LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made and entered into as of this 30th
day of August, 1991, by and between Phoenix Nursing Home Limited Partnership
II, an Illinois limited partnership (hereinafter referred to as "Lessor") and
Sunrise Healthcare Corporation, a New Mexico corporation, Xxxxxx Xxxxxx and
Xxxx Xxxxxx, individually (hereinafter referred to together as "Lessee").
WITNESSETH
WHEREAS, Lessor is the owner of a certain vacant tract of land located at the
Southeast corner of Xxxxxx Street and 19th Avenue in Phoenix, Arizona, upon
which Lessor intends to construct a 65 bed addition to the nursing home
facility known as Coronado Care Center located at 0000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000-0000, 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");
WHEREAS, Lessor shall acquire the furnishings, furniture, equipment and
fixtures to be used in or about the Demised Premises (hereinafter
collectively referred to as the "Personal Property"), which personal property
is more fully described in Exhibit B attached hereto;
WHEREAS, following construction of the nursing home facility and purchase of
the 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 purchased by Lessor, which Personal Property is more fully
described in Exhibit B attached hereto.
c) "Leased Property" shall mean the Demised Premises and the Personal
Property.
d) "Lease Year" shall mean with respect to the first Lease Year a
period commencing on the Commencement Date and ending on December 31 of that
year and, thereafter a twelve month period commencing on the first day of
January and ending on the 31st day of December.
e) "Rent Year" shall mean each twelve (12) month period commencing on
the Commencement Date and each anniversary thereof and ending on the last day of
the twelfth (12) calendar month thereafter.
f) All other terms shall be as defined in other sections of this
Lease.
ARTICLE II - DEMISED PREMISES AND PERSONAL PROPERTY
2.1 Lessor, for and in consideration of the rents, covenants and agreements
hereinafter reserved, mentioned and contained on the part of the Lessee, its
successors and assigns, to be paid, kept and performed, does hereby lease unto
Lessee the Demised Premises together with the Personal Property to be used in
and upon the Demised Premises for the term hereinafter specified, for use and
operation therein and thereon of a 65 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 term of this Lease shall be for a period commencing on the
Commencement Date (hereinafter defined), and shall expire on December 31, 1997
(the "Initial Term") unless extended or sooner terminated as hereinafter
provided. The date on which this Lease becomes effective, as set forth in
Section 32.2 hereof, shall be the "Commencement Date" of the term of this Lease.
The parties shall enter into a memorandum setting forth the Commencement Date
within five (5) days of the actual Commencement Date.
3.2 Lessee shall have the right to extend the lease term 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
applicable. Notwithstanding the foregoing Lessee may exercise the foregoing
option only if, at that time, it also exercises the option to extend contained
in the Coronado Lease (hereinafter defined in Section 19.1(1)), subject to the
terms contained herein and therein.
3.3 Lessee shall not have the right to extend the Initial Term or any
Extended Term if an Event of Default shall exist hereunder at the time said
notice is given or at the time the renewal term commences. Any such renewal
shall be on the same terms and conditions as set forth herein. Lessee does
hereby acknowledge that in the event it fails to give the notice of renewal
within the time periods specified herein, the Lease shall terminate at the end
of the then applicable term.
3.4 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, as Lessor shall direct, as fixed annual
rental for the Demised Premises and the Personal Property over and above all
other additional payments to be made by Lessee as provided in this Lease the
following: (a) during the first Rent Year, the annual sum of $301,545.00 payable
in equal monthly installments of $25,128.75 (the "Initial Rent"); and (b) during
each succeeding Rent Year during the Lease Term an amount equal to the annual
rent for the immediately preceding Rent Year multiplied by 1.03, payable in
twelve (12) equal monthly installments. The memorandum described in Section 3.1
hereof shall also set forth the annual and monthly rental for the Lease Term
based on the foregoing.
4.2 In the event the Commencement Date shall be other than the first (1st)
day of the month, Lessee shall pay to Lessor a pro rata portion of rent for the
month. All annual rental payments shall be made in equal monthly installments
and shall be paid in advance on the tenth (10th) day of each month. Unless
otherwise notified in writing, all checks shall be made payable to Phoenix
Nursing Home Limited Partnership II, c/x Xxxxxx Capital Ventures, Inc., Xxx
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000.
