations hereunder, Lessee shall concurrently with the execution of
this Lease pay to Lessor, as a security deposit the sum of Ninety Five
Thousand and 00/100 Dollars ($95,000.00), payable on the first day of the
Term. Said security deposit may be applied by Lessor for the purpose of
curing any default or defaults of Lessee hereunder, in which event Lessee
shall replenish said deposit in full by promptly paying to Lessor the amount
so applied. Lessor shall not pay any interest on said deposit, except as
required by law. If Lessee has not defaulted hereunder and Lessor has not
applied said deposit to cure a default, then said deposit, or such applicable
portion thereof, shall be paid to Lessee within thirty (30) days after the
termination of this Lease. Said deposit shall not be deemed an advance
payment of Rent or a measure of Lessor's damages for any default hereunder by
Lessee.
ARTICLE XXXII - FINANCIAL STATEMENTS
32.1 Within 120 days after the end of each of its fiscal years, Lessee
shall furnish to Lessor full and complete financial statements of the
operations of the Demised Premises and nursing home operated thereon for such
annual fiscal period which shall be prepared by or on behalf of Lessee, and
which shall contain a balance sheet and detailed income and expense statement
(collectively called "Financial Statements"), and copies of all Medicaid and
Medicare cost reports as filed with the governmental authority, as of the end
of the fiscal year. In addition, Lessee shall furnish Lessor, within 10 days
following filing, a copy of its or its parent corporation's federal income
tax return if it does not file separate returns for the preceding year. Each
such statement shall be certified as being true and correct by an officer of
Lessee.
32.2 Within thirty (30) days after each calendar quarter, Lessee shall
furnish to Lessor copies of all Financial Statements for the Demised Premises
prepared by Lessee for the preceding calendar quarter.
32.3 At all times, Lessee shall keep and maintain full and correct
records and books of account of the operations of Lessee in the Demised Premises
and records and books of account of the entire business operations of Lessee in
accordance with sound accounting practices. Upon request
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by Lessor, Lessee shall make available for inspection by Lessor or its
designee, during reasonable business hours, the said records and books of
account covering the entire business operations of Lessee on the Demised
Premises.
ARTICLE XXXIII -
TRANSFER OF OPERATIONS UPON TERMINATION OF LEASE
33.1 The date on which this Lease either terminates pursuant to its
Terms or is terminated by either party whether pursuant to a right granted to it
hereunder or otherwise shall be referred to as the "Closing Date" in this
Article. On the Closing Date, this Lease shall be deemed and construed as an
absolute assignment for purposes of vesting in Lessor or Lessor's designee all
of Lessee's right, title and interest in and to the following intangible
property which is now or hereafter used in connection with the operation of the
Demised Premises (the "Intangibles") and an assumption by Lessor of Lessee's
obligations under the Intangibles other Intangibles from and after the Closing
Date; provided that from and after the Closing Date, Lessee shall indemnify,
defend and hold harmless Lessor against any claims, losses, costs or damages,
including reasonable attorneys' fees incurred or arising by reason of Lessee's
obligations under the Intangibles prior to the Closing Date:
(a) service contracts for the benefit of the Demised Premises to
which Lessee is a party, and which can be terminated without penalty
within sixty (60) or fewer days' notice or which Lessor requests be
assigned to Lessor or its designee pursuant to this Article 33;
(b) any provider agreements with Medicare, Medicaid or any other
third-party payor programs (excluding the right to any reimbursement for
periods on or prior to the Closing Date) entered in connection with the
Demised Premises to the extent assignable by Lessee;
(c) all licenses, permits, accreditations, and certificates of
occupancy issued by any federal, state, municipal or quasi-governmental
authority for the use, maintenance or operation of the Demised Premises,
running to or in favor of Lessee, to the extent assignable by Lessee;
(d) all documents, charts, personnel records, property manuals,
resident/patient records and lists maintained with respect to the Demised
Premises (subject to the resident's rights to access to his/her medical
records as provided by law and confidentiality requirements), books,
records, files and other business records attributable to the business or
operations of the Demised Premises to the extent assignable by Lessee;
(e) all existing agreements with residents and any guarantors thereof
of
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the Demised Premises, to the extent assignable by Lessee (excluding the
right to any payments for periods prior to the Closing Date) any and all
patient trust fund accounts;
(f) all assignable guaranties and warranties in favor of Lessee with
respect to the Demised Premises and/or the Personal Property;
(g) all other assignable intangible property not enumerated herein
which is now or hereafter used in connection with the operation of the
Demised Premises as a long-term care facility; and
(h) At Lessors option, the business of the Lessee as conducted at the
Demised Premises as a going concern, including but not limited to the name
of the business conducted thereon and all telephone numbers presently in
use therein but specifically excluding the name "Sunrise Healthcare" or any
Sunrise policy or procedure manuals, forms or systems.
