Exhibit 10.114
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the 1st day of March,
1997, (the "Effective Date") by and between ________ P.C., a New York
professional corporation (the "Practice"), and Nissan Xxxxxxxxxxx, M.D. (the
"Employee").
WHEREAS, the Employee desires to obtain employment with the Practice
and the Practice desires to employ the employee upon the terms and conditions
stated herein;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:
1. Employment. Employee is hereby employed by the Practice as its
Medical Services Director, or such other reasonably related position as it
may designate, to perform such duties as are reasonably required by such
position(s) and such other duties as he may be assigned from time to time.
The Employee agrees to accept such employment under the terms and conditions
herein, and to devote a minimum of ten (10) hours per month to the Practice.
In performing duties hereunder, Employee shall at all times act in a
professional, competent and loyal manner and shall comply with all policies
and procedures of the Practice as they may be amended from time to time. The
Employee shall maintain complete and accurate time and duty log sheets
reflecting the time spent fulfilling his duties under this Agreement.
2. Term. The term of this Agreement shall commence on its
above-written effective date and shall continue for a period of five (5)
years, unless sooner terminated pursuant to the provisions of Section 9
herein. The parties may renew this Agreement for an additional five (5) year
period in a written instrument signed by both parties.
3. Compensation. The Practice agrees to pay to Employee as
compensation for his services hereunder a salary at the rate of $2,000.00 per
month, payable in accordance with the payroll procedures established by the
Practice, as they may be amended from time to time.
4. Benefits. As a part-time employee, the Employee will not be
eligible to participate in any benefit program offered by the Practice to its
full-time employees.
5. Expenses. The Practice shall reimburse the Employee for all
reasonable and necessary business expenses incurred by him in the performance
of his duties hereunder, in accordance with its policies and procedures, as
they may be amended from time to time.
6. Insurance. Throughout the term of this Agreement, the Employee
shall maintain, at all times and at his own expense, professional liability
insurance coverage in the amount of at least $1,000,000.00 per occurrence and
$3,000,000.00 in the annual aggregate.
All such malpractice or professional liability insurance must be in a form
reasonably satisfactory to the Practice and include coverage for all clinical
services rendered pursuant to this Agreement.
7. Notice of Proceedings. The Employee shall notify the Practice
within one (1) business day after he becomes aware of any malpractice action
against him or any investigation, action or proceeding, the outcome of which
could result in revocation or suspension of his license to practice medicine
8. Compliance with Other Agreements and Applicable Law. The
Employee represents and warrants that his performance hereunder shall not
conflict with any other agreements to which he was or is a party. The
Employee agrees not to enter into any agreement, either written or oral,
which may conflict with this Agreement. The Employee further represents and
warrants that in performing his duties hereunder, he shall comply with all
applicable laws and regulations and that he immediately will report to the
Practice's Board of Directors all illegal conduct by the Practice or its
employees or agents of which he is aware. The Employee represents and
warrants that he has a current, valid license to practice medicine in the
State of New York, and he agrees that he must maintain such license as a
condition of continued employment by the Practice. The Employee further
represents and warrants that there is not presently pending nor threatened
against him any action, claim or proceeding the outcome of which could result
in revocation or suspension of his license to practice medicine in New York.
9. Termination. This Agreement shall terminate automatically upon
the expiration of its term or upon the death of the Employee. In addition,
this Agreement may be terminated by the Practice or the Employee under the
following circumstances:
9.1 By the Practice.
(a) Termination for Cause. The Practice may terminate
this Agreement at any time prior to the expiration of its terms for cause.
For purposes of this Section 9. 1 (a), "cause" shall mean: (i) the Employee's
conviction for any felony or crime of moral turpitude; (ii) dishonesty or
disloyalty by the Employee in performance of his duties hereunder; (iii)
insubordination by the Employee; (iv) conduct by the Employee which
jeopardizes the Practice's right or ability to operate its business; (v) the
Employee's material breach of any provision of this Agreement; (vi) the
failure or inability of the Employee to perform his duties in a manner which
is reasonably acceptable to the Practice; (vii) gross neglect of duty; or
(viii) the Employee fails to retain his license in good standing to practice
medicine in the State of New York.
(b) Termination Without Cause. The Practice may, in its
sole discretion, without any cause whatsoever, terminate the Employee's
employment by providing him with 30 days' prior written notice and, at its
election, may relieve the Employee of his duties and responsibilities at any
time thereafter and provide his with pay in lieu of notice.
9.2 By the Employee
(a) Termination for Cause. The Employee may terminate
this Agreement at any time prior to the expiration of its term for cause.
For the purposes of this Section 9.2(a), the term "cause" means the material
breach of any provision of this Agreement by the Practice.
(b) Termination Without Cause. The Employee may
terminate this Agreement without cause upon 30 days' written notice to the
Practice. Upon receipt of such notice, the Practice may elect to terminate
his employment at any time thereafter prior to the Employee's designated last
day of employment, and provide him with pay in lieu of notice.
10. Protection of the Practice. In consideration of the Employee's
initial and/or continued employment and other good and valuable consideration
provided by the Practice, the adequacy of which is hereby acknowledged, the
parties agree to the following:
10.1 Covenants. The Employee agrees, both during his employment with the
Practice and for a period of two (2) years following termination of this
Agreement, that he will not (a) directly or indirectly (whether as sole
proprietor, partner, stockholder, director, officer, employee, consultant,
independent contractor, or in any capacity as principal or agent or in any other
individual or representative capacity) compete with the Practice in any business
that is in competition in any manner whatsoever with (i) the then-existing
business or operations of the Practice, or (ii) any business that the employee
knows or should know that the Practice intends to enter or pursue; (b) be
interested in, associated with, render services to or sell any ideas, inventions
or products to any party in competition with the Practice; (c) make known or
disclose the name and/or address of any clients, customers or patrons of the
Practice or persons having a contractual relationship with the Practice; (d)
call upon, solicit, divert or take away, or attempt to solicit, divert or take
away any such clients, customers or patrons or employees of the Practice or any
persons having a contractual relationship with the Practice; or (e) request or
advise any present or future client, customer or patron of the Practice or any
persons having a contractual relationship with the Practice to withdraw, curtail
or cancel their business relationship with the Practice. For the purposes
hereof, "competition" shall include the providing of professional services by
psychologists or psychiatrists to individuals either individually or in group
settings in clinics, nursing homes, hospitals or in private offices within a
radius of fifteen (15) miles from any location in which such professional
services are being provided by the Practice; provided, however, that the
Employee may continue to provide professional services to patients through his
current medical practice and at the facilities listed on Schedule 10. 1 attached
hereto without violating the covenants contained in this Section.. For the
purposes hereof, "competition" shall not preclude the ownership of less than one
percent (1 %) of the common stock, or other class of voting stock, of any
publicly traded company.
10.2 Enforcement. The Employee agrees that the remedies
available at law for any breach of the covenants contained in this Section
10 will be inadequate and that the Practice shall be entitled to
appropriate equitable remedies, including injunctive relief in any action
or proceeding brought to prevent the taking or continuation of any action
which would constitute or result in a breach of such covenant. Such
remedies shall not be exclusive and shall be in addition to any and all
remedies which may be available, directly or indirectly, without limiting
the recovery of any damages, including incidental, consequential and/or
punitive damages. The Employee further agrees that if any restriction in
this Article is held by any court to be unenforceable or unreasonable, a
lesser restriction will be enforced in its place and the remaining
restrictions will be enforced independently of each other. The Employee
agrees to pay the attorneys' fees, court costs and other expenses incurred
by the Practice to enforce any provision under this Section.
10.3 Ancillary Obligations. This covenant shall be construed as
an obligation ancillary to the other provisions of this Agreement, and the
existence of any claim or cause of action by the Employee, whether
predicated on a breach of this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Practice of this covenant.
10.4 Jurisdiction. The Employee hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of New York located in New York City for any actions,
suits or proceedings arising out of or relating to this covenant and
further agrees that service of any process, summons, notices or document by
U.S. registered mail to the address set forth herein shall be effective
service of process for any action, suit or proceeding brought against him
in any such court.
11. Nature of Relationship. Nothing in this Agreement shall be
construed as establishing the parties as partners or joint venturers.
12. Arbitration. Whenever a "dispute" arises between the parties
concerning this Agreement or their employment relationship, including
without limitation the termination thereof, the parties shall use their
best efforts to resolve the "dispute" by mutual agreement. If such a
"dispute" cannot be so resolved, it shall be submitted to final and binding
arbitration to the exclusion of all other avenues of relief and adjudicated
pursuant to the American Arbitration Association's Rules for Commercial
Arbitration then in effect, except that the parties to such arbitration
shall be entitled to engage in pre-hearing discovery, to the extent
permitted by and according to the provisions of the Federal Rules of Civil
Procedure. The decision of the arbitrator must be in writing and shall be
final and binding on the parties, and judgment may be entered on the
arbitrator's award in any court having jurisdiction thereof. The expenses
of the arbitration shall be borne equally by the parties, and each party
shall be responsible for his or its own costs and attorneys' fees. For the
purposes of this Section 12, the term "dispute" means all controversies or
claims relating to terms, conditions or privileges of employment, including
without limitation claims for breach of contract, discrimination,
harassment, wrongful discharge, misrepresentation, defamation, emotional
distress or any other personal injury, but excluding claims for
unemployment compensation or worker's compensation. This Section shall
survive the termination of this Agreement.
13. No Requirement to Refer. It is not a purpose of this Agreement
to induce or encourage the referral of patients, and there is no requirement
under this Agreement, or under any other agreement between the Practice and
the Employee, that the Employee refer any patient to the Practice or to any
other entity for the delivery of health care items or services. The
compensation paid to the Employee under this Agreement is made for
professional services and obligations as set forth in this Agreement, and no
payment made under this Agreement is in return for the referral of patients
or in return for purchasing, leasing, ordering or arranging for any good,
facility, item or service from the Practice or any other entity.
14. Non-Waiver. The Practice's failure at any time to require the
performance by the Employee of any of the terms hereof shall in no way affect
the Practice's right thereafter to enforce the same, nor shall the waiver by
the Practice of the breach of any term hereof be taken or held to be a waiver
of any succeeding breach.
15. Severability. In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed, or if
any such provision is held invalid or unenforceable by a court of competent
jurisdiction or an arbitrator, such provision shall be deleted from this
Agreement and the Agreement shall be construed to give full effect to the
remaining provisions thereof.
16. Governing Law. This Agreement shall be interpreted, construed
and governed according to the laws of the State of New York, without regard
to the conflicts of laws principles thereof.
17. Headings and Captions. The paragraph headings and captions
contained in this Agreement are for convenience only and shall not be
construed to define, limit or affect the scope or meaning of the provisions
hereof.
18. Entire Agreement. This Agreement contains and represents the
entire agreement of the parties and supersedes all prior agreements,
representations or understandings, oral or written, express or implied with
respect to the subject matter hereof. This Agreement may not be modified or
amended in any way unless in a writing signed by both the Employee and an
authorized representative of the Practice. No representation, promise or
inducement has been made by either party hereto that is not embodied in this
Agreement, and neither party shall be bound or liable for any alleged
representation, promise or inducement not specifically set forth herein.
19. Assignability. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns. Neither this Agreement nor any rights or obligations hereunder may
be assigned by the Practice without the prior written consent of the
Employee, which consent shall not be unreasonably withheld. Notwithstanding
the foregoing, in the event of the merger or consolidation of the Practice
with any other corporation or corporations, the sale by the Practice of a
major portion of its assets or of its business and good will, or any other
corporate reorganization involving the Practice, this Agreement may, without
the Employee's written consent, be assigned and transferred to such successor
in interest as an asset of the Practice upon such assignee assuming the
Practice's obligation hereunder, in which event the Employee agrees to
continue to perform his duties and obligations according to the terms hereof,
to or for such assignee or transferee of this Agreement; provided, however,
that the Practice will remain secondarily liable as a guarantor of such
assignee or transferee's obligations to the Employee hereunder. The Employee
shall not have any right to assign, delegate or transfer any duty or
obligation to be performed by him hereunder to any third party, nor to assign
or transfer the right, if any, to receive payments hereunder.
20. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed properly given if delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested, or
sent by telegram, telex, telecopy or similar form of telecommunication, and
shall be deemed to have been given when received. Any such notice or
communication shall be addressed: (a) if to the Practice, to P.C., c/o Arent
Fox Xxxxxxx Xxxxxxx and Xxxx, 0000 Xxxxxxxx, Xxx Xxxx, X.X. 00000, Xxxx:
Xxxxxx Xxxx, Esq.; or (b) if to the Employee, to his/her last known home
address on file with the Practice; or to such other address as the parties
shall have furnished to one another in writing.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, to be effective as of the day and year first above written.
NISSAN XXXXXXXXXXX, M.D.
______________________________________P.X.
Xxxx: _______________________ By:
__________________________________
Title:
________________________________
Date:
________________________________
- 7 -
SCHEDULE 10.1
FACILITIES EXCLUDED FROM THE NONCOMPETITION COVENANTS
OF SECTION 10.1
Sagamore Children's Psychiatric Center
Flushing Hospital Medical Center
Upstate Clinical Associates
Xxxxxxxx Xxxxx Nursing Center
Private Practice
00-00 000 Xxxxxx
Xxxxxx Xxxxx, XX 00000
- 8 -
Exhibit 10.115
OPTION AND INDEMNITY AGREEMENT
This OPTION AND INDEMNITY AGREEMENT (the "Agreement") is made this ____
day of February, 1997, by and between Pioneer Healthcare, Inc. ("Pioneer"),
and Nissan Xxxxxxxxxxx M.D. ("Xxxxxxxxxxx").
WITNESSETH
WHEREAS, Pioneer is in the business of providing management and
administrative services to psychotherapy practices through its wholly-owned
subsidiary BSC-NY, Inc. (the "Subsidiary"); and
WHEREAS, in November 1996, the Subsidiary merged with Behavioral Stress
Centers, Inc., which had been providing management and administrative
services to Clinical Associates and Clinical Diagnostics, a general
partnership and sole proprietorship respectively, which had been engaged in
the provision of psychotherapy services in the New York metropolitan area; and
WHEREAS, Xxxxxx X. Xxxxxx, M.D. ("Xxxxxx") presently owns 98 percent of
the shares in Xxxxxx Physicians, P.C., a New York professional corporation
(the "P.C.") that was formed in October 1996 in order to provide
psychotherapy services to the patients formerly served by Clinical Associates
and Clinical Diagnostics; and
WHEREAS, Xxxxxxxxxxx presently owns two percent of the shares in the P.C.;
and
WHEREAS, in November 1996, Pioneer loaned $750,000 to the P.C. in order
to allow the P.C. to purchase the professional assets of Clinical Associates
and Clinical Diagnostics, including the various contracts that those entities
have with health care facilities and third party payers for the provision of
psychotherapy services; and
WHEREAS, in November 1996, the P.C. also entered into a management
agreement with the Subsidiary (the "Management Agreement") pursuant to which
the Subsidiary provides non-clinical management and administrative services
to the P.C.; and
WHEREAS, as consideration for the aforementioned loan to the P.C. and
execution of the Management Agreement, Pioneer and Xxxxxx entered into an
Option Agreement, dated November 5, 1996, which provides that no part of
Xxxxxx'x interest in the P.C. may be transferred without the prior written
consent of Pioneer; and
WHEREAS, Xxxxxx now wishes to transfer his entire interest in the P.C. to
Xxxxxxxxxxx, and Xxxxxxxxxxx wishes to receive that interest, provided that he
is indemnified by Pioneer for any losses which he may incur as a result of his
service as a shareholder, director, officer or employee of the P.C. and
WHEREAS, it is a condition of Pioneer's consent to the transfer of Xxxxxx'x
interest in the P.C. to Xxxxxxxxxxx that this Option be granted to Pioneer.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereunder, agree as follows:
X . Xxxxx of Option. Xxxxxxxxxxx hereby irrevocably grants to
Pioneer the right and option (hereinafter called the "Option") to designate a
person who lawfully may hold an ownership interest in the P.C. (the
"Optionee") who shall be entitled to purchase all of the shares of the P.C.
owned by Xxxxxxxxxxx ("Shliselberg's Interest") at the exercise price set
forth in paragraph 2, during the period and subject to the conditions herein
set forth.
2. Exercise Price. The exercise price (the "Exercise Price")
for Shliselberg's Interest shall be One Thousand Dollars ($1,000.00).
3. Option Term. The term of this Option shall expire on the
fortieth (40th) anniversary of the date hereof.
4. Exercise of Option. The Option shall be exercisable only
upon the occurrence of one or more of the following events:
(a) Shliselberg's death;
(b) Shliselberg's disability which, for purposes of this
Agreement, shall be defined as Shliselberg's failure or inability to perform
his customary duties for a consecutive period of three (3) months or for any
number of days totalling 120 within a six (6) month period;
(c) The loss or suspension of Shliselberg's medical
license, cancellation of the P.C.'s medical malpractice insurance without
replacement, commission of a felony by the P.C. or by Xxxxxxxxxxx, or the
loss or suspension, for more than ninety (90) days, of the P.C.'s or
Shliselberg's participation in the Medicare or Medicaid programs or in any
third-party payor contract which, in the reasonable discretion of Pioneer, is
a significant contract for the P.C.;
(d) Upon the default or termination of that certain
Employment Agreement of even date herewith between the P.C. and Xxxxxxxxxxx;
(e) Upon default or termination of the Management
Agreement between the Subsidiary and the P.C.; or
(f) The filing by Xxxxxxxxxxx of a petition in
bankruptcy, an assignment for the benefit of creditors, or other action taken
voluntarily or involuntarily under any state or federal statute for the
protection of debtors.
5. Manner of Exercise. Each exercise of the Option shall be
by written notice to Xxxxxxxxxxx, and shall be accompanied by the designated
Optionee's check payable to Xxxxxxxxxxx for the amount of the Exercise
Price. Upon delivery of such notice and payment, the Optionee shall be
deemed to have acquired Shliselberg's Interest and shall be deemed to have
become a member of the P.C. without any further action on the part of the
Optionee, Xxxxxxxxxxx or the P.C.. However, at the Optionee's request,
Xxxxxxxxxxx shall also deliver an assignment of his shares in the P.C. to the
Optionee in form and substance reasonably satisfactory to the Optionee.
6. No Obligation to Exercise Option. Pioneer shall be under
no obligation to exercise all or any part of the Option.
7. Transferability of Option. The Option is freely
transferable by Pioneer. Pioneer shall notify the P.C and Xxxxxxxxxxx of the
exercise or the revocation of any assignment of the Option.
8. Restrictions on Transfer of Shliselberg's Interests
Consents. During the Option Period, no part of Shliselberg's Interest shall
be transferred without the prior written consent of Pioneer. For purposes of
this Agreement, a transfer shall include any dissolution or termination of
the P.C. or any assignment, mortgage, hypothecation, transfer, pledge,
creation of a security interest in or lien upon, encumbrance, gift or other
disposition unless such transfer is made subordinate to or subject to this
Option. An authorized assignee or transferee must consent in writing to be
bound by the terms of this Agreement. Further, the P.C. and Xxxxxxxxxxx
shall not amend or modify the P.C.'s Articles of Organization or Bylaws in
any manner that would adversely affect Pioneer's rights hereunder without
Pioneer's prior written consent. Xxxxxxxxxxx consents to the Option on his
interests granted herein, and agrees to recognize the Optionee as a
substituted shareholder immediately upon the exercise of this Option. Any
provisions in the P.C.'s Bylaws that conflict with this Agreement are
superseded and shall be of no effect.
9. Representations and Warranties of Xxxxxxxxxxx. Xxxxxxxxxxx
hereby represents and warrants to, and covenants with, Pioneer as follows:
(a) Xxxxxxxxxxx has full power and authority to permit
him to execute and deliver this Agreement and to perform all of the
obligations contained herein, and none of such actions will violate any
provisions of law or will violate or constitute a default under any agreement
or instrument to which Xxxxxxxxxxx is a party.
(b) This Agreement constitutes, and each instrument to be
executed and delivered by Xxxxxxxxxxx in connection with the exercise of the
Option will constitute, a valid and legally binding obligation of
Xxxxxxxxxxx, enforceable against him in accordance with its terms.
(c) No other person will be permitted to become a
shareholder (other than pursuant to the exercise of this Option) without
prior written notice to the Pioneer and the grant to Pioneer of an option of
such person's interest in form and substance comparable to this Agreement.
(d) Xxxxxxxxxxx shall take, or cause to be taken, all
steps necessary to maintain the P.C. as a New York professional corporation
in good standing and, without the prior written consent of the Pioneer, shall
not take, or cause or allow to be taken, any steps to dissolve the P.C..
(e) A legend shall be placed on each stock
certificate issued by the P.C. to Xxxxxxxxxxx indicating that the shares
represent by that certificate are subject to this Agreement and may not be
transferred without the express written consent of Pioneer.
