EXHHIBIT 10.2
LEASE ASSIGNMENT AGREEMENT
THIS LEASE ASSIGNMENT AGREEMENT, made this 1st day of December, 1999, by
and between CHARLOTTE HEALTH INVESTORS, L.L.C., a North Carolina Limited
Liability Company, ("Assignor") party of the first part; CENTENNIAL HEALTHCARE
INVESTMENT CORPORATION, a Georgia corporation ("Assignee") party of the second
part; ELDERBERRY MANOR OF MECKLENBURG, LIMITED PARTNERSHIP, a Virginia Limited
Partnership, ("Landlord") party of the third part; and CENTENNIAL HEALTHCARE
MANAGEMENT CORPORATION, a Georgia corporation ("Manager") party of the fourth
part.
WITNESSETH:
WHEREAS, by Lease Agreement dated June 3, 1991, (the "Lease") modified by
that certain Lease Assignment and Modification Agreement dated December 19,
1996, (the "Modification") copies thereof designated EXHIBIT "A" being hereto
attached, Elderberry Nursing Home, Inc., as Landlord, demised to Cardinal of
Kentucky, a Kentucky corporation, as Tenant, the premises located at 000 Xxx
Xxxxxx Xxxx, Xxxx xx Xxxxxxxxx, Xxxxxx of Mecklenburg, North Carolina, including
the 130 bed nursing care facility located thereon, (the "Property") and more
particularly described on "EXHIBIT B" hereto attached; and
WHEREAS, by various mesne assignments and other transactions, Landlord has
become the owner of the Property and Assignor the Tenant under the leasehold
established by the Lease and Modification agreements; and
WHEREAS, Assignor and Assignee have agreed to the assignment of said
leasehold estate, including the assumption by Assignee of all obligations of the
Tenant thereunder (Assignor to continue to be secondarily liable to Landlord for
said obligations, including without limitation those set forth in the Lease and
the Modification agreements hereinabove mentioned) to which assignment Landlord
consents as required by the Lease and as hereinafter more particularly provided;
WHEREAS, Assignee shall be substituted for Assignor under the Long Term
Care Facility Management Agreement dated December 19, 1996, (the "Management
Agreement") and Manager agrees with Assignee and Landlord as third party
beneficiary to continue to manage the Nursing Home Facility under the provisions
of said Agreement as well as the Lease and Modification agreements;
NOW, THEREFORE, for good and valuable consideration, including without
limitation, certain security provided by Assignee to Landlord, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. Assignment. Assignor transfers and assigns all of its
right, title and interest to the Lease and the Property of Assignee as
of the Effective Date hereinafter defined and Landlord, as of the Effective
Date, consents to the transfer and assignment by Assignor to Assignee of
Assignor's right, title and interest in the Lease and the Property subject to
the provisions hereof. Assignor agrees to continue to be secondarily liable to
Landlord with respect to all obligations signed by it to Assignee, and to
guarantee to Landlord Assignee's performance of the same, said guarantee to
continue to be secured by collateral provided to the Landlord at the time of
execution of the Modification.
Assignor warrants to Assignee that as of the Effective Date the Lease is in
full force and effect and no default exists thereunder. Landlord warrants to
Assignee that rents due under the Lease have been paid and there is no default
thereunder known to Landlord as of its date of execution hereof. Assignor and
Landlord jointly and severally warrant to Assignee that a true and correct copy
of the Lease is attached hereto as EXHIBIT "A" and that no amendments or
modifications have been made to the Lease except as disclosed to Assignee in
writing.
Landlord and Assignor covenant and agree that after the date hereof the
Lease will not be amended, supplemented or modified in any way without the prior
written consent of Tenant/Assignee. Assignor and Assignee agree that they will
not encumber in any way their respective interests in the Lease after the date
of this Memorandum of Lease Assignment.
2. Effective Date. The Effective Date of this Assignment shall be January
1, 1999.
3. Term. The term of the Lease terminates June 30, 2011.
4. Existing Debt. The parties acknowledge that the Property is subject to
the lien of a Deed of Trust and that the Lease is subject to a collateral
assignment in favor of Wachovia Bank of North Carolina, N.A., to secure certain
financing associated with the facility.Landlord warrants that the financing
secured by deed of trust lien on the Property and collateral assignment of the
Lease in favor of Wachovia Bank of North Carolina, N.A., is not in default and
that Landlord has complied with its obligations to said Bank with respect to
this document.
5. Power and Authority. Each party hereto covenants and represents to the
other that it has the power and has taken all necessary action to authorize the
execution of this document which is enforceable as to such party according to
its terms. Except as herein specifically modified, the Lease shall remain in
full force and effect. The consent given by Landlord hereunder does not waive
the requirement for the Landlord's advance consent with respect to future
assignments, if any, and the release of Assignor hereunder does not constitute a
waiver of Landlord's right to hold any tenant under said Lease secondarily
liable after a permitted assignment thereof.
6. Payment of Rent. As an inducement for Landlord's execution hereof,
Assignee and Manager agree that Manager shall make timely payments of all rents
due under the Lease as hereby modified as a first priority from cash flows in
the manner set forth in ss.1.05 (b) of the Management Agreement; shall provide
promptly to Landlord copies of cost reports and surveys submitted to and/or
received from governmental or supervisory agencies, as well as copies of all
reports required to be provided to Assignee under ss. 1.04 of the Management
Agreement; and shall give Landlord written notice of any default and/or
termination of the Management Agreement and otherwise comply with the Lease, the
Assignment and Modification Agreement, and this Assignment.