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. Lessee does hereby acknowledge and agree that
each payment of rent is a separate, absolute, unconditional and independent
covenant of Lessee, and shall be subject to no right of offset, discount or
abatement. 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, defend and hold harmless 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 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 of every kind and character which have or may be levied,
imposed or assessed upon the Demised Premises or upon the Personal Property
and any replacements thereof during the term of this Lease including but not
limited to the Arizona Privilege Tax, A.R.S. Section 42-1310.09, as amended
from time to time, (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 Except as set forth in Section 6.7 below, 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; provided, however, that in the event
Lessor's mortgagee requires a cash deposit or other security in order to
undertake such a contest, Lessee shall satisfy any such obligations imposed
by said mortgagee.
6.5 Upon the termination of any such proceeding, Lessee shall pay, prior
to delinquency, 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 at Lessee's expense shall join in
such proceedings or permit the same to be brought in its name. Lessor shall
not ultimately be subjected to any liability for the payment of any costs or
expenses in connection with any such proceedings, and Lessee will indemnify,
defend 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 - (THIS SECTION INTENTIONALLY DELETED)
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
maintain in good standing and full force all the licenses issued by the State
of Arizona 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 shall 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 Leased Property 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 licensure in full force
and good standing. All the Demised Premises, with the improvements located
thereon and all the Personal Property shall be surrendered in good order,
condition and repair, reasonable wear and tear excepted. Upon termination or
expiration of the Lease and surrender of the Leased Property, Lessee shall
remove Lessee's Property and shall repair any injury or damage to the Leased
Property caused by the removal thereof and Lessee shall restore the same to
the same condition as prior to the installation thereof. If Lessee fails to
do so, Lessor may, at its option, remove the same (and repair any damage
occasioned thereby) and dispose thereof or deliver the same to Lessee and
Lessee shall pay the cost of such removal, repair or delivery or treat such
Lessee's Property as having been conveyed to Lessor with this Lease as a Xxxx
of Sale, without further payment or credit by Lessor to Lessee.
ARTICLE IX - INSURANCE
9.1 Lessee shall, at its sole cost and expense, during the full term of
this Lease, maintain so-called "All Risk" or "All Perils" insurance with
extended coverage endorsement on the Leased Property against loss or damage
by fire, vandalism, casualty, malicious mischief and such other risks or
hazards as are customarily insured against at the time. Such insurance shall
be obtained from a responsible company or companies approved by Lessor, which
approval will not be unreasonably withheld. Such insurance shall, at all
times, be maintained in an amount equal to the full replacement cost of the
Demised Premises and the Personal Property (without any co-insurance clause,
if possible) or in such other amount as may be required by Lessor and any
mortgagee of the Demised Premises but, at all times, in an amount sufficient
to prevent Lessor and Lessee from becoming co-insurers under applicable
provisions of the insurance policies. As used herein, the term "full
replacement cost" shall mean coverage for the actual replacement cost of the
Demised Premises and the Personal Property requiring replacement from time to
time (including an increased cost of construction endorsement), which, if not
agreed upon by Lessor and Lessee, shall be determined by an appraiser,
engineer, architect or contractor acceptable to Lessor and Lessee. 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 expenses 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, 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 $2,000,000.00 in the aggregate and an umbrella liability policy of not
less than $5,000,000.00 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 $1,000,000.00.
Lessor may, from time to time, reasonably require Lessee to change the
amount or type of insurance, or to add or substitute additional coverages,
required to be maintained by Lessee hereunder.
9.3 All policies of insurance shall provide:
a) They are carried in favor of the Lessor, Lessee and any
mortgagee, as their respective interests may appear, and any loss shall be
payable as therein provided, notwithstanding any act or negligence of Lessor
or Lessee, which might otherwise result in forfeiture of insurance;
b) They shall not be canceled, terminated, reduced or materially
modified without at least twenty (20) days prior written notice to Lessor and
any mortgagee of 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.
9.4 An original certificate of insurance and a copy of each policy,
certified by an officer of Lessee as being true, correct and complete, for
all insurance policies required by this Article shall be delivered to Lessor
at least five (5) days prior to the Commencement Date.
