EXHIBIT 10.14
LEASE AGREEMENT
This is a LEASE AGREEMENT ("Lease") dated as of the 1st day of August,
1995, by and between BROWNSBORO HILL NURSING HOME, INC., a Kentucky corporation,
and BROWNSBORO HILLS PLAZA, a Kentucky general partnership, and their respective
successors and assigns (hereinafter referred to together as "Landlord"), and
TRANSITIONAL HEALTH PARTNERS d/b/a TRANSITIONAL HEALTH SERVICES, a Delaware
general partnership (hereinafter referred to as "Tenant").
NOW, THEREFORE, in consideration of the mutual covenants and obligations
herein contained, the parties agree:
1. FACILITY: Effective upon the receipt of the regulatory approvals or
lapse of any applicable statutory notice periods referred to in the Management
Agreement dated August 1, 1995, among the parties to this Lease (the "Management
Agreement") and the termination of the Management Agreement and subject the
preparation of Schedules to the Agreement dated August 1, 1995, among Landlord,
Tenant, Xxxxxx X. Xxxxx, Xx. and Xxxxxx X. Xxxxx, III with contents mutually
satisfactory to the parties (the "Effective Date"), but no later than October 1,
1995 (as provided in the Management Agreement) 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 96 bed nursing home facility known
commonly as Brownsboro Hills Nursing Home, and a related 20-bed home for the
aged known commonly as Brownsboro Hills Plaza, and the privileges and
appurtenances thereunto appertaining, situate, lying and being on 0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000, in Jefferson County, Kentucky, and being more
particularly described on "EXHIBIT A" hereto attached, hereafter referred to as
the "Facility."
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 Facility 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 Facility 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 Facility shall not be disturbed or interfered with
by any party in privity of contract with Landlord.
3. AUTHORIZATIONS AND COMPLIANCE WITH GOVERNMENTAL PROGRAMS: Landlord
hereby represents and warrants to Tenant that (i) the use of the Facility as an
intermediate or skilled care and home for the aged nursing home facility is a
permitted use under all applicable zoning or other use restrictions or
regulations, and (ii) the character, materials, design, construction and
location of the improvements is, to the best of its knowledge, in full
compliance with all building codes, zoning laws and all other laws and
ordinances pertaining thereto.
Tenant agrees (i) to use the Facility as an intermediate, skilled and home
for the aged nursing home facility and operate the Facility in full compliance
with all laws, regulations and licenses applicable thereto, (ii) that no part of
the Facility shall be used for any unlawful purpose, nor will any unlawful
condition or nuisance be permitted to exist thereon, and (iii) that its
operation of the Facility of a nursing home facility shall materially comply
with all licensure, certification, and other requirements of law applicable to
nursing home facilities.
4. TERM:
a. The term of this Lease (the "Initial Term") shall commence on the
Effective Date hereof and end on January 31, 2008.
b. If Tenant is not in default hereunder, Tenant shall have the
option to renew the term of this Lease after the Initial Term for three (3)
additional terms of five (5) years each (the "Renewal Term(s))", which together
with the Initial Term shall be referred to herein as the "Term"). Such Renewal
Terms shall be upon the same terms and conditions contained in this Lease for
the Initial Term except it (i) will be subject to an adjustment of Rent payments
as described in Section 5 below, and (ii) will not be less than the previous
year's Total Rent (as defined below). Tenant may exercise its option to renew
for the Renewal Term by notifying Landlord in writing of its intention to renew
at least one hundred eighty (180) days prior to the expiration of the Initial
Term or any Renewal Term.