7. Notices. The parties agree that notices given under the Lease shall be
as follows:
If to Assignee (as Tenant of the Lease):
If to Landlord: Elderberry Manor of Mecklenburg,
Limited Partnership
P. 0. Xxx 000
Xxxxxxxxx, Xxxxxxxx 00000
If to Tenant: Centennial HealthCare Investment Corporation
000 Xxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X.Xxxx, Executive Vice President
with a copy to: Centennial HealthCare Investment Corporation
000 Xxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Senior Vice President
and General Counsel
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized agents as of this day and year first above written:
CHARLOTTE HEALTH INVESTORS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxx
Its: Manager
ELDERBERRY MANOR OF MECKLENBURG,
LIMITED PARTNERSHIP,
By: Elderberry Nursing Home, Inc.
Its General Partner
By: /s/ X. Xxxxx Christian, Jr.
X. Xxxxx Xxxxxxxxx, Jr.
President
CENTENNIAL HEALTHCARE INVESTMENT CORPORATION
By: /s/ Xxxx X. Xxxx
Xxxx X. Xxxx
Executive Vice President
CENTENNIAL HEALTH CARE MANAGEMENT CORPORATION
By: /s/ Xxxx X. Xxxx
Xxxx X. Xxxx
Executive Vice President
EXHIBIT "A"
LEASE AGREEMENT
THIS LEASE, made this 3rd day of June, 1991, by and between ELDERBERRY
NURSING HOME, INC., a Virginia Corporation, its successors and assigns,
(hereinafter referred to as "Landlord") party of the first part; and CARDINAL OF
KENTUCKY, INC., a Kentucky Corporation, (hereinafter referred to as "Tenant"),
party of the second part;
W I T N E S S E T H :
In consideration of the mutual covenants and obligations herein contained,
IT IS AGREED:
1. PREMISES: Landlord does hereby demise and lease unto Tenant, and Tenant
does hereby take, hire and let from Landlord that certain tract or parcel of
real estate, together with the buildings and improvements (and including
furniture, fixtures and equipment belonging to or provided by Landlord) and
constituting a 130 bed (120 nursing home beds and 10 home for adult beds)
intermediate, skilled and home for the aged nursing home facility, and the
privileges and appurtenances thereunto appertaining, situate, lying and being on
Xxx Xxxxxx Road in Mecklenburg County, North Carolina, and being more
particularly described on "EXHIBIT A" hereto attached, hereafter referred to as
"Premises" or "Demised Premises".
2. COVENANT OF TITLE AND QUIET ENJOYMENT: Landlord covenants and warrants
that it alone has full right and lawful authority to enter into this Lease for
the full term hereof; that it is lawfully seized of the Premises in fee simple
and has good title thereto, free and clear of all tenancies, restrictions and
encumbrances, (with the exception of liens securing Lenders providing financing
for the facility which is the subject of this Lease, and other matters not
adversely affecting the intended use of the Premises or merchantability of
title, or other matters agreed to between the parties) and that at all times
during the term of this Lease and any extensions of said term, Tenant's quiet
and peaceful enjoyment of the Premises shall not be disturbed or interfered with
by anyone.
3. GOVERNMENTAL AUTHORIZATIONS, UTILITIES AND USE OF PREMISES: Landlord
hereby represents and warrants to Tenant, that the use of the Premises as an
intermediate, skilled and home for the aged nursing home facility is a permitted
use under all applicable zoning or other use restrictions or regulations.
Landlord further warrants that the character, materials, design, construction
and location of the improvements is in full compliance with all building codes,
zoning laws and all other laws and ordinances pertaining thereto.
The Tenant shall use the premises as an intermediate, skilled and home for
the aged nursing home facility which shall be operated in full compliance with
all laws, regulations and licenses applicable thereto. Tenant covenants that no
part of the Demised Premises shall be used for any unlawful purpose, nor will
any unlawful condition or nuisance be permitted to exist thereon.
Tenant further covenants and agrees that its operation of the nursing home
facility shall materially comply with the representations in the certificate of
need application for the facility on file with the North Carolina Department of
Human Resources, Division of Facility Services, shall materially
comply with all conditions placed upon the certificate of need, and shall comply
with all licensure, certification, and other requirements of law applicable to
nursing home facilities.
4. TERM: The original term of this Lease shall be for Ten (10) years
commencing with the first day of the calendar month following the date that the
facility is licensed and becomes operational (the "Availability Date"). The
effectiveness of this Lease is specifically contingent upon prior licensure of
the facility.
5. RENT: A. Tenant shall pay to Landlord at its offices in Lynchburg,
Virginia, or at such other place as it may advise in writing, in advance, on the
1st day of each calendar month, without notice, demand, offset or deduction, in
lawful money of the United States of America, during and throughout the term of
this Lease, rent which shall be payable in monthly installments equal to the sum
of:
(1) For the first twenty-four (24) months of the term (Lease Years 1
and 2) the sum of Thirty-Six Thousand, Five Hundred Seventy-Six
Dollars ($36,576.00).