9.5 Lessee shall at all times keep in effect business interruption
insurance with a loss of rents endorsement naming Lessor as an insured in an
amount at least sufficient to cover:
a) The aggregate of the cost of all Taxes and Assessments due
during the period of the next succeeding twelve (12) months following the
occurrence of the business interruption;
b) The cost of all insurance premium for insurance required to be
carried by Lessee for such twelve (12) month period; and
c) The aggregate of the amount of the monthly Rent for the next
consecutive twelve (12) month period.
In lieu of the foregoing, Lessee may, at its option, obtain and
maintain a blanket insurance policy in an amount sufficient to provide the
coverage described in this Section 9.5. All proceeds of any business
interruption insurance shall be applied, first, to the payment of any and all
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 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 should Lessee fail to cure said failure within the time periods
specified in Article XIX, 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
11.1 Throughout the term of this Lease, Lessee, at its sole cost and
expenses, will keep and maintain, or cause to be kept and maintained, the
Demised Premises (including the grounds, sidewalks and curbs abutting the
same, the heating, ventilating and air conditioning systems and the roof) 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; provided, however,
that to the extent Lessee undertakes any repairs or improvements that involve
structural changes to the Demised Premises, including, but not limited to,
replacement of the roof or structural work which requires penetration of the
roof, Lessee shall not undertake the same without the prior written consent
of Lessor, which consent shall not be unreasonably withheld.
11.2 All replacing, repairing and restoring required of Lessee under this
Article 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.
11.3 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's Property").
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 or the Personal Property 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 shall notify Lessor in writing thereof and Lessor may elect to
terminate this Lease by giving Lessee written notice of its election within
forty-five (45) days immediately following its receipt of notice of such
substantial damage or destruction. This lease shall then terminate thirty
(30) days after such notice, with rent adjusted to the effective date of
termination. 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 30.
11A.2 If the Demised Premises or the Personal Property 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 Lessor 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 diligently repair and restore the Demised Premises and the
Personal Property 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.
11A.3 Before Lessee commences such repair, restoration or rebuilding, within
thirty (30) days of the later of the occurrence of the damage or destruction
or Lessor's election not to terminate this Lease, Lessee shall submit to
Lessor for its review and approval, which approval shall not be unreasonably
withheld, plans and specifications therefor (the "Plans"), prepared by a
licensed architect, if required by law, along with an estimated cost of the
proposed work and the sources of funds to be utilized to cover said cost.
11A.4 Within fifteen (15) days after approval of the Plans, Lessee shall
commence to restore the Demised Premises and Lessee shall complete the same
within 180 days thereafter, provided, however, that in the case of damage or
destruction which cannot with due diligence be cured within said 180 day
period, Lessee shall have an additional period of time, not to exceed 60
additional days, to complete the reconstruction, provided Lessee is
proceeding promptly and with due diligence to complete the restoration.
Provided there is not then an Event of Default hereunder, 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 rent
payments and to pay all other charges required by this Lease shall not be
abated during the period of the 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 in
accordance with the provisions of Section 11.1 it will not make, authorize or
permit to be made any structural 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. Nothing herein shall be deemed or
construed to require Lessee to obtain Lessor's consent to nonstructural
changes or alterations such as painting, the replacement of wallcoverings or
the replacement of floor coverings.
ARTICLE XIII - COMPLIANCE WITH LAWS AND ORDINANCES
13.1 Throughout the term of this Lease, Lessee shall 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 observe and comply with the requirements of all policies
of public liability and fire insurance and all other policies of insurance at
any time in force with respect to the Demised Premises.
13.3 Lessee shall promptly apply for and procure and keep in good standing
and in full force and effect all necessary licenses, permits and
certifications required by any governmental authority for the purpose of
maintaining and operating on the Demised Premises a skilled and/or
intermediate care nursing home which at all times shall be qualified to
participate in the Medicare and/or Maricopa County reimbursement programs, as
appropriate.
13.4 Lessee shall notify Lessor within twenty-four (24) hours after receipt
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.
13.5 Lessee shall deliver to Lessor within thirty (30) days of Lessee's
receipt thereof, copies of any inspection reports or surveys from any state,
federal and local governmental bodies regarding the Demised Premises.