5. RENT: Tenant shall pay to Landlord at its offices in Louisville,
Kentucky, or at such other place as it may advise in writing, in advance, on the
tenth (10th) 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, base rent, which shall be payable in monthly
installments of Fifty Six Thousand Two Hundred Fifty Dollars ($56,250.00) (the
"Base Rent"). Commencing August 1, 1996 (and increasing on each anniversary
thereof during the Term hereof), Tenant shall also pay on a monthly basis to
Landlord, additional rent ("Additional Rent"), which will be an annual amount
equal to the Base Rent times three percent (3%) times the number of years the
Lease has at that time been in effect on a non-compounded basis, i.e., year
two's rent shall be 103% of the Base Rent, year two shall be 106%, year 10 shall
be 130%, etc. Base Rent together with Additional Rent may be referred to herein
as "Total Rent."
If the Landlord does not receive from Tenant any payment of Base
Rent or Additional Rent 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 such rental payment, 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, in addition to all other rights
hereunder, may thereafter require that Tenant pay the Rent and any other charges
payable hereunder by a certified or cashier's check.
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If Landlord directs, the Tenant agrees to pay such portion of the
Total Rent directly to LandLord's mortgagee as may be necessary to service
Landlord's mortgage indebtedness, if any, and the balance of such Total Rent
remitted paid directly to Landlord.
6. REPORTS: Tenant agrees to provide Landlord with monthly and annual
financial statements accurately reflecting Tenant's consolidated financial
condition and the results for its business operations for the period then ended
with respect to its operations generally, as well as its business conducted at
the Facility. Such statements shall be due thirty (30) days after the quarter
then ended or ninety (90) days after the close of the Tenant's fiscal year, as
the case may be, 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. Tenant agrees to also provide upon request to
Landlord, as the same are filed with the Kentucky Cabinet for Human Resources,
copies of the facility's Medicare and Medicaid Cost Reports, and copies of
annual state licensure survey reports.
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 and Tenant agree that all water, sewer, electric
current and telephone facilities are available, connected and working as of the
Effective Date. Tenant shall pay when due all charges for heat, air
conditioning, water, gas, electricity and other utilities furnished to the
Facility for occupants thereof during the Term hereof.
9. REPAIR AND MAINTENANCE OF IMPROVEMENTS: Landlord warrants that the
entire Facility and the building and improvements thereon shall be in good, safe
condition and repair on the Effective Date. Tenant shall be responsible for
maintaining the Facility in good repair, including without limitation all
exterior and 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), ordinary wear and tear, and any damages caused or
suffered to be caused by Landlord (including any indemnity claims as set forth
in Section 28 below). 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 ten percent (10%) if such
expense is not paid within thirty (30) days.
Landlord, its agents and employees, shall have the right at all reasonable
times and upon reasonable notice to Tenant, to enter the Facility or any part
thereof, to inspect and examine the same.
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10. TAXES AND ASSESSMENTS: Tenant agrees to pay when due all taxes on or
with respect to the Facility (except Landlord's income taxes). Such payments
shall be made in accordance with the terms, and payable directly to the
appropriate governmental authority. 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 upon request 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 change 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.
11. INSURANCE INDEMNITY:
a. During the Term of this Lease, Tenant shall at all times keep the
Facility insured with the kinds and amounts of insurance described below. This
insurance shall be written by companies authorized to do insurance business in
the Commonwealth of Kentucky. The policies must name Landlord as an additional
insured. Losses shall be payable to Landlord and Tenant as provided in Section
11(e) below. In addition, the policies shall name as an additional insured any
mortgagee by way of a standard form of mortgagee's loss payable endorsement. Any
loss adjustment shall require the written consent of Landlord, Tenant, and each
mortgagee. Evidence of insurance shall be deposited with Landlord and, if
requested, with any mortgagee(s). The insurance policies shall provide thirty
(30) days notice of cancellation to all parties named therein as insured. The
policies on the Facility shall insure against the following risks:
(1) Loss or damage by fire and such other risks as may be
included in the broadest form of extended coverage insurance from time to time
available, including but not limited to loss or damage from leakage of any
sprinkler system now or hereafter installed in the Facility or on the Facility,
in amounts sufficient to prevent Landlord or Tenant from becoming a co-insurer
within the terms of the applicable policies and in any event in an amount not
less than one hundred percent (100%) of the then full replacement value thereof
(as defined below in Paragraph (b));
(2) Loss or damage by explosion of steam boilers, pressure
vessels or similar apparatus, now or hereafter installed in the Facility, in
such limits with respect to any one accident as may be reasonably agreed by
Landlord and Tenant from time to time;
(3) Claims for personal injury or property damage under a
policy of general public liability insurance with amounts not less than One
Million Dollars ($1,000,000) per occurrence/Three Million Dollars
($3,000,000.00) aggregate, in respect of bodily injury or death and property
damage;
(4) Claims arising out of malpractice in an amount not less
than One Million and No/100 Dollars ($1,000,000.00) for each person and for each
occurrence;
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(5) Such other hazards and in such amounts as may be customary
for comparable properties in the area and is available from insurance companies
authorized to do business in the Commonwealth of Kentucky;
(6) Business interruption insurance covering a risk of loss
during the first six (6) months of reconstruction resulting from the occurrence
of any of the hazards described in subsections (i) and (ii) of Paragraph (a) in
an amount sufficient to prevent Landlord from becoming a co-insurer; and
(7) Worker's compensation.