10. Indemnity. As additional consideration for this Agreement,
the Corporation hereby indemnifies Xxxxxxxxxxx from and against all uninsured
liability, losses or damages that he may sustain as a result of claims,
demands, costs (including reasonable attorneys' fees) or judgments arising
from his service as a shareholder, director, officer or employee of the PC.
11. Notices. All notices required or permitted hereunder shall
be in writing and shall be deemed to be properly given when personally
delivered to the party entitled to receive the notice or when sent by
certified or registered mail, postage prepaid, properly addressed to the
party entitled to receive such notice at the address stated below or at such
other address as may be furnished in writing by any party hereto to the other:
If to Xxxxxxxxxxx: Nissan Xxxxxxxxxxx, M.D.
00-00 00xx Xxxxxx - 0-X
Xxxx Xxxx, XX 00000
If to Pioneer: Pioneer Healthcare, Inc.
000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: President
12. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
executors, administrators, heirs, and assigns.
13. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to the
conflicts of laws provisions of that state.
14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
15. Amendment. This Agreement may not be amended except by an
instrument in writing signed by all the parties.
16. Specific Performance. The parties hereto agree that
Shliselberg's Interest in the P.C. is unique and that failure to honor the
rights granted by this Agreement will result in irreparable damage, and that
in addition to all other remedies of which Pioneer may avail itself at law or
in equity, Pioneer shall have the right of specific performance.
17. Entire Agreement. This Agreement embodies the entire
agreement between the parties with respect to its subject matter. There are
no restrictions, promises, representations, warranties, covenants or
undertakings other than those expressly set forth herein. This Agreement
supersedes any and all prior agreements and understandings between the
parties with respect to its subject matter.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first written above.
PIONEER HEALTHCARE, INC.:
By: _______________________________
Name: _____________________________
Its: ________________________________
___________________________________
Nissan Xxxxxxxxxxx, M.D.
Exhibit 10.116
SECURED TERM NOTE
$1,100.000.00
March , 1997
FOR VALUE RECEIVED, and intending to be legally bound, PHC OF
MICHIGAN, INC., a Massachusetts corporation, ("Borrower") hereby promises
to pay to the order of HEALTHCARE FINANCIAL PARTNERS - FUNDING II, L.P., a
Delaware partnership, its successors and assigns ("Lender"), the maximum
principal sum of ONE MILLION ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($1,100.000.00) (the "Principal Sum") together with interest, costs of
collection and other fees as further set forth herein, to be paid in
accordance with the terms set forth below. All terms not defined herein
shall have the meanings assigned to them in that certain Loan and Security
Agreement dated as of February 3, 1997 (the "Revolving Loan Agreement") by
Borrower and HCFP Funding, Inc., a Delaware corporation that is the
assignee of Lender ("HCFP Funding"). This Secured Term Note shall amend,
restate and replace in its entirety the Secured Bridge Note in the
principal amount of Four Hundred Thousand and No/100 Dollars ($400,000.00)
(the "Previous Advance") made by Borrower in favor of HCFP Funding dated
January 13, 1997, as amended (the "Old Note"). Upon execution of this
Secured Term Note by Borrower and Lender, the Old Note shall be canceled
and shall be of no further force and effect.
1. Commitment Fee. In consideration for the financing provided by
Lender as evidenced by this Secured Term Note, Borrower shall pay to Lender
(i) an initial Commitment Fee in the amount of Seven Thousand and No/100
Dollars ($7,000.00), which shall be paid to Lender through a deduction from
the additional Seven Hundred Thousand and No/100 Dollars ($700,000.00) (the
"New Advance") to be advanced on the date of this Secured Term Note, and
(ii) an annual Commitment Fee in the amount of one percent (1%) of the
Principal Sum outstanding on each anniversary date of this Secured Term
Note, to be payable on each such anniversary date.
2. Principal and Interest. Borrower promises to pay to Lender
interest on the Principal Sum at a fluctuating rate per annum (on the basis
of the actual number of days elapsed over a year of 360 days) equal to the
Prime Rate plus five percent (Prime plus 5.00%) (the "Base Rate"), provided
that after an Event of Default such rate shall be equal to the Base Rate
plus five percent (5%). For purposes of the foregoing, the term "Prime
Rate" means that rate of interest designated as such by Fleet National Bank
of Connecticut. N.A., or any successor thereto, as the same may from time
to time fluctuate. Interest only shall be payable monthly in arrears on
the last Business Day (defined herein) of each month for the first twelve
(12) months that this Secured Term Note remains outstanding, beginning on
April 30, 1997 (which interest installment shall include interest accrued
from the date hereof through April 30, 1997) and continuing on the last
Business Day of each month thereafter through and including March 31. 1998.
On April 30, 1998, and on the last Business Day of each month thereafter
through and including February 28, 2001, Borrower will make one of
thirty-five (35) equal monthly installment payments of principal, each of
which is equal to Nine Thousand One Hundred Sixty-Six and 67/100 Dollars
($9,166.67) per installment, together with accrued interest on each such
installment calculated at the Base Rate. On March 12, 2001 (the "Maturity
Date") Borrower shall make a balloon principal installment of the then
remaining principal of Seven Hundred Seventy-nine Thousand One Hundred
Sixty-Six and 55/100 Dollars ($779,166.55), together with all accrued and
unpaid interest. After the Maturity Date and until the entire Principal Sum
shall be paid in full. the amount of the Principal Sum then outstanding
shall bear interest, payable on demand, at the Base Rate plus five percent
(5%),
but in no event to exceed the maximum lawful rate.
Additional Payments. Borrower further promises to pay to Lender,
immediately upon demand, all reasonable costs. disbursements and reasonable
attorneys' fees incurred by Lender in connection with the preparation of
this Secured Term Note and all related agreements and documents, or in
connection with any action, suit or proceeding to protect, sustain or
enforce the rights and remedies of Lender hereunder.
4. Borrowing and Prepayment
a. Subject to the terms and conditions hereof, Lender shall
make available to Borrower the New Advance (less the remaining portion of
the initial Commitment Fee) in immediately available funds not later than
12:00 Noon (Washington, D.C. time) on the Business Day on which the
following conditions precedent are satisfied: (i) no default shall have
occurred under this Secured Term Note, the Revolving Loan Agreement, or that
certain Loan and Security Agreement by and between PHC of Utah, Inc. (an
affiliate of Borrower) and HCFP Funding ((as successor-in-interest to
HealthPartners Funding, L.P.) dated May 21, 1996, as amended (the "Utah Loan
Agreement"), (ii) all representations and warranties contained in this
Secured Term Note, the Revolving Loan Agreement, the Utah Loan Agreement, or
otherwise made in writing in connection herewith by or on behalf of Borrower
shall be true and correct in all material respects, (iii) PHC, Inc. shall
have executed and delivered to Lender a guaranty of the obligations under
this Secured Term Note (the "Guaranty"), (iv) Borrower shall have properly
executed a mortgage granting to Lender a first priority lien on the real
property described on Exhibit A attached to this Secured Term Note, which
exhibit is made a part hereof (the "First Mortgage"), (v) Borrower shall
have properly executed a mortgage granting to HCFP Funding a second priority
lien on the real property described on Exhibit A attached to this Secured
Term Note, which exhibit is made a part hereof (the "Second Mortgage"), (vi)
Borrower shall have delivered each of the First Mortgage and the Second
Mortgage, in recordable form, to Lender, and (vii) Borrower shall have
received Uniform Commercial Code ("UCC"), judgment and tax lien searches
with the Secretary of State and local filing offices of each jurisdiction
where Borrower maintains a place of business, which yield results consistent
with the representations and warranties contained herein.
b. Borrower may prepay all or any part of the Principal Sum
outstanding without penalty, together with all interest accrued thereon, and
all other sums that are payable pursuant to this Secured Term Note.
5. Payment 0ffice - Both the Principal Sum and the interest hereon
and any other amounts payable hereunder are payable in lawful money of the
United States of America at the office of Lender, at 0 Xxxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxx Xxxxx, XX 00000, Attention: Xx. Xx Xxxxxxxx, or at such
other place as Lender may specify in writing to Borrower. Any payment by
other than immediately available funds shall be subject to collection.
Interest shall continue to accrue until the funds by which payment is made
are available to Lender for its use. Any payment hereunder which is stated
to be due on a day on which banks in Washington, DC are required or
permitted to be closed for business shall be due and payable on the next
business day (each such next day a "Business Day-") and such extension of
time shall be included in the computation of interest in connection with
such payment.
6. Acceleration: No Presentment. On the Maturity Date or upon the
occurrence of an Event of Default (as defined in Section 12 hereof), the
outstanding Principal Sum, accrued and unpaid interest thereon and all other
sums owed by Borrower to Lender in connection herewith shall immediately
become due and payable. Borrower hereby expressly waives any presentment
for payment, demand for payment, notice of nonpayment or dishonor, protest
and notice of protest of any kind, except the notices required under Section
12 hereof.
7. Security Agreement.
a. This Secured Term Note shall constitute a security
agreement as that term is used in the UCC and Borrower hereby grants to
Lender, as security for Borrower's obligations hereunder, a security
interest in the following, (collectively, the "Collateral"), which security
interest shall have first priority and be senior to all other liens and
encumbrances except those made in favor of HCFP Funding and in existence
prior to the date of this Secured Term Note:
(i) All of Borrower's now-owned and hereafter acquired
or arising Accounts, accounts receivable and rights to payment of every kind
and description, and any contract rights, chattel paper, documents and
instruments with respect thereto;
(ii) All of Borrower's now owned and hereafter acquired
or arising general intangibles of every kind and description pertaining to
its Accounts, accounts receivable and other rights to payment, including,
but not limited to, all existing and future customer lists, choses in
action, claims, books, records, contracts, licenses, formulae, tax and other
types of refunds, returned and unearned insurance premiums, rights and
claims under insurance policies, and computer information, software,
records, and data;
(iii) All of Borrower's now or hereafter acquired deposit
accounts into which Accounts are deposited, including the Concentration
Account;
(iv) All of Borrower's monies and other property of every
kind and nature now or at any time or times hereafter in the possession of
or under the control of Lender or a bailee or Affiliate of Lender;
(v) All of Borrower's now owned or hereafter acquired
inventory of every description which is held by the Borrower for sale or
lease or is furnished by the Borrower under any contract of service or is
held by the Borrower as raw materials, work in process or materials used or
consumed in a business, wherever located, and as the same may now and
hereafter from time to time be constituted, together with all cash and
non-cash proceeds and products thereof,
(vi) All of Borrower's now owned or hereafter acquired
machinery, equipment, tools, tooling, furniture, fixtures, goods. supplies,
materials, work in process, whether now owned or hereafter acquired,
together with all additions, parts, fittings, accessories, special tools,
attachments, and accessions now and hereafter affixed thereto and/or used in
connection therewith, all replacements thereof and substitutions therefor,
and all cash and non-cash proceeds and products thereof-,
(vii) all of Borrower's general intangibles (including,
without limitation, any proceeds from insurance policies after payment of
prior interests), patents, unpatented inventions, trade secrets, copyrights,
contract rights, goodwill, literary rights, rights to performance, rights
under licenses, choses-in-action, claims, information contained in computer
media (such as data bases, source and object codes, and information
therein), things in action, trademarks and trademarks applied for (together
with the goodwill associated therewith) and derivatives thereof, trade
names, including the right to make, use, and vend goods utilizing any of the
foregoing, and permits, licenses, certifications, authorizations and
approvals, and the rights of the Borrower thereunder, issued by any
governmental, regulatory, or private authority, agency, or entity whether
now owned or hereafter acquired, together with all cash and non-cash
proceeds and products thereof,
(viii) the real property described on Exhibit A to this
Secured Term; and
(ix) The proceeds (including, without limitation,
insurance proceeds) of all of the foregoing.
Borrower shall, at Borrower's expense, perform all acts and execute
all documents requested by Lender at any time to evidence, perfect, maintain
and enforce Lender's security interest and the priority thereof in the
Collateral. Upon Lender's request, at any time and from time to time,
Borrower shall, at Borrower's sole cost and expense, execute and deliver to
Lender one or more financing statements (in form and substance satisfactory
to Lender) pursuant to the UCC and, where permitted by law, Borrower hereby
authorizes Lender to execute and file one or more financing statements
signed only by Lender. Notwithstanding anything to the contrary contained
in this Secured Term Note, Borrower and Lender agree that Lender is, and
shall be deemed to be, the "secured party" as that term is defined in the
UCC and elsewhere with respect to personal property.
b. In addition to all other rights, options. and
remedies granted to Lender under this Secured Term Note, upon the occurrence
of an Event of Default Lender may exercise all other rights granted to it
hereunder and all rights under the Uniform Commercial Code in effect in the
applicable jurisdictions) and under any other applicable law, and exercise
the following rights and remedies (which list is given by way of example and
is not intended to be an exhaustive list of all such rights and remedies):
(i) The right to take possession of, send notices
regarding, and collect directly the Collateral, with or without judicial
process, and to exercise all rights and remedies available to Lender with
respect to the Collateral under the Uniform Commercial Code in effect in the
jurisdiction(s) in which such Collateral is located;
(ii) The right to (by its own means or with
judicial assistance) enter any of Borrower's premises and take possession of
the Collateral, or render it unusable, or dispose of the Collateral on such
premises in compliance with subsection c. below, without any liability for
rent, storage, utilities, or other sums, and Borrower shall not resist or
interfere with such action;
(iii) The right to require Borrower at Borrower's
expense to assemble all or any part of the Collateral and make it available
to Lender at any place designated by lender, and
(iv) The right to relinquish or abandon any
Collateral or any security interest therein.
c. Borrower agrees that a notice received by it at least five
(5) days before the time of any intended public sale, or the time after
which any private sale or other disposition of the Collateral is to be made,
shall be deemed to be reasonable notice of such sale or other disposition.
If permitted by applicable law, any perishable Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be
sold immediately by Lender without prior notice to Borrower. At any sale or
disposition of Collateral, Lender may (to the extent permitted by applicable
law) purchase all or any part of the Collateral, free from any right of
redemption by Borrower, which right is hereby waived and released. Borrower
covenants and agrees not to interfere with or impose any obstacle to
Lender's exercise of its rights and remedies with respect to the Collateral
following an Event of Default.
d. Lender shall have the right to proceed against all or any portion of the
Collateral to satisfy the liabilities and obligations of Borrower to Lender in
any order. All rights and remedies granted Lender hereunder and under any
agreement referred to herein, or otherwise available at law or in equity, shall
be deemed concurrent and cumulative, and not alternative remedies, and Lender
may proceed with any number of remedies at the same time until the Principal
Sum, all interest, costs, expenses and other charges due hereunder, and all
other existing and future liabilities and obligations of Borrower to Lender, are
satisfied in full. The exercise of any one right or remedy shall not be deemed a
waiver or release of any other right or remedy, and Lender, upon the occurrence
of an Event of Default, may proceed against Borrower, and/or the Collateral, at
any time, under any agreement, with any available remedy and in any order.
9. Use of Funds. Borrower covenants and agrees that the loan of
the Principal Sum or any portion thereof shall be used for working capital
or other commercial purposes of Borrower.
10. Representative. Borrower hereby warrants and represents to
Lender that:
a. This Secured Term Note constitutes a valid and
binding obligation of Borrower, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws generally affecting creditors' rights or remedies, and
judicial doctrines concerning waivers of rights.
b. Except as may be provided in instruments executed by
Borrower in favor of HCFP Funding or except as otherwise provided in
Schedule 10b attached hereto and made a part hereof, the execution, delivery
or performance of or under this Secured Term Note will not violate or
conflict with any law, rule, regulation, order, judgment, indenture,
instrument, or agreement by which Borrower or Borrower's properties or
assets are bound or affect, or conflict or be inconsistent with, or result
in any breach of, any of the terms, covenants or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, security interest, charge or other encumbrance upon any of the
properties or assets of Borrower, pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other instrument to which Borrower is
a party or by which Borrower's properties or assets may be bound or to which
they may be subject other than a lien, security interest, charge or other
encumbrance in favor of Lender or its affiliates, successors or assigns.
c. Except as provided in Schedule 10c attached hereto
and made a part hereof, there are no actions, suits or other proceedings
pending, including, without limitation, any condemnation proceeding, or to
the knowledge of Borrower threatened, against or adversely affecting
Borrower's properties or assets or the validity or enforceability of this
Secured Term Note. Borrower is not in default with respect to any order,
writ, injunction, decree or demand of any court or governmental authority.
There is no litigation or proceeding, including, without limitation, any
condemnation proceeding, pending or, to the knowledge of Borrower,
threatened against or affecting Borrower's properties or assets, or any
circumstances existing which would in any manner materially adversely affect
Borrower's properties or assets, or the validity or ability of Borrower to
perform any obligations under this Secured Term Note.
d. The financial statements of Borrower previously
delivered to Lender are true, correct and complete and fairly present the
financial condition of Borrower as of the date thereof. No material adverse
change in the financial condition of Borrower has occurred since the date of
such financial statements of Borrower delivered to Lender.
e. Except for liens, security interests, charges or
encumbrances in favor of HCFP Funding or as otherwise provided in Schedule
10e attached hereto and made a part hereof. Borrower is the sole owner of
all right, title and interest in and to all of the Collateral free and clear
of any lien, security interest, charge or encumbrance.
Borrower shall deliver to Lender: (i) its monthly financial
statements, prepared in accordance with the financial statements of such
party previously delivered to Lender, consistently applied, and certified by
such party to Lender to be true and correct and accurately reflecting such
party's financial condition as of the date thereof; (ii) prompt written
notice of any event or occurrence (including any pending or threatened
litigation) of which such party has knowledge which may materially adversely
affect the financial condition of Borrower; and (iii) any other information
relating to Borrower reasonably requested by Lender.
11. Covenants. Borrower covenants and agrees that until this
Secured Term Note shall be repaid in full, it shall be bound by, and shall
comply fully with, all of the affirmative and negative covenants set forth
in Article VI and Article VII of the Revolving Loan Agreement, all of which
covenants are hereby incorporated by reference into this Secured Term Note..
12. Events of Default. The following events are each an "Event of
Default" hereunder:
a. Borrower fails to make any payment of principal when
due or fails to make any payment of interest, fees or other amounts owed to
or for the account of Lender hereunder and such payment remains unpaid for
five (5) Business Days after written notice hereof from Lender to Borrower
is received; or
b. Borrower has made any representations or warranties
in this Secured Term Note or any financial statement delivered to Lender or
otherwise in connection herewith or therewith which contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained herein or therein not misleading; or
c. Borrower shall fail to perform or observe, or cause
to be performed or observed, any other term, obligation, covenant, condition
or agreement contained in this Secured Term Note and such failure shall have
continued for a period of ten (10) days after written notice thereof, or
d. Borrower shall (i) apply for, or consent
in writing to, the appointment of a receiver, trustee or liquidator; or (ii)
file a voluntary petition seeking relief under the Bankruptcy Code, or be
unable, or admit in writing Borrower's inability, to pay their debts as they
become due; or (iii) make a general assignment for the benefit of creditors,
or (iv) file a petition or an answer seeking reorganization or an
arrangement or a readjustment of debt with creditors, apply for, take
advantage, permit or suffer to exist the commencement of any insolvency,
bankruptcy, suspension of payments, reorganization, debt arrangement,
liquidation, dissolution or similar event, under the law of the United
States or of any state in which Borrower is a resident; or (v) file an
answer admitting the material allegations of a petition filed against
Borrower in any such bankruptcy, reorganization or insolvency case or
proceeding or (vi) take any action authorizing, or in furtherance of, any
of the foregoing; or
e. (i) an involuntary case is commenced against
Borrower and the petition is not controverted within ten (10) days or is not
dismissed within thirty (30) days after the commencement of the case or (ii)
an order, judgment or decree shall be entered by any court of competent
jurisdiction on the application of a creditor adjudicating Borrower bankrupt
or insolvent, or appointing a receiver, trustee or liquidation of Borrower
or of all or substantially all of the assets of Borrower and such order,
judgment or decree shall continue unstayed and in effect for a period ninety
(90) days or shall not be discharged within thirty (30) days after the
expiration of any stay thereof, or
f. an Event of Default shall have occurred under the
Revolving Loan Agreement, the Mortgage or the Utah Loan Agreement.