33.2 Lessee shall be responsible for, and pay all accrued expenses with
respect to the Demised Premises and Personal Property accruing before 12:00
a.m. on the Closing Date and shall be entitled to all revenues from the
Demised Premises for the period through 12:00 a.m. on the Closing Date.
Lessor shall be responsible for and pay all accrued expenses with respect to
the Demised Premises accruing on or after 12:01 a.m. on the day after the
Closing Date and shall be entitled to receive and retain all revenues from
the Demised Premises accruing on or after the Closing Date. Within fifteen
(15) business days after the Closing Date, the following adjustments and
prorations shall be determined as of the Closing Date and the party to whom
payment is owed shall receive said payment within said fifteen (15) day
period:
(a) Real estate taxes, ad valorem taxes, school taxes, assessments
and personal property, intangible and use taxes, if any. If the actual ad
valorem taxes are not available on the Closing Date for the tax year in
which the Closing Date occurs, the proration of such taxes shall be
estimated at the Closing Date based upon reasonable information available
to the parties, including information disclosed by the local tax office or
other public information, and an adjustment shall be made when actual
figures are published or otherwise become available.
(b) Lessee will terminate the employment of all employees on the
Closing Date. The obligation for wages and the obligation, if any, to pay
to employees of the Demised Premises accrued vacation and sick leave pay or
employee severance pay or other accrued benefits which may be payable as
the result of any termination of any employee on or prior to the Closing
Date for the period prior to the Closing Date shall remain the Lessee's
obligation after the Closing Date.
(c) Lessor shall receive a credit equal to any advance payments
received
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by Lessee from patients of the Demised Premises to the extent
attributable to periods following the Closing Date.
(d) The present insurance coverage on the Demised Premises shall be
terminated as of the Closing Date and there shall be no proration of
insurance premiums.
(e) All other income from, and expenses of, the Demised Premises
(other than Mortgage interest and principal), including but not limited to
public utility charges and deposits, maintenance charges and service
charges shall be prorated between Lessee and Lessor as of the Closing Date.
Lessee shall, if possible, obtain final utility meter readings as of the
Closing Date. To the extent that information for any such proration is not
available on the Closing Date, Lessee and Lessor shall effect such
proration within ninety (90) days after the Closing Date or as soon
thereafter as such information becomes available.
(f) Lessee shall receive a credit equal to (i) any sums held in
escrow by Lessor or the holder of any Mortgage for taxes or insurance
premiums; and (ii) any other sums being held by Lessor for the benefit of
Lessee provided that any such sums are not needed to pay costs and expenses
which relate to the period prior to the Closing Date, in accordance with
the applicable provisions of this Lease.
(g) Subject to the terms of Article XXXI hereof, Lessee shall receive
a credit for any security deposit made pursuant to this Lease.
(h) Lessor shall receive a credit for any amounts due from Lessee
pursuant to the terms of this Lease, including payments due to third party
vendors, which are paid by Lessor on behalf of Lessee.