b. Replacement Cost. The term "full replacement value" of
improvements as used herein, shall mean the actual replacement cost thereof from
time to time, less exclusions provided in the normal fire insurance policy.
c. Additional Insurance. In addition to the insurance described
above, Tenant shall maintain such additional insurance (including Tenant's $10
million umbrella policy) as may be reasonably required from time to time by any
mortgages.
d. Waiver of Subrogation. Any provision in this Lease to the
contrary notwithstanding, each party, to the extent it is permitted to do so by
the terms and provisions of any of the above policies, hereby waives any and all
rights it may have against the other, its agents, or employees, for 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 the 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 or employees.
e. Insurance Proceeds. All proceeds payable by reason of any loss or
damage to any of the improvements comprising the Facility and insured under any
policy of insurance required by (a) above of this Lease shall be paid to
Landlord and held by Landlord in trust (subject to the provisions of Paragraph
(f) below and the rights of the holders of the Facility mortgages) and shall be
made available for reconstruction or repair, as the case may be, of any damage
to or destruction of the Facility, and shall be paid out by Landlord from time
to time for the reasonable costs of such work. Any excess proceeds of insurance
remaining after the completion of the restoration or reconstruction of the
Facility shall be retained by Landlord and shall be credited against future
rental payments due from Tenant under this Lease. All salvage resulting from any
such loss covered by insurance shall belong to Landlord.
f. Damage or Destruction. If, during the Term, the Facility is
totally or partially destroyed from a risk covered by the insurance described in
Paragraph (a), Landlord shall, as soon as practicable, rebuild or restore the
Facility to substantially the same condition as existed immediately before the
destruction. If the remaining term is one (1) year or less, either party shall
have the right to terminate this Lease. If the costs of the restoration exceed
the amount of proceeds received by Landlord from the insurance required under
Paragraph (a)
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above, Tenant shall be solely responsible for paying the difference between the
amount of insurance proceeds and such cost of restoration.
g. Restoration of Tenant's Property. If Landlord is required to
restore the Facility as provided in Paragraph (f), Landlord shall not be
required to restore alterations made by Tenant, or Tenant's improvements, trade
fixtures or personal property, such excluded items being the sole responsibility
of Tenant to restore. Landlord shall be required to restore tangible personal
property owned by Landlord and leased to Tenant pursuant to this Lease or
otherwise.
h. Tenant's Blanket Policy. Notwithstanding anything to the contrary
contained in this Section 11, Tenant's obligation to carry the insurance
provided for herein may be brought within the coverage of a so-called blanket
policy carried and maintained by Tenant; provided, however, that the coverage
afforded Landlord will not be reduced or diminished or otherwise be different
from that which would exist under a separate policy meeting all other
requirements of this Lease.