13. Lender's Rights.
a. Upon the occurrence of an Event of Default, Lender
may, in addition to the remedies set forth in Section 7 herein, proceed, to
the extent permitted by law, to protect and enforce its rights either by
suit in equity or by action at law, or both, whether for the specific
performance of any covenant, condition or agreement contained in this
Secured Term Note or in aid of the exercise of any power granted in this
Secured Term Note, or proceed to enforce the payment of this Secured Term
Note or to enforce any other legal or equitable right of Lender. No right
or remedy herein or in other agreement or instrument to the benefit of
Lender is intended to be exclusive of any other right or remedy, and each
and every such right or remedy shall be cumulative and shall be in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. Without limiting the
generality of the foregoing, if the outstanding Principal Sum, or any of the
other obligations of Borrower to Lender shall not be paid when due, Lender
shall not be required to resort to any particular security, right or remedy
or to proceed in any particular order of priority, and Lender shall have the
right at any time and from time to time, in any manner and in any order, to
enforce its security interests, liens, rights and remedies, or any of them,
as it deems appropriate in the circumstances, and apply the proceeds of any
collateral to such obligations of Borrower as it determines in its sole
discretion.
b. In the event that an Event of Default has occurred
as provided herein and Borrower has not paid the total outstanding Principal
Sum, together with interest accrued thereon upon demand by Lender, then
Borrower shall pay to Lender interest on such outstanding amounts at a rate
per annum equal to the Base Rate plus five percent (5%) from the date such
outstanding amounts are due until the date this Secured Term Note is paid in
full. Borrower promises to pay all costs of collection, including
reasonable attorneys' fees, if this Secured Term Note is referred to an
attorney for collection after the Event of Default.
15. No Waiver. No failure or delay on the part of Lender in
exercising any right, power or privilege under this Secured Term Note nor
any course of dealing between Borrower and Lender, shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
or further exercise or the exercise of any right, power or privilege.
16. Writing Required. No modification or waiver of any provisions
of this Secured Term Note, nor consent to any departure by Borrower, shall
in any event be effective, irrespective of any course of dealing between the
parties, unless the same shall be in a writing executed by Lender and then
such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on Borrower in any
case shall thereby entitle Borrower to any other or further notice or demand
in the same, similar or other circumstances.
17. Usury Limitation. Notwithstanding anything contained
herein to the contrary, Lender shall never be entitled to receive, collect
or apply as interest any amount in excess of the maximum rate of interest
permitted to be charged by applicable law; and in the event Lender receives,
collects or applies as interest any such excess, such amount which would be
excessive interest shall be applied to the reduction of the Principal Sum;
and if the Principal Sum is paid in full, any remaining excess shall be paid
to Borrower. In determining whether or not the interest paid or payable in
any specific case exceeds the highest lawful rate, Lender and Borrower shall
to the maximum extent permitted under applicable law (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest;
(ii) exclude voluntary prepayments and the effects thereof, and (iii)
"spread" the total amount of interest throughout the entire term of the
obligation so that the interest rate is deemed to have been uniform
throughout said entire term.
18. Notices. Any notice or demand given under this Secured Term
Note shall be given by delivering it, sending by telecopier (with a
confirming copy by regular mail), or by mailing it by certified or
registered mail, postage prepaid, return receipt requested, or sent by
prepaid overnight courier service addressed to Borrower at: 000 Xxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, XX 00000 Attention: Xxxxx Xxxxx, Chief Financial
Officer, (fax) (000) 000-0000, with a copy to Xxxxxx X. Xxxxxxxxxx, Esquire,
Xxxxxx, Hall & Xxxxxxx, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000,
(fax) (000) 000-0000. Any notice to be given to Lender under this Secured
Term Note shall be given by delivering it, sending by telecopier (with a
confirming copy by regular mail), or mailing it by certified or registered
mail, return receipt requested, or sent by prepaid overnight courier
service, addressed to Lender at: 0 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx
Xxxxx. XX 00000 Attention: Xx. Xx Xxxxxxxx, or at such other place as
Lender may specify in writing to Borrower. Each party may designate a
change of address by notice to the other given in accordance herewith at
least fifteen (15) days before such change of address is to become
effective. A notice given under this Secured Term Note shall be deemed
received five (5) days after it is sent by regular mail, or upon receipt
when it is delivered or sent by telecopier according to the requirements of
this paragraph, or if sent by courier on the next Business Day following
deposit with the courier.
19. Section Headings. The headings of the several paragraphs of
this Secured Term Note are inserted solely for convenience of reference and
are not a part of and are not intended to govern, limit or aid in the
construction of any term or provision.
20. Severability. Any provision contained in this Secured Term
Note which is prohibited or unenforceable in any respect in any jurisdiction
shall, as to such jurisdiction be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
21. Survival of Terms. All covenants, agreements, representations
and warranties made in this Secured Term Note or in any financial statements
delivered pursuant hereto shall survive Borrower's execution and delivery of
this Secured Term Note to Lender and shall continue in full force and effect
so long as this Secured Term Note or any other obligation hereunder shall be
outstanding and unpaid or any other obligation of Borrower hereunder shall
remain unperformed.
22. GOVERNING LAW, JURISDICTION, ETC. This Secured Term Note is to
be governed by and construed in accordance with the laws of the State of
Maryland without respect to any otherwise applicable conflicts-of-laws
principles, both as to interpretation and performance, and the parties
expressly consent and agree to the non-exclusive jurisdiction of the State
of Maryland courts, waiving all claims or defenses based on lack of personal
jurisdiction, improper venue, inconvenient forum or the like. Borrower
hereby consents to service of process by mailing a copy of the summons to
Borrower, by certified or registered mail, to Borrower's address set forth
in Section 18 above, or otherwise furnished to Lender in writing. Borrower
further waives any claim for consequential damages in respect of any action
taken or omitted to be taken by lender in good faith.
23. JURY TRIAL WAIVER. In any action or proceeding relating to
this Secured Term Note, Borrower, and Lender by its acceptance of this
Secured Term Note, irrevocably and unconditionally waive trial by jury.
Borrower understands that this waiver is a material inducement to Lender's
agreement to lend the principal sum.
24. CONFESSED JUDGMENT. Borrower irrevocably authorizes and
empowers any attorney of record, or the prothonotary, clerk or similar
officer of any court in any county of the State of Maryland or of Baltimore
City, Maryland, or in the United States District Court for the District of
Maryland, as attorney for Borrower, as well as for any persons claiming
under, by or through Borrower, to appear for Borrower in any such court in
any such action brought against Borrower at the suit of Lender to confess
judgment against Borrower in favor of Lender in the full amount due amount
due on this Secured Term Note (including principal, accrued interest and any
and all charges, fees and costs) plus reasonable attorneys incurred plus
court costs, all without prior notice or opportunity of Borrower for prior
hearing. The authority and power to appear for and enter judgment against
Borrower shall not be exhausted by one or more exercises thereof, or by any
imperfect exercise thereof, and shall not be extinguished by any judgment
entered pursuant thereto; such authority and power may be exercised on one
or more occasions from time to time, in the same or different jurisdictions,
as often as Lender shall deem necessary, convenient and proper.
25. Joint and Several Liability. Each of the undersigned is jointly
and severally liable for the payment and performance of all covenants and
obligations of Borrower set forth in this Secured Term Note.
IN WITNESS WHEREOF, the undersigned has executed this Secured Term
Note as of the day and year first above written.
ATTEST: PHC OF MICHIGAN, INC.
(Seal) a Massachusetts corporation
By: ____________________________ By: ________________________________
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Shear
Title: CFO/Assistant Clerk Title: President
note2.phc
Exhibit 10.117
MORTGAGE
This mortgage is made on March , 1997, between PHC OF MICHIGAN, INC.
a Massachusetts corporation, as Mortgagor, and HEALTH CARE FINANCIAL
PARTNERS - FUNDING II, L. P., a Delaware limited partnership, having its
principal office at 0 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxx. Xxxxxxxx
00000, as Mortgagee.
For value received, Mortgagor mortgages and warrants to Mortgagee the
property situated in the City of New Baltimore, County of Macomb, and State
of Michigan, with a street address of 00000 Xxxx Xxxx, Xxx Xxxxxxxxx,
Xxxxxxxx 00000, and legally described as shown on the attached Exhibit A;
together with the easements, rights-of-way, licenses, privileges,
hereditaments, and appurtenances belonging to the property, and all the
rents, issues, leases, and profits, the interest of Mortgagor in the
property, either at law or in equity, all buildings, structures, and
improvements, and all fixtures located in, on, or affixed to the property,
and used or usable in connection with the operation of the property (all of
the above-stated property are collectively referred to in this mortgage as
the "premises").
This mortgage is given to secure the following:
(a) payment of the indebtedness evidenced by a promissory note of even
date, made and delivered by Mortgagor to Mortgagee, in the principal
sum of One Million One Hundred Thousand Dollars ($1,100,000.00),
payable with interest ("Secured Term Note");
(b) payment by Mortgagor to Mortgagee of all sums expended or advanced by
Mortgagee pursuant to any term or provision of this mortgage;
(c) performance of the covenants, conditions, and agreements contained in
this mortgage and in the Secured Term Note and in any other documents
securing the indebtedness shown above,
(d) all other indebtedness and obligations of Mortgagor presently or
subsequently owing to Mortgagee, including but not limited to all
future advances under this mortgage or on the Secured Term Note, loan
agreements, security agreements, pledge agreements, assignments,
mortgages, leases, Guarantees, and any other agreements, instruments,
or documents previously or subsequently signed by Mortgagor, whether
the indebtedness or obligations are direct or indirect, absolute or
contingent, primary or secondary, or related or unrelated to the
premises or the transaction of which this mortgage is a part, and any
and all partial or full extensions or renewals of this indebtedness or
other indebtedness and obligations (all of the foregoing are
collectively referred to as the "indebtedness").
Mortgagor warrants, covenants, and agrees that:
I . Title. Mortgagor is seized of the premises, in fee simple. Mortgagor
had the right and power to mortgage and warrant the premises as set
forth in this Mortgage. The premises are free from all liens and
encumbrances except easements and restrictions of record disclosed in
Lawyers Title Insurance Corporation Title Commitment No. 60108 LTC
dated October 8, 1996, relating to the premises. Mortgagor will
defend the premises against all claims and demands.
2. Payment of Indebtedness. Mortgagor will pay all indebtedness when
due, including the principal and interest. as provided in the Secured
Term Note.
3. Taxes and Assessments. Until the indebtedness is fully satisfied.
Mortgagor will pay all taxes. assessments, and other similar charges
and encumbrances levied on the premises before they become delinquent.
and will promptly deliver to Mortgagee, without demand, receipts
showing the payment.
4. Tax and Insurance Escrow. On request, at the option of Mortgagee,
Mortgagor will pay to Mortgagee monthly, in addition to each monthly
payment required by this mortgage or under the Secured Term Note, a
sum equivalent to one-twelfth of the amount estimated by Mortgagee to
be sufficient to enable Mortgagee to pay, at least 30 days before they
become due, all taxes, assessments, and other similar charges levied
against the premises, and all insurance premiums on any policy or
policies of insurance required by this mortgage. The additional
payments may be commingled with the general funds of Mortgagee, and no
interest shall be payable on those payments. On demand by Mortgagee,
Mortgagor will deliver and pay over to Mortgagee any additional sums
necessary to make up any deficiency in the amount necessary to enable
Mortgagee to fully pay when due any of the preceding items. In the
event of any default by Mortgagor in performing any of the terms of
this mortgage, Mortgagee may apply against the indebtedness, in the
manner that Mortgagee may determine, any funds of Mortgagor then held
by Mortgagee under this paragraph.
5. Change of Law. If, after the date of this Mortgage, any statute or
ordinance is passed that changes in any way the laws now in force for
the taxation of mortgages or mortgaged debts or the manner in which
those taxes are collected, so as to affect this mortgage or the
interest of Mortgagee, the whole of the principal sum secured by this
mortgage. with all interest and charges, if any, at the option of
Mortgagee, shall become due and payable.
6. Insurance. Mortgagor will procure, deliver to, and maintain for the
benefit of Mortgagee during the term of this Mortgage:
(a) a policy of hazard insurance, providing an all-risk extended
coverage endorsement. in an amount equal to the highest
replacement value of the premises;
(b) a policy of comprehensive public liability insurance insuring
against bodily injury, with a coverage limit of at least
$1,000,000, and against property damage, with a coverage limit
of at least $250,000, from any accident or occurrence with
respect to the premises.
All policies of insurance required by this paragraph shall be in a
form, with companies, and in amounts acceptable to Mortgagee, and
shall contain a mortgagee endorsement clause acceptable to Mortgagee,
with loss payable to Mortgagee. Mortgagor will pay when due the
premiums on any policy of insurance required by Mortgagee, and will
deliver to Mortgagee renewals of all policies at least 10 days before
their expiration date(s). Duplicates of all policies shall be
delivered to Mortgagee.
In the event of any loss or damage to the premises. Mortgagor
will give immediate written notice to Mortgagee, and Mortgagee may
then make proof of the loss or damage, if it is not promptly made by
Mortgagor. All proceeds of insurance shall be payable to Mortgagee,
and any affected insurance company is authorized and directed to make
payment directly to Mortgagee. Mortgagee is authorized to settle,
adjust. or compromise any claims for loss. damage, or destruction
under any policy of insurance.
7. Maintenance and Repair. Mortgagor will not cause or permit the
commission of waste on the premises and will keep the premises in good
condition and repair. No building or other improvement on the
premises shall be removed. demolished. or materially altered without
the prior written consent of Mortgagee. Mortgagor will comply with
all laws, ordinances, regulations, and orders of all public
authorities having jurisdiction over the premises. If the premises,
in the sole judgment of Mortgagee, require inspection or repair,
Mortgagee may enter upon the premises and inspect and/or repair the
premises as Mortgagee may deem advisable. and may take other action as
Mortgagee may deem appropriate to preserve the premises. Mortgagor
will pay when due all charges for utilities or services contracted for
by Mortgagor.
8. Environmental Matters. No use, exposure, release, generation,
manufacture, storage. treatment, transportation or disposal of
Hazardous Material (as defined) has occurred or is occurring on or
from the property. All Hazardous Material used, treated, stored,
transported to or from, generated or handled on the property has been
disposed of on or off the property by or on behalf of Borrower in a
lawful manner. There are no underground storage tanks present on or
under the property. No other environmental, public health or safety
hazards exist with respect to the property. "Hazardous Material"
means any substances defined or designated as hazardous or toxic
waste, hazardous or toxic material, hazardous or toxic substance, or
similar term, by any environmental statute, rule or regulation or any
federal, state or local governmental authority.
9. Waste. The failure of Mortgagor to meet its maintenance obligations
or to pay any taxes assessed against the premises or any insurance
premium on policies covering any property located on the premises
shall constitute waste as provided by MCLA 600.2927, MSA 27A.2927,
and shall entitle Mortgagee to appoint a receiver of the property for
the purpose of preventing the waste. The receiver may collect the
rents and income from the premises.
10. Condemnation. If the premises, or any part, are taken under the power
of eminent domain, the entire award, to the full extent of the
indebtedness, shall be paid to Mortgagee. Mortgagee is empowered in
the name of Mortgagor to receive and give acquittance for any award,
whether it is joint or several. However, Mortgagee shall not be held
responsible for failing to collect any award.
11. Mortgagee Expenses. If Mortgagor fails to meet any of its obligations
under this mortgage, Mortgagee shall have the right, but not the
obligation, to perform in the place of Mortgagor. If Mortgagee incurs
or expends any sums, including reasonable attorney fees, whether or
not in connection with any action or proceeding, to (a) sustain the
lien of this mortgage or its priority, (b) protect or enforce any of
Mortgagee's rights, (c) recover any part of the indebtedness, (d) meet
an obligation of Mortgagor under this mortgage, or (e) collect
insurance or condensation proceeds, then those sums shall become
immediately due and payable by Mortgagor with interest at the default
rate set forth in the Secured Term Note from the date of Mortgagee's
payment until paid by Mortgagor. The sums expended in this manner by
Mortgagee shall be secured by this mortgage and be a lien on the
premises prior to any right, title, or interest on the premises
attaching or accruing subsequent to the lien of this mortgage.
12. Assignment of Contracts and Licenses. Mortgagor assigns to Mortgagee,
as further security for payment of the indebtedness, Mortgagor's
interest in all agreements, contracts (including any contracts for the
lease or sale of the premises), licenses, and permits affecting the
premises. The assignment shall not be construed as a consent by
Mortgagee to any agreement, contract. license or permit so assigned.
or to impose any obligations on Mortgagee. Mortgagor shall not
cancel. amend, permit, or cause a default or termination of any of the
agreements, contracts. licenses, and permits used in conjunction with
the operation of the premises without the written approval of
Mortgagee.
13 Assignment of Rents and Leases. As additional security for the payment
of the indebtedness, Mortgagor assigns and transfers to Mortgagee,
pursuant to 1953 PA 210, as amended by 1966 PA 151 (MCLA 554.231 et
seq., MSA 26.1137(1) et seq.), all the rents, profits, and income under
all leases, occupancy agreements, or arrangements upon or affecting the
premises (including any extensions or amendments) now in existence or
coming into existence during the period this mortgage is in effect.
This assignment shall run with the land and be good and valid as
against Mortgagor and those claiming under or through Mortgagor. This
assignment shall continue to be operative during foreclosure or any
other proceedings to enforce this mortgage. If a foreclosure sale
results in a deficiency, this assignment shall stand as security during
the redemption period for the payment of the deficiency. This
assignment is given only as collateral security and shall not be
construed as obligating Mortgagee to perform any of the covenants or
undertakings required to be performed by Mortgagor in any leases.
In the event of default in any of the terms or covenants of this
mortgage, Mortgagee shall be entitled to all of the rights and benefits
of MCLA 554.233B, MSA 26.1137(1)B(3) and 1966 PA 151, and Mortgagee
shall be entitled to collect the rents and income from the premises, to
rent or lease the premises on the terms that it may deem best, and to
maintain proceedings to recover rents or possession of the premises
from any tenant or trespasser.
Mortgagee shall be entitled to enter the premises for the purpose
of delivering notices or other communications to the tenants and
occupants. Mortgagee shall have no liability to Mortgagor as a result
of those acts. Mortgagee may deliver all of the notices and
communications by ordinary first-class U.S. mail.
If Mortgagor obstructs Mortgagee in its efforts to collect the
rents and income from the premises or unreasonably refuses or neglects
to assist Mortgagee in collecting the rent and income, Mortgagee shall
be entitled to appoint a receiver for the premises and the income,
rents, and profits, with powers that the court making the appointment
may confer.
Mortgagor shall at no time collect advance rent in excess of one
month under any lease pertaining to the premises, and Mortgagee shall
not be bound by any rent prepayment made or received in violation of
this paragraph. Mortgagee shall not have any obligation to collect
rent or to enforce any other obligations of any tenant or occupant of
the premises to Mortgagor. No action taken by Mortgagee under this
paragraph shall cause Mortgagee to become a "mortgagee in possession."
14. Performance of Leases. Mortgagor shall observe and perform all
obligations contained in any lease affecting the premises. Mortgagor
shall not default in performing any of the obligations imposed on
Mortgagor by any lease; such a default gives the lessee the right to
terminate or cancel the lease or offset against rentals. Upon request,
Mortgagor shall furnish to Mortgagee a statement, in any reasonable
detail that Mortgagee may request, of all leases relating to the
premises and executed counterparts of any and all leases.
15. Records. With respect to the premises and its operations, Mortgagor
shall keep proper books in accordance with generally accepted
accounting principles consistently applied. Mortgagee shall have the
right to examine the books at reasonable times as Mortgagee may elect.
Upon request, Mortgagor shall furnish to Mortgagee within 60 days
after the end of each calendar year, a financial statement of Mortgagor
for the calendar year, in reasonable detail and stating in comparative
form the figures as of the end of the previous calendar year, including
statements of income and expense relating to operations of the
premises, certified by an independent certified public accountant
acceptable to Mortgagee. In addition, Mortgagor shall furnish to
Mortgagee, in a form acceptable to Mortgagee, interim financial
statements that Mortgagee may request, certified by Mortgagor.
16. Waiver. If Mortgagee (a) grants any extension of time with respect to the
payment of any part of the indebtedness, (b) takes other or additional
security for the payment of the indebtedness, (c) waives or fails to
exercise any right granted by this mortgage or the Secured Term Note, (d)
grants any release on any part of the security held for the payment of the
indebtedness, or (e) amends any of the terms and provisions of this
mortgage or the Secured Term Note, that act or omission shall not release
Mortgagor under any covenant of this mortgage or the Secured Term Note, nor
preclude Mortgagee from exercising any right or power granted, nor impair
the lien or priority of this mortgage.
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17. Use of Premises. Mortgagor shall not make, or permit, without the
prior written consent of Mortgagee, (a) any use of the premises for any
purpose other than that for which they are now used; (b) any alterations of
the buildings, improvements, and fixtures located on the premises; (c) any
purchase, lease of, or agreement for any fixtures to be placed on the
premises under which title is reserved in the vendor. Mortgagor shall
execute and deliver documents that may be requested by Mortgagee to confirm
the lien of this mortgage on any fixtures, machinery, and equipment.