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 promptly
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, subject to the terms of any mortgage affecting the Leased Property,
Lessee shall have the right to contest such lien or charge, provided, within
sixty (60) days after notice of the filing thereof, Lessee will cause the
same to be discharged of record or in lieu thereof, prior to the expiration
of said 60 day period, Lessee shall secure Lessor against said lien by
depositing with Lessor such security as may be reasonably demanded by Lessor.
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, including
its reasonable attorney's fees, 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 representatives 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 proceeds of any condemnation award, settlement or compromise
for the Leased Property shall belong to Lessor; provided, however, that
Lessee shall have the right to pursue a separate award, settlement or
compromise from the condemning authority for the value of Lessee's leasehold
interest or Lessee's Property, as defined in Section 11.4 as long as any such
award does not diminish Lessor's award, settlement or compromise. 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 Lessor and Lessee; subject, however, to the rights
of determination of Lessor's lender under any mortgage affecting the Leased
Property.
16.2 In the event of a partial condemnation the result of which shall be a
reduction in the number of licensed beds on the Demised Premises to 30 or
less, Lessee shall have the right to terminate this Lease by written notice
to Lessor within thirty (30) days following the issuance of the condemnation
order or conveyance of the property, whichever is earlier. If Lessee does
not elect to terminate this Lease, Lessee shall restore the Demised Premises
in accordance with all of the terms set forth in paragraph 16.3 below.
16.3 In the event of a condemnation which does not involve all or
substantially all of the Demised Premises leased hereunder (a "Partial
Condemnation"), Lessor shall have the right to terminate this Lease by
written notice to Lessee 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. Subject to Lessee's
termination right described in paragraph 16.2 above, in the event Lessor does
not elect to terminate this Lease and in the event the condemnation proceeds
are available to Lessor, Lessor shall remit the condemnation proceeds to
Lessee, and Lessee shall use the same to repair and restore the Leased
Property, to the extent practical in light of the nature of the condemnation,
to as near the same general plan and dimensions as existed before said
condemnation and, to the extent proceeds remain available after said repair,
Lessee shall retain the same and use them to satisfy its monthly rental
obligations to Lessor, with no abatement of rent hereunder. In the event of
such a Partial Condemnation where no condemnation proceeds are made available
to Lessor because, for example, Lessor's lender has claimed title thereto
under the terms of the mortgage or in the event that following such repair or
restoration the number of licensed beds is permanently reduced due to the
Partial Condemnation, rent due hereunder shall xxxxx to the extent that is
fair, just and equitable to both Lessor and Lessee, taking into
consideration, among other relevant factors, the number of licensed beds
rendered unusable by such taking; provided, however, in no event shall the
rent be less than Lessor's monthly mortgage payment.
ARTICLE XVII - LESSOR'S WARRANTIES AND REPRESENTATIONS
17.1 Subject to the terms of Article XXXII hereof, Lessee shall have
inspected, accepted and approved the Facility as of the Commencement Date of
this Lease and it shall accept the Facility as fully equipped.
17.2 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, 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 it excess of the maximum amount permitted by law.
ARTICLE XVIII - ASSIGNMENT AND SUBLETTING
18.1 During the term of the Lease, Lessee shall not assign this Lease,
Sublet the Demised Premises or in any manner whatsoever sublet, assign or
transfer all or any part of the Leased Property without the prior written
consent of the Lessor, which consent shall not be unreasonably withheld,
except that the parties acknowledge and agree that Lessor may withhold its
consent to any proposed sublet or assignment which does not also relate to
the Coronado Lease or the premises covered thereby. It shall be deemed to be
an assignment of this Lease for purposes of this Section 18.1 in the event of
a change in the ownership of Lessee's stock, such that all or such
substantial portion of it as comprises a controlling interest in Lessee is
owned by one person or entity, other than Xxxxxx Xxxxxx, an entity controlled
by Xxxxxx Xxxxxx or a wholly owned subsidiary of Lessee. 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 Leased Property, in any such
transferee or assignee; and Lessor may, at its exclusive option, terminate
this Lease and invoke the provisions of this Lease relating to default.