(2) For the next thirty-six (36) months of the term (Lease Years 3, 4
and 5) the sum of Thirty-Seven Thousand, Five Hundred Sixty-Five
Dollars ($37,565.00).
(3) For the next thirty-six (36) months of the term (Lease Years 6, 7
and 8) the sum of Forty-One Thousand, Five Hundred Nineteen Dollars
($41,519.00).
(4) For the next twenty-four (24) months of the term (Lease Years
9 and 10) the sum of Forty-Three Thousand, Four Hundred
Ninety-Six Dollars ($43,496.00).
Any rent adjustment resulting from a change in licensed beds becoming
effective on any day other than the first day of any month shall be prorated on
a per diem basis.
If the Landlord does not receive from Tenant any monthly rental payment
within ten (10) days after such payment is due, Landlord, at its option, may
charge Tenant a late charge and handling fee equal to Five Percent (5%) of the
monthly rental payment (such late charge and handling fee shall be deemed
additional rent) and such late charge and handling fee shall be due and payable
by Tenant to Landlord immediately upon delivery of written notice to Tenant. In
addition, if any check of Tenant's is returned to Landlord unpaid, Tenant shall
reimburse Landlord for all charges associated with such returned check and
Landlord, at its option, may thereafter require that Tenant pay the Rent and any
other charges payable hereunder by a certified or cashier's check.
B. If the Availability Date (as hereinabove defined) is not on the first
day of a month, a prorated monthly installment of Rent shall be paid by Tenant
to Landlord for the period of time from the Availability Date up to (but not
including) the first day of the next succeeding month, and thereafter the Rent
shall be paid on the first day of each and every month.
C. All additional sums payable by Tenant to Landlord under the provisions
of this Lease Agreement shall constitute additional rent.
6. REPORTS: Tenant agrees to provide Landlord with signed annual financial
statements accurately reflecting Tenant's financial condition and the results
for its business operations for the preceding year with respect to its
operations generally, as well as its business conducted on the Demised Premises.
Such statements shall be due ninety (90) days after the close of the Tenant's
fiscal year and shall be prepared in accordance with generally accepted
accounting principles consistently applied and further shall be in such form as
required by Landlord's mortgagee. In the event of any default hereunder or any
state of facts which upon the passage of time would constitute a default, Tenant
shall provide audited statements prepared by certified public accountants
satisfactory to Landlord. Tenant agrees to provide Landlord with annual
financial statements of any Guarantor of this Lease, duly signed by such
Guarantor within ninety (90) days after the close of the Guarantor's fiscal
year.
Tenant further will provide Landlord, as the same are filed with the State
of North Carolina, copies of all Medicaid Cost Reports, reports submitted to the
Department of Human Resources and other State agencies, and further will provide
Landlord copies of all communications with the State of North Carolina regarding
violations or alleged violations of applicable laws, rules, codes or
regulations.
7. LEGAL FEES AND COSTS: Tenant agrees, in the event it becomes necessary
for Landlord to enforce any provision of this Lease by legal action, or to
engage attorneys for the collection of rent or other monies due under this
Lease, to pay to Landlord reasonable attorney's fees and all court costs and
other costs of such collection or enforcement proceedings incurred by Landlord
if a valid claim is established.
8. UTILITIES: Landlord covenants that all water, sewer, electric current
and telephone facilities are available, connected and working as of the
availability date. Tenant shall pay when due all charges for heat, air
conditioning, water, gas, electricity and other utilities furnished to the
Premises for occupants thereof during the term hereof when the same become due
and payable.
9. REPAIR AND MAINTENANCE OF IMPROVEMENTS: Landlord warrants that the
entire Premises and the building and improvements thereon shall be in good, safe
condition and repair on the Availability Date and for a period of One (1) year
thereafter. Landlord shall be responsible for the structural integrity of the
building and repair of the roof and exterior walls, excluding windows and glass
panels, and except for damages caused or suffered to be caused by Tenant during
the term of this Lease. Except for such responsibility undertaken by Landlord,
Tenant shall be responsible, during the term, for maintaining the Premises in
good repair, including without limitation all interior surfaces, electrical,
plumbing, heating, air conditioning, and other systems, as well as the exterior
grounds, and shall at the end of the term, return the same to Landlord in good
repair and condition, with the exception of casualties insured against (the
proceeds of such insurance having been paid to Landlord) and ordinary wear and
tear. If Tenant fails to make any repairs, and/or perform any maintenance for
which it is responsible, within thirty (30) days after written notice thereof,
Landlord may, at its sole option, make the repairs and/or perform the
maintenance and the reasonable expense thereof shall be paid by Tenant, together
with interest at a rate equal to One and One-Half Percent (1-1/2%) in excess of
the Prime Rate then in effect at the Bank financing the construction of the
facility if such expense is not paid within thirty (30) days. Tenant shall have
the right at any time and with the Landlord's prior consent, which consent shall
not be unreasonably withheld, to construct, alter, repair or maintain on any
part of the Premises such buildings, parking areas, driveways, structures,
sidewalks and other similar and dissimilar improvements as Tenant shall desire.
All improvements constructed by Tenant shall comply with all applicable building
codes and ordinances and shall be at Tenant's sole cost and expense and shall
become the property of Landlord at the termination of this Lease. Tenant agrees
to indemnify Landlord against all claims by laborers and materialmen for any
improvements constructed by Tenant.