18. Events of Default. The occurrences listed below shall be deemed events
of default and shall entitle Mortgagee, at its option and without
notice except as required by law, to exercise any one or any
combination of remedies under this mortgage or permitted by law:
(a) the failure by Mortgagor to (i) make any payment when due under
the Secured Term Note, or (ii) to perform any of the other terms,
covenants, or conditions of this mortgage within a period of 10
days after written notice from Mortgagee of Mortgagor's failure
to perform an obligation;
(b) the institution of foreclosure or other proceedings to enforce
any junior lien or encumbrance on the premises;
(c) the appointment by a court of a receiver or trustee of Mortgagor
or for any property of Mortgagor; (d) a decree by a court
adjudicating Mortgagor a bankrupt or insolvent, or for the
sequestration of any of Mortgagor's property;
(e) the filing of a petition in bankruptcy by or against Mortgagor
under the federal Bankruptcy Code or any similar statute that is
in effect,
(f) an assignment by Mortgagor for the benefit of creditors or a
written admission by Mortgagor of the inability to pay debts
generally as they become due;
(g) the failure to comply with all of the terms and covenants of any
leases or other agreements, documents, or restrictions that now
encumber, affect, or pertain to the premises;
(h) Mortgagor, without the written consent of Mortgagee, sells,
conveys, or transfers the premises, any interest in the premises,
or any rents or profits from the premises, or causes or allows
any mortgage, lien, or other encumbrance, or any writ of
attachment, garnishment, execution, or other legal process to be
placed on the premises, or any part of the premises is
transferred by operation of law;
(1) all or any part of the premises is damaged or destroyed by fire
or other casualty, regardless of insurance coverage, or is taken
by power of eminent domain.
19. Default Remedies. Upon the occurrence of any event of default of this
mortgage, Mortgagee shall have the option, in addition to and not in
lieu of all other rights and remedies provided by law, to do any or
all of the following:
(a) Without notice, except as expressly required by law, to declare
the principal sum secured by the Mortgage, together with all
interest and all other sums secured by this mortgage, to be
immediately due and payable; to demand any installment payment
due under the Secured Term Note; and to institute any
proceedings that Mortgagee deems necessary to collect and
otherwise to enforce the indebtedness and obligations secured by
this mortgage and to protect the lien of this mortgage.
(b) Commence foreclosure proceedings against the premises pursuant
to applicable laws. Mortgagee's commencement of a foreclosure
shall be deemed an exercise by Mortgagee of its option to
accelerate the due date of all sums secured by this mortgage.
Mortgagor grants to Mortgagee, in the event of the occurrence of
an event of default, the power to sell the premises at public
auction by advertisement, without notice or hearing, except as
required by Michigan statutes.
5
(c) To enter into peaceful possession of the premises and/or to
receive the rent, income, and profits, and to apply those in
accordance with paragraph 13. Mortgagor acknowledges having
been advised that Mortgagee believes that the value of the
security covered by this mortgage is inextricably intertwined
with the effectiveness of the management, maintenance, and
general operation of the premises, and that Mortgagee would not
make the loan secured by this mortgage unless it could be
assured that it would have the right to take possession of the
premises in order to manage, control management, and enjoy the
income, rents, and profits, immediately upon default by
Mortgagor, notwithstanding that foreclosure proceedings may not
have been instituted, or are pending, or that the redemption
period may not have expired. Accordingly, Mortgagor knowingly
and voluntarily waives all right to possession of the premises
from and after the date of default, upon demand for possession
by Mortgagee.
20. Sale of Premises as a Whole or in Parcels. Upon any foreclosure sale
of the premises, the premises may be sold either as a whole or in
parcels, as Mortgagee may elect, and if in parcels, to be divided as
Mortgagee may elect, or, at the election of Mortgagee, the premises
may be offered first in parcels and then as a whole, with the offer
producing the highest price for the entire property to prevail.
21. Assignment. Mortgagor shall not make a conveyance of any interest in
the premises. A "conveyance" of Mortgagor's interest in the premises
shall include without limitation any voluntary or involuntary
disposition or dilution of legal or beneficial title to the premises
by any means. If ownership of the premises, or any part, becomes
vested in a person other than Mortgagor (with or without Mortgagee's
consent), Mortgagee may, without notice to Mortgagor, deal with the
successors in interest with reference to this mortgage or the Secured
Term Note without in any way releasing or otherwise affecting
Mortgagor's liability under the Secured Term Note and mortgage.
22. Application of Proceeds. In the event of the payment to Mortgagee,
pursuant to this mortgage, of any rents or profits, or proceeds of any
insurance or condemnation award, or proceeds from the sale of the
premises upon foreclosure, Mortgagee shall have the right to apply the
rents, profits, or proceeds, in amounts and proportions that Mortgagee
shall, in its sole discretion, determine, against the cost and
expenses incurred by Mortgagee in exercising its fights under this
mortgage, payment of the interest and principal due under the Secured
Term Note, payment of any other portion of the indebtedness, and
payment of expenses incurred in preserving the premises. Application
by Mortgagee of any proceeds toward the last maturing installments of
principal and interest to become due under the Secured Term Note shall
not excuse Mortgagor from making the regularly scheduled payments due
under the Secured Term Note and this mortgage, nor shall the
application reduce the amount of the payments. In the event of the
payment of proceeds as a result of an insurance or condemnation award,
Mortgagee shall have the right, but not the obligation, to require all
or part of the proceeds of any insurance or condemnation award to be
used to restore any part of the premises damaged or taken by reason of
the occurrence which gave rise to the payment of the proceeds.
CAUTION: PARAGRAPH 23 CONTAINS A WAIVER OF
IMPORTANT LEGAL RIGHTS
23. Waiver of Rights. This mortgage contains a power of sale which
permits Mortgagee to cause the premises to be sold in the event of a
default. Mortgagee may elect to cause the premises to be sold by
advertisement rather than pursuant to court action, and Mortgagor
voluntarily and knowingly waives any right Mortgagor may have by
virtue of any applicable constitutional provision or statute to any
notice or court hearing prior to the exercise of the power of sale,
except as may be expressly required by the Michigan statute governing
foreclosures by advertisement. In addition, Mortgagor knowingly and
voluntarily waives any right Mortgagor may have to remain in
possession of the premises or to collect any rents or income therefrom
during the pendency of any foreclosure proceedings and during any
applicable redemption period. Also, paragraphs 18 and 21 above
entitle Mortgagee to require immediate payment of the balance of the
indebtedness in full if the premises are sold or otherwise
transferred. By execution of this mortgage, Mortgagor represents and
acknowledges that the meaning and consequences of these paragraphs
have been discussed as fully as desired by Mortgagor with Mortgagor's
legal counsel.
24. Environmental Matters. Mortgagor agrees to indemnify Mortgagee
against, and hold it harmless from, all obligations and liabilities
relating to the premises arising out of claims made or suits brought
for investigation, study, remedial work, monitoring, or other costs
and expenses arising from or associated with response to any
environmental matters, including but not limited to any (a) water
pollution, air pollution, noise, odor, spills, leaks. or inadvertent
discharges. emissions, or releases, or the generation, transportation,
storage. treatment, or disposal of solid waste. including hazardous
waste, hazardous substances. pollutants and contaminants; (b) injury,
sickness, disease, or death of any person; or (c) damage to any
property, regardless of whether the cause of the injury or damage
occurred before or after the date of this mortgage. Mortgagor further
agrees that Mortgagee shall have no liability for any environmental
contamination associated with Mortgagees business or the premises, and
that any involvement of Mortgagee with Mortgagor's business to protect
its security interest in the premises shall not constitute Mortgagor
as an "owner or operator" of Mortgagor's business for purposes of
determining environmental liability. In any event, if Mortgagee
becomes obligated, by judicial or administrative judgment or
settlement of a claim, to pay any amounts for response to any
environmental contamination associated or connected with Mortgagor's
business or the premises, any payment by Mortgagee shall be deemed
additional indebtedness secured by the lien of this mortgage, shall be
immediately due and payable to Mortgagee, and shall bear interest
until paid at the default interest rate specified in the Secured Term
Note.
25. Covenants Run with Land. All of the terms and covenants of this
mortgage shall run with the land and shall be binding on and inure to
the benefit of the respective legal representatives and successors of
the parties.
26. Release of Mortgage. If Mortgagor pays to Mortgagee the money
required by the Secured Term Note, in the manner and at the times
provided in the Secured Term Note, and all other sums of the
indebtedness payable by Mortgagor to Mortgagee, and keeps and performs
the terms, covenants, and agreements of Mortgagor with Mortgagee, then
this mortgage shall be satisfied, and Mortgagee shall release the
mortgage.
27. Notice. All notices, demands, and requests required or permitted to
be given to Mortgagor or by law shall be deemed delivered when
deposited in the United States mail, with postage prepaid, addressed
to Mortgagor or Mortgagee at their last known addresses.
28. Severability. If any provision of this mortgage is in conflict with
any statute or rule of law of the State of Michigan or is otherwise
unenforceable for any reason, then that provision shall be deemed null
and void to the extent of the conflict or unenforceability, but shall
be deemed separable from and shall not invalidate any other provision
of this Mortgage.
29. Venue and Jurisdiction. All provisions of this mortgage shall be
governed by and construed in accordance with the laws of the State of
Michigan. Venue shall be in Macomb County, Michigan for any action
brought with regard to this mortgage. Mortgagor consents to personal
jurisdiction over it by any Michigan courts to the extent that
personal jurisdiction may be necessary to enforce any of the
provisions of this mortgage.
Signed on the date set forth above.
WITNESSES: MORTGAGOR:
PHC OF MICHIGAN, INC.,
_________________________________ a Massachusetts corporation
By: ____________________________
Name: Xxxxx X. Shear
Its: President
State of Massachusetts
County of Essex
The forgoing instrument was acknowledged before me on 12 March, 1997 by
Xxxxx X Xxxxx, the President of PHC of Michigan, Inc., a Massachusetts
corporation, on behalf of the corporation
_________________________________ XXXXX X XXXXX
Notary Public, Essex County Notary Public
My Commission Expires 11/29/2002 My Commission Expires November
29, 2002
1commorl.phc
Exhibit 10.118
MORTGAGE
This mortgage is made on March , 1997, between PHC OF MICHIGAN, INC.
a Massachusetts corporation. as Mortgagor. and HCFP FUNDING. INC., a
Delaware corporation. having its principal office at 0 Xxxxxxxxx Xxxxxx,
Xxxxx 000. Chevy Xxxxx, Xxxxxxxx 00000, as Mortgagee.
For value received, Mortgagor mortgages and warrants to Mortgagee the
property situated in the City of New Baltimore, County of Macomb. and State
of Michigan, with a street address of 0000000 Xxxx Xxxx, Xxx Xxxxxxxxx,
Xxxxxxxx 00000, and legally described as shown on the attached Exhibit A;
together with the easements, rights-of-way, licenses, privileges,
hereditaments,. and appurtenances belonging to the property, and all the
rents, issues, leases, and profits, the interest of Mortgagor in the
property, either at law or in equity, all buildings, structures, and
improvements, and all fixtures located in, on, or affixed to the property,
and used or usable in connection with the operation of the property (all of
the above-stated property are collectively referred to in this mortgage as
the "premises").
This mortgage is given to secure the following:
(a) payment of the indebtedness evidenced by a promissory note dated
February 3, 1997, made and delivered by Mortgagor to Mortgagee, in the
principal sum of One Million Five Hundred Thousand Dollars
($1,500,000.00), payable with interest ("Revolving Credit Note");
(b) payment by Mortgagor to Mortgagee of all sums expended or advanced by
Mortgagee pursuant to any term or provision of this mortgage,
(c) performance of the covenants, conditions, and agreements
contained in this mortgage, in that certain Loan and Security
Agreement between Mortgagor and Mortgagee. dated February 3, 1997 (the
"Revolving Loan Agreement") and in any other documents securing the
indebtedness shown above;
(d) all other indebtedness and obligations of Mortgagor presently or
subsequently owing to Mortgagee, including but not limited to all
future advances under this mortgage or on the Revolving Credit Note
and under all loan agreements, security agreements, pledge agreements,
assignments, mortgages, leases, guarantees, and any other agreements,
instruments, or documents previously or subsequently signed by
Mortgagor, whether the indebtedness or obligations are direct or
indirect, absolute or contingent, primary or secondary, or related or
unrelated to the premises or the transaction of which this mortgage is
a part, and any and all partial or full extensions or renewals of this
indebtedness or other indebtedness and obligations (all of the
foregoing are collectively referred to as the "indebtedness").
Mortgagor warrants, covenants, and agrees that:
1. Mortgagor is seized of the premises. in fee simple. Mortgagor had the
right and power to mortgage and warrant the premises as set forth in
this Mortgage. The premises are free from all liens and encumbrances
except (i) the first priority mortgage of HealthCare Financial
Partners - Funding II, L.P. and (ii) easements and restrictions of
record disclosed in Lawyers Title Insurance Corporation Title
Commitment No. 60108 LTC dated October 8, 1996, relating to the
premises. Mortgagor will defend the premises against all claims and
demands.
2. Payment of Indebtedness. Mortgagor will pay all indebtedness when
due, including the principal and interest. as provided in the
Revolving Credit Note.
3. Taxes and Assessments. Until the indebtedness is fully satisfied,
Mortgagor will pay all taxes, assessments, and other similar charges
and encumbrances levied on the premises before they become delinquent,
and will promptly deliver to Mortgagee, without demand, receipts
showing the payment.
4. Tax and Insurance Escrow. On request, at the option of Mortgagee,
Mortgagor will pay to Mortgagee monthly, in addition to each monthly
payment required by this mortgage or under the Revolving Credit Note,
a sum equivalent to one-twelfth of the amount estimated by Mortgagee
to be sufficient to enable Mortgagee to pay, at least 30 days before
they become due, all taxes, assessments, and other similar charges
levied against the premises, and all insurance premiums on any policy
or policies of insurance required by this mortgage. The additional
payments may be commingled with the general funds of Mortgagee, and no
interest shall be payable on those payments. On demand by Mortgagee,
Mortgagor will deliver and pay over to Mortgagee any additional sums
necessary to make up any deficiency in the amount necessary to enable
Mortgagee to fully pay when due any of the preceding items. In the
event of any default by Mortgagor in performing any of the terms of
this mortgage, Mortgagee may apply against the indebtedness, in the
manner that Mortgagee may determine, any funds of Mortgagor then held
by Mortgagee under this paragraph.
5. Change of Law. If, after the date of this Mortgage, any statute or
ordinance is passed that changes in any way the laws now in force for
the taxation of mortgages or mortgaged debts or the manner in which
those taxes are collected, so as to affect this mortgage or the
interest of Mortgagee, the whole of the principal sum secured by this
mortgage, with all interest and charges, if any, at the option of
Mortgagee, shall become due and payable.
6. Insurance. Mortgagor will procure, deliver to, and maintain for the
benefit of Mortgagee during the term of this Mortgage:
(a) a policy of hazard insurance, providing an all-risk extended
coverage endorsement, in an amount equal to the highest
replacement value of the premises;
(b) a policy of comprehensive public liability insurance insuring
against bodily injury, with a coverage limit of at least $
1,000,000, and against property damage, with a coverage limit of
at least $250,000, from any accident or occurrence with respect
to the premises.
All policies of insurance required by this paragraph shall be in a
form, with companies, and in amounts acceptable to Mortgagee, and
shall contain a mortgagee endorsement clause acceptable to Mortgagee,
with loss payable to Mortgagee. Mortgagor will pay when due the
premiums on any policy of insurance required by Mortgagee, and will
deliver to Mortgagee renewals of all policies at least 10 days before
their expiration date(s). Duplicates of all policies shall be
delivered to Mortgagee.
In the event of any loss or damage to the premises, Mortgagor
will give immediate written notice to Mortgagee, and Mortgagee may
then make proof of the loss or damage, if it is not promptly made by
Mortgagor. All proceeds of insurance shall be payable to Mortgagee.
and any affected insurance company is authorized and directed to make
payment directly to Mortgagee. Mortgagee is authorized to settle,
adjust, or compromise any claims for loss, damage, or destruction
under any policy of insurance.
7. Maintenance and Repair. Mortgagor will not cause or permit the
commission of waste on the premises and will keep the premises in good
condition and repair. No building or other improvement on the
premises shall be removed, demolished. or materially altered without
the prior written consent of Mortgagee. Mortgagor will comply with
all laws. ordinances, regulations. and orders of all public
authorities having jurisdiction over the premises. If the premises,
in the sole judgment of Mortgagee, require inspection or repair,
Mortgagee may enter upon the premises and inspect and/or repair the
premises as Mortgagee may deem advisable, and may take other action as
Mortgagee may deem appropriate to preserve the premises. Mortgagor
will pay when due all charges for utilities or services contracted for
by Mortgagor.
8. Environmental Matters. No use, exposure, release, generation,
manufacture, storage, treatment, transportation or disposal of
Hazardous Material (as defined) has occurred or is occurring on or
from the property. All Hazardous Material used, treated, stored,
transported to or from, generated or handled on the property has been
disposed of on or off the property by or on behalf of Borrower in a
lawful manner. There are no underground storage tanks present on or
under the property. No other environmental, public health or safety
hazards exist with respect to the property. "Hazardous Material"
means any substances defined or designated as hazardous or toxic
waste, hazardous or toxic material. hazardous or toxic substance, or
similar term, by any environmental statute, rule or regulation or any
federal, state or local governmental authority.
9. Waste. The failure of Mortgagor to meet its maintenance obligations
or to pay any taxes assessed against the premises or any insurance
premium on policies covering any property located on the premises
shall constitute waste as provided by MCLA 600.2927, MSA 27A.2927, and
shall entitle Mortgagee to appoint a receiver of the property for the
purpose of preventing the waste. The receiver may collect the rents
and income from the premises.
10. Condemnation. If the premises, or any part, are taken under the power
of eminent domain, the entire award, to the full extent of the
indebtedness, shall be paid to Mortgagee. Mortgagee is empowered in
the name of Mortgagor to receive and give acquittance for any award,
whether it is joint or several. However, Mortgagee shall not be held
responsible for failing to collect any award.
11. Mortgagee Expenses. If Mortgagor fails to meet any of its obligations
under this mortgage, Mortgagee shall have the right, but not the
obligation, to perform in the place of Mortgagor. If Mortgagee incurs
or expends any sums, including reasonable attorney fees, whether or
not in connection with any action or proceeding, to (a) sustain the
lien of this mortgage or its priority, (b) protect or enforce any of
Mortgagee's rights, (c) recover any part of the indebtedness, (d) meet
an obligation of Mortgagor under this mortgage, or (e) collect
insurance or condemnation proceeds, then those sums shall become
immediately due, and payable by Mortgagor with interest at the default
rate set forth in the Revolving Credit Note from the date of
Mortgagee's payment until paid by Mortgagor. The sums expended in
this manner by Mortgagee shall be secured by this mortgage and be a
lien on the premises prior to any right, title, or interest on the
premises attaching or accruing subsequent to the lien of this mortgage.
12. Assignment of Contracts and Licenses. Mortgagor assigns to Mortgagee,
as further security for payment of the indebtedness, Mortgagor's
interest in all agreements, contracts (including any contracts for the
lease or sale of the premises), licenses, and permits affecting the
premises. The assignment shall not be construed as a consent by
Mortgagee to any agreement, contract, license or permit so assigned,
or to impose any obligations on Mortgagee. Mortgagor shall not
cancel. amend. permit, or cause a default or termination of any of the
agreements, contracts, licenses, and permits used in conjunction with
the operation of the premises without the written approval of
Mortgagee.
13. Assignment of Rents and Leases. As additional security for the
payment of the indebtedness, Mortgagor assigns and transfers to
Mortgagee, pursuant to 1953 PA 210, as amended by 1966 PA 151 (MCLA
554.231 et seq.), MSA 26.1137(l) et seq.), all the rents, profits, and
income under all leases, occupancy agreements, or arrangements upon or
affecting the premises (including any extensions or amendments) now in
existence or coming into existence during the period this mortgage is
in effect. This assignment shall run with the land and be good and
valid as against Mortgagor and those claiming under or through
Mortgagor. This assignment shall continue to be operative during
foreclosure or any other proceedings to enforce this mortgage. If a
foreclosure sale results in a deficiency, this assignment shall stand
as security during the redemption period for the payment of the
deficiency. This assignment is given only as collateral security and
shall not be construed as obligating Mortgagee to perform any of the
covenants or undertakings required to be performed by Mortgagor in any
leases.
In the event of default in any of the terms or covenants of this
mortgage, Mortgagee shall be entitled to all of the rights and benefits
of MCLA 554.231B.233, MSA 26.1137(1)B(3))and 1966 PA 151, and Mortgagee
shall be entitled to collect the rents and income from the premises, to
rent or lease the premises on the terms that it may deem best, and to
maintain proceedings to recover rents or possession of the premises
from any tenant or trespasser.
Mortgagee shall be entitled to enter the premises for the purpose
of delivering notices or other communications to the tenants and
occupants. Mortgagee shall have no liability to Mortgagor as a result
of those acts. Mortgagee may deliver all of the notices and
communications by ordinary first-class U.S. mail.
If Mortgagor obstructs Mortgagee in its efforts to collect the
rents and income from the premises or unreasonably refuses or neglects
to assist Mortgagee in collecting the rent and income, Mortgagee shall
be entitled to appoint a receiver for the premises and the income,
rents, and profits, with powers that the court making the appointment
may confer.
