LEASE AGREEMENT
THIS LEASE AGREEMENT made and entered into as of this 18TH day of December,
1987, by and between PHOENIX NURSING HOME LIMITED PARTNERSHIP, an Illinois
limited partnership (hereinafter referred to as "Lessor") and HORIZON HEALTHCARE
CORPORATION, a Delaware corporation (hereinafter referred to as "Lessee").
WITNESSETH
WHEREAS, Lessor has entered into a contract to purchase a certain tract of
land which is improved with a nursing home facility, located at 00000 X. 00xx
Xxx. Xxxxxxx, XX and known as the Phoenix Jewish Care Center, all as more
particularly described in Exhibit A attached hereto and made a part hereof
(which tract and nursing home facility, together with any other improvements now
or hereafter located on the tract and all easements, tenements, hereditaments
and appurtenances thereto are hereinafter referred to as the "Demised
Premises"); and
WHEREAS, Lessor has entered into a contract to purchase the furnishings,
furniture, equipment and fixtures to be used in or about the Demised Premises
(hereinafter collectively referred to as the "Personal Property"); and
WHEREAS, following the closing of the purchase of the Demised Premises and
Personal Property, Lessor desires to lease the Demised Premises and Personal
Property to the Lessee and Lessee desires to lease the Demised Premises and
Personal Property from Lessor; 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 shall, for all purposes of this Lease and
all agreements supplemental hereto, have the meaning herein specified:
(a) "Demised Premises" shall mean the real property described in Exhibit A
and all improvements located thereon.
(b) "Personal Property" shall mean the furniture, fixtures, equipment and
supplies acquired by Lessor.
(c) "Leased Property shall mean the Demised Premises and the Personal
Property.
(d) "Lease Year" shall mean each twelve-month period commencing on January
1 or each year and ending on December 31 or the same year.
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(e) All other terms shall be as defined in other sections or this Lease.
ARTICLE II - DEMISED PREMISES AND PERSONAL PROPERTY
2.1 Lessor, for and in consideration of the rents, and covenants and agreements
hereinafter reserved, mentioned and contained on the part of the Lessee, its
successors and assigns, to be 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 128 bed skilled and/or intermediate care nursing home,
in full compliance with all the rules and regulations and minimum standards
applicable thereto, as prescribed by the State of Arizona and such other
governmental authorities having jurisdiction thereof.
ARTICLE III - TERM OF LEASE
3.1 The initial term of this Lease shall be for a period or ten (10) years
commencing on January 1, 1988 (said date is hereafter referred to as the
"Commencement Date"), and shall expire on December 31, 1997 (the "Initial
Term"), unless extended or sooner terminated as hereinafter provided.
3.2 Lessee shall have the right to extend the term of this Lease for two (2)
consecutive periods of five (5) years each (the "Extended Terms"). Lessee shall
exercise its option to extend by written notice to Lessor given at least 180
days prior to expiration of the Initial Term or the First Extended Term, as
appropriate.
3.3 The Initial Term and the Extended Terms are hereinafter sometimes
collectively referred to as the "Lease Term".
ARTICLE IV - RENT
4.1 Lessee shall pay to Lessor, or as Lessor shall direct, Minimum Rent and
Additional Rent in the amounts and in the manner specified below. Unless
otherwise notified in writing by Lessor, all such payments shall be made by
check made payable to Phoenix Nursing Home Partnership and shall be sent c/o
Xxxxxx Xxxxxx, 00 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000.
4.2 Rent. Rent shall be payable in each Lease Year of the Initial Term and any
Extended Terms in the following amounts:
4.2.1 In the first Lease Year, an annual Rent payment of Three Hundred
Ninety Seven Thousand One Hundred Twenty and No/100 Dollars ($397,120) shall be
due and owing on the first of each month commencing January 1, 1988, and shall
be payable in equal consecutive monthly installments of $33,093.33.
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4.2.2 In the Second Year, an annual Rent payment of Four Hundred Eight
Thousand Eight Hundred and No/100 Dollars ($408,800) shall be due and owing on
the first of each month commencing January 1, 1989 and shall be payable in equal
consecutive monthly installments or $34,066.67.