(i) Lessee shall be and will remain responsible for any employee's
severance pay and accrued benefits which may be payable as a result of any
termination of an employee's employment on or prior to the Closing Date.
33.3 All necessary arrangements shall be made to provide possession of
the Demised Premises to Lessor on the Closing Date, at which time of possession
Lessee shall, to the extent permitted by law, deliver to Lessor all medical
records, patient records and other personal information concerning all patients
residing at the Demised Premises as of the Closing Date and other relevant
records used or developed in connection with the business conducted at the
Demised Premises other than Lessee's corporate business records, manuals, forms
and systems documentation. Such transfer and delivery shall be in accordance
with all applicable laws, rules and regulations concerning the transfer of
medical records and other types of patient records.
33.4 Within fifteen (15) days following the Closing Date, Lessee shall
provide Lessor with
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an accounting of all funds belonging to patients at the Demised Premises which
are held by Lessee in a custodial capacity. Such accounting shall set forth the
names of the patients for whom such funds are held, the amounts held on behalf
of each such patient and the Lessee's warranty that, to the actual current
knowledge of Lessee, the accounting is true, correct and complete. Additionally,
Lessee, in accordance with all applicable rules and regulations, shall make all
necessary arrangements to transfer such funds to a bank account designated by
Lessor, and Lessor shall in writing acknowledge receipt of and expressly assume
all the Lessee's financial and custodial obligations with respect thereto.
Notwithstanding the foregoing, Lessee will indemnify and hold Lessor harmless
from all liabilities, claims and demands, including reasonable attorney's fees,
in the event the amount of funds, if any, transferred to Lessor's bank account
as provided above, did not represent the full amount of the funds then or
thereafter shown to have been delivered to Lessee as custodian that remain
undisbursed for the benefit of the patient for whom such funds were deposited,
or with respect to any matters relating to patient funds which accrue during the
Term of this Lease.
33.5 For the period commencing on the Closing Date and ending on the date
Lessor or its designee obtains all appropriate state or other governmental
licenses and certifications required to operate the Demised Premises as a
Medicare and Medicaid certified nursing home, Lessee shall enter into a
management agreement with Lessor or Lessor's designee whereby Lessor or its
designee shall have the right to operate the Demised Premises, on a triple net
basis, and shall be entitled to all revenues of the Demised Premises during such
period, and to use any and all licenses, certifications and provider agreements
issued to Lessee by any federal, state or other governmental authority for such
operation of the Demised Premises, if permitted by such governmental
authorities.
33.6 All cash, checks and cash equivalents at the Demised Premises and
deposits in bank accounts (other than patient trust accounts) relating to the
Demised Premises on the Closing Date shall remain Lessee's property after the
Closing Date. All accounts receivable, loans receivable and other
receivables of Lessee, whether derived from operation of the Demised Premises
or otherwise, shall remain the property of Lessee after the Closing Date.
Lessee shall retain full responsibility for the collection thereof. Lessor
shall assume responsibility for the billing and collection of payment on
account of services rendered by it on and after the Closing Date. In order to
facilitate Lessee's collection efforts, Lessee agrees to deliver to Lessor,
within a reasonable time after the Closing Date, a schedule identifying all
of those private pay balances owing for the month prior to the Closing Date
and Lessor agrees to apply any payments received which are specifically
designated as being applicable to services rendered prior to the Closing Date
to reduce the pre-Closing balances of said patients by promptly remitting
said payments to Lessee. In the event payments specifically indicate that
they relate to services rendered post-Closing, such payments shall be
retained by Lessor. In the event no designation is made, such payments shall
be applied one-half to Lessee's accounts receivable and one-half to Lessor's
accounts receivable. Lessor shall cooperate with Lessee in Lessee's
collection of its pre-Closing accounts receivable. Lessor shall have no
liability for uncollectible receivables and shall not be obligated to bear
any expense as a result of such activities on behalf of Lessee. Subject to
the provisions of Article 24 hereof, Lessor shall remit to Lessee or its
assignee those portions of any payments received by Lessor which are
specifically designated as repayment or reimbursement received by Lessor
arising out of cost reports filed for the cost reporting
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periods ending prior to the Closing Date.