12. ASSIGNMENT AND SUBLETTING: Provided Tenant is not in default of the
terms and provisions of this Lease, Tenant shall have the right to assign this
Lease or leasehold estate hereby created, or sublet all or any part of the
Facility, to another party with the prior written consent of the Landlord.
Landlord and any mortgagee shall not unreasonably withhold its consent to an
assignment or subletting of this Lease, and shall be given without the payment
of any additional consideration or other amendments or modifications to this
Lease or any other agreement. In determining reasonableness, the following
factors shall apply: (i) whether the assignee or sublessee agrees in writing to
be bound by the terms and conditions of this Lease, (ii) whether the assignee or
sublessee has assets and net worth sufficient to operate the premises and meet
the obligations of tenant, (iii) whether assignee or sublessee has experience
and a reputation in rendering long term care that is not less than roughly
comparable to that of the Tenant, and (iv) whether the assignee or sublessee
promptly obtains appropriate licensure approvals in accordance with applicable
Kentucky statutes and regulations. In the event Landlord refuses or withholds
such consent and Tenant wishes to challenge such decision, Tenant shall be
entitled to pursue both damages and injunctive relief. Tenant shall also have
the right to leasehold mortgage/collaterally assign its interest herein as
provided in Section 29 below. Any merger, consolidation, reorganization, or
liquidation of Tenant, or the sale of a controlling interest of the capital
stock of Tenant's consolidated group, or of a majority of the consolidated
group's assets, shall, for purposes of this Lease, constitute an assignment
thereof.
13. SIGNS: Tenant shall have the right to install, maintain and replace
in, on or over or in front of the Facility 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.
14. EMINENT DOMAIN: If the whole or substantially all of the Facility, 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
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subsequent to the actual physical taking. Separate awards for damages shall be
made to the Landlord and the Tenant for the taking to the extent permitted by
applicable law. Should, however, only a portion of the Facility 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 Facility as nearly as
feasible to the condition of such Facility immediately prior to the taking, but
Landlord shall not be required, at its option, to restore or rebuild the
Facility 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.
15. DEFAULT: Any one or more of the following events shall at the
Landlord's option constitute an "Event of Default":
(a) Tenant's failure to make payment of Base Rent or Additional Rent
when the same is due and payable and the continuance of such failure 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; 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 such 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.
(d) Tenant's failure to timely correct any deficiencies of any kind
issued by any state or federal agency having jurisdiction over the Facilities,
where such failure if not timely corrected would have a material adverse effect
on the Facilities operations or its licenses.
If an Event of Default occurs (a "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
Facility and take possession of the same, or, at its option, in such event
Landlord may, without declaring this Lease terminated, re-enter the Facility 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. If a
Default occurs, Landlord shall exercise reasonable efforts to mitigate damages
hereunder and to re-let the Facility, but Landlord's failure to relet or sublet
the Facility shall not prevent or delay the exercise by Landlord, at its option,
of its right to
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recover as damages any Base Rents and Additional 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 a 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
ten (10) 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.
(e) 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 ten (10) day or greater 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
proceeding to cure the same in good faith or be delayed in or prevented from
curing the same by force majeure.
16. HOLDING OVER: If Tenant remains in possession of the Facility 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 Facility 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 Base Rent
and Additional Rent herein provided.
17. 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 such 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.
18. SURRENDER OF FACILITY: Upon the expiration or other termination of
this Lease, Tenant covenants and agrees that it will peaceably leave and
surrender possession of the Facility to Landlord. Upon such surrender, all
improvements on the Facility 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.
19. 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 telephonic
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facsimile (transmission electronically confirmed), nationally recognized
overnight delivery service (freight prepaid), hand delivery, or by mail (postage
prepaid) addressed to:
LANDLORD: BROWNSBORO HILLS NURSING HOME, INC.
c/o Messrs. XXXXXX X. XXXXX, XX. and XXXXXX X. XXXXX III
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
TENANT: TRANSITIONAL HEALTH SERVICES
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
20. SHORTFORM LEASE: The parties hereto shall forthwith execute and record
with the Jefferson County Clerk a Memorandum or Short Form Lease Agreement, in
recordable form, including such provisions hereof as either party may desire to
incorporate therein.