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, of any other sum or sums of money due or payable to the
Lessor under the provisions of this Lease within five (5) days following the
date therefor;
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 an additional period
of time, not to exceed sixty (60) additional days, to cure the same, provided
Lessee proceeds promptly and with due diligence to cure such default after
receipt of such notice or such longer period of time granted by any
governmental agency having jurisdiction over the Facility);
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 percent (50%) or more of the patients located in the
nursing home;
d) The failure of Lessee to comply, or the violation by Lessee of,
any of the terms, conditions or provisions of any 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 the 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 of the 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;
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 within 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 or Maricopa County reimbursement
programs, subject however to Lessee's rights under Article XX hereof;
k) The abandonment of the Demised Premises by Lessee; and
l) The occurrence of an Event of Default under that certain
Sublease, Assumption and Consent Agreement dated May 31, 1990, by and between
Lessor, as Landlord, Lessee, as Sublessee, and Horizon Healthcare Corporation
("Horizon"), as Tenant/Sublessor, relating to that certain nursing home
facility known as Coronado Care Center located in Phoenix, Arizona and that
certain Lease Agreement dated December 18, 1987 between Lessor and Horizon
relating thereto (the "Coronado Center Lease").
ARTICLE XX - RIGHT TO CONTEST
20.1 Lessee shall have the right, upon written notice thereof to 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, and with or without any further 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 Lessor, and Lessee hereby grants to Lessor full
and free license to enter into and upon the Demised Premises in such event
with or without process of law and to repossess the Demised Premises and
Personal Property as Lessor's former estate. In the event of any such
termination of this Lease, 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 Section 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 including,
Lessor's reasonable attorney's fees. 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;
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.
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 or any provision or provisions
of this Lease. The failure of Lessor to insist, in any one or more cases,
upon the strict performance of any of the terms, covenants, conditions,
provisions or agreements of this Lease, or to exercise any option herein
contained, shall not be construed as a waiver or relinquishment for the
future of any such term, covenant, condition, provisions, agreement or option.
ARTICLE XXIV - (THIS SECTION INTENTIONALLY DELETED)
ARTICLE XXV - INDEMNIFICATION
25.1 Whether or not from available insurance proceeds or otherwise, Lessee
agrees to protect, indemnify, defend and save harmless the Lessor from and
against any and all claims, demands and causes of action of any nature
whatsoever for injury to or death of persons or loss of or damage to
property, occurring 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 attorney's 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; 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 gross negligence or willful
misconduct of Lessor. Lessor hereby agrees to protect, indemnify, defend and
hold Lessee harmless from and against any and all liabilities and obligations
arising out of or incurred in connection with any claims, demands or causes
of action relating in any matter whatsoever to the gross 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 mortgage to any lender
which may now or hereinafter affect the Demised Premises and/or Personal
Property, and to all renewals, modifications, consolidations, replacements
and executions 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
provided Lessee is in compliance hereunder. Lessee does hereby agree to
execute and to deliver any and all documents reasonably requested by Lessor I
s lender to evidence such subordination and non-disturbance agreements. This
Lease hereof shall be assignable by Lessor as collateral to any such lender
or mortgagee.
ARTICLE XXVII - RIGHT OF FIRST REFUSAL
27.1 Lessor shall not sell the Leased Property 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 Leased Property 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 Leased
Property, Lessor and Lessee shall enter into a written purchase and sales
agreement for Lessor's sale of the Leased Property 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 Leased
Property 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;
27.4 Notwithstanding anything to the contrary contained in this Article
XXVII, (a) Lessee shall have no right to exercise its Right of First Refusal
if any Events of Default shall exist under this Lease at the time of Lessor's
receipt of the Offer or at the time of the exercise of the right by Lessee;
and (b) Lessee's Right of First Refusal shall not apply with respect to a
sale to one or more partners of Lessor or an entity in which one or more
partners of Lessor shall have a controlling interest.
ARTICLE XXVIII - MORTGAGE RESERVES
28.1 Lessee shall be required to make deposits for annual real estate taxes
and insurance premiums and will make monthly deposits with Lessor, of an
amount equal to one-twelfth (1/12) of the annual real estate taxes or such
greater amount as may be required by any mortgagee and an amount equal to
one-twelfth (1/12) of the annual premiums for insurance on the Demised
Premises and Personal Property. Said deposits shall be due and payable on the
first (lst) day of each month as Additional Rent, shall not bear interest and
shall be held by Lessor and/or a
mortgagee of the Lessor to pay the real estate taxes and insurance premiums
as they become due and payable. If the total of the monthly payments as made
under this Article shall be insufficient to pay the real estate taxes and
insurance premiums when due, then Lessee shall on demand pay Lessor the
amount necessary to make up the deficiency in its pro rata share in the
initial and last year of the term hereof and thereafter shall pay the full
deficiency upon demand.