33.7 With respect to residents in the Demised Premises on the Closing
Date, Lessor and Lessee agree as follows:
(a) With respect to Medicare and Medicaid residents, Lessor and
Lessee agree that payment for in-house residents covered by Medicare or
Medicaid on the Closing Date will, under current regulations, be paid by
Medicare or Medicaid directly to Lessee for services rendered at the
Demised Premises prior to the Closing Date allocated on the per diem basis.
Said payments shall be the sole responsibility of Lessee and, except as
provided in Section 33.6(B) below, Lessor shall in no way be liable
therefore. After the Closing Date, Lessor and Lessee shall each have the
right to review supporting books, records and documentation that are in the
possession of the other relating to Medicaid or Medicare payments.
(b) If, following the Closing Date, Lessor receives payment from any
state or federal agency or third-party payor which represents
reimbursement with respect to services provided at the Demised Premises
prior to the Closing Date, Lessor agrees that it shall remit such payments
to Lessee. Payments by Lessor to Lessee shall be accompanied by a copy of
the appropriate remittance advice.
33.8 In addition to the obligations required to be performed hereunder
by Lessee and Lessor at the Closing Date, Lessee and Lessor agree to perform
such other acts, and to execute, acknowledge, and/or deliver subsequent to
the Closing Date such other instruments, documents and materials, as the
other may reasonably request in order to effectuate the consummation of the
transaction contemplated herein. The obligations hereunder shall survive
termination or expiration of the Lease.
33.9 Lessee and Lessor each, for itself, its successors and assigns
hereby indemnifies and agrees to defend and hold the other and its successors
and assigns harmless from any and all claims, demands, obligations, losses,
liabilities, damages, recoveries and deficiencies (including interest,
penalties and reasonable attorney's fees, costs and expenses) (hereinafter
collectively "the Claims") which any of them may suffer as a result of the
breach by the other party in the performance of any of its commitments,
covenants, or obligations under this Article 33. Lessee does further agree
to indemnify, defend and hold harmless Lessor from any such Claims or with
respect to any suits, arbitration proceedings, administrative actions or
investigations which relate to the use by Lessee of the Demised Premises
prior to the Closing Date or any liability which may arise from operation by
Lessee of the Demised Premises as a nursing home prior to the Closing Date or
any amounts recaptured under Title XIX based upon applicable
Medicare/Medicaid Recapture Regulations. Lessor does further agree to
indemnify, defend and hold harmless Lessee from any such Claims or with
respect to any suits, arbitration proceedings, administrative actions or
investigations which relate to the ownership of the Demised Premises by
Lessor or the use of the Demised Premises by Lessor or the operation by
Lessor of the nursing home located thereon after the Closing Date. The
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rights of Lessor under this paragraph are without prejudice to any other
remedies not inconsistent herewith which Lessor may have against Lessee
pursuant to the terms of this Lease and the rights of Lessee hereunder are
subject to Section 22.1 hereof.
33.10 Anything to the contrary contained in this Article 33
notwithstanding, in the event the termination of this Lease is due to a
default by Lessee, none of the provisions of this Article 33 shall in any way
limit, reduce, restrict or modify the rights granted to Lessor pursuant to
Articles 21, 23, and 24 of this Lease. If the termination of this Lease is a
result of an Event of Default, then to the extent any monies are due to
Lessee pursuant to this Article 33, such sums shall be applied by Lessor to
any damages suffered by Lessor as a result of Lessee's Event of Default.