4.2.3 In the Third, fourth and Fifth Lease Years, an annual Rent
payment of Four Hundred Twenty Thousand Four Hundred Eighty and No/100 Dollars
($420,480) shall be due and owing on the first of each month commencing January
1, 1990 and shall be payable in equal consecutive monthly installments or
$35,040.00.
4.2.4 In the remaining Lease Years, Lessee shall pay to Lessor the
annual Rent specified below:
LEASE YEAR ANNUAL MONTHLY
---------- ------ --------
6 $426,787.20 $35,565.50
7 433,189.01 36,099.08
8 439,686.85 36,640.57
9 446,282.15 37,190.18
10 452,976.38 37,748.03
11 459,771.03 38,314.25
12 466,667.60 38,888.97
13 473,667.61 39,472.30
14 480,772.62 40,064.39
15 487,984.21 40,665.35
16 495,303.97 41,275.33
17 502,733.53 41,894.46
18 510,274.53 42,522.88
19 517,928.65 43,160.72
20 525,697.58 43,808.13
4.2.5 In the event the Lease should commence or terminate other then on
the first day of a month, Lessee shall pay to Lessor a pro rata portion of the
Rent due for the month.
4.3 This Lease is and shall be deemed and construed to be an absolutely 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 relating to the Leased Property as set forth herein, and excluding
any principal and interest payments relating to any mortgage on the Demised
Premises, which payments shall be the responsibility of Lessor. Lessee does
hereby indemnify the Lessor against any and all said 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
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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.
ARTICLE VI - PAYMENT OF TAXES AND ASSESSMENTS
6.1 Subject to the conditions of this paragraph, Lessee shall pay before
delinquency all taxes, assessments, improvement assessments and charges for
public utilities or every kind and character which have or may be levied,
imposed or assessed upon the Demised Premises and upon the Personal Property and
any replacements thereof during the term of this Lease (hereinafter referred to
as "Taxes and Assessments"); provided, however, this Article VI shall not
require Lessee to make any payments for which Lessee has previously deposited
funds with Lessor pursuant to Article XXVIII hereof. Forthwith upon payment by
Lessee of any Taxes or Assessments required to be paid by it, Lessee shall
submit to Lessor the official receipt or receipts showing payment of such taxes,
or photostatic copies thereof.
6.2 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 before or 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.
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.
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
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proceedings, and Lessee will indemnify and save harmless Lessor from any such
costs and expenses. Lessee shall be entitled to any refund of any real estate
taxes 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, 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
during the term of this Lease, then Lessee shall be responsible for the payment
of such tax.
ARTICLE VII - RESERVES AND ACCOUNTS RECEIVABLE
7.1 At the Commencement Date, Lessor shall account, or shall direct PJCC
Partnership, the current operator of the Facility, to account, to Lessee for all
entrance fees, advance payments or other funds held by Lessor, or PJCC
Partnership for any patients (in trust or otherwise) or in connection with any
reserve requirements imposed by statute, regulation or otherwise in connection
with operation of the Demised Premises and Personal Property and shall thereupon
deliver such funds to Lessee.
7.2 All accounts receivable in respect of the facility on the Demised
Premises shall be prorated as of the Commencement Date. All amounts collected
from private patients after the Commencement Date shall be first applied to
services rendered or to be rendered after the Commencement Date.
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 skilled care and/or intermediate care nursing
home and for no other purpose without the prior written consent of Lessor, which
consent shall not be unreasonably withheld. Lessee shall at all times use its
best efforts to maintain in good standing and full force all the licenses issued
by the State of Washington and any other governmental agencies permitting the
operation on the Demised Premises of a skilled and/or intermediate care nursing
home facility.
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 Upon termination of this Lease for any reason, Lessee will return to
Lessor the Demised Premises qualified and sufficient for licensing by all
governmental agencies having jurisdiction over the Demised Premises as a skilled
and/or intermediate care nursing home with licenses in full force and good
standing. All the Demised Premises, with the improvements located therein and
all the Personal Property shall be surrendered in good order, condition and
repair, reasonable wear and tear excepted.