ARTICLE XXIX - LESSEE'S ATTORNMENT
29.1 Lessee covenants and agrees that, if by reason of a default upon the
part of Lessor herein in the performance of any of the terms and conditions
of any mortgage, the estate of Lessor thereunder is terminated by SUMMARY
disposition 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 Lessor under such mortgage or the holder of
any such mortgage, and agrees that this Lease shall not be affected in any
way whatsoever by any such proceedings.
29.2 If Lessor shall default in the performance of any of the terms,
provisions, covenants or conditions under any mortgage, or fails to pay the
amounts due thereunder when due, then immediately upon notice of such default
or failure on the part of Lessor, Lessee shall have the right to cure such
defaults, and to make such payments as are due from Lessor, directly to the
holder of the mortgage, as the case may be, and to the extent such payments
are accepted by the holder of the mortgage, to deduct the amounts by Lessee
to cure such defaults, together with interest therein from the date of
payment by Lessee at the rate of fifteen percent (15%) per annum, 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 under the laws of the State of New Mexico and is qualified
to do business in the State of Arizona.
b) The execution, delivery and performance of this Lease have been
duly authorized by the directors of Lessee and no consent by any other person
or entity to such execution, delivery and performance is required.
ARTICLE XXXI - SECURITY DEPOSIT
31.1 Following the occurrence of a default hereunder, Lessor may require
Lessee to pay to Lessor, as additional security for the faithful and prompt
performance of its obligations hereunder, a security deposit in an amount
equal to $50,257.50. Said security deposit may be applied by Lessor for the
purpose of curing any default or defaults of Lessee hereunder, in which event
Lessee shall replenish said deposit in fully by promptly paying to Lessor the
amount so applied. Lessor shall not pay any interest on said deposit, except
as required by law. If Lessee has not defaulted hereunder and Lessor has not
applied said deposit to cure a default, then said deposit, or such applicable
portion thereof, shall be paid to Lessee after the termination of this Lease.
Said deposit shall not be deemed an advance payment of Rent or a measure of
Lessor's damages for any default hereunder by Lessee.
ARTICLE XXXII - CONDITIONS OF LEASE
32.1 Lessor and Lessee acknowledge that the nursing home facility has not
yet been constructed and that the Personal Property has not yet been
purchased but that Lessor shall be responsible therefor following the
execution hereof. Lessee hereby acknowledges that it has reviewed and
approved the plans for the construction of the Facility and Lessor
acknowledges that it shall construct the Facility substantially in accordance
with such plans and in accordance with the requirements of federal and state
law relating to the operation of the facility as a nursing home. Lessee
shall have the right to inspect the Facility upon its completion to verify
that it has been substantially completed and equipped in accordance with the
plans therefor. If following the Lessee's inspection of the Facility, it is
not satisfied that the Facility has be substantially completed and equipped
in accordance with the plans, Lessee shall within five (5) days following its
inspection notify Lessor in writing of the manner in which Lessee believes
the Facility fails to comply with the plans. Lessee's failure to notify
Lessor within said five (5) day period shall constitute Lessee's acceptance
of the Facility as substantially completed by Lessor. If Lessor reasonably
concludes that the Facility has not been substantially completed and equipped
in accordance with the plans in any respect described in Lessee's notice,
Lessor shall promptly cause the required changes to be made.
32.2 This Lease is expressly conditioned upon and will become effective and
operative on the later to occur of the date that the certificate of occupancy
for the Demised Premises has been issued by the City of Phoenix and the date
that the State of Arizona licensing agency has inspected and approved the
facility in connection with the issuance of Lessee's license to operate the
Facility as a nursing home.
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 or such additional
financial information as Lessor or Lessor's lender may reasonably require.
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 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 rent, so that
in the event of a default of payment when due, 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 letter 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 f ees 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 consent of Lessor, Lessee shall pay Lessor a
monthly rental, for the period of such month-to-month tenancy, in an amount
equal to 1.5 times the applicable Minimum Rent at the expiration of the term
of this Lease. In addition, during said period of occupancy, Lessor may
exercise any and all remedies available to it at law or in equity to recover
possession of the Leased Property and to be compensated for its damages
incurred by said holding over.