Mortgagor shall at no time collect advance rent in excess of one
month under any lease pertaining to the premises, and Mortgagee shall
not be bound by any rent prepayment made or received in violation of
this paragraph. Mortgagee shall not have any obligation to collect
rent or to enforce any other obligations of any tenant or occupant of
the premises to Mortgagor. No action taken by Mortgagee under this
paragraph shall cause Mortgagee to become a "mortgagee in possession."
14. Performance of Leases. Mortgagor shall observe and perform all
obligations contained in any lease affecting the premises. Mortgagor
shall not default in performing any of the obligations imposed on
Mortgagor by any lease; such a default gives the lessee the right to
terminate or cancel the lease or offset against rentals. Upon request,
Mortgagor shall furnish to Mortgagee a statement, in any reasonable
detail that Mortgagee may request, of all leases relating to the
premises and executed counterparts of any and all leases.
15. Records. With respect to the premises and its operations, Mortgagor
shall keep proper books in accordance with generally accepted
accounting principles consistently applied. Mortgagee shall have the
night to examine the books at reasonable times as Mortgagee may elect.
Upon request, Mortgagor shall furnish to Mortgagee within 60 days after
the end of each calendar year, a financial statement of Mortgagor for
the calendar year, in reasonable detail and stating in comparative form
the figures as of the end of the previous calendar year, including
statements of income and expense relating to operations of the
premises, certified by an independent certified public accountant
acceptable to Mortgagee. In addition, Mortgagor shall furnish to
Mortgagee, in a form acceptable to Mortgagee, interim financial
statements that Mortgagee may request, certified by Mortgagor.
16. Waiver. If Mortgagee (a) grants any extension of time with respect to
the payment of any part of the indebtedness, (b) takes other or
additional security for the payment of the indebtedness, (c) waives or
fails to exercise any right granted by this mortgage, the Revolving
Credit Note, (d) grants any release on any part of the security held
for the payment of the indebtedness, or (e) amends any of the terms and
provisions of this mortgage or the Revolving Credit Note, that act or
omission shall not release Mortgagor under any covenant of this
mortgage or the Revolving Credit Note, nor preclude Mortgagee from
exercising any right or power granted, nor impair the lien or priority
of this mortgage.
17. Use of Premises. Mortgagor shall not make, or permit, without the
prior written consent of Mortgagee, (a) any use of the premises for any
purpose other than that for which they are now used; (b) any
alterations of the buildings. improvements, and fixtures located on the
premises; (c) any purchase, lease of, or agreement for any fixtures to
be placed on the premises under which title is reserved in the vendor.
Mortgagor shall execute and deliver documents that may be requested by
Mortgagee to confirm the lien of this mortgage on any fixtures,
machinery, and equipment.
18. Events of Default. The occurrences listed below shall be deemed events
of default and shall entitle Mortgagee, at its option and without
notice except as required by law, to exercise any one or any
combination of remedies under this mortgage or permitted by law:
(a) the failure by Mortgagor to (i) make any payment when due under
the Revolving Credit Note, (ii) make any payment required be made
under the Revolving Loan Credit Note, (ii) make any payment
required under the Revolving Loan Agreement, or (iii) fail to
perform any of the other terms, covenants, or conditions of this
mortgage, or conditions of this mortgage within a period of 10
days after written notice from Mortgagee of Mortgagor's failure
to perform an obligation;
(b) the institution of foreclosure or other proceedings to enforce
any junior lien or encumbrance on the premises;
(c) the appointment by a court of a receiver or trustee of Mortgagor or
for any property of Mortgagor; (d) a decree by a court adjudicating
Mortgagor a bankrupt or insolvent, or for the sequestration of any
of Mortgagor's property;
(e) the filing of a petition in bankruptcy by or against Mortgagor
under the federal Bankruptcy Code or any similar statute that is
in effect,
(f) an assignment by Mortgagor for the benefit of creditors or a
written admission by Mortgagor of the inability to pay debts
generally as they become due;
(g) the failure to comply with all of the terms and covenants of any
leases or other agreements, documents, or restrictions that now
encumber, affect, or pertain to the premises;
(h) Mortgagor, without the written consent of Mortgagee, sells,
conveys, or transfers the premises, any interest in the premises,
or any rents or profits from the premises, or causes or allows
any mortgage, lien, or other encumbrance, or any writ of
attachment, garnishment, execution, or other legal process to be
placed on the premises, or any part of the premises is
transferred by operation of law;
(i) all or any part of the premises is damaged or destroyed by fire
or other casualty, regardless of insurance coverage, or is taken
by power of eminent domain.
19. Default Remedies. Upon the occurrence of any event of default of this
mortgage, Mortgagee shall have the option, in addition to and not in
lieu of all other rights and remedies provided by law, to do any or
all of the following:
(a) Without notice, except as expressly required by law, to declare
the principal sum secured by the Mortgage, together with all
interest and all other sums secured by this mortgage, to be
immediately due and payable; to demand any installment payment
due under the Revolving Credit Note; and to institute any
proceedings that Mortgagee deems necessary to collect and
otherwise to enforce the indebtedness and obligations secured by
this mortgage and to protect the lien of this mortgage.
(b) Commence foreclosure proceedings against the premises pursuant
to applicable laws. Mortgagee's commencement of a foreclosure
shall be deemed an exercise by Mortgagee of its option to
accelerate the due date of all sums secured by this mortgage.
Mortgagor grants to Mortgagee, in the event of the occurrence of
an event of default, the power to sell the premises at public
auction by advertisement, without notice or hearing, except as
required by Michigan statutes.
(c) To enter into peaceful possession of the premises and/or to
receive the rent, income, and profits, and to apply those in
accordance with paragraph 13.
Mortgagor acknowledges having been advised that Mortgagee
believes that the value of the security covered by this mortgage
is inextricably intertwined with the effectiveness of the
management, maintenance, and general operation of the premises,
and that Mortgagee would not make the loan secured by this
mortgage unless it could be assured that it would have the right
to take possession of the premises in order to manage, control
management, and enjoy the income, rents, and profits,
immediately upon default by Mortgagor, notwithstanding that
foreclosure proceedings may not have been instituted, or are
pending, or that the redemption period may not have expired.
Accordingly, Mortgagor knowingly and voluntarily waives all
right to possession of the premises from and after the date of
default, upon demand for possession by Mortgagee.
20. Sale of Premises as a Whole or in Parcels. Upon any foreclosure sale
of the premises, the premises may be sold either as a whole or in
parcels, as Mortgagee may elect, and if in parcels, to be divided as
Mortgagee may elect, or, at the election of Mortgagee, the premises
may be offered first in parcels and then as a whole, with the offer
producing the highest price for the entire property to prevail.
21. Assignment. Mortgagor shall not make a conveyance of any interest in
the premises. A "conveyance" of Mortgagor's interest in the premises
shall include without limitation any voluntary or involuntary
disposition or dilution of legal or beneficial title to the premises
by any means. If ownership of the premises, or any part, becomes
vested in a person other than Mortgagor (with or without Mortgagee's
consent), Mortgagee may, without notice to Mortgagor, deal with the
successors in interest with reference to this mortgage or the Secured
Term Note without in any way releasing or otherwise affecting
Mortgagor's liability under the Revolving Credit Note and mortgage.
22. Application of Proceeds. In the event of the payment to Mortgagee,
pursuant to this mortgage, of any rents or profits, or proceeds of any
insurance or condemnation award, or proceeds from the sale of the
premises upon foreclosure, Mortgagee shall have the right to apply the
rents, profits, or proceeds, in amounts and proportions that Mortgagee
shall, in its sole discretion, determine, against the cost and
expenses incurred by Mortgagee in exercising its fights under this
mortgage, payment of the interest and principal due under the
Revolving Credit Note, payment of any other portion of the
indebtedness, and payment of expenses incurred in preserving the
premises. Application by Mortgagee of any proceeds toward the last
maturing installments of principal and interest to become due under
the Secured Term Note shall not excuse Mortgagor from making the
regularly scheduled payments due under the Revolving Credit Note and
this mortgage, nor shall the application reduce the amount of the
payments. In the event of the payment of proceeds as a result of an
insurance or condemnation award, Mortgagee shall have the right, but
not the obligation, to require all or part of the proceeds of any
insurance or condemnation award to be used to restore any part of the
premises damaged or taken by reason of the occurrence which gave rise
to the payment of the proceeds.
CAUTION: PARAGRAPH 23 CONTAINS A WAIVER OF
IMPORTANT LEGAL RIGHTS
23. Waiver of Rights. This mortgage contains a power of sale which
permits Mortgagee to cause the premises to be sold in the event of a
default. Mortgagee may elect to cause the premises to be sold by
advertisement rather than pursuant to court action, and Mortgagor
voluntarily and knowingly waives any right Mortgagor may have by
virtue of any applicable constitutional provision or statute to any
notice or court hearing prior to the exercise of the power of sale,
except as may be expressly required by the Michigan statute governing
foreclosures by advertisement. In addition, Mortgagor knowingly and
voluntarily waives any right Mortgagor may have to remain in
possession of the premises or to collect any rents or income therefrom
during the pendency of any foreclosure proceedings and during any
applicable redemption period. Also, paragraphs 18 and 21 above
entitle Mortgagee to require immediate payment of the balance of the
indebtedness in full if the premises are sold or otherwise
transferred. By execution of this mortgage, Mortgagor represents and
acknowledges that the meaning and consequences of these paragraphs
have been discussed as fully as desired by Mortgagor with Mortgagor's
legal counsel.
24. Environmental Indemnity. Mortgagor agrees to indemnify Mortgagee
against, and hold it harmless from, all obligations and liabilities
relating to the premises arising out of claims made or suits brought
for investigation, study, remedial work, monitoring, or other costs
and expenses arising from or associated with response to any
environmental matters, including but not limited to any (a) water
pollution, air pollution, noise, odor, spills, leaks. or inadvertent
discharges. emissions, or releases, or the generation, transportation,
storage. treatment, or disposal of solid waste. including hazardous
waste, hazardous substances. pollutants and contaminants; (b) injury,
sickness, disease, or death of any person; or (c) damage to any
property, regardless of whether the cause of the injury or damage
occurred before or after the date of this mortgage. Mortgagor further
agrees that Mortgagee shall have no liability for any environmental
contamination associated with Mortgagees business or the premises, and
that any involvement of Mortgagee with Mortgagor's business to protect
its security interest in the premises shall not constitute Mortgagor
as an "owner or operator" of Mortgagor's business for purposes of
determining environmental liability. In any event, if Mortgagee
becomes obligated, by judicial or administrative judgment or
settlement of a claim, to pay any amounts for response to any
environmental contamination associated or connected with Mortgagor's
business or the premises, any payment by Mortgagee shall be deemed
additional indebtedness secured by the lien of this mortgage, shall be
immediately due and payable to Mortgagee, and shall bear interest
until paid at the default interest rate specified in the Revolving
Credit Note.
25. Covenants Run with Land. All of the terms and covenants of this
mortgage shall run with the land and shall be binding on and inure to
the benefit of the respective legal representatives and successors of
the parties.
26. Release of Mortgage. If Mortgagor pays to Mortgagee the money
required by the Revolving Credit Note, in the manner and at the times
provided in the Revolving Credit Note, and all other sums of the
indebtedness payable by Mortgagor to Mortgagee, and keeps and performs
the terms, covenants, and agreements of Mortgagor with Mortgagee, then
this mortgage shall be satisfied, and Mortgagee shall release the
mortgage.
27. Notice. All notices, demands, and requests required or permitted to
be given to Mortgagor or by law shall be deemed delivered when
deposited in the United States mail, with postage prepaid, addressed
to Mortgagor or Mortgagee at their last known addresses.
28. Severability. If any provision of this mortgage is in conflict with
any statute or rule of law of the State of Michigan or is otherwise
unenforceable for any reason, then that provision shall be deemed null
and void to the extent of the conflict or unenforceability, but shall
be deemed separable from and shall not invalidate any other provision
of this Mortgage.
29. Venue and Jurisdiction. All provisions of this mortgage shall be
governed by and construed in accordance with the laws of the State of
Michigan. Venue shall be in Macomb County, Michigan for any action
brought with regard to this mortgage. Mortgagor consents to personal
jurisdiction over it by any Michigan courts to the extent that
personal jurisdiction may be necessary to enforce any of the
provisions of this mortgage.
Exhibit 10.119
SUBMISSION NOT AN OPTION
THE SUBMISSION OF THIS LEASE FOR EXAMINATION AND NEGOTIATION DOES NOT
CONSTITUTE AN OFFER TO LEASE, A RESERVATION OF, OR OPTION OF THE PREMISES AND
SHALL VEST NO RIGHT IN ANY PARTY. TENANT OR ANYONE CLAIMING UNDER OR THROUGH
TENANT SHALL HAVE THE RIGHTS TO THE PREMISES AS SET FORTH HEREIN AND THE
LEASE BECOMES EFFECTIVE AS A LEASE ONLY UPON EXECUTION,
ACKNOWLEDGMENT AND DELIVERY THEREOF BY LANDLORD AND TENANT, REGARDLESS OF ANY
WRITTEN OR VERBAL REPRESENTATION OF ANY AGENT, MANAGER OR EMPLOYEE OF
LANDLORD TO THE CONTRARY.
LANDLORD: CONESTOGA CORP.
TENANT: PIONEER HEALTHCARE INC.
PREMISES: APPROXIMATELY 1200 S.F. OF SPACE LOCATED AT
000 XXXX XXXXXX, XXXXXXX, XXXXXXXXXXXXX
FROM THE OFFICE OF:
XXXX X. XXXXXX, ESQUIRE
BROWN, RUDNICK, FREED & GESMER
XXX XXXXXXXXX XXXXXX
XXXXXX, XXXXXXXXXXXXX 00000
ARTICLE I - BASIC LEASE PROVISIONS
Each reference in this Lease to titles or terms contained in Article I
shall be deemed to incorporate the applicable definitions or data. The
Exhibits attached to this Lease are incorporated by reference.
Date of Lease: 11/09/95
Commencement Date: 12/01/95
Rent Commencement Date: 12/01/95
Landlord: CONESTOGA CORP.
Landlord's Mailing
Address: 00 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Director
Tenant: Pioneer Healthcare
Tenant's Mailing 000 Xxxx Xxxxxx xxxxx 000x
Xxxxxxx: Xxxxxxx, XX 00000
Premises: Approximately 1200 rentable square feet of space, as
shown on Exhibit A, in the building ("Building"),
currently containing a total of approximately 14,400
rentable square feet of space, located in Peabody,
Essex County, Massachusetts, with an address of 000
Xxxx Xxxxxx, and situated on the property
("Property") legally described in the metes and
bounds description as shown on Exhibit A-1.
Term: Twelve (12) months plus any partial month at the
commencement of the Term, unless sooner terminated as
provided herein.
Extension Option: At end of lease period (12/l/96) the above defined
space may be extended at the same rates and dates as
lease dated 07/11/94 (3,600 square feet, suite 000x,
000x & x, 000 Xxxx Xxxxxx)
Xxxxxxxxx Use: Office, and for no other use or purpose.
Base Rent: Lease Year Annually Monthly
12/01/95 -11/30/96 13,200 1,100
Extension Period
Base Rent: None
Lease Year: 12 full month period beginning on the Commencement
Date (plus any partial month).
Additional Rent: All sums, other than Base Rent, due
from Tenant pursuant to the terms of the Lease.
Pro Rata Share: zero percent (00.00%).
Utilities: Tenant shall have the right to use the utilities
which service the Premises as of the Commencement
Date provided all costs relating to the furnishing
and use of the utilities except water and sewer
shall be paid by Tenant.
Security Deposit: 1,100.00
Tenant's Guarantor:
Build out cost: None
ARTICLE II - PREMISES
2.1 Premises. On the terms of this Lease, Landlord leases to
Tenant, and Tenant accepts from Landlord the Premises.
2.2 Common Areas. The term "Common Areas: shall mean all areas
within the Property which are available for the common use of the tenants
of the Property from time to time, as designated by Landlord, including but
not limited to, parking areas, driveways, sidewalks, loading areas, access
roads, corridors, landscaping and planted areas. Landlord may, from time
to time, change the size, location, nature and use of any of the Common
Areas, in any manner whatsoever. Tenant acknowledges that such activities
may result in an inconvenience or interruption to Tenant, but Tenant shall
not be entitled to any reduction in rent, or damages resulting from such
interference or interruption.
Tenant shall have the non-exclusive right to use the Common
Areas for the intended purposes, subject to reasonable rules and
regulations established by Landlord from time to time.
Tenant shall abide by such rules and regulations, shall cause others who use
the Common Areas with Tenant's express or implied permission to abide by
Landlord's rules and regulations, and shall not interfere with the rights of
Landlord, other tenants or any other person entitled to use the Common Area.
At any time, Landlord may close any Common Area, improve the Property or to
protect Landlord's rights with respect to the Property. Landlord shall
maintain the Common Areas in good condition, subject to reasonable wear and
tear.
2.3 Parking. Tenant shall be entitled to the nonexclusive use of the
parking area depicted on Exhibit A, attached hereto. Tenant's parking shall
be limited to vehicles no larger than standard size automobiles or pick-up
utility vehicles. Tenant shall not cause large trucks or other vehicles to
be parked within the Property or on adjacent public street. Vehicles shall
be parked only in striped parking spaces and not in driveways, loading areas
or other locations not specially designated for parking.
ARTICLE III - TERM; LANDLORDS AND TENANT'S WORK
3.1 Term. This Lease is for the Term beginning on the Commencement
Date. If Landlord is unable to deliver possession on the Commencement Date,
Tenant's sole remedy shall be an abatement of rent until delivery, provided
there shall be no abatement if Landlord's failure results from Tenant's acts
or omissions.
3.2 INTENTIONALLY OMITTED
3.3 Landlord's Work. Except for Landlord's Work, if any, as set
forth in Exhibit B, the Premises shall be delivered "AS IS", subject to-all
title matters, all applicable zoning, and Laws and Insurance Regulations, as
defined in Section 5.1(a), and Landlord shall not be required to make any
repairs or replacements (hereafter jointly "Repairs") or improvements,
alterations or additions (hereafter collectively "Improvements") to the
Premises. Tenant acknowledges the Tenant has inspected (or had the
opportunity to inspect) the Premises, is satisfied with the condition thereof
and waives any existing defect in the condition of the Premises or Property
(latent or otherwise). Tenant agrees that all claims with respect to
Landlord's Work, if any, (latent or otherwise) shall be made within thirty
(30) days of the Commencement Date or, in the case of latent defects, not
later than ninety (90) days after the Commencement Date, and that all claims
not made within such periods shall be forever waived.
3.4 Tenant's Work. Upon delivery of possession, Tenant shall (a)
promptly perform Tenant's Work set forth in Exhibit C and equip the Premises
with all necessary trade fixtures and personal property, and (b) open for
business as soon after Commencement Date as possible. Tenant's Work and all
work performed by Tenant hereunder shall be done in a good and workmanlike
manner using first-class new materials and equipment, and in accordance with
the requirements of all applicable Laws and Insurance Regulations. If Tenant
fails to commence Tenant's Work within 10 days after delivery of possession
or open within 60 days after the Commencement Date, Landlord may terminate
the Lease.
ARTICLE IV - RENT
4.1 Base Rent and Additional Rent. Tenant shall pay Base Rent
monthly, in advance, on the Rent Commencement Date and on the first day of
each calendar month thereafter. Any additional Rent, (except Base Rent)
payable by Tenant, shall be paid when due. If (i) Base Rent and/or any
Additional Rent is not received by Landlord or otherwise paid by the due
date, or (ii) Tenant's check is not honored, and because actual damages
result from late payments and dishonored checks are more difficult to fix,
Tenant agrees to pay all direct charges for each late payment or dishonored
check. In addition, Landlord may charge interest from the initial due date
at the rate of the lesser of 18% or the maximum legal rate on all amounts not
paid or received by Landlord within 5 days of the due date.
4.2 Net Lease. Tenant's rent payments shall be completely net to
Landlord so that this Lease yields to Landlord the net annual Base Rent, and
Tenant shall pay all Base Rent, Additional Rent and costs of every kind
relating to the Premises without notice, demand, setoff, deduction,
counterclaim, defense or abatement except as specifically provided in the
Lease.
4.3 Additional Rent. Tenant shall pay Tenant's Pro Rata Share of the
following: Zero percent (00.00%)
(i) "Tax Rent" which shall include real estate taxes,
assessments, sales or use taxes, sewer entrance fees, and
other public charges on or relating to the Property
including, without limitation, the Building other
improvements, land and personalty, (together called
"Taxes"). Tenant also shall pay before the due date all
taxes attributable to its signs or personal property, and
all Tax increases resulting from Tenant's Improvements to
the Premises, if any.
Landlord shall have sole control of all tax abatement
proceedings, and the pendency of abatement proceedings or
Landlord's.