Landlord, its agents and employees, shall have the right at all reasonable
times and upon reasonable notice to Tenant, to enter the Demised Premises or any
part thereof, to inspect and examine the same for the purpose of making any
repairs to or within the Demised Premises.
10. DAMAGE OR DESTRUCTION OF IMPROVEMENTS: If the improvements located
upon the Premises shall be damaged or destroyed by any cause insured against,
Landlord shall, rebuild or restore the damaged or destroyed improvements, using
insurance proceeds for such purpose and this Lease shall continue in full force
and effect. In such event the rental reserved hereunder shall be paid by the
business interruption insurance hereinafter provided for. If the remaining term
is one (1) year or less, either party shall have the right to terminate this
Lease.
11. TAXES AND ASSESSMENTS: Tenant agrees to pay when due, all taxes (as
hereinafter defined) on or with respect to the Premises. Such payments shall be
made in accordance with the terms, and payable directly to the appropriate
authority or body. Landlord will promptly send Tenant copies of all bills for
taxes to be paid by Tenant and Tenant will pay the same to the appropriate
governmental authority. Tenant shall promptly send Landlord reasonable evidence
of payment of such xxxx after such payment.
In the event this Lease shall commence, or shall end (by reason of
expiration of the term or earlier termination pursuant to the provisions
hereof), on any date other than the first or last day of the year, or should the
year or period of assessment of real estate taxes be changed to more or less
than one year, as the case may be, then the amount of taxes which may be payable
by Tenant as provided hereunder shall be appropriately apportioned.
12. INSURANCE INDEMNITY:
(a) Tenant shall at all times during the original term and any
extension thereof, carry and maintain, for the mutual benefit of Landlord,
Tenant and Landlord's designated mortgagee, general public liability insurance
issued by a company or companies licensed to do business in North Carolina and
which are approved by Landlord (which approval shall not be unreasonably
withheld) against claims for personal injury, sickness, or disease, including
death and property damages in, on or about the Premises, such insurance to
afford protection to the limit of not less than $1,000,000.00 in respect to each
person, and to the limit of not less than $3,000,000.00 in respect to any one
occurrence causing bodily injury or death, and to the limit of not less than
$200,000.00 in respect to property damage. Tenant shall furnish Landlord with a
duplicate certificate or certificates of such insurance policy or policies, and
Tenant shall name Landlord and upon request, Landlord's mortgagee, as a party
insured in such policy or policies.
(b) During the term of this Lease or any extension thereof, Tenant
shall maintain for the benefit of Tenant, Landlord, and Landlord's designated
Mortgagee, business interruption insurance sufficient to pay the rent and
Tenant's other obligations hereunder for a period of six (6) months. Tenant
shall be entitled to all payments made under such business interruption
insurance to the extent such payments exceed sums necessary to pay the rent and
Tenant's other obligations hereunder.
(c) During the term, of this Lease or any extension thereof, Tenant
shall keep all buildings and improvements on the premises insured in the amount
of the full replacement cost for the benefit of Tenant, Landlord, and Landlord's
designated mortgagee against loss or damage by fire, with customary extended
coverage. All proceeds payable at any time and from time to time by an insurance
company under such policies (except contents belonging to Tenant and Tenant's
relocation allowance, if any) shall be payable to Landlord, or its designated
mortgagee. The proceeds shall be utilized by Landlord and Tenant for the
restoration of improvements in the event such restoration is required hereunder.
If no restoration is required, the proceeds shall belong to Landlord.
(d) The insurance policies herein mentioned shall provide thirty (30)
days notice of cancellation to all parties named therein as insured.
(e) Tenants shall fully indemnify, protect and save Landlord
harmless from all expenses, claims, demands, counsel fees, costs, liabilities,
judgments and executions in any manner relating to or arising out of the use or
occupancy of the Premises for the term of this Lease or any extension thereof.
(f) Any provision in this Lease to the contrary notwithstanding, each
party, to the extent it is permitted so to do by the terms and provisions of any
such policy or policies, hereby waives any and all rights to recover from the
other, its agents, or employees, any loss or damage from risks ordinarily
insured against under such policies, but only to the extent that such loss or
damage is in fact covered by such insurance and is collectible by such insured
party. Each party further covenants and agrees that it will, upon request of the
other, request each such insurance company to attach to such policy or policies
issued by it a waiver of subrogation with respect to the other party, its agents
and employees.
13. ASSIGNMENT AND SUBLETTING: Tenant shall have the right to assign this
Lease or sublet all or any part of the Premises with the consent of Landlord,
such consent not to be unreasonably withheld, but Tenant shall in such event
remain liable to Landlord for Tenant's obligations hereunder. Any merger,
consolidation, reorganization, or liquidation of Tenant, or the mortgage by
Tenant of the leasehold estate hereby created, or the sale or other transfer of
a controlling interest of its capital stock, or of a majority of its assets,
shall, for purposes of this Lease, constitute an assignment thereof.
14. SIGNS: Tenant shall have the right to install, maintain and replace in,
on or over or in front of the Premises or in any part thereof such signs and
advertising matter as Tenant may desire, and Tenant shall comply with all
applicable requirements of governmental authorities having jurisdiction and
shall obtain any necessary permits for such purpose. As used in this paragraph,
the word "sign" shall be construed to include any placard, light or other
advertising symbol or object, irrespective of whether same be temporary or
permanent.