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 addressed to the other
party hereto at the address set forth below:
If to Lessor:
Phoenix Nursing Home Limited Partnership II c/x Xxxxxx Capital Ventures,
Inc.
Xxx Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxxx
If to Lessee:
Sunrise Healthcare Corporation
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxx
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. Notice shall be either (i) personally delivered to the offices
set forth above, in which case they shall be deemed delivered on the date of
delivery to said offices, (ii) sent by Western Union telegram, in which case
they shall be deemed delivered on the date Western Union delivers its
telephonic communication, (iii) sent by certified mail, return receipt
requested, in which case they shall be deemed delivered on the date of
delivery set forth in the return receipt, or (iv) by air courier (Federal
Express or like service) in which case they shall be deemed received on the
date of delivery set forth in the courier's receipt.
34.8 Upon demand by either party, Lessor or 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 or leasehold interest, as
appropriate, in the Leased Property or of this Lease.
34.10 All of the provisions of this Lease shall be deemed and construed to
be "conditions" and "covenants" as though the words specifically expressing
or importing covenants and conditions were used in each separate provision
hereof.
34.11 Any reference herein to the termination of this Lease shall be deemed
to include any termination thereof by expiration, or pursuant to Articles
referring to earlier termination.
34.12 The headings and titles in this Lease are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the
scope or intent of this Lease, nor in any way affect this Lease.
34.13 This Lease contains the entire agreement between the parties and any
executory agreement hereafter made shall be ineffective to change, modify or
discharge it in whole or in part unless such executory agreement is in
writing and signed by the party against whom enforcement of the change,
modification or discharge is sought. This Lease cannot be changed orally or
terminated orally.
34.14 Except as otherwise herein expressly provided, the covenants,
conditions and agreements in this Lease shall bind and inure to the benefit
of the Lessor and Lessee and their respective successors and assigns.
34.15 All nouns and pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural as the identity
of the person or persons, firm or firms, corporation or corporations, entity
or entities or any other thing or things may require.
34.16 If any term or provision of this Lease shall to any extent be held
invalid or unenforceable, the remaining terms and provisions of this Lease
shall not be affected thereby, but each term and provision shall be valid and
be enforced to the fullest extent permitted by law.
34.17 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 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.
34.18 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 covenants,
agreement, term, condition or option and the same shall be and remain in full
force and effect.
34.19 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.
34.20 If any mortgagee or committed financier of Lessor should require, as a
condition precedent to the closing of any loan or the disbursal of any money
under any loan, that this Lease be amended or supplemented in any manner
(other than in the description of the Leased Property, the term, the purpose,
the rent or other charges hereunder, or in any other regard as will
substantially or materially affect the rights of Lessee under this Lease)
Lessor shall give written notice thereof to Lessee, which notice shall be
accompanied by a Lease Supplement Agreement, embodying such amendments and
supplements. Lessee shall within ten (10) days after the effective date of
Lessor's notice, either consent to such amendments and supplements (which
consent shall not be unreasonably withheld) and execute the tendered Lease
Supplement Agreement, or deliver to Lessor a written statement of its reason
or reasons for refusing to so consent and execute. If Lessee fails to
respond within said ten (10) day period, it shall be deemed to have consented
to such Lease Supplement Agreement without further notice. If Lessor and
Lessee are then unable to agree on a Lease Supplement Agreement satisfactory
to each of them and to the lender within thirty (30) days after delivery of
Lessee's written statement, Lessor shall have the right to terminate this
Lease within sixty (60) days after the end of said thirty (30) day period.
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 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.
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be signed by
persons authorized to do so on behalf of each of them respectively the day
and year first written above.
LESSOR: Phoenix Nursing Home Limited
Partnership II, an Illinois
limited partnership
By: /s/ Xxx Xxxxxxx
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its general partner
LESSEE: SUNRISE HEALTHCARE CORPORATION,
a New Mexico corporation
By: /s/ Xxxxxx X. Xxxxxx
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Its: President
---------
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx Xxxxxx
/s/ Xxxx Xxxxxx
---------------
Xxxx Xxxxxx