ARTICLE IX - INSURANCE
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9.1 Lessee shall, at its sole cost and expense, during the full term of this
Lease, maintain fire and casualty insurance with extended coverage endorsement
on the Leased Property with a responsible company or companies approved by
Lessor, which approval will not be unreasonably withheld. Such insurance shall,
at all times, be maintained (without any co-insurance clause, if possible) in an
amount as may be required by an mortgagee of the Demised Premises or, absent
such requirement, in an amount sufficient to prevent Lessor and Lessee from
becoming co-insurers under applicable provisions of the insurance policies.
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.
9.2 Lessee shall also, at Lessee's sole cost and expense, cause to be issued
and shall maintain during the entire term of this Lease:
a) A public liability policy naming Lessor, as an additional insured or
loss payee, as appropriate, and insuring Lessor against claims for bodily
injury, or property damage occurring upon, in or about the Demises Premises, or
in or upon the adjoining streets, sidewalks, passageways, and areas such
insurance to afford protection to the limits of not less than $1,000,000.00 per
each occurrence and $1,000,000.00 in the aggregate and an umbrella liability
policy of not less than $4,000,000.00 per each occurrence;
b) Boiler explosion insurance, in the amount of not less than $100,000.00
under the terms of which Lessor and Lessee will be indemnified, as their
interests may appear, against any loss or damage which may result from any
accident or casualty in connection with any boiler used in the Demised Premises,
whereby any person or persons may be injured or killed or property damaged in or
about the Demised Premises; and
c) Medical Malpractice insurance in the amount of $500,000.00.
9.3 All policies of insurance shall provide:
a) That 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;
b) That they shall not be cancelled, terminated, reduced or materially
modified without at least twenty (20) days' prior written notice to Lessor; and
c) 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.
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9.4 Certificates evidencing the existence of the insurance required to be
carried by Lessee shall be delivered to Lessor upon request.
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) To the extent the same can be ascertained, the aggregate of the cost
of all Taxes and Assessments due during the period of the next succeeding twelve
(12) months following the occurrence of the business interruption;
b) The cost of all insurance premiums for insurance required to be
carried by Lessee for such twelve (12) month period; and
c) The aggregate of the amount of (i) Miniumum Rent for the next
consecutive twelve (12) month period and the (ii) the Additional Rent paid in
the immediately preceeding Lease Year.
All proceeds of any business interruption insurance shall be applied,
first, to the payment of any and all Rent payments for the next succeeding
twelve (12) months; second, to the payment of any Taxes and assessments and
insurance deposits required for the next succeeding twelve (12) months; 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 section 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, and such failure shall continue for ten (10) days after Lessor has
given Lessee written notice of such failure unless such failure cannot, with due
diligence, be cured within a period of thirty (30) days, in which case such
failure shall not be deemed to continue if Lessee proceeds promptly and with due
diligence to cure the failure, Lessor may, 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 the rate of fifteen percent (15%) per annum 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.
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.
ARTICLE XI - REPAIRS AND MAINTENANCE
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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 a suitable state of
repair at least comparable to that which existed immediately prior to the
Commencement Date (ordinary wear and tear expected), and will make or cause to
be made, as and when the same shall become necessary, all structural and
non-structural, 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 a 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 skilled and/or intermediate care nursing home. Any items
of Personal Property that are uneconomical to repair shall be replaced where
reasonable by 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 may remove such additional property
upon termination 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.
ARTICLE XIA - DAMAGE AND DESTRUCTION
11A. 1 If the Demised Premises shall be substantially damaged or destroyed, as
hereinafter defined, by fire, casualty, act of God or similar or dissimilar
causes, then in any such event Lessee may elect to terminate this Lease by
giving Lessor within forty-five (45) days immediately following such substantial
damage or destruction written notice electing to terminate. This Lease shall
then terminate thirty (30) days after delivery of such notice, with rent
adjusted to the effective date of damage or destruction. For the purposes of
this Lease, the Demised Premises shall be deemed substantially damaged or
destroyed if the number of beds usable at the nursing care facility included
therein, immediately after the damage or destruction, is reduced below one
hundred (100).