ARTICLE V -
TENANT'S CONVENTS AND LANDLORD'S OBLIGATIONS
5.1 General Convenants. In addition to Tenant's other Lease
convenants, Tenant shall, as its expense:
(a) use the Premises solely and continuously for the Permitted
Use and for no other purpose, procure all required licenses and permits, and
not use the Premises or Property in violation of any laws, ordinances, orders
or regulations of any public authority or of any insurer, Board of Fire
Underwriters, or similar insurance rating bureau having jurisdiction over the
Premises (hereafter collectively "Laws and Insurance Regulations"), or in a
manner which may be injurious to or adversely affect the general character of
the Property and not conduct any auction, bankruptcy or similar sale thereon;
(b) comply with Landlord's sign criteria, if any, and sign
criteria imposed by applicable governmental authorities:
(c) pay, as they become due, all charges for utilities for the
Premises and contract for same in Tenant's name or if any such utilities are
not separately metered, pay Xxxxx'x Pro Rata Share of same;
(d) keep the Premises in a neat, clean, sanitary condition and
in good order and repair (making replacements as necessary) including,
without limitation, doors, windows, plumbing and electrical systems; and all
fixtures and equipment appurtenant to the Premises; replace broken glass with
the same quality glass; paint and refurbish the Premises and restore or
replace the floor covering at reasonable intervals, and in any event at such
times as may reasonably be required to keep the Premises attractive in
appearance; not overloaded, damage or deface the Premises; and properly store
and dispose of all trash using services (if any) on a Pro Rata Share as
designated by Landlord:
(e) make Improvements and Repairs of whatever nature required
by Laws and Insurance Regulations, except that Tenants shall not be required
to make any structural Improvements unless required as a result of Tenant's
Improvements to or use of the Premises:
(f) pay for all repairs and replacements to the Premises, the
Building and the Property required by Tenant's misuse or negligence;
(g) not act in any manner which prevents Landlord or Tenant
from obtaining, or makes void or voidable, any insurance, or creates extra
premiums for or increases the rate of, insurance, and if Tenant causes extra
premiums or increased rates, Tenant will pay the increased cost to Landlord
upon demand;
(h) not act in any manner, which prevents Landlord or Tenant
from obtaining, or causes the revocation of, any government license, permit,
authority, and if as a direct or indirect result of Tenant's business an
addition to or change in the same is required by Laws or Insurance
Regulations. Tenant shall pay for the addition or change;
(i) INTENTIONALLY OMITTED
(j) abide by reasonable rules and regulations made by Landlord
from time to time.
5.2 Environmental Convenants.
(a) Definition. As used in this Lease, the term "Hazardous
Material" means any flammable items, explosives, radioactive materials,
hazardous or toxic substances, material or waste or related materials,
including any substances defined as or including in the definition of
"hazardous substances", "hazardous wastes", "infectious wastes", "hazardous
materials" or "toxic substances" now or subsequently regulated under any
federal, state or local laws, regulations or ordinances including, without
limitation, oil, petroleum-based products, paints, solvents, lead, cyanide,
DDT, printing inks, acids, pesticides, ammonia compounds and other chemical
products, asbestos, PCB's and similar compounds, and including any different
products and materials which are subsequently found to have adverse effects
on the environment or the health and safety of persons.
(b) General Prohibition. Tenant shall not cause or permit any
Hazardous Material to be generated, produced, brought upon, used, stored,
treated, discharged, released, spilled or disposed of on, in, under or about
the Premises, Building, or Property by Tenant, its affiliates, agents,
employees, contractors, sublessees, assignees or invitees. Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all
actions (including, without limitation, remedial or enforcement actions of
any kind, administrative or judicial proceedings, and orders or judgments
arising out of or resulting therefrom), costs, claims, damages (including,
without limitation, attorneys', consultants' and experts' fees, court costs
and amounts paid in settlement of any claims or actions), fines, forfeitures
or other civil, administrative or criminal penalties, injunctive or other
relief (whether or not based upon personal injury, property damage, or
contamination of, or adverse effects upon, the environment, water tables or
natural resources), liabilities or losses arising from a breach of this
prohibition by Tenant, its affiliates, agents, employees, contractors,
sublessees, assignees or invitees (collectively, "Tenant's Affiliates").
(c) Notice. In the event that Hazardous Materials are discovered
upon, in, or under the Property, and any governmental agency or entity having
jurisdiction over the Property requires the removal of such Hazardous
Materials, Tenant shall be responsible for removing those Hazardous Materials
arising out of or related to the use or occupancy of the Property by Tenant
or Tenant's Affiliates. Notwithstanding the foregoing, Tenant shall not take
any remedial action without first notifying Landlord of Tenant's intention to
do so and affording Landlord the opportunity to protect Landlord's interest
with respect thereto. Tenant immediately shall notify Landlord in writing
of: (i) any spill, release, discharge or disposal of any Hazardous Material
in, on or under the Property, the Premises or any portion thereof, (ii) any
notice, enforcement, clean-up, removal or other governmental or regulatory
action instituted, contemplated, or threatened (if Tenant has notice thereof)
pursuant to any Hazardous Materials Laws; (iii) any claim made or threatened
by any person against Tenant, the Property, relating to Hazardous Materials;
and (iv) any reports made to any governmental agency or entity arising out of
or in connection with any Hazardous Materials in, on, under or about or
removed from the Property, including any complaints, notices, warnings,
reports or asserted violations in connection therewith.
(d) Survival. The respective rights and obligations of
Landlord and Tenant under this subsection shall survive the expiration or
earlier termination of this Lease.
ARTICLE VI - CONDITION OF PREMISES
6.1 Improvements. Tenant may not make structural or non-structural
Improvements to the Premises without Landlord's prior written consent. At
the end of the Term, except to the extent Tenant is directed by Landlord to
remove and Improvements and to repair damage relating to such removal, the
Premises shall remain in the altered condition with all Improvements.
Consent will in no way be unreasonably withheld delayed on any non-structural
Improvements providing that they are in complete compliance with all laws and
regulations.
6.2 Fixtures; Yield-up. Except as Landlord directs in writing,
Tenant shall remove its personal property, signs and trade fixtures, and
peaceably yield-up the Premises, broom-clean and in good order repair and
condition at the end of the Term, with all Repairs, including painting and
patching to the Premises required by such removal, having been made and all
utility lines left exposed or unconnected having been capped. If Tenant
fails to remove its property or to make the Repairs by the end on the Term,
Landlord may remove and store Tenant's property in a public warehouse at
Tenant's expense or sell same at public auction, and make the Repairs, and
Tenant promptly shall reimburse Landlord for its costs.
6.3 Mechanic's Lien. Tenant shall immediately discharge any
mechanic's, materialmen's or other lien against the Premises and/or
Landlord's interest therein arising out of any payment due, or purported to
be due, for any labor, services, materials, supplies, or equipment alleged to
have been furnished to or for Tenant.
ARTICLE VII - INSURANCE
7.1 Insurance. Throughout the duration of this Lease, Tenant shall
maintain, at its sole expense, casualty property insurance for the premises
in the amount of $1 million, in addition to coverage sufficient for full
replacement value of Lessee's contents and improvements, and general
liability insurance with limits of $1 million per incident for bodily injury
or property damage and $2 million single limit coverage aggregate. Lessee
shall use reasonable effort to obtain coverage which meets the following
requirements of Lessor.
All insurance policies shall be with companies qualified to do business in
Massachusetts and acceptable to Landlord, and shall name Landlord, and if
Landlord so requests, Landlord's mortagee(s) and any other party, as insured
parties on casualty policies and additional named insured on liability
policies. In addition, all liability insurance obtained by Tenant shall be
(a) primary insurance as to all claims thereunder and provide that any
insurance of Tenant; (b) contain cost liability endorsements or a
Severability of interest clause acceptable to Landlord; (c) be written on an
occurrence basis; and (d) specifically cover the liability assumed by Tenant
under this Lease.
Tenant shall provide Landlord with a Certificate of Insurance showing
Landlord as Additional insured, or loss payee, as the case may be. The
Certificate shall provide for a ten-day written notice to Landlord in the
event of cancellation or material change of coverage. Landlord and Tenant
release each other and each other's officers, directors, employees and agents
from liability or responsibility for any loss or damage covered by insurance,
or which would have been covered if the party complied with the provisions of
this lease.
7.2 Tenant's Risk. Except as modified by statue, all merchandise,
furniture, fixtures and property which may be on or about the Premises,
Building or Property shall be at the sole risk and hazard of Tenant.
7.3 INTENTIONALLY OMITTED
7.4 INTENTIONALLY OMITTED
7.5 INTENTIONALLY OMITTED
ARTICLE VIII - CASUALTIES AND EMINENT DOMAIN
8.1 Damage. If the Premises become untenantable in whole or part
because of fire or other casualty covered by insurance, or as the result of a
taking of, or damage to, the Premises or the Building as a result of the
exercise of any power of eminent domain, condemnation, or purchase under
threat or in lieu thereof ("Talking"), then unless the Lease is terminated in
accordance with Section 8.2, Landlord, with reasonable dispatch (but subject
to delays for adjustment of insurance proceeds and causes beyond Landlord's
reasonable control), shall repair the damage so that the Premises are in
substantially the same condition as on delivery of possession subject to
rights of mortgagees, zoning laws, and building codes then in existence, and
provided Landlord shall not be required to expend more than the net insurance
proceeds Landlord receives for damage to the Premises of the net Taking award
attributable to the Premises. "Net" means the insurance proceeds or award
less all costs and expenses, including adjusters and attorney's fees, of
obtaining the same. Not withstanding the foregoing to the contrary, Tenant
shall be required to pay Landlord the amount of any deductible under
Landlord's insurance policy if the casualty is the result of the acts or
omissions of Tenant or Tenant's Affiliates. Tenant immediately shall give
written notice to Landlord of any damage to the Premises.
8.2 Termination Rights. If (a) any of the Premises or Building are
damaged to the extent of 10% or more of its insurable value, or by risk not
covered by Landlord's insurance, of the cost of repair would excess
1,000,000.00, or the damage is of a character that it cannot reasonably be
repaired within sixty (60) days of the date on which repair work commences,
or (b) if 25t or more of either (i) the floor area of the Building, or (ii)
the land which constitutes the Premises is Taken, Landlord may elect to
terminate this Lease by written notice to Tenant within 30 days after the
damage or within 6 months of the date on which the condemning authority has
the right to possession ("Taking Date") in which case the Lease shall
terminate as of the Taking Date. If the entire Premises are taken by eminent
domain, except for temporary use, the Lease shall terminate automatically as
of the Taking Date. If causality occurs within the last six (6) months of
lease term, lessee may elect to terminate remainder of lease term by
notifying xxxxxx with 30 day notice of intent.
8.3 Abatement. If a portion of the Premises is damaged or Taken,
except for temporary use, and the Lease is not terminated, the Base Rent and
Tenant's Pro Rata Share shall be reduced proportionately based on the area of
the Premises damaged and therefore not used by Tenant or Taken until the
earlier of when Landlord's Repairs to the Premises are completed or Tenant
begins using the damaged area.
8.4 Taking for Temporary Use. If the Premises is Taken for temporary
use, this Lease and Tenant's obligations shall continue, except to the extent
the Taking renders compliance impossible or impracticable.
8.5 Disposition of Award. Except for any separate award for Tenant's
movable trade fixtures or relocation expenses which does not reduce
Landlord's award, all Taking awards to Landlord or Tenant shall be Landlord's
property without Tenant's participation.
ARTICLE IX
DEFAULTS AND REMEDIES
9.1 Tenant's Default. The following conditions shall be considered a
"Default" by Tenant: (a) failure to pay Base Rent, Additional Rent, or any
other charge if not paid within five (5) days of time due;
(b) Tenant's leasehold estate is taken by execution or other
process of law; or Tenant is liquidated, dissolved, commits an act of
bankruptcy, is declared bankrupt or insolvent according to law or admits in
writing its inability to pay debts generally as they become due, or an
assignments of Tenant's property is made for the benefit of creditors or a
receiver , guardian, conservator, trustee or assignee, or any other similar
officer or person is appointed to take charge of any part of Tenant's
property; or any reorganization or similar proceedings are commenced by or
against Tenant under ant bankruptcy or insolvency law and not dismissed
within 30 days from its commencement; or any court enters an order providing
for the modification of rights of Tenant's creditors;
(c) vacating of the Premises or closing for business for an
aggregate period during the Term exceeding 30 days except for fires and
unavoidable casualties;
(d) a Transfer without Landlord's prior written consent;
(e) failure to perform or observe any other Lease terms or
convenants for a period of 30 days after notice, or if same shall reasonably
take longer than 30 days, of Tenant fails to commence same promptly and to
complete same with due diligence and in any event within 60 days from the
notice; or
(f) any other breach for which the Lease gives Landlord the
right of termination.
If Tenant Defaults, Landlord may at any time until the Default
is cured either (1) terminate the Lease by written notice effective on the
date of the notice or on any date specified in the notice, or (2) without
demand or notice, re-enter, take possession and repossess the Premises and,
with a court order and at Tenant's risk, expel Tenant and those claiming
under Tenant and remove, store and sell their effects at public action, all
without prejudice to any remedies for arrearages or preceding Defaults. The
net proceeds of any sale shall be applied to sums due to Landlord from Tenant
and the balance paid to Tenant. Tenant waives all statutory right (including
rights of redemption) to the extent such rights may be lawfully waived. With
or without terminating this Lease, Landlord may re-let all or any part of the
Premises from time to time for periods, at such renewal and upon the terms
and conditions as Landlord deems advisable, and may make Improvements and
Repairs to the Premises. No re-entry or taking of possession by Landlord
shall terminate this Lease unless Landlord gives a written notice of such
intention to Tenant, nor shall Landlord's right to re-let constitute an
obligation to re-let or to mitigate damages.
9.2 Damages. Tenant's liability and obligations under the Lease
shall survive termination or repossession, and Tenant shall pay as current
damages the Base Rent, Additional Rent and other sums up to what would have
been the end of the Term in the absence of the termination or repossession,
with a credit for the net proceeds, if any, Landlord receives from any
reletting of the Premises, after deducting all of Landlord's expenses in
connection with the reletting including, without limitation, expenses of
preparing the Premises for the reletting. Tenant shall pay the current
damages to Landlord on the days Base Rent would have been payable if not for
the termination or repossession. In addition, and notwithstanding any Lease
provision or the termination of this Lease, Tenant shall reimburse Landlord
for any free rent and construction allowance, and all expenses and
liabilities incurred by Landlord in connection with Tenant's Default
including brokerage commissions, reasonable attorneys, fees and alteration
costs.
After any termination or repossession, whether or not Landlord
has collected any current damages, Tenant shall pay to Landlord, at
Landlord's option and on demand, liquidation final damages in lieu of all
current damages beyond the date final damages are paid. The final damages
shall be the amount by which (i) all rent and other charges which would be
payable from the date to which Tenant paid current damages through what would
have been the expired Term exceeds (ii) the then fair market rental value of
the Premises for the same period. If any law validly limits the amount of
final liquidated damages to less than described above, Landlord shall be
entitled to the maximum amount legally allowed.
9.3 Landlord's Self Help. If Tenant Defaults, Landlord may, at its
option, without waiving its right to terminate this Lease or its claim for
damages, cure the Default and Tenant shall reimburse Landlord in doing so;
provided Landlord may immediately cure any. Default or failure by Tenant to
perform any Lease obligation if the cure or performance is reasonably
necessary to protect the Premises or Landlord's interests, or to prevent
injury or damage to persons or property.
9.4 Landlord's Default. Landlord shall not be deemed to be in
default hereunder unless its default continues for 30 days, or such
additional time as is reasonably required to correct its default, after
Tenant has given written notice to Landlord specifying the nature of the
alleged default.
ARTICLE X - SUBORDINATION
10.1 Subordination. Tenant's rights and interests under this Lease
shall be (i) subject and subordinate to any existing or future mortgages,
deeds of trust, xxxxxxxxx, or similar instruments covering the Premises and
to all advances, modifications, renewals, replacements, and extension
("Mortgages"), or (ii) if the Mortgagee elects, prior to the lien of any
present or future Mortgagee. Tenant further shall attorn to and recognize
any successor landlord, whether through foreclosure or otherwise, as if the
successor landlord were the originally named Landlord. Tenant concurrently
shall give Mortgagee the same notices given to Landlord, and Mortgagee shall
have the same opportunity and rights to cure as is available to Landlord to
cure default provided Mortgagee shall have an additional thirty (30) days
after the expiration of Landlord's cure period within which to commence a
cure or such longer period as may be reasonably necessary. Mortgagee's
curing of any of Landlord's default shall be treated as performance by
Landlord.
10.2 Reguest BY Mortgagee. If a Mortgagee or prospective Mortgagee
requests any Lease modification which do not have a material adverse effect
on Tenant's rights, Tenant will enter into a written modification agreement
in recordable form (which shall have the same force as a Lease amendment) if
the Mortgagee forecloses or takes similar action.
ARTICLE XI - MISCELLANEOUS PROVISIONS
11.1 Parties Bound. Except as otherwise provided, the Lease
agreements and conditions to be performed and observed by Landlord or Tenant
shall bind and inure to the heirs, legal representatives, successors and
assigns of each, provided no reference to Tenant's successors and assigns
will constitute a consent to a Transfer by Tenant. If Tenant consists of
more than one person or entity, or if there is a guarantor, then all such
persons, entitles and guarantors shall be jointly and severally liable and
the word "Tenant," as used in this Lease, including Article IX, includes such
person, entities, and guarantors. The word "Landlord" means only the owner,
or the lessee if this Lease becomes subject to an xxxxxxxxx, or the mortgages
in possession of the Premises such that, all prior landlords, including
Landlord, shall be relieved of all landlord covenant's and obligations
accruing after the transfer. If the entity which holds Landlord's interest
in the Lease is a trust, then the Landlord obligations shall be binding upon
the trustees of said trust, as trustees and not individually, and not upon
the trust estate.
11.2 Landlord's Liabilities and Additional Rights.
(a) Landlord shall have no obligations or liability with
respect to or in any way connected with the Premises or the Building, or
services to be provided from same, except to the extent specifically set
forth in the Lease. Landlord shall not be deemed to have committed a breach
of any repair obligations unless it makes repairs negligently or fails to
commence repairs within a reasonable time after Landlord receives notice from
Tenant, and Landlord's liability in any case shall be limited to the cost of
making the required repairs.
(b) Landlord shall not be liable for indirect or consequential
damages for any reason, or for any inconvenience, interruption or
consequences resulting from the failure of utilities or any service, making
repairs, improvements or resulting from leaks of steam, gas, electricity,
water, or any other substance from pipes, wire or other conduits, or from the
bursting or stoppage thereof, or from leaks of water, snow, or rain.
(c) Tenant agrees for itself and each succeeding holder of
Tenant's interest, or any portion thereof, that any judgment, decree or award
obtained against Landlord, or and succeeding owner of Landlord's interest,
which is related to this Lease or the Premises, whether at law or in equity,
shall be satisfied out of Landlord's equity in the Premises, and further
agrees to look only such assets and to no other asses of Landlord for
satisfaction.
(d) Landlord reserves the right at any time or times during the
Term and without charge, abatement or reduction in rent (i) to examine and to
show the Premises at reasonable times; (ii) to put up "For Sale" or "For
Rent" signs; (iii) to perform such works as may be required by the Lease, any
public authority, or to facilitate making repairs or improvements to the
Building, the Property or any portion thereof, provided that unless any such
work is of an emergency nature, Landlord shall give reasonable notice and
shall use reasonable efforts to minimize interference with Tenant's
operations; and (iv) to enter upon, and use portions of, the Premises for the
foregoing purposes.
11.3 Holding Over. If Tenant or anyone claiming under its holds over
after end of the Term, the party shall, prior to Landlord's acceptance of
rent, be a tenant at sufferance, and, after Landlord's acceptance of rent, be
a tenant at will subject to the provisions of this Lease insofar as the same
may be made applicable to a tenancy at will; provided that Tenant shall pay
Base Rent for the period of such tenancy at 150% of the highest rate of Base
Rent payable during the Term, and, in addition, Tenant shall be liable for
all damages incurred by Landlord (including consequential damages) as a
result of the holding over.
11.4 Quiet Enjoyment. Provided Tenant timely pays all rent and
performs and observe the terms, conditions and covenants of the Lease, Tenant
may peaceably and quietly have, hold and enjoy the Premises as provided in
the Lease, without hindrance or molestation from Landlord or anyone claiming
legally under Landlord, subject to the terms of the Lease and any instruments
having priority.
11.5 No Brokerage. Tenant warrant and represents that it has
dealt-with no broker in connection with this Lease except the Broker (if
any). Tenant agrees to defend and indemnify Landlord against any brokerage
claims related to this Lease other than by the Broker.