15. EMINENT DOMAIN: If the whole or substantially all of the Premises, or
all means of access thereto, be acquired by eminent domain, or by purchase in
lieu thereof, this lease shall terminate and the rent shall be abated during the
unexpired portion of the lease subsequent to the actual physical taking.
Separate awards for damages shall be made to the Landlord and the Tenant for the
taking to the extend permitted by applicable law. Should, however, only a
portion of the premises be so condemned or taken, this Lease shall continue in
full force and effect provided, however, that the rent payable under the
unexpired portion of this Lease shall be adjusted to such extent as may be fair
and reasonable under the circumstances. Landlord shall, in such event, promptly
restore the Demised Premises as nearly as feasible to the condition of such
premises immediately prior to the taking, but Landlord shall not be required, at
its option, to restore or rebuild the Demised Property during the last year of
the Lease term. Tenant shall not be entitled to any part of the condemnation
proceeds arising from any partial taking except that Tenant shall be entitled to
make a claim for any of Tenant's property condemned.
16. DEFAULT: Any one or more of the following events shall constitute
events of default.
(a) Tenant's failure to make payment of rent when the same is due and
payable and the continuance of such failure for a period of ten (10) days after
mailing by certified mail or delivery to Tenant of notice in writing from
Landlord specifying in detail the nature of such failure; or,
(b) Tenant's failure to perform any of the other covenants, conditions,
and agreements imposed by it under this Lease and the continuance of such
failure without the curing of same for a period of thirty (30) days after
mailing by certified mail or delivery to Tenant of notice in writing from
Landlord specifying in detail the nature of such failure and provided Tenant
shall not cure said failure as provided in paragraph (d) below, or,
(c) The adjudication of Tenant as a bankrupt, or the appointment of a
receiver or trustee for Tenant's property and affairs, or the making by Tenant
of any assignment for the benefit of its creditors or the filing by or against
Tenant of a petition in bankruptcy not vacated or set aside within ten (10) days
of such filing.
In the event of default, the Landlord, in addition to any other right or
remedy it may have with respect to such default, may upon ten (10) days written
notice, terminate this Lease for cause and re-enter the Premises and take
possession of the same, or, at its option, in such event Landlord may, without
declaring this Lease terminated, re-enter the Premises and occupy or lease the
whole or any part thereof, for and on account of Tenant and on such terms and
conditions for such rental as Landlord may deem proper based on reasonable
business practices, and Landlord shall in such event collect such rent and apply
the same upon the rents due from Tenant and upon the expenses of such
subletting, and any and all other damages sustained by Landlord. In the event of
default, Landlord shall exercise reasonable efforts to mitigate damages
hereunder and to re-let the Premises, but Landlord's failure to re-let or sublet
the Premises shall not prevent or delay the exercise by Landlord, at its option,
of its right to recover as damages rents due and owing for the remainder of the
term, together with all costs and expenses of collecting the same, subject to
Landlord's obligation to repay or credit the Tenant with all recoveries made by
Landlord.
Upon the occurrence of any of the above events of default, Landlord may, at
its option, give Tenant written notice by certified mail of Landlord's election
to end the term of this Lease upon a date specified in such notice, which date
shall be not less than thirty (30) days after the date of delivery or certified
mailing by Landlord of such notice, and whereupon the term and estate hereby
vested in Tenant shall cease and any and all other right, title and interest of
Tenant hereunder shall likewise cease without further notice or lapse of time as
fully and with like effect as if the entire term of this Lease had elapsed, but
Tenant shall continue to be liable to Landlord as hereinafter set forth;
provided, that this Lease shall not terminate if Tenant shall cure such default
prior to the termination date specified in such notice.
(d) In the event Landlord gives notice of a default of such a nature
(other than a default which may be cured by a payment of money) that it cannot
be cured within such thirty (30) day period, then such default shall not be
deemed to continue so long as Tenant, after receiving such notice, proceeds
diligently and continuously to cure the default as soon as reasonably possible
and continues to take all steps necessary to complete the same within a period
of time which, under all prevailing circumstances shall be reasonable. No
default shall be deemed to continue if, and so long as, Tenant shall be so
proceeding to cure the same in good faith or be delayed in or prevented from
curing the same by Force Majeure.
17. HOLDING OVER: In the event Tenant remains in possession of the Premises
after the expiration of the term hereof, including any extensions of the term,
and without the execution of a new lease, Tenant shall occupy the Premises as a
Tenant from month to month, subject to all of the conditions of this Lease
insofar as consistent with such a tenancy and at the highest monthly rental
herein provided.
18. COMPLIANCE WITH GOVERNMENTAL PROGRAMS: Landlord covenants that the
Premises will, during the term hereof, meet all standards required for Federal
Medicare (Title 18) or Medicaid (Title 19) skilled care or intermediate care
nursing programs and that it will make any alterations necessary to maintain
compliance with same. Any alterations or changes or expansion will be negotiated
at the then current cost of construction, which cost, together with interest at
the rate of interest for which money is financed, shall be
amortized in level monthly additional rent payments over the agreed upon
remaining lease period.
Tenant further covenants and agrees that its operation of the nursing home
facility shall materially comply with the representations in the certificate of
need application for the facility on file with the North Carolina Department of
Human Resources, Division of Facility Services, shall materially comply with all
conditions placed upon the certificate of need, and shall comply with all
licensure, certification, and other requirements of law applicable to nursing
home facilities.