11A.2 If the Demised Premises Lessee shall be damaged or destroyed by fire,
casualty, act of God or similar or dissimilar causes, and this Lease is not
terminated as provided in paragraph 11A.1 above, either because Lessee elects
not to terminate or because the damage or destruction is not deemed substantial
as defined in such paragraph, Lessee, at its expense, and subject to the
provisions of this paragraph, shall repair and restore the Premises upon the
same general plan and dimensions as before such damage or destruction, unless
another plan is agreed upon in writing between Lessor and Lessee. Lessee shall
commence to repair and restore the Demised Premises within fifteen (15) days
after Lessee gives written notice of damage or destruction to Lessor and that
Lessee elects not to exercise any available right to terminate as provided by
paragraph 11A.1 above. Lessee may utilize all insurance proceeds available for
any such repair or restoration, subject to any required approval of any
mortgagee. Lessee's obligation to make
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rent payments and to pay all other charges required by this Lease shall be
equitably abated during the period of repair or restoration.
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 the 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.
ARTICLE XIII - COMPLIANCE WITH LAWS AND ORDINANCES
13.1 Throughout the term of this Lease, Lessee shall use its best efforts to
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 skilled and/or intermediate care nursing home,
which may be applicable to the Personal Property and the nursing home 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, whether or not such law, ordinance, order, rules, regulation or
requirement shall necessitate structural changes or improvements.
13.2 Lessee shall likewise use its best efforts to 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 use its best efforts to
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 skilled and/or
intermediate care nursing home which at all times shall be qualified to
participate in the Medicare and/or Maricopa County Welfare Programs.
13.4 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 or certification relating
to the Demised Premises or the nursing home operated thereon.
13.6 Lessee will deliver to Lessor within thirty (30) days of Lessor's written
request therefor, copies of any inspection reports or surveys from any state,
federal and local governmental bodies regarding the Demised Premises.
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ARTICLE XIV - DISCHARGE OF LIENS
14.1 Subject to the provisions of Article 14.2 hereof, 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 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.
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 sixty (60) 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 in writing by Lessor to Lessee, 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 the rate of fifteen
percent (15%) per annum, but not in excess of the maximum amount 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 mortgagee's interest in the
Demised Premises.
ARTICLE XV - INSPECTION OF PREMISES BY LESSOR
15.1 At any time, during reasonable business hours, Lessor and/or its
authorized representative shall have the right to enter and inspect the Demised
Premises and Personal Property.
15.2 Lessor agrees that the person or persons upon entering and inspecting the
Demised Premises and Personal Property will cause as little inconvenience to the
Lessee as may reasonably be possible under the circumstances.
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 of
title vesting in such proceeding and all rentals shall be paid to that date. If
all or substantially all of the Leased Property shall be taken, the net proceeds
of any condemnation award, settlement or compromise for the Leased Property
taken shall be allocated between Lessor and Lessee in the proportion in which
the value of Lessor's
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interest under this Lease plus the value of Lessor's reversionary interest in
the Leased Property, both as of the date of title vesting in such proceeding,
bears to the value of Lessee's interest (taking into consideration its rental
obligations) under this Lease as of the date of title vesting in such
proceedings. 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 discretion of Lessee.
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, Lessee shall have the
right to terminate this Lease by written notice to Lessor within ninety (90)
days following the Issuance of the condemnation order or conveyance of the
property, whichever is earlier, with rent adjusted to the date of termination.
ARTICLE XVII - LESSOR'S WARRANTIES AND REPRESENTATIONS
17.1 Lessee hereby acknowledges that it has inspected the Facility prior to
execution of this Lease and that the Facility is currently fully equipped.
Lessor does hereby represent and warrant that to the extent the Demised Premises
is found by Lessee after the Commencement Date not to be so fully equipped, and
Lessee advises Lessor in writing of said deficiency, Lessor shall take such
steps as may be reasonably necessary to secure the missing equipment and/or to
compensate Lessee for the replacement value thereof.
17.2 Lessee shall peaceably and quietly hold and enjoy the Demised Premises
and Personal Property for the term hereby demised without hindrance or
interruption by Lessor or any other person or persons lawfully or equitably
claiming by, through or under Lessor subject, nevertheless, to the terms and
conditions of this Lease.