11.6 Certificates. Within 10 days after Landlord's request, Tenant
shall deliver to Landlord or to any prospective Mortgagee or purchaser (a) an
estoppel certificate in recordable form stating such information as Landlord
reasonably requests, and (b) such financial statements as Landlord reasonably
requires to verify the net worth of Tenant or any Transferee of Guarantor of
Tenant, and Tenant represents and warrants that each such financial statement
shall be true and accurate as of the date thereof.
11.7 Notices. Any notice, consent, or other communication relating to
this Lease shall be given in writing and by hand, by registered or certified
mail or overnight express mail such as "Federal Express", postage or charges
prepaid, to the other party's Notice Address or for Tenant to the Premises,
to such other address or addresses as may be designated by the party by
notice, and if to a Mortgagee, to such address as the Mortgagee shall
designate.
1.8 No Waiver. Landlord's failure to complain of any Tenant act or
omission shall not be deemed a waiver of any of Landlord's rights.
Landlord's waiver, express or implied, of any breach f the Lease shall not be
deemed a waiver of a breach of any other provision or a consent to any
subsequent breach of the same or any other provision. Landlord's consent to
or approval to any action on one occasion shall not be deemed a consent to or
approval of any other action or to such action on any subsequent occasion.
Tenant's payment or Landlord's acceptance of a lesser amount than is due from
Tenant to Landlord shall not be deemed anything but payment on account and
Landlord's acceptance of a check for a lesser amount with an endorsement or a
statement thereon or upon a letter accompanying the check that the lesser
amount is payment in full shall not be deemed an accord and satisfaction, and
Landlord may accept the check without prejudice to recover the balance due or
pursue any other remedy. All of Landlord's rights and remedies under this
Lease or by operation of law, either at law or in equity, for any breach
shall be distinct, separate, cumulative and non-exclusive and shall not be
deemed inconsistent with each other.
11.9 Force Xxxxxx. With the exception of the payment of money, if any
party's performance of any act is delayed, or prevented because of strikes,
lockouts, labor troubles, inability to procure materials, power failures,
restrictive Laws, riots, insurrection, war, or other causes beyond such
party's reasonable control, then said performance shall be excused for the
period of the delay and any time period shall be extended for an equivalent
period.
11.10 Recording. Tenant shall not record this Lease for a notice
thereof.
11.11 Paragraph Headings. All paragraph headings are for convenience
and reference only, and shall not be held to explain, modify, amplify or aid
in the construction, interpretation or meaning of the provisions of this
Lease.
11.12 Governing Law. This Lease shall be governed by the laws of the
Commonwealth of Massachusetts.
1.13 Separability; Construction and Interpretation. If any Lease term
or provision or the application thereof to any person or circumstance is
invalid or unenforceable, the remainder of this Lease, or the application of
the term or provision to other persons or circumstances shall not be
affected, and the Lease shall be valid and be enforced to the fullest extent
permitted by law. If any Lease provision is capable of two constructions,
then the provision shall have the meaning which renders it valid.
11.14 When Lease Becomes Binding - Entire Agreement. Landlord's
employees or agents have no authority to make or agree to make a lease or any
other agreement or undertaking, and the submission of this document for
examination and negotiation does not constitute and offer to lease, or a
reservation of, or option for, the Premises, and this document shall become
effective and binding only upon the execution and delivery by both Landlord
and Tenant-. All negotiations, considerations, representations, and
understandings between Landlord and Tenant are incorporated herein, and no
oral statements or prior or contemporaneous written matter, whether by the
parties or otherwise, which is not specifically incorporated herein shall be
of any force or effect.
11.15 Execution. This Lease may be executed in any number of original
counterparts. Each fully executed counterpart shall be deemed an original.
EXECUTED AS A SEALED INSTRUMENT.
ATTEST/WITNESS: LANDLORD: CONESTOGA CORP.
___________________________ By: _________________________
(Authorized Officer)
Print Name: ______________________ Print Name: __________________
Title: ______________________
ATTEST/WITNESS: TENANT: PIONEER HEALTHCARE
___________________________ By: ________________________
(Authorized Officer)
Print Name: __________________ Print Name: Xxxxx X. Shear
Title: President
EXHIBIT A
Plans of Premises and Property
EXHIBIT A-1
Legal Description of the Property
EXHIBIT B
Landlord's Work
Remove and replace foyer rug, color toast 35752. Shampoo office rug. Fix and
repair woodwork and ceilings as
needed. Wax parquet floor.
EXHIBIT C
Tenant's Work
EXHIBIT D
Rules and Regulations
Exhibit 10.120
AGREEMENT
THIS AGREEMENT is entered into as of this 1st day of July, 1996, by and
between PHC of Michigan, Inc. d/b/a/ Harbor Oaks Hospital ("Hospital"), a
Massachusetts Corporation, and New Life Treatment Centers, Inc., a Delaware
Corporation ("NLTC").
A. Hospital is the licensee and operates a hospital in New
Baltimore, Michigan that is licensed under the laws of the State of Michigan
(such hospital is herein referred to as the "Hospital" or "Facility");
B. NLTC is in the business of providing contract management
services for the treatment and care of psychiatric adult and adolescent
patients with Christian principles (such services are herein referred to as
the "Program");
C. The parties desire to cooperate in providing treatment
services with Christian principles to adult and adolescent psychiatric
patients at the Facility so that such patients may return to a useful life in
the community;
D. The Hospital will provide a minimum of twelve (12) contiguous
beds in a separate wing for the Program's use during the initial term of this
Agreement and any subsequent terms (s);
E. The parties hereto, after considering appropriate
methods of compensation for the services rendered hereunder and having
reviewed the matter with independent advisors knowledgeable in the field,
have determined that the compensation provided for herein reflects fair value
for the services provided hereunder and will contribute to the cost efficient
delivery of health care services;
THEREFORE, it is mutually agreed as follows:
1. Term and Termination.
(a) Term. This Agreement shall have an
initial term of two (2) years, commencing on July 25, 1995 and shall
terminate at the end of such initial term, unless extended for an agreed upon
time period, with the written approval of Hospital and NLTC.
(b) Termination. This Agreement may be
terminated as follows:
(i) Mutual Agreement. This Agreement may be
terminated upon the mutual written consent of the parties on the date and
time specified in the writing.
(ii) Default. In the event either party defaults in
the performance of any material obligation under this Agreement and such
default is not cured to the reasonable satisfaction of the other party within
thirty (30) days after written notice is given to the defaulting party, this
Agreement may be terminated by the non-defaulting party in its sole
discretion immediately upon the expiration of such thirty (30) day period.
If, however, the nature of the default is such that the same cannot
reasonably be cured within such thirty (30) day period, the defaulting party
shall not be deemed to be in default if it, within such thirty (30) day
period commences cure of such default and notifies the other party that a
cure has been commenced and thereafter diligently prosecutes the same to
completion to the reasonable satisfaction of the non-defaulting party within
a reasonable period of time as determined by the non-defaulting party. Any
defaults subsequently cured must be so stated in writing by the
non-defaulting party.
(iii) Litigation. In the event that Hospital becomes
subject to a temporary restraining order, preliminary injunction, permanent
injunction or other legal process which cannot be stayed or discharged except
by terminating or suspending this Agreement, Hospital may terminate this
Agreement to the extent reasonably necessary to comply with or resolve the
terms of such legal process.
(iv) Written Notice. Either
party may, by giving written notice of at least thirty (30) days, elect to
terminate this Agreement without cause by delivering notice to the other of
its desire to cause such termination.
2. Appointment. Facility does hereby exclusively designate
and appoint NLTC to manage a psychiatric treatment program with Christian
Principles at the Facility, and NLTC does hereby accept such exclusive
appointment and agree to provide services in accordance with the terms of
this Agreement. NLTC agrees not to manage or operate another Program for the
provision of inpatient or partial day treatment within 50 miles of Hospital
during the term of this Agreement. NLTC further agrees that it will not
operate a Program for the provision of outpatient treatment within 30 miles
of Hospital during the term of this Agreement except with the prior written
approval of Hospital. Such approval is not to be unreasonably withheld and
the scope of services is to be clearly defined. Hospital hereby grants
approval for the outpatient Program in Southfield, Michigan.
3. Covenants of the Hospital. Hospital shall:
(a) Furnish twelve (12) contiguous licensed
adult psychiatric beds in a separate wing of the facility and furnish
adolescent beds on an as needed and as available basis in the adolescent wing
of the facility.
(b) Furnish reasonably necessary equipment, nursing
services as agreed by the parties, support services, and inpatient and
partial hospitalization services to patients, including available diagnostic
facilities, as directed by each patient's attending physician or psychologist
within the scope of his/her licensure and privileges granted at Hospital.
Such support services will include, but not necessarily be limited to
clinical ancillary services, such as laboratory, radiology and pharmacy;
recreational therapy, dietary, linen, security, social services,
housekeeping, admitting, medical records, utilization review and assistance
with insurance verification. These do not include Extraordinary Ancillary
Services such as: Emergency Room visits, EEG'S, CT scans, NM's and any
outside physician consultations. Additionally, it is understood that properly
equipped offices for the NLTC employees, and adequate consultation and group
space will be provided. Extraordinary Ancillary Services must have prior
approval of NLTC except in emergencies.
(c) Invoice and collect all charges for services (other than
professional services including history and physicals, individual
psychotherapy, hospital rounds and psych testing which are billed by NLTC or
its designee) rendered to patients by Hospital in the Program. All rates for
Program patients shall be established by Hospital after consulting with NLTC.
This section shall in no way restrict members of the medical staff or allied
health professional staff from lawfully invoicing and collecting fees for
professional services rendered to patients in the Program.
(d) Provide for all Hospital and NLTC employees in the Program
all necessary pre-employment and periodic diagnostic and health screening
procedures as are customary or required for Hospital employees. The
provision of such examinations shall not be deemed to affect the status of
any employee as being an employee of NLTC rather than the Hospital. NLTC is
responsible for the reasonable costs associated with said screening as it
relates to NLTC employees.
(e) Maintain accreditation of the Hospital by the Joint
Commission on Accreditation of Healthcare Organizations ("JCAHO") and pay
all related application fees, and assist in the preparation of any and all
information, data and material relating to the Program required in
connection with application for such accreditation.
(f) Use reasonable efforts to facilitate the processing of
application for appointment and/or privileges, including temporary
privileges, to the Medical Staff and Allied Health Professional Staff of
qualified applicants presented by NLTC.
(g) Use reasonable efforts to enter into agreements with
managed care providers and contractors for the provision of Program services.
(h) In non-emergency cases, after a medical
determination of clinical criteria for admission, Hospital, after
consultation with NLTC, shall at Hospital's discretion determine whether or
not patients meet financial guidelines for admission.
(i) Hospital will prepare cost reports for the Medicare and
Medicaid programs as soon as is practicable and will provide copies of same
to NLTC.
4. Covenants of NLTC. NLTC shall:
(a) Provide intensive, specialized, Christian-oriented services in the care
and treatment of Program patients and ongoing program management and support
services. In addition, NLTC shall be responsible for obtaining insurance
verification and pre-certification for all prospective patients in the Program.
(b) Provide for the Program a (i) Program Manager, (ii)
Medical Director (who shall be a psychiatrist duly licensed by the State of
Michigan and shall be a member of the Hospital Medical Staff) and staff
doctors for Program, (iii) Clinical Coordinator, (iv) Case Manager(s), (v)
Intake Counselor(s); and (vi) Chaplain to provide for the professional
treatment and counseling of patients and to supervise and operate the Program
adequately. All medical personnel employed or contracted by NLTC to render
services in the Program must be credentialed in the appropriate categories
in accordance with the Hospital's policies and procedures. Such personnel
shall not be deemed employees or agents of HospitaL and NLTC shall have full
responsibility for compensating such personnel. NLTC will adjust staffing as
census requires and as mutually agreed to between the parties. AU NLTC
staff shall be subject to the prior and continuing approval of the Hospital.
(c) Consult with the Hospital for the purpose of developing
nursing coverage necessary for the Program.
(d) Provide comprehensive marketing services for the
Program, including advertising and sales. All advertisements which mention
the Hospital or its address must be approved prior to publication by Hospital.
(e) Assist in the preparation of any and all information, data and
materials required in connection with application and maintenance of
accreditation and licensure of the Program and the Hospital by the JCAHO, the
State of Michigan and any third party payors.
5. Compensation.
(a) Hospital shall pay to NLTC a monthly fee for professional and
administrative services (the "Program Fee") an amount equal to fifty (50)
percent of net receipts from the Program exclusive of receipts from Medicare,
Medicaid, CHAMPUS and other federally funded programs. This amount shall be
subject to a minimum amount of Fifty-two Thousand Five Hundred dollars
($52500) per month.
(b) The monthly Program Fee shall be calculated by multiplying the net
revenue for all NLTC program xxxxxxxx for a given month excluding Medicare,
Medicaid, CHAMPUS and other federally funded program revenue, as determined by
the Hospital billing reports and with contractual and bad debt allowances
estimated in accordance with the standard accounting practices of the Hospital
and Generally Accepted Accounting Principles, by 0.5. The product will then be
multiplied by 0.9 to determine the amount of money that the Hospital will pay to
NLTC for that month's services. This calculation is subject to the minimum
payment of Fifty-two Thousand Five Hundred dollars ($52,500) per month (per
paragraph 5.(a)).
(c) The terms of 5.(a) and 5.(b) shall not apply to Medicare,
Medicaid, CHAMPUS, or other patients whose treatment is paid in whole or in
part by any federally funded programs. The program fee for these patient
classes shall be a fixed fee in the amount of Seven Thousand Five Hundred
dollars ($7,500) per month. This amount is to be considered independent of
the amounts calculated and paid per the terms of paragraph 5.(a) and 5.(b).
(d) Payment of the Program Fee shall be due within day
sixty (60) days following the month of service.
(e) Nine (9) months following a given month of service, the accounts for
patients that were discharged during the given month will be audited to
determine the actual net receipts exclusive of receipts from Medicare, Medicaid,
CHAMPUS and other federally funded programs. The audited net receipts amount
will be multiplied by 0.5 to determine the actual amount that should have been
paid to NLTC for that month's services. To the extent that such audit results in
additional payments by Hospital to NLTC, such payments shall be made within
sixty (60) days of the above referenced audit. To the extent that such audit
results in a refund of payments by NLTC to Hospital, such payments shall be made
within sixty (60) days of the above referenced audit. This calculation is
subject to the minimum payment of Fifty-two Thousand Five Hundred dollars
($52,500) per month (per paragraph 5.(a)).
(f) If any amount due hereunder is not paid on or
within thirty (30) days of its due date, the outstanding balance shall bear
simple interest from the due date at a rate of ten percent (10%) per annum
until such amount shall be paid in full. In addition, the parties agree that
a failure to pay within thirty (30) days of the due date shall be a material
breach of this Agreement, subject to the termination and cure provisions at
Section l(b)(ii). Any such termination of this Agreement shall not affect a
party's obligation to pay amounts due under this Agreement, but no such
payment after the cure period shall affect the effectiveness of such
termination. additionally, both parties may attempt to cure any payment
defaults by off-setting their respective obligations.
(g) Hospital shall provide NLTC with copies of all
reports showing charges billed, collections received and any adjustments made
to the accounts of patients within the Program. In addition, Hospital will
provide NLTC with detailed aging reports by account and payor type for those
accounts of patients who participated in the Program. Such reports will be
provided to NLTC within thirty (30) days of the end of a given month.
(h) Exhibit A.1 and A.2 shall provide an example of
the calculation of the Program Fee, the application of the minimum base fee
and the reconciliation process at the nine (9) month audit of the accounts.
(i) Hospital or its duly authorized agent shall have the
exclusive and sole right to invoice and collect all charges for services
(other than professional services including histories and physicals,
individual psychiatric therapy, hospital rounds and psych testing which are
billed by NLTC or its designee) rendered by NLTC to patients in the Program.
All rates for Program patients shall be established by Hospital after
consultation with NLTC. This paragraph shall in no way restrict the medical
director or other members of the Hospital Professional Staff and allied
health professional staff from invoicing and collecting fees for professional
services rendered to patients in the Program. All amounts collected by
Hospital or its duly authorized agents pursuant to such invoices shall belong
to Hospital and New Life shall have no right or interest in the same, except
as provided herein. Hospital will notify NLTC if it uses program receivable
to finance working capital needs.
(j) For the period of August 1, 1995 through March 31,
1996, the total Program Fees shall not exceed the Fifty-two Thousand Five
Hundred Dollars ($52,500) minimum variable Program Fee, per section 3.(a),
and the Seven Thousand Five Hundred Dollars ($7,300) fixed Program Fee, per
section 5.(c). This period shall not be subject to the audit of actual
receipts per section 5.(e).
6. Liability Insurance. NLTC shall at its sole cost and expense,
maintain in full force and effect during the term of this Agreement,
comprehensive general liability and malpractice (errors and omissions)
insurance issued by insurance companies reasonably acceptable to Hospital.
The minimum amount shall be One Million Dollars ($1,000,000) per occurrence,
One Million Dollars ($1,000,000) in the aggregate for bodily injury and
Twenty-Five Thousand Dollars ($25,000) for property damage, with an umbrella
policy for Three Million Dollars ($3,000,000). The deductible will not exceed
Ten Thousand Two Hundred Dollars ($10,200) per occurrence. Hospital shall be
named as an additional insured on all such insurance. NLTC shall cause
certificates evidencing such insurance to be delivered to Hospital upon
Hospital's request. NLTC shall give Hospital thirty (30) days' prior written
notice of any cancellation or reduction of coverage, change in deductible,
material change in the terms or conditions of the policies, or addition or
deletion of endorsements.
Hospital shall carry insurance covering losses relating to general
liability and malpractice (errors or omissions) in amounts of One Million
Dollars ($1,000,000) per occurrence, Three Million Dollars ($3,000,000) in the
aggregate. Certificates of Hospital's insurance shall be delivered to NLTC upon
NLTC's request. Hospital shall give NLTC thirty (30) days' prior written notice
of any cancellation or reduction of coverage, change in deductible, material
change in the terms or conditions of the policies, or addition or deletion of
endorsements.
The insurance coverage required by this paragraph shall be in full force
and effect throughout the term of this Agreement and, if written on a claims
made basis, for it period of four (4) years after the termination of this
Agreement; provided, however, that insurance coverage for the period following
the termination of this Agreement may be "tail" coverage mutually acceptable to
the parties.
7. Confidential Information. For purposes of this Agreement, the
term "Confidential Information" shall include the following: (i) all
documents and other materials, including but not limited to memoranda,
manuals, handbooks, production books and audio or visual recordings, which
are developed by NLTC and contain written information relating to the Program
(excluding written materials distributed to patients in the Program or as
promotion for the Program); (ii) all methods, techniques and procedures
developed by NLTC and utilized in providing psychiatric and chemical
dependency care and treatment services to patients in the program at the
Hospital which are not readily available through sources in the public
domain; and (iii) all trademarks, trade names and service marks of NLTC; (iv)
all financial, operational and related information of Hospital not readily
available through sources in the public domain; and (v) the terms of third
party payor agreements entered into by the Hospital.
Both parties agree and acknowledge that the Confidential Information is
disclosed to it in confidence and with the understanding that it constitutes
valuable business information developed by the other party at great expenditure
of time, effort and money. Each party agrees it shall not, without the express
prior written consent of the other party, use Confidential Information for any
purpose other than the performance of this Agreement. Each party further agrees
to keep strictly confidential all Confidential Information and not disclose or
reveal such information to any third party without the prior written consent of
the other party.
Each party acknowledges that the disclosure of Confidential Information to it by
the other party is done in reliance upon the representations and covenants in
this Agreement. Upon termination of this Agreement by either party for any
reason whatsoever, each party shall forthwith destroy or return to the other
party all material constituting or containing Confidential Information and
will not thereafter use, appropriate, or reproduce such information or
disclose such information to any third party.
NLTC shall protect the confidentiality of patient information at the Facility
and will comply with all Facility policies and procedures and Federal and State
laws, rules and regulations concerning the release of information about
patients.
8. Recruitment of Employees. Hospital acknowledges that NLTC has
expended and will continue to expend substantial time, effort and money in
training its employees and independent contractors in the operation of the
Program. The employees and independent contractors of NLTC who will work in
the Program at the Facility will have access to and possess Confidential
Information of NLTC. Hospital acknowledges that to employ or contract with
former employees or independent contractors of NLTC would likely result in
the use by Hospital of NLTC Confidential Information in violation of Section
7 hereof. hospital therefore, agrees that it will not, through its efforts or
through the efforts of person(s) acting as Hospital's agent, during the
initial term or any extended term of this Agreement, and during an
additional one (1) year thereafter, unless this agreement is terminated by
Hospital for reason of default by NLTC, employ, solicit the employment of, or
in any way retain the services of any employee or former employee of NLTC to
work in a psychiatric treatment program if such individual has been employed
or retained by NLTC at any time during the immediately preceding one (1) year
unless NLTC gives its prior written consent thereto. NLTC similarly agrees it
will not, during the same period or periods, employ or solicit the employment
of any employee or former employee of Hospital who has been employed or
retained by Hospital at any time during the preceding one (1) year without
Hospital's prior written consent thereto. Nothing in this Section 8 shall be
construed to prevent any psychiatrist from being granted Medical Staff
privileges and treating patients in the Facility in their private practices.