19. WAIVERS: Failure of Landlord or Tenant to complain of any act or
omission on the part of the other party, no matter how long the same may
continue, shall not be deemed to be a waiver by said party of any of its rights
hereunder. No waiver by Landlord or Tenant at any time, expressed or implied of
any breach of any provisions of this Lease, shall be deemed a consent to any
subsequent breach of the same or any other provision. No acceptance by landlord
of any partial payment shall constitute an accord or satisfaction but shall only
be deemed a part payment in account.
20. SURRENDER OF PREMISES: Upon the expiration or other termination of this
Lease, Tenant covenants and agrees that it will peaceably leave and surrender
possession of the Premises to Landlord. Upon such surrender, all improvements on
the Premises shall be in good repair, damage or destruction by fire or other
casualty insured against and ordinary wear and tear, alterations, additions and
improvements herein permitted, excepted.
21. NOTICES: Until notice to the contrary to the other party has been
given, all notices and payments of money if made to Landlord shall be made or
given by delivery or by mail (postage prepaid) addressed to Landlord at P. 0.
Box 638, 0000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, 00000-0000, with a copy to
Xxxxxx X. Xxxxxx, Xx., Esq., Xxxxxx & Frost, P. 0. Box 6360, 0000 Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxx, 00000, or if made to Tenant shall be made by delivery
or by certified mail (postage prepaid) addressed to Tenant at 0000 Xxxxxxxxxxx
Xxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx.
22. SHORT FORM LEASE: The parties hereto shall forthwith execute a
memorandum or short form lease agreement, in recordable form, including such
provisions hereof as either party may desire to incorporate therein.
23. NON-DISTURBANCE AND ATTORNMENT: Tenant agrees upon request of
Landlord's mortgagee to attorn to such mortgagee, subordinate this Lease to any
deed of trust constituting a lien on the premises, and to provide such other
reasonable assurances as such mortgagee may reasonably require in connection
with the financing of the Premises and the improvements thereon provided,
however, any such agreement or document shall provide, and such mortgagee shall
covenant, that Tenant's use and possession of the Premises shall not be
disturbed so long as Tenant shall not make or suffer any material default
hereunder, and further that in the event Landlord shall default in any payment
due to such mortgagee, Tenant shall have the right upon ten (10) days written
notice to pay such amount due and thereby cure such default.
24. PERFORMANCE BY LANDLORD: Landlord covenants to perform all of its
obligations to any mortgagee or other secured lender holding a lien on any
property subject to this lease and to make timely payments on all such secured
indebtedness. In the event payment is made by Tenant for Landlord's account as
hereinabove provided in Section 23 hereof, Tenant shall be entitled to recover
such payment from Landlord with interest from the date of such payment at the
same rate applicable with respect to the secured indebtedness upon which such
payment is made, but no such payment shall be offset or otherwise relieve Tenant
from making future rental payments as and when the same come due.
25. ENTIRE AGREEMENT: No oral statement or prior written matter shall have
any force or effect. Tenant agrees that it is not relying on any
representations or agreements other than those contained in this Lease. This
Lease shall not be modified or cancelled except by writing subscribed to by all
parties.
26. BROKERAGE: Each of the parties covenants and represents to the other
that neither has incurred brokerage fees with respect to the transaction herein
set forth.
27. PARTIES: The covenants, conditions, obligations and agreements
contained in this Lease shall bind and inure to the benefit of Landlord and
Tenant and their respective successors and assigns. Each member of the Cardinal
Group jointly and severally endorses this Lease for the purpose of guaranteeing
all of Tenant's obligations to Landlord during the first thirty-six (36) months
of the term, including without limitation, the obligation to make timely payment
of all installments of rent becoming due during such period.
28. RIGHT OF FIRST REFUSAL: In the event Landlord desires during the term
(including any optional term which becomes effective) to sell the premises or
any part thereof, Landlord shall notify Tenant of such desire to sell in writing
by certified mail setting forth the amount of the proposed sale price and all
other terms and conditions of such proposed sale and Tenant shall have the right
of first refusal to purchase said premises upon the same terms and conditions by
giving Landlord written notice of its election so to do within sixty (60) days
after receipt of Landlord's notice. In the event Tenant fails to notify Landlord
of its election within such sixty (60) day period, or notifies Landlord it does
not wish to exercise its right to purchase, Landlord shall have the right to
sell the premises upon terms and conditions no more favorable to a purchaser
than those contained in said notice to Tenant.
In the event Landlord desires to relet to any person or entity the Premises
upon the expiration of the original term, Landlord shall notify Tenant of such
desire to relet in writing by certified mail, setting forth the proposed terms
of such lease, and Tenant shall have the right of first refusal to relet said
premises upon the same Terms and conditions by giving Landlord written notice of
its election to do so within thirty (30) days after receipt of Landlord's
notice. In the event Tenant fails to notify Landlord of its election within the
thirty (30) day period or notifies Landlord it does not wish to exercise its
right to relet,Landlord shall have the right to relet the premises upon terms
and conditions no more favorable to a tenant than those contained in said notice
to Tenant.