17.3 With respect to the obligations of Lessor (or any other party who shall
be obligated to do so) to pay when due any amounts due under a mortgage which
may now or hereafter affect the Demised Premises including, but not limited to,
the Deed of Trust described in Section 19.1(d), below, or to pay (or bond over
in a manner reasonably satisfactory to Lessee) any other charge or lien which if
unpaid, would affect Lessee's quiet enjoyment of the Demised Premises, then
after ten (10) days' written notice from Lessee to Lessor specifying with
particularity the alleged default, and failure of Lessor to cure such default
within such period, Lessee may cure any such default, all on behalf of and at
the expense of Lessor and make all necessary payments in connection therewith,
including payments for reasonable attorneys fees in instituting, prosecuting or
defending any action or proceedings instituted by reason of any default of
Lessor, and withhold any and all rental payments and other payments thereafter
due to Lessor, up to the amount of the sums theretofore actually advanced by or
on behalf of Lessee under this Lease together with interest thereon from the
date of payment by Lessee at the rate of fifteen (15%) percent per annum, but
not in excess of the maximum amount permitted by law. In addition, in the event
of Lessor's failure on three occasions to make its mortgage payments, in lieu of
exercising the rights and remedies specified above, Lessee may terminate this
Lease,
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provided at the time of said termination Lessee is not in default of its rental
obligations hereunder.
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 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, it its
exclusive option, terminate this Lease and invoke the provisions of this Lease
relating to default.
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:
(a) The failure of Lessee to pay when due any rental payment, 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 after notice in writing thereof by Lessor to Lessee;
(b) The failure of Lessee to perform, or the violation by Lessee of,
any of the covenants, terms, conditions or provisions of this Lease, if such
failure or violation shall not be cured within thirty (30) days after notice
thereof in writing by Lessor to Lessee, (provided, however, that in the case of
a default which cannot with due diligence be cured within said period of thirty
(30) days after the notice, Lessee shall have such additional time to cure the
same as may reasonably be necessary, provided Lessee proceeds promptly and with
due diligence to cure such default after receipt of such notice);
(c) 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 (50%) percent or more of the patients located in the nursing
home;
(d) The failure or Lessee to comply, or the violation by Lessee of,
any of the terms, conditions or provisions of any Deed of Trust or Mortgage
encumbering the Leased Property which Lessee has agreed in writing to be bound
by, if such failure or violation shall not be cured within twenty (20) days (or
such lesser period as may be provided in said Deed of Trust or Mortgage) after
notice in writing thereof by Lessor to Lessee, subject, however, to the
provision of 19.1(b) with respect to defaults not susceptible of cure within
such period to the extent the same is consistent with the cure provisions or the
said Deed of Trust or Mortgage;
(e) The failure of Lessee to replace, within thirty (30) days after
notice in writing by Lessor to Lessee, a substantial portion of the Personal
Property previously removed by Lessee;
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(f) The making by Lessee of an assignment for the benefit of
creditors;
(g) 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 thirty (30) days after such levy or attachment (provided
if the stay is vacated or ended, this paragraph shall again apply);
(h) 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 with thirty (30) days after the institution of said proceedings;
(i) The sale of the interest of Lessee in the Demised Premises under
execution;
(j) The 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 or (ii) decertify the nursing home operated on the Demised
Premises from participation in the Medicaid reimbursement program, subject
however to Lessee's rights under Article XX hereof.
(k) The abandonment of the Demised Premises by Lessee.
ARTICLE XX - RIGHT TO CONTEST
20.1 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 further provided that the effectiveness and good standing of any
license, certificate or permit substantially affecting the Demised Premises or
the nursing home operated thereon would continue in full force and effect during
the period of such contest.
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 twenty (20) 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 Leased Property,
or, at the option of the Lessor, terminate Lessee's right to possession of the
Leased Property 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
13
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 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 21.1 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, less any rents and other charges that
Lessor will receive by reason of reletting the Demised Premises, and in any such
case, Lessee shall pay to Lessor a sum equal to the entire amount of any 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. Lessee shall, upon demand, pay the cost of 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 any reasonable costs of repairs, alterations,
additions or redecorating necessitated by Lessee's default hereunder, Lessee
shall pay to the Lessor the amount of each monthly deficiency upon demand.