ARTICLE XXXIV - MISCELLANEOUS
34.1 Lessee, upon paying the fixed Rent, Additional Rent including Taxes
and Assessments and all other charges herein provided, and upon observing and
keeping the covenants, agreements, terms and conditions of this Lease on its
part to be performed, shall lawfully and quietly hold, occupy and enjoy the
Demised Premises during the Term of this Lease, and subject to its terms,
without hindrance by Lessor or by any other person or persons claiming under
Lessor.
34.2 All payments to be made by the Lessee hereunder, whether or not
designated as Rent, shall be deemed Additional Rent, so that in the event of
a default of payment when due, the Lessor shall be entitled to all of the
remedies available at law or equity, or under this Lease, for the nonpayment
of Rent.
34.3 It is understood and agreed that the granting of any consent by
Lessor to Lessee to perform any act of Lessee requiring Lessor's consent
under the terms of this Lease, or the failure on the part of Lessor to object
to any such action taken by Lessee without Lessor's consent, shall not be
deemed a waiver by Lessor of its rights to require such consent for any
further similar act by Lessee, and Lessee hereby expressly covenants and
warrants that as to all matters requiring Lessor's consent under the terms of
this Lease, Lessee shall secure such consent for each and every happening of
the event requiring such consent, and shall not claim any waiver on the part
of Lessor of the requirement to secure such consent.
34.4 Lessee and Lessor each represent to the other party that it did not
deal with any broker in connection with this Lease, and hereby indemnifies
the other party against the claims or demands of any broker claimed through a
relationship with it.
34.5 If an action shall be brought to recover any rental under this
Lease, or for or on account of any breach of or to enforce or interpret any
of the terms, covenants or conditions of this Lease, or for the recovery of
possession of the Demised Premises, the prevailing party shall be entitled to
recover from the other party, as part of the prevailing party's costs,
reasonable attorney's
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fees, the amount of which shall be fixed by the court and shall be made a
part of any judgment rendered.
34.6 Should Lessee hold possession hereunder after the expiration of the
Term this Lease with the consent of Lessor, Lessee shall become a tenant on a
month-to-month basis upon all the terms, covenants and conditions herein
specified, excepting however that Lessee shall pay Lessor a monthly rental,
for the period of such month-to-month tenancy, in an amount equal to twice
the last rental specified.
34.7 Any notice, or demand required to be given by either party to the
other shall be in writing and shall be sent by (a) personal delivery, (b)
expedited delivery service with proof of delivery, (c) United States
registered/certified mail, return receipt requested or (d) prepaid telecopy,
telegram, telex or fax, addressed to the other party hereto at the address
set forth below:
If to Lessor: Tor Associates
c/x Xxxxxx Capital Ventures, Inc.
Xxxxx 0000
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
ATTN: Xx. Xxx Xxxxxxx and
Xx. Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
If to Lessee: Sunrise Healthcare Corporation
000 Xxx Xxxx X.X.
Xxxxxxxxxxx, Xxx Xxxxxx 00000
ATTN: Mr. Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
or if written notification of a change of address has been sent, to such other
party and/or to such other address as may be designated in that written
notification. Any such notice or demand shall be deemed to have been given
either at the time of personal delivery or in the case of service by mail, as of
the date of first attempted delivery at the address and in the manner provided
herein, or in the case of telecopy, telegram or telex, upon receipt.
34.8 Upon demand by either party, Lessor and Lessee agree to execute and
deliver a Memorandum of Lease in recordable form so that the same may be
recorded by either party.
34.9 Each party agrees any time, and from time to time, upon not less
than ten (10) days prior written request from the other party, to execute,
acknowledge and deliver to the other party a statement in writing, certifying
that this Lease is unmodified and in full force and effect (or if there
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have been modifications, that the same is in full force and effect as
modified, and stating the modifications), the dates to which rent has been
paid, the amount of the Security Deposit held by Lessor, and whether the
Lease is then in default or whether any events have occurred which, with the
giving of notice or the passage of time, or both, could constitute a default
hereunder, it being intended that any such statement delivered pursuant to
this paragraph may be relied upon by any prospective assignee, Mortgagee or
purchaser of the fee interest in the Demised Premises or of this Lease.