Tenant's right to notice and/or exercise either of the rights of first
refusal hereinabove specified shall be subject to the condition that Tenant
shall not be in default hereunder. If Tenant shall have lost its right to
purchase by reason of default as hereinabove set forth, or if after receiving
notice Tenant shall not exercise its right to acquire the Premises and the
Premises shall be sold by Landlord to a third party, the rights of first refusal
herein granted shall be terminated as of the recordation of the deed conveying
the Premises.
IN WITNESS WHEREOF, the parties hereto have each, pursuant to due corporate
authority, caused this Lease to be executed in its name and on its behalf, each
by its duly authorized officer, all as of this day and year first above written.
LANDLORD:
ELDERBERRY NURSING HOME, INC.
By: /s/ X. Xxxxx Xxxxxxxxx, Jr.
Its: President
TENANT:
CARDINAL OF KENTUCKY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Its: Vice President
LEASE ASSIGNMENT AND MODIFICATION AGREEMENT
THIS LEASE ASSIGNMENT AND MODIFICATION AGREEMENT, made this 19th day of
December, 1996, by and between TRANSITIONAL HEALTH PARTNERS, a Delaware general
partnership, ("Assignor") party of the first part; CHARLOTTE HEALTH INVESTORS, a
North Carolina Limited Liability Company, ("Assignee") party of the second part;
ELDERBERRY MANOR OF MECKLENBURG, LIMITED PARTNERSHIP, a Virginia Limited
Partnership, ("Landlord") party of the third part; CENTENNIAL HEALTH CARE
MANAGEMENT CORPORATION, a Georgia corporation, ("Manager") party of the fourth
part;
W I T N E S S E T H:
WHEREAS, by Lease Agreement dated June 3, 1991, a copy thereof designated
"EXHIBIT A" being hereto attached, (the "Lease") Elderberry Nursing Home, Inc.,
as Landlord, demised to Cardinal of Kentucky, a Kentucky corporation, as Tenant,
the premises located at 000 Xxx Xxxxxx Xxxx, Xxxx xx Xxxxxxxxx, Xxxxxx of
Mecklenburg, North Carolina, including the 130 bed nursing care facility located
thereon, (the "Property") and more particularly described on "EXHIBIT B" hereto
attached; and
WHEREAS, by various mesne assignments and other transactions, Landlord has
become the owner of the Property and Assignor the Tenant under the leasehold
established by the Lease; and
WHEREAS, Assignor and Assignee have agreed to the assignment of said
leasehold estate, including the assumption by Assignee of all obligations of the
Tenant thereunder and the release of Assignor from said obligations subject to
the extension and modifications herein set forth, to which Landlord consents as
required by the Lease and as hereinafter more particularly provided;
WHEREAS, Assignee, pursuant to contract dated December 19, 1996, designated
"Long Term Care Facility Management Agreement", has engaged Manager to manage
such facility and Assignee and Manager acknowledge that such engagement
constitutes an inducement for Landlord to enter into this Agreement and to such
extent Landlord becomes a beneficiary of the foregoing Management Agreement.
NOW, THEREFORE, for good and valuable consideration, including without
limitation, certain security provided by Assignee to Landlord, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. Assignment. Assignor transfers and assigns all of its right, title and
interest to the Lease and the Property to Assignee as of the Effective Date
hereinafter defined and Landlord, as of the Effective Date releases Assignee
from all obligations as Tenant under the Lease arising after the Effective Date.
Assignor warrants to Assignee that as of the Effective Date the Lease
is in full force and effect and no default exists thereunder. Landlord warrants
to Assignee that rents due under the Lease have been paid and there is no
default thereunder known to Landlord as of its date of execution hereof.
2. Modification of Term. The original term of the Lease terminates June 30,
2001. The parties agree that such term shall be extended to June 30, 2011.
3. Modification of Rent. The rents payable in monthly installments pursuant
to Paragraph 5 A of the Lease shall, for the first six (6) months beginning
January 1, 1997, be Two Hundred Fifty-Five Thousand, Forty-Forty Dollars
($255,044.00) and thereafter annually on July 1st of each of the next
six (6) years consecutively following, such annual rent shall increase by Eleven
Thousand, Eight Hundred Sixty-Three Dollars ($11,863.00) over the annual rent
for the preceding year and thereafter for the remaining eight (8) years of the
term (beginning July 1, 2003) such annual rent shall increase by Five Thousand
Nine Hundred and Thirty-One Dollars ($5,931.00) over the annual rent for the
preceding lease year, provided further, nevertheless, if in any year (from July
1 to June 30) such annual rent increase is less than an amount equal to Fifty
Percent (50%) of the most recent authorized increase in the Reimbursement Rate,
(applied to the number of beds in the facility for a period of 365 days) the
increased rental for such year shall be an amount equal to Fifty Percent (50%)
of such increase in the Reimbursement Rate. The Reimbursement Rate is the
"Indirect Reimbursement Rate for Nursing Homes" or any similar measure of
reimbursement hereafter adopted as the same shall be increased by the North
Carolina Department of Human Resources or any successor agency. The intention of
the parties is that the increase in rent for each year shall be the larger of
(1) the specified increase ($11,863.00 for each of the next six (6) years
beginning July 1, 1997, and $5,931.00 for each of the following eight (8] years)
or (2) the amount obtained by applying to the number of beds in the facility for
a 365 day period, Fifty Percent (50%) of the increase in the Reimbursement Rate.