21.3 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. However, in exercising any remedies hereunder, Lessor
shall have the duty to mitigate the damages for which Lessee may be liable to
the extent reasonably possible, including, but not limited to, efforts to lease
or relet the Demised Premises. 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 liquidated and final damages, less
any current monthly deficiencies Lessor shall have collected under the foregoing
paragraph, and in lieu of such current deficiencies after the date of demand for
such final 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;
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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
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 liquidated final
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.
21.4 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 skilled
and/or intermediate care nursing home is not terminated or cancelled, 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.
ARTICLE XXII - (THIS SECTION INTENTIONALLY DELETED)
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.
15
ARTICLE XXIV - (THIS SECTION INTENTIONALLY DELETED)
ARTICLE XXV - INDEMNIFICATION
25.1 To the extent insurance proceeds do not cover same, Lessee agrees to
protect, indemnify 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 on the Demised
Premises or adjoining sidewalks, streets or ways, or in any manner growing out
of or connected with the use and occupation of the Demised Premises or the
condition thereof. 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; provided, however, that notwithstanding anything to the
contrary contained within this Article XXV, Lessee shall not and does not hereby
assume any liabilities of Lessor for payment of the debt service or other sums
under any Deed of Trust or mortgage encumbering the Leased Property or relating
to Lessor's ownership of the Leased Property, except for the payment of taxes
and insurance and other expenses to be paid by Lessee as specified in this
Lease, or any other liabilities or obligations arising prior to the Commencement
Date of this Lease; and provided, further, that Lessee shall not and does not
hereby assume any obligations to Lessor or any other party or person pursuant to
this Article XXV with respect to any claims, demands or causes of action
relating in any manner whatsoever to the negligence or willful misconduct of
Lessor. Lessor hereby agrees to indemnify and hold Lessee harmless from and
against any and all liabilities and obligations arising out of or incurred in
connection with the operation of such facility prior to the Commencement Date,
including, but not limited to any claim arising out of any lease or management
of any such facility prior to such date and any claims, demands or causes of
action relating in any manner whatsoever to the negligence or willful misconduct
of Lessor.
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 first mortgage to any lender
which may now or hereinafter affect the Demised Premises and/or Personal
Property, and to any junior mortgage (if the holder of the first mortgage
consents thereto in writing) and to all renewals, modifications, consolidations,
replacements and extensions thereof, provided that any such renewals,
modifications, consolidations and extensions do not require monthly payments
thereon of principal and interest, in excess of the monthly rental payment from
time to time required hereunder, and provided, further, that such lender or
holder of any mortgage agrees in writing not to disturb Lessee's quiet
possession. Notwithstanding the immediately proceeding sentence, with respect
to any mortgage which may now affect the Demised Premises and which does not
contain a nondisturbance clause, Lessor agrees to use its best efforts to obtain
such a nondisturbance clause relating to Lessee's quiet possession of the
Demised Premises.
ARTICLE XXVII - RIGHT OF FIRST REFUSAL
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27.1 Lessor shall not sell the Demised Premises to a third party ("Third
Party") unless and until (i) Lessor has received and, subject to Lessee's right
of first refusal, accepted a bonafide written offer ("Offer") from Third Party
containing the sales price and all of the terms and conditions upon which Lessor
is willing to sell the Demised Premises to Third Party and (ii) Lessor has
provided Lessee with a copy of the Offer and disclosed the identity of Third
Party to Lessee.
27.2 If Lessee, within thirty (30) days after receipt of Lessor's written
notice, gives Lessor written notice of its desire to purchase the Demised
Premises, Lessor and Lessee shall, within thirty (30) days after Lessor receives
Lessee's notice, enter into a written purchase and sales agreement for Lessor's
sale of the Demised Premises to Lessee for the price, and on the terms and
conditions, set forth in the Offer.