21. NON-DISTURBANCE AND ATTORNMENT: Tenant agrees upon request of
Landlord's mortgagee to attorn to such mortgagee, subordinate this Lease to any
mortgage constituting a lien on the Facility, and to provide such other
reasonable assurance as such mortgagee may reasonably require in connection with
the financing of the Facility 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 Facility shall not be disturbed so long
as Tenant shall not cause or suffer any material Default hereunder. In the event
Landlord shall default in any payment due in respect of such mortgage, Tenant
shall have the right under Landlord's mortgage, but not the obligation, upon ten
(10) days written notice from either Landlord or Landlord's mortgage, to pay
such amount due and thereby cure such default (and credit the amount of any such
payment against the Tenant's next succeeding Rent obligations).
22. 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 21 hereof, Tenant shall be entitled to recover
such payment from Landlord with interest from the day 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 Rent payments as and when the same come due.
23. ENTIRE AGREEMENT: This Lease constitutes the entire agreement between
the parties hereto, and no other oral or written statement shall apply. Tenant
agrees that it is
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not relying on any representations or agreements other than those contained in
this Lease. This Lease shall not be modified or canceled except by writing
subscribed to by all parties.
24. 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.
25. 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. Tenant's general partners
and holding company jointly and severally endorse this Lease for the purpose of
guaranteeing all of Tenant's obligations to Landlord during the Term hereof,
including without limitation, the obligation to make timely payment of all
installments of Base Rent and/or Additional Rent becoming due during the Term.
26. RIGHT OF FIRST REFUSAL: In the event Landlord wishes during the Term
to sell the Facility or any part thereof, Landlord shall notify Tenant of its
intent 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 the Facility upon
the same terms and conditions by giving Landlord written notice of its election
so to do within thirty (30) days after receipt of Landlord's notice. In the
event Tenant fails to notify Landlord of its election within such thirty (30)
day period, or notifies Landlord it does not wish to exercise its right to
purchase, Landlord shall have the right to sell the Facility subject to this
Lease upon terms and conditions no more favorable to a purchaser than those
contained in its notice to Tenant.
In the event Landlord wishes to relet to any person or entity the
Facility upon the expiration of the Term, Landlord shall notify Tenant of its
intent 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 the
Facility 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 Facility upon terms
and conditions no more favorable to a Tenant than those contained in its 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 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 Facility and the
Facility 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 Facility.
27. RENT DEPOSIT: To secure its payment of Rent and performance of all its
other obligations under this Lease, Tenant shall deposit Two Hundred Fifty
Thousand Dollars ($250,000.00) (i.e., the "Rent Deposit") with Landlord on the
Effective Date. Landlord shall not be obliged to keep the Rent Deposit as a
separate fund, but may mix the Rent Deposit with its own funds. A portion of the
Rent Deposit shall be used to satisfy and pay the landlord's
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obligations under a Promissory Note dated July 5, 1995, in the principal amount
of $50,000.00, including payment of all principal and accrued interest. In the
event of an Event of Default and Landlord's termination of this Lease or any
termination of this Lease, Landlord shall apply the Rent Deposit towards Rents
or other charges in arrears, reasonable repossession costs, or upon damages for
Tenant's failure to perform. Provided Tenant is not then in default under this
Lease, Tenant shall be permitted to setoff, and Landlord agrees to apply the
balance of, the Rent Deposit towards the Tenant's Rent obligations during the
last possible months of the Term hereof, taking into account any other amounts
due Tenant from Landlord.