During the term of this agreement, Hospital agrees that it will not solicit
nor agree to the formation of private practice treatment relationships with
NLTC's independent contractors for the purpose of excluding NLTC from the
continuance of its relationship with the Hospital, m which case, such
relationships between Hospital and former independent contractors NLTC would
constitute a violation of this Section 8.
9. Compliance with Regulations. NLTC will conduct its activities
and operations in strict compliance with all rules and regulations of the
Hospital and its Medical Staff, applicable state and other governmental
authorities and applicable accreditation standards promulgated by the Joint
Commission on Accreditation of Healthcare Organizations. NLTC's employees
and representatives shall comply with and observe all such rules and
regulations.
10. Service Xxxx License. Hospital acknowledges that New Life, New
Life Treatment Centers, Inc., Xxxxxxx-Xxxxx, Xxxxx Clinics, and Minirth Xxxxx
New Life Clinics, Inc. are registered service marks belonging exclusively to
NLTC, and that during the term of this Agreement only, Hospital is
licensed to utilize these service marks in the marketing of professional
services for the treatment and care of psychiatric patients in the Program.
Hospital's use of these service marks shall inure to the benefit of NLTC, and
shall not give Hospital any right or title therein, and any common law
service marks rights acquired as a consequence of Hospital's use thereof are
hereby assigned exclusively to NLTC. At the termination of this Agreement,
Hospital shall immediately terminate the use of these service marks unless a
separate written service xxxx license agreement, specifically authorizing
continued use of such service marks, is entered into by the parties hereto at
that time. Hospital will not cause any documents to be printed bearing such
service marks without an accompanying xxxx indicating that such service marks
are registered service marks. NLTC will not cause any documents to be printed
that reference the Hospital without prior written consent of Hospital.
11. Access to Records.
(a) Each party hereto agrees to maintain such records and provide such
information relating to the Program, the services and supplies provided
thereunder, the cost thereof and payments received in connection therewith, to
the other, contracting payors, and to applicable state and federal regulatory
agencies for compliance, as may be required. Such obligations shall not be
terminated upon termination of this Agreement. Each party agrees to permit the
other party or its authorized representatives at all reasonable times to have
access upon request to books, records and other papers relating to the cost
thereof and to the amounts of any payments received in connection therewith.
(b) NLTC shall until the expiration of four (4) years after the
furnishing of Medicare/Medicaid reimbursable services pursuant to this
Agreement allow the Comptroller General of the United States, the Secretary
of Health and Human Services, and their duly authorized representatives
access to this Agreement and NLTC books, documents and records necessary to
certify the nature and extent of costs of Medicare / Medicaid reimbursable
services provided by NLTC under this Agreement. Any subcontract between NLTC
and another organization for the provision of services related to this
Agreement shall contain a clause comparable to this section 11(b).
12. Governing Law. The validity of this Agreement, the
interpretation of the rights and duties of the parties hereunder and the
construction of the terms hereof shall be governed in accordance with the
laws and regulations of the State of Michigan.
13. Force Majeure. If either of the parties hereto is delayed or prevented
from fulfilling any of its obligations under this Agreement by force majeure,
said party shall not be liable under this Agreement for said delay or
failure. "Force Majeure" means any cause beyond the reasonable control of a
party, including but not limited to act of God, act of omission of civil or
military authorities of a state or a nation, fire, strike, flood, riot, war,
delay of transportation, or inability due to the aforementioned causes to
obtain necessary labor, materials or facilities.
14. Waiver. A waiver by either party of a breach of failure to
perform shall not constitute a waiver of any subsequent breach or failure.
15. Severability. If any part of this Agreement should be held to be void
or unenforceable, such part will be treated as severable, leaving valid the
remainder of this Agreement notwithstanding the part or parts found void or
unenforceable.
16. Binding Effect. This Agreement shall be binding on the heirs,
executors, administrators, successor and assigns of the respective parties.
17. Arbitration. Any controversy or claim arising out of or relating
to this Agreement shall be settled by binding arbitration in accordance with
the rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction therefore, subject to the following terms, conditions and
exceptions:
(a) The demand for arbitration shall be initiated in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
in the form existing at the time the arbitration is initiated.
(b) There shall be a single arbitrator who shall be an attorney and whose
selection shall be made in accordance with the procedures then existing for the
selection of such arbitrators by the American Arbitration Association.
(c) The jurisdiction of the arbitrator and the arbitrability of
any issue raised by the parties shall be decided by the arbitrator in the
first instance.
(d) The venue of any arbitration shall be Macomb County, Michigan and the
arbitration shall be conducted in accordance with the laws of the State of
Michigan.
(e) Notwithstanding any provisions of the Michigan Code of
Civil Procedure or the Commercial Arbitration Rules of the American
Arbitration Association to the contrary, each party shall have all of the
rights of discovery pertaining to civil litigation as provided in the
Michigan Code of Civil Procedure. Unless the parties otherwise agree in
writing, any arbitration hereunder shall be conducted in accordance with the
rules of evidence existing in the State of Michigan at the time of the
arbitration.
(f) Insofar as possible, sufficient time shall be designated in
consecutive business days to allow for completion of he arbitration
proceedings without interruptions or adjournments.
(g) Each of the parties will share equally in the costs and expenses of
arbitration unless the arbitrator finds that the position of the non-prevailing
party in such arbitration was without substantial justification or frivolous, in
which event the arbitrator may assess all of such costs and expenses together
with reasonable attorneys' fees against the non-prevailing party.
18. Complete Agreement. This Agreement constitutes the complete
understanding of the parties and supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
subject matter hereof , and no agreement, statement, or promise relating to
the subject matter of this Agreement which is not contained herein shall be
valid or binding. This Agreement may be modified only by a writing signed by
both parties.
19. Counterparts. This Agreement may be executed in one (1) or more
counterparts, all of which together shall continue only one (1) Agreement.
20. Notice. All notices hereunder shall be in writing delivered personally
or by Certified or Registered postal mails and shall be deemed given when
delivered personally or when deposited in the United States mail, addressed as
below and with proper postage affixed:
If to NLTC: Xxxx X Xxxxxx
Minirth Xxxxx New Life Clinics
/ New Life Treatment Centers, Inc.
000 Xxxxxxxxx Xxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
If to Hospital: Xxxxx X Xxxxx, President
PHC of Michigan, Inc.
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
21. Indemnify.
(a) NLTC shall defend, indemnify and hold Hospital and its officers,
employees and agents harmless from and against any and all liability, loss,
expense, attorneys' fees, or claim for injury or damages arising from any act
or omission in connection with this Agreement, but only in proportion
to and to the extent such liability, loss, expense, attorneys' fees, or claim
for injury or damages is caused by or results from the negligent or
intentional acts or omissions of NLTC or its officers, physician chaplain,
mental health professional contractors, agents, or employees.
(b) Hospital shall defend, indemnify and hold NLTC and its officers,
employees and agents harmless from and against any and all liability, loss,
expense, attorneys' fees, or claim for inquiry or damages arising from any
act or omission in connection with this Agreement, but only in proportion
to and to the extent such liability loss, expense, attorneys' fees or claim
for injury or damages is caused by or results from the negligent or
intentional acts or omissions of Hospital or its officers, agents, or
employees.
22. Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective successors and assigns;
provided, however, that neither party shall have the right to assign this
Agreement without the prior written consent of the other party hereof, which
consent may be withheld for any or no reason. Notwithstanding the foregoing
Hospital may assign this Agreement to an affiliated corporation or upon a
transfer of Hospital's operations at the Facility.
23. Independent Contractor. The parties hereto acknowledge and agree
that the relationship created between them is that of independent contractor.
Nothing contained herein shall be construed as creating a partnership or
joint venture or any other type of relationship between the parties other
than one of independent contractor. It is expressly understood that each
party hereto shall be responsible for its own employees and shall make no
claims to the other for work and vacation pay, sick leave, retirement
benefits, social security, worker's compensation, disability or unemployment
insurance benefits or employee benefits of any kind. Nothing contained herein
shall create any equity or leasehold interest in the Facility on the part of
NLTC. In the absence of express authorization of the Hospital in each
instance, NLTC shall not enjoy the use of (i) any trademark, trade secrets,
trade name, service xxxx, proprietary information, or other intangible
property belonging to hospital or (ii) any transportation, credit card,
letterhead or other perquisite owned by the Hospital. Nothing in this
Agreement shall be construed to confer upon NLTC any authority, express or
implied, to bind or commit the Hospital to any third party in any way.
24. Illegality. Notwithstanding anything to the contrary contained
herein in the event performance by either party hereto of any term, covenant,
condition or provision of this Agreement should jeopardize the licensure of
hospital its participation in Blue Cross or other reimbursement or payment
programs, or its full accreditation by the JCAHO or any other state or
nationally recognized accrediting organization, or if for any other reason
said performance should be in violation of any statute, ordinance, or be
otherwise deemed illegal or unethical by a recognized body, agency, or
association in the medical or hospital fields, Hospital may at its option
terminate this Agreement forthwith, provided, however, in the event of any
such termination under this Section, the parties hereto agree to make good
faith efforts to enter into a new Agreement within thirty (30) days
incorporating the terms and provisions of this Agreement which are consistent
with any statute, ordinance or other requirements in effect at such time.
25. No Requirement to Refer. Nothing in this Agreement,
whether written or oral, nor any consideration in connection herewith
contemplates or requires the referral of any patient. This Agreement is not
intended to influence the judgment of any physician contracting with Hospital
in choosing the medical facility appropriate for the proper treatment and
care of his or her patients. No physician shall receive any compensation or
remuneration for referrals, if any. The parties hereto support a patient's
right to select the medical facility of his or her choice.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
day and year first above written.
HARBOR OAKS HOSPITAL
By: __________________________________
Xxxxx X. Shear
President
NEW LIFE TREATMENT CENTERS, INC.
By: __________________________________
Xxxx X. Xxxxxx
Executive Vice President
Exhibit A.1
Example of Calculation of Program Fee
Month 1, 1996
Gross Charges $ 125,000 Per hospital billing reports
Estimated Contractuals and Bad Debt (31,250)Per hospital billing reports
Net Revenue 93,750
Multiplied by 0.5 0.50
46,875
Multiplied by 0.9 0.90
Calculated amount due to NLTC $ 42,188
Minimum Base Amount (per 5.(a)
and 5.(b)) $ 52,500
Program Fee for Medicare/Medicai
/Champus (per 5.( c)) $ 7,500
NLTC would be paid $60,000 for Month 1.This amount is due on the 5th of Month 3.
Month 2,1995
Gross Charges $ 220,000 Per hospital billing reports
Estimated Contractuals and Bad Debt (55,000) Per hospital billing reports
Net Revenue 165,000
Multiplied by 0.5 0.50
82,500
Multiplied by 0.9 0.90
Calculated amount due to NLTC $ 74,250
Minimum Base Amount (per 5.(a) and
5.(b)) $ 52,500
Program Fee for Medicare/Medicaid
/Champus (per 5.( c)) $ 7,500
NLTC would be paid $81,750 ($74,250 + $7,500) for Month 2. This amount is due on
the 5th of Month 4.
Month 3, 1995
Gross Charges $ 275,000 Per hospital billing reports
Estimated Contractuals and Bad Debt (68,750)Per hospital billing reports
Net Revenue 206,250
Multiplied by 0.5 0.50
$ 103,125
Multiplied by 0.9 0.90
Calculated amount due to NLTC $ 92,813
Minimum Base Amount (per 5.(a) and
5.(b)) $ 52,500
Program Fee for Medicare/Medicaid
/Champus (per 5. (c)) $ 7,500
NLTC would be paid $100,313 ($92,813 + $7,500) for Month 3. This amount is due
on the 5th of Month 5.
Month 4,1996
Gross Charges $ 205,000 Per hospital billing reports
Estimated Contractuals and Bad
Debt (51,250)Per hospital billing reports
Net Revenue 153,750
Multiplied by 0.5 0.50
76,875
Multiplied by 0.9 0.90
Calculated amount due to NLTC $ 69,188
Minimum Base Amount (per 5.(a) and
.(b)) $ 52,500
Program Fee for Medicare/Medicaid
/Champus (per 5.( c)) $ 7,500
NLTC would be paid $76,688 ($69,188 + $7,500) for Month 4. This amount is due on
the 5th of Month 6.
Gross Charges does not include amounts billed to Medicare, Medicaid, CHAMPUS
or other federally funded programs.
Exhibit A.2
Example of Audit of Not Receipts
------------------------------------------------------------------------------
In all examples below, the audit and subsequent calculations refer to
non-Medicaid, Medicaid and Champus patients only. The fixed Program Fee
of $7,500 is not to be included in the total receipts paid to NLTC for
the purpose of doing the actual audited division of the net receipts.
------------------------------------------------------------------------------
-------------------------------------------------------------
Audit for All accounts for patients discharged in month 1 will be
Month 1 audited in Month 10, 9 months following month of service,
to determine the total actual receipts
-------------------------------------------------------------
.
Calculated Fee For Month 1 (per Exhibit A. 1)42,188
Actual Program Fee Paid in Month 1 (per Exhibit A. 1) 52,500
Audited Net Receipts for Patients Discharged in Month 1* 47,000
Multiplied by 0.5 0.50
Audited Program Fee for Month 1 23,500
Excess of Actual Program Fee Paid Over Audited Program Fee 29,000
Amount Due Hospital 0
Note:No refund is due to Hospital as the minimum monthly Program Fee is $52,500.
------------------------------------------------------------
Audit for AR accounts for patients discharged in month 2 will
Month 2 be audited in Month 11, 9 months folllowing month of
service, to determine the total actual receipts
------------------------------------------------------------
. Calculated Fee For Month 2 (per Exhibit A.1)74,250
Actual Program Fee Paid in Month 2 (per Exhibit A. 1) 74,250
Audited Net Receipts for Patients Discharged in Month 2* 182,000
Multiplied by 0.5 0.50
Audited Program Fee for Month 2 91,000
Shortfall of Actual Program Fee Paid From Audited Program Fee (16,750)
Amount Due to NLTC 16,750
This amount would be due Month 1, 1996 (60 days from audit in month 11)
------------------------------------------------------------
Audit for Month 3 All accounts for patients discharged in month 3 will be
audited in Month 12, 9 months following month of service,
to determine the total actual receipts
------------------------------------------------------------
Calculated Fee For Month 3 (per Exhibit A. 1)92,813
Actual Program Fee Paid in Month 3 (per Exhibit A. 1) 92,813
Audited Net Receipts for Patients Discharged in Month 3' 162,000
Multiplied by 0.5 0.50
Audited Program Fee for Month 3 81,000
Excess of Actual Program Fee Paid Over Audited Program Fee11,813
Amount Due Hospital 11,813
This amount would be du March 2, 1996 (60 days from audit in month 12)
------------------------------------------------------------
Audit for Month 4 All accounts for patients discharged in month 4 will be
audited in Month 1, 9 months following month of service,
to determine the total actual receipts
------------------------------------------------------------
Calculated Fee For Month 4 (per Exhibit A. 1)69,188
Actual Program Fee Paid in Month 4 (per Exhibit A-1)69,188
Audited Net Receipts for Patients Discharged in Month 4* 95,000
Multiplied by 0.5 0.50
Audited Program Fee for Month 4 47,500
Excess of Actual Program Fee Paid Over Audited Program Fee 21,688
Amount Due Hospital 16,688
This amount would be due March 3, 1996 (60 days from audit in Month 1)
The full amount of the excess is nonrefundable to the Hospitals it would
lower the Program Fee below
the $52,5 minimum. Therefore, the difference between what was paid and the
minimum fee is refunded.
69,188 - 52,500 = 16,688.
Audited net receipts do not include amounts Coined from Medicare, Medicaid,
CHAMPUS and other federally funded programs.
Exhibit 10.121
LINC GROUP
The LINC Group, Inc. 000 Xxxx Xxxxxx Xxxxx Xxxxxxx Xxxxxxxx 00000 Tel
000-000-0000 Fax 000-000-0000
Xxxxxx X.
Xxxxxxxxx
VIA
FACSIMILE
Chairman and Chief Executive Officer
March 18, 1997
Xx. Xxxxx Xxxxx
President
Pioneer Health Care, Inc.
000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Dear Xxxxx:
It was a pleasure talking to you last week. We are pleased to propose on a
lease line of credit for your needs through March 31, 1998, as outlined
below. As we discussed, due to the size of the overall financing, we have
used a term of 42 months for all the equipment, inclusive of computers.
Lessee: Pioneer Health Care, Inc. and its subsidiaries
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Lessor: LINC Capital Partners
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Lease Line Amount: $200,000
Equipment: The "Equipment" shall consist of new and used movable
assets per attached "Schedule A."
A detailed list of the Equipment including locations
to be provided by Lessee.
"Equipment Cost" shall be equal to the lowest of (1)
manufacturer' s net invoice price exclusive of taxes,
freight and installation costs; (2) net book value
(determined in accordance with generally accepted
accounting principles); and (3) fair market value.
No more than 25% of the total lease line shall be
used Equipment.
Xx. Xxxxx Xxxxx
March 18, 1997
Page 2
The "Amount Advanced" shall be equal to 100% of
Equipment Cost for new Equipment. No Equipment with
an Equipment Cost less than $1,000 shall be financed.
Term and Rate: The "Initial Lease Term" shall be for 42 months. The
applicable "Monthly Lease Rate Factor" shall be
2.8307% of Equipment Cost per month, reflecting an
annual implicit rate of 10.5% for the monthly rental
payments only ("Lease Rate").
The above rates are equal to an annual implicit rate
of 10.5% per year for the monthly rent payments only.
Rate Adjustment: The rate will be adjusted at the time of takedown to
the extent of any increase in the yield of 48 month
Treasury Notes which yielded 5.78% on October 25,
1995.
Progress Payments: If requested, progress payments will be made at the
request of the lgssee. Progress payments may be for
any amount over $1,000 per invoice. Interim rent
shall be payable from the date progress payments are
made to the Commencement Date of the corresponding
Equipment Schedule. Interim rent shall be calculated
at the daily equivalent of the Monthly Lease Rate
Factor.
Commencement Date: Commencement of each Equipment Schedule will occur on
the first day of the calendar quarter following
Lessee's acceptance of all Equipment listed on such
Equipment Schedule. Equipment shall be funded on
Equipment Schedules of at least $50,000 each.
Payment Terms: Monthly, in advance. In addition, the last month's
rent on the entire Lease Line Amount shall be due on
the Commencement Date of the first Equipment
Schedule. Such rent shall be applied to the last
month's rent for each Equipment Schedule on a
pro-rata basis. If Lessee does not utilize the
entire lease line described herein, any such
unapplied rent balance shall be retained by Lessor.
End of Term Options: At the end of the Initial Lease Term of the first
Equipment Schedule, Lessee shall choose one of the
following options:
Purchase all, but not less than all, of the
Equipment for Fair Market Value.
Xx. Xxxxx Xxxxx
March 18, 1997
Page 3
Renew the lease for a period of 12 months at Fair Rental Value not to
exceed 50% of the monthly lease race factor payable monthly in advance. Return
the Equipment to LINC in accordance with the Master Lease.
The option must be exercised on an "all or none" basis, prior to the
expiration of the Initial Lease Term of the first Equipment Schedule and shall
apply to all Equipment on all Equipment Schedules.
Takedown Period: All Equipment Schedules shall takedown prior to March
31, 1998.
Maintenance, Taxes,
and Insurance: For the account of the Lessee.
Reports: So long as there are amounts due LINC under the
Master Lease, Pioneer shall supply LINC with
financial and operating performance data as is
provided to Board Members and investors and the
S.E.C., and shall immediately notify LINC of any
material adverse change in its financial condition
or business prospects.
Transaction Costs: Lessee shall reimburse LINC for its out-of pocket due
diligence costs, on-site documentation preparation
costs (if such service is requested by Lessee) and
other reasonable expenses related to this
transaction, including a documentation fee of $2,000.
Xxxxxxx Money Deposit: Upon acceptance of this proposal, Pioneer will
provide an Xxxxxxx Money Deposit of $5,000 which
shall be applied first to Transaction Costs and then
to the first lease rental payment.
In the event that this transaction is not approved by
Lessor's Commitments Committee, the Xxxxxxx Money
Deposit shall be returned within thirty (30) days of
such decision net of Transaction Costs (if any)
incurred to that date.
If Pioneer and Lessor do not execute final
documentation acceptable to Lessor or if Pioneer
elects not to proceed with transactions contemplated
herein, then the deposit amount will be retained by
Lessor.
Xx. Xxxxx Xxxxx
March 18, 1997
Page 4
Conditions Precedent: 1. Mutually acceptable documentation, the form of
which will be provided by LINC.
2. No material adverse change in Borrower's or
Partnership's financial condition prior to