27.3 If Lessee does not give Lessor its written notice within such thirty (30)
day period, Lessor thereafter shall have the right to sell the Demised Premises
to Third Party on the terms and conditions set forth in the Offer, so long as
the sale to Third Party closes within one hundred eighty (180) days after
Lessor's delivery of the Offer to Lessee. If such sale to Third Party does not
close within the time period specified herein, then all Lessee's first refusal
rights stated within this Article XXVII shall be reinstated with respect to such
Offer and any and all subsequent Offers.
ARTICLE XXVIII - MORTGAGE RESERVES
28.1 Any tax or insurance reserve required by the holder of any mortgage
against the Demised Premises during the term of this Lease shall be paid by the
Lessee to Lessor, marked payable to such holder.
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, and the estate of the Lessor thereunder are 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; provided, however, that the holder of such mortgage or
the purchaser in foreclosure proceedings agrees in writing not to disturb
Lessee's quiet possession of the Demised Premises so long as Lessee is not in
default hereunder. Lessee covenants and agrees to execute and deliver, at any
time and from time to time, upon the reasonable 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
17
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 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 - LESSEE'S REPRESENTATIONS AND WARRANTIES
30.1 Lessee represents, warrants and covenants to Lessor as follows:
a) Lessee is a corporation duly organized and validly existing and in
good standing.
b) Lessee has full right and power to enter into, or perform its
obligations under this Lease and has taken all requisite action to authorize the
execution, delivery and performance of this Lease.
ARTICLE XXXI - (THIS SECTION INTENTIONALLY DELETED)
ARTICLE XXXII - LESSOR'S PURCHASE OF LEASED PREMISES
32.1 Lessee hereby acknowledges that it has been advised that Lessor has
entered into a contract to purchase the Leased Property from the current owner.
Lessee hereby agrees that this Lease, the obligations of Lessor and the rights
of Lessee to lease the Leased Premises pursuant to this lease are subject to and
conditioned upon the purchase of the Leased Premises by Lessor, provided,
however, that if Lessor has not consummated its purchase of the Leased Property
on or before December 31, 1987, Lessee has the option to terminate this Lease.
ARTICLE XXXIII - FINANCIAL STATEMENTS
33.1 Within 120 days after the end of each of its fiscal years, Lessee shall
furnish to Lessor unaudited financial statements of the operations of the
Demised Premises and nursing home operated thereon.
ARTICLE XXXIV - MISCELLANEOUS
34.1 Lessee, upon paying the annual rental and all other charges herein
provided, and for 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
18
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 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 Lessor and Lessee each represent to the other that there are no claims
for brokerage or other commission or finder's or other similar fees in
connection with this Lease, and hereby agree to hold the other harmless in the
event any such claims or demands are made based on arrangements allegedly made
by or on behalf of the party so representing.
34.5 In the event either party brings an action to enforce any of the terms
hereof or in connection herewith the prevailing party shall be entitled to
recover from the other party, as part of the prevailing party's costs,
reasonable attorney's fees the amount of which shall be fixed by the court and
shall be made a part of any judgement rendered.
34.6 Should Lessee hold possession hereunder after the expiration of the term
of this Lease without the written 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 mutually
agreed upon by Lessor and Lessee.
34.7 All notices, demands or requests which may or are required to be given by
either party to the other shall be in writing and shall be sent by United States
certified mail, return receipt requested, addressed to the other party hereto at
the address set forth below:
If to Lessor:
Phoenix Nursing Home
x/x Xxxxxx Xxxxxx
00 Xxxx Xxxxxx, #1690
Xxxxxxx, Xxxxxxxx 00000
With copies to:
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Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx
Goldbereg, Kohn, Bell, Black, Xxxxxxxxxx & Moritz, Ltd.
00 Xxxx Xxxxxx Xx.
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
If to Lessee:
Horizon Healthcare Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
or if 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.
34.8 Upon demand by either party, Lessor and Lessee agree to execute and
deliver a short form lease in recordable form so that the same may be recorded
by either party.
34.9 Each party agrees that 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 have
been modifications, that the same is in full force and effect as modified, and
stating the modification), the dates to which the rent has been paid 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
20
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
enforced to the fullest extent permitted by law.