28. ENVIRONMENTAL MATTERS: Landlord hereby represents and warrants to, and
covenants with, Lessee, without regard to whether Lessee has or hereafter
obtains any knowledge or report of the environmental condition of the Facility,
as follows:
a. The Facility has never been used by Landlord for industrial or
manufacturing purposes, for landfill dumping or other waste disposal activities
or operations, for generation, storage, use, sale, treatment, processing,
recycling or disposal of any Hazardous Material (except for miscellaneous
cleaning supplies, diesel fuel for the Facility's emergency generator in an
above ground storage tank, and medical/infectious waste, all of which is stored
and disposed of in compliance with applicable Hazardous Materials Law), for
underground or aboveground storage tanks, or for any other use that could give
rise to the release of any Hazardous Material on the Facility; and, to the best
of Landlord's knowledge, no such use of the Facility occurred at any time prior
to the period of Landlord's ownership or use of the Facility, and to the best of
Borrower's knowledge, no such use on any adjacent Facility occurred at any time
prior to the date hereof;
b. To Landlord's knowledge, there is no Hazardous Material, storage
tank (or similar vessel) whether underground or otherwise, sump or well
currently on the Facility;
c. Landlord has no notice and any knowledge of any pending or
threatened claim or investigation concerning the presence, release, or
remediation of any Hazardous Material or other environmental condition on or
about the Facility or any adjacent property or concerning whether any condition,
use or activity on the Facility or any adjacent property is in violation of any
Hazardous Materials Law;
d. To Landlord's knowledge, the present conditions, uses and
activities on the Facility do not violate any Hazardous Materials Law, and the
use of the Facility which Landlord makes of the Facility complies and will
comply with all applicable Environmental Requirements;
e. The Facility does not appear on and to the best of Landlord's
knowledge has never been on the National Priorities List, any federal or state
"superfund" or "superlien" list, or any other list or database of properties
maintained by governmental authority showing properties which are known to
contain or which are suspected of containing Hazardous Materials;
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f. Landlord, nor to Landlord's knowledge any tenant or subtenant,
has obtained or is required to obtain any permit or authorization to construct,
occupy, operate, use or conduct any activity on any of the Facility by reason of
any Environmental Requirement.
Landlord agrees to indemnify, defend and hold Lessee harmless from
and against any and all claims, actions or damages involving Hazardous Materials
or any issues or matters discussed in paragraphs (a) through (f) above to the
extent such claims, actions or damages arose or relate to conditions on or about
the Facility or the activities of the Landlord prior to the Commencement Date,
and to the extent that the existence of such matters or issues constitute a
breach by Landlord of the representations and warranties set forth in this
Section 28. Tenant agrees to indemnify, defend and hold Landlord harmless from
and against any and all claims, actions or damages involving Hazardous Materials
and arising out of Tenant's operation of the Facilities.
As used in this paragraph, "Hazardous Material" means any substance,
whether solid, liquid or gaseous, which is listed, defined or regulated as a
"hazardous substance," "hazardous waste" or "solid waste", or otherwise
classified as hazardous or toxic, in or pursuant to Hazardous Materials Law,
including without limitation, asbestos, radon, polychlorinated biphenyls, urea
formaldehyde foam insulation, medical/infectious waste, explosive or radioactive
material, motor fuel or other petroleum hydrocarbons, chemicals known to cause
cancer or reproductive toxicity, pollutants, effluents, contaminants, emissions
or related materials, and any items included in the definition of hazardous or
toxic wastes, or any other materials or substances under any Hazardous Materials
Law; and "Hazardous Materials Law" means any law pertaining to health, safety,
Hazardous Material, or the environment, including, without limitation, the Solid
Waste Disposal Act, the Resource Conservation and Recovery Act of 1976 ("RCRA"),
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of
1986 ("XXXX"), the Hazardous Materials Transportation Act, the Federal Water
Pollution Control Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, the Safe Drinking Water Act, and all similar federal,
state and local environmental statutes, ordinances and the regulations, orders,
or decrees now or hereafter promulgated thereunder.
29. LEASEHOLD IMPROVEMENTS; LEASEHOLD FINANCING: 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 Facility and such related buildings, parking areas, driveways, structures,
sidewalks and other similar and dissimilar improvements as Tenant shall desire.