34.10 All of the provisions of this Lease shall be deemed and construed
to be "conditions" and "covenants" as though the words specifically
expressing or importing covenants and conditions were used in each separate
provision hereof.
34.11 Any reference herein to the termination of this Lease shall be
deemed to include any termination thereof by expiration or pursuant to
Articles referring to earlier termination.
34.12 The headings and titles in this Lease are inserted only as a matter
of convenience and for reference and in no way define, limit or describe the
scope or intent of this Lease, nor in any way affect this Lease.
34.13 This Lease contains the entire agreement between the parties and
any executory agreement hereafter made shall be ineffective to change, modify
or discharge it in whole or in part unless such executory agreement is in
writing and signed by the party against whom enforcement of the change,
modification or discharge is sought. This Lease cannot be changed orally or
terminated orally.
34.14 Except as otherwise herein expressly provided, the covenants,
conditions and agreements in this Lease shall bind and inure to the benefit
of the Lessor and Lessee and their respective successors and assigns.
34.15 All nouns and pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons, firm or firms, corporation or
corporations, entity or entities or any other thing or things may require.
34.16 If any term or provision of this Lease shall to any extent be held
invalid or unenforceable, the remaining terms and provisions of this Lease
shall not be affected thereby, but each term and provision shall be valid and
be enforceable to the fullest extent permitted by law.
34.17 In the event of any conveyance or other divestiture of title to the
Demised Premises, the grantor or the person who is divested of title shall be
entirely freed and relieved of all covenants and obligations thereafter
accruing hereunder, and the grantee or the person who otherwise succeeds to
title shall be deemed to have assumed the covenants and obligations of the
grantor or the person who is divested of title thereafter accruing hereunder
and shall then be the Lessor under this Lease. Notwithstanding anything to
the contrary provided in this Lease, if Lessor or any successor in
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interest of Lessor shall be an individual, partnership, corporation, trust,
tenant in common or Mortgagee, there shall be absolutely no personal
liability on the part of any individual or member of Lessor or any
stockholder, director, officer, employee, partner or trustee of Lessor with
respect to the terms, covenants or conditions of this Lease, and Lessee shall
look solely to the interest of Lessor in the Demised Premises for the
satisfaction of each and every remedy which Lessee may have for the breach of
this Lease; such exculpation from personal liability to be absolute and
without any exception, whatsoever.
34.18 The failure of either party to insist on strict performance of any
of the covenants, agreements, terms, and conditions of this Lease or to
exercise any option conferred herein in any one or more instances shall not
be construed to be a waiver or relinquishment of any such covenant,
agreement, term, condition or option and the same shall be and remain in full
force and effect.
34.19 This Lease may be executed in counterparts, each of which shall be
deemed to be an original but all of which taken together shall constitute but
one and the same instrument.
34.20 This Lease shall be governed by and construed in accordance with
the laws of the State of Connecticut.
34.21 Notwithstanding anything contained herein to the contrary, the
covenants, agreements, obligations, liabilities, terms and provisions of the
Original Lease, which, pursuant to the Original Lease, expressly survive the
expiration or termination of the Original Lease, shall survive the
termination of the Original Lease pursuant hereto and are hereby incorporated
herein by reference.
(Signature Page to Follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be signed
by persons authorized so to do on behalf of each of them respectively the day
and year just above written.
LESSOR: LESSEE:
TOR ASSOCIATES, SUNRISE HEALTHCARE
an Illinois limited partnership CORPORATION,
a New Mexico corporation
TOR L.L.C., an Illinois limited
liability company, its general partner
By: By:
--------------------------- --------------------------------
Its: Its:
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