34.17 Lessee agrees at any time and from time to time upon not less than twenty
(20) days' prior written notice by Lessor or any mortgagee to execute,
acknowledge and deliver to Lessor or such mortgagee, as the case may be, a
statement in writing certifying that this Lease is unmodified and in full force
and effect (or if there have been modifications, that the same is in full force
and effect as modified and stating the modifications) and the dates to which any
rental, Taxes and Assessments and other charges have been paid in advance, if
any, and stating whether or not to the best knowledge of the signer of such
certificate Lessee or Lessor is in default in performance of any covenant,
agreement or condition contained in this Lease and, if so, specifying each such
default of which the signer may have knowledge.
34.18 In the event of any conveyance or other divestiture of title to the
Leased Property 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 Lessor thereafter
accruing hereunder and shall then be the Lessor under this Lease.
Notwithstanding anything to the contrary provided in this Lease, there shall be
no personal liability on the part of any stockholder, director, officer,
employee or partner of Lessor with respect to the terms, covenants or conditions
of this Lease. Lessee shall look solely to Lessor and the assets of Lessor,
including but not limited to, the interest of Lessor in the Leased Property, for
the satisfaction of each and every remedy which Lessee may have for the breach
of this Lease.
34.19 The failure of either party to insist upon 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.
21
34.20 This Lease may be simultaneously executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but such
counterparts together shall constitute but one and the same instrument.
34.21 This Lease shall be governed by and construed in accordance with the laws
of the State of Arizona.
ARTICLE XXXV - CONDITION OF THE DEMISED PREMISES
35.1 The Personal Property and the Demised Premises are let and leased subject
to the rights of the residents of the nursing facility located thereon and the
state of the title thereof as of the date the Lessor acquired title from the
predecessor in title, 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; provided, however, that to the extent that any of the foregoing items
precludes Lessee from using or operating the Leased Property, Lessor shall take
such reasonable steps as may be necessary to cure the same within sixty (60)
days of Lessee's delivery to Lessor of notice thereof and failing such Lessee
shall have the right to terminate this Lease.
ARTICLE XXXVI - EMPLOYEE'S BENEFITS
36.1 On or before the Commencement Date, Lessor shall provide, or shall direct
the current operator of the Facility, to provide, Lessee with a statement of all
amounts of accrued vacation benefits as of the Commencement Date (the "accrued
vacation schedule"), a statement of all earned vacation benefits as of the
Commencement Date (the "earned vacation schedule") and a statement of earned
sick pay as of the Commencement Date (the "earned sick pay schedule") and the
names and addresses of the employees to whom said amounts are payable. For
purposes of this Article XXXVI, a benefit shall be deemed to be earned if the
employee is then entitled to be compensated for or to take said benefit and/or
if upon termination the employee would be entitled to be compensated in whole or
in part for said benefit; if not, the benefit shall be deemed to be accured.
36.2 Lessor shall pay, or shall direct the then operator of the Facility pay,
to Lessee on the Commencement Date all sums for vacation pay set forth in the
earned and accured vacation schedules.
36.3 Lessee agrees to pay all sums set forth in the accrued vacation and
earned vacation schedules referred to in Section 36.1 above, to the appropriate
employees when the same become due and payable in accordance with its Paid Time
Off policy.
36.4 Lessor hereby agrees that if any of the earned sick pay set forth in the
earned sick pay schedule referred to in Section 36.1 above, is paid by Lessee,
Lessor shall reimburse, or shall direct the prior operator of the Facility to
reimburse, Lessee therefore, upon Lessor's receipt of a written request for
reimbursement and evidence that payment has been made.
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36.5 Payroll shall be prorated as of 12:01 am the Commencement Date, with
Lessee assuming full responsibility therefore as of said time and date.
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
signed by persons authorized so to do on behalf of each or them respectively the
day and year first above written.
LESSOR: PHOENIX NURSING HOME LIMITED
PARTNERSHIP,
an Illinois limited partnership
By:
---------------------------------
Xxxxxx Xxxxxx, general partner
By:
---------------------------------
Xxx Xxxxxxx, general partner
LESSEE: HORIZON HEALTHCARE CORPORATION,
a Delaware corporation
By:
---------------------------------
Its:
---------------------------------
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