4. The parties acknowledge that the Property is subject to the lien of a
Deed of Trust and that the Lease is subject to a collateral assignment in favor
of Wachovia Bank of North Carolina, N.A., to secure certain financing associated
with the facility. Landlord warrants that the financing secured by deed of trust
lien on the Property and collateral assignment of the Lease in favor of Wachovia
Bank of North Carolina, N.A., is not in default and that Landlord has complied
with its obligations to said Bank with respect to this document.
5. Each party hereto covenants and represents to the other that it has the
power and has taken all necessary action to authorize the execution of this
document which is enforceable as to such party according to its terms. Except as
herein specifically modified, the Lease shall remain in full force and effect.
The consent given by Landlord hereunder does not waive the requirement for the
Landlord's advance consent with respect to future assignments, if any, and the
release of Assignor hereunder does not constitute a waiver of Landlord's right
to hold any tenant under said Lease secondarily liable after a permitted
assignment thereof.
6. The parties covenant and agree that all monies due and payable by
Assignee under separate contractual arrangements between them or their
affiliates as well as any subsequent management agreement pertaining to the
operation of the Property shall be subordinate to the Landlord's claims for
rent.
7. As an inducement for Landlord's execution hereof, Assignee and Manager
agree that Manager shall make timely payments of all rents due under the Lease
as hereby modified as a first priority from cash flows in the manner set forth
in ss.1.05 (b) of the Management Agreement; shall provide promptly to Landlord
copies of cost reports and surveys submitted to and/or received from
governmental or supervisory agencies, as well as copies of all reports required
to be provided to Assignee under S1.04 of the Management Agreement; and shall
give Landlord written notice of any default and/or termination of the Management
Agreement.
8. The parties agree that notices given under the Lease shall be as
follows:
If to Assignee (as Tenant of the Lease):
Charlotte Health Investors
c/o Xxxxxxx X. Xxxxxxxx
00 Xxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxx Xxxxxxxx 00000
If to Landlord: Elderberry Manor of Mecklenburg,
Limited Partnership
P. 0. Xxx 000
Xxxxxxxxx, Xxxxxxxx 00000
IN WITNESS WHEREOF, the party of the first part has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
___________________, the party of the second part has caused this Agreement to
be executed in its name and on its behalf by its Managing Partner, and the party
of the third part has caused this Agreement to be executed in its name and on
its behalf by its General Partner, all as of this day and year first above
written:
TRANSITIONAL HEALTH PARTNERS,
a Delaware general partnership
By THS Partners I, Inc.,
General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Vice President
CHARLOTTE HEALTH INVESTORS,
By: /s/ Xxxxxxx X. Xxxxxxxx
Its Manager Partner
ELDERBERRY MANOR OF MECKLENBURG,
LIMITED PARTNERSHIP,
by Elderberry Nursing Home, Inc.,
Its General Partner
By: /s/ X. Xxxxx Christian, Jr.
X. Xxxxx Xxxxxxxxx, Jr.
President
CENTENNIAL HEALTH CARE MANAGEMENT CORPORATION,
a Georgia corporation,
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Vice President
EXHIBIT "B"
The subject tract of land is irregular in shape and contains a total area
of 8.13 acres. The legal description as shown on Page 138 of Deed Book 6273 of
the Mecklenburg County Registry is as follows:
BEGINNING at N.C. Grid Coordinate (NAD 1983) N = 561195.004, E =
1470446.435, at or near the northern right of way line of Xxx Xxxxxx Road
and runs thence North 84-02-54 West 108.33 feet; thence North 09-32-47 West
398.70 feet to an iron; thence North 09-13-01 West 519.56 feet to an iron;
thence South 77-15-03 East 625.61 feet to an iron; thence South 14-07-12
East 244.94 feet to an iron; thence South 08-02-08 West 247.78 feet to an
iron; thence North 78-51-49 West 345.45 feet to an iron; thence South
06-10-25 West 365.16 feet to the point of BEGINNING and containing 8.13
acres as surveyed by Hanover Design Services, P.A., February, 1990. For
reference see Deeds recorded in Book 6088, Page 620, Book 3434, Page 918,
and Book 5115, Page 0088, of the Mecklenburg County Registry.
RESERVED AND EXCEPTED from the above described property a utilities
easement 20 feet in width, the western boundary line of said easement being
the western boundary line of the above-described tract and the eastern
boundary of said easement being at all points 20 feet East of said western
boundary. Said easement is non-exclusive and for the benefit of the Grantor
and Grantee herein and their successors.
This tract is somewhat irregular in shape and the main body of the land
lies approximately 365 feet north of Xxx Xxxxxx Road. There is 108.33 feet of
street frontage which is more than adequate to provide for an attractive entry
road to buildings located on the main body of the tract. The 20 foot wide
utility easement adjacent to the western property line should have no affect
upon the utility of this tract. Topographically, the land is at street grade and
moderately rolling. The extreme eastern side of the tract has a downward slope
to a small drainageway but this has no adverse affect upon the utility of the
land. There are no known adverse surface or subsurface soil conditions that
would affect the utility of this tract. Drainage is considered adequate due to
the sloping topography and the street drainage system. This land is not in a
designated flood plain and there are no nearby streams or other bodies of water
which would adversely affect the property. Very good access is provided by the
frontage on Xxx Xxxxxx Road and the surrounding street system.
Subject to all easements, rights of way, and reservations and restrictions
and other matters of record.