Consent by the Landlord to an increase in the Facilities' beds or apartments may
be unreasonably withheld. All alterations and improvements constructed by Tenant
shall (i) comply with all applicable building codes and ordinances, (ii) be
borne and paid for by Tenant exclusively, (iii) be diligently completed once
construction has commenced, and (iv) become the property of Landlord upon the
termination of this Lease. Prior to the commencement of any such alterations,
additions, replacements or improvements, Tenant shall submit to and obtain
Landlord's written approval of the plans and specifications thereof, which
approval shall not be unreasonably withheld. Tenant agrees to indemnify Landlord
against all claims by laborers and materialmen for any improvements constructed
by Tenant, and save and hold Landlord and Facility harmless from any and all
liability of any kind on account
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of such work or improvement. Whenever Tenant shall not be subject to an Event of
Default, Tenant shall have the right to mortgage its leasehold interest and
contract rights arising under this Lease. If Tenant does so, Landlord agrees as
follows: (a) Landlord shall not agree to any modification, amendment or
termination of this Lease without first obtaining the prior written approval of
Tenant's leasehold mortgagee (the "Tenant's Mortgagee"), which approval shall
not be unreasonably withheld, provided, however, that this provision shall not
impair Lessor's right to terminate this Lease pursuant to its terms due to Event
of Default hereunder; (b) Landlord shall notify Tenant's Mortgagee in writing of
any Event of Default by Tenant under this Lease at the time notice is sent to
Tenant and Tenant's Mortgagee shall then have the right, but not the obligation,
to correct any such default within the time allotted to Tenant under this Lease,
provided, that no such notification of Tenant's Mortgagee shall be required
unless Tenant has provided Lessor with name and current address of Tenant's
Mortgagee; (c) If for any reason whatsoever, including the disaffirmance or
rejection of this Lease in a bankruptcy proceeding, this Lease shall terminate
or come to an end during the term of Tenant's Mortgagee's mortgage, Landlord
shall enter into a new lease with Tenant's Mortgagee on the same terms and
conditions as this Lease if Tenant's Mortgagee shall pay Landlord all amounts
owed by Tenant under the Lease; (d) Tenant's Mortgagee shall not be liable for
the performance of this Lease (subject to subsection (c) above) except during
such time as Tenant's Mortgagee shall be in possession due to foreclosure or
other acquisition of the leasehold estate, and upon any permitted subsequent
assignment of this Lease by Tenant's Mortgagee, Tenant's Mortgagee shall remain
liable for the performance of the obligations of any Tenant under any substitute
agreement entered into between Tenant's Mortgagee and Lessor. The rights of
Tenant pursuant to this Section 29 shall be subject to any restrictions set
forth in any mortgage on the Facility.
Landlord shall enter into an agreement in recordable form with Tenant's
Mortgagee, if so requested by Tenant;s Mortgagee, containing the foregoing terms
and conditions. In no event shall Lessor be liable to pay any such amounts due
to Tenant's Mortgagee or under any such leasehold mortgage.
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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: BROWNSBORO HILLS NURSING HOME, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxx, Xx., Secretary-Treasurer
Date: 8/3/95
and
By: /s/ Xxxxxx X. Xxxxx, III
-----------------------------------------
Xxxxxx X. Xxxxx, III, President
Date: 0/0/00
XXXXXXXXXX XXXXX XXXXX
a Kentucky general partnership
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxx, Xx., General Partner
Date: 8/3/95
and
By: /s/ Xxxxxx X. Xxxxx, III
-----------------------------------------
Xxxxxx X. Xxxxx, III, General Partner
Date: 8/3/95
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TENANT: TRANSITIONAL HEALTH PARTNERS d/b/a
TRANSITIONAL HEALTH SERVICES.,
a Delaware general partnership
By THS Partners I, Inc., and
THS Partners II, Inc., General Partners
By: /s Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx, General Manager
Date: 8/8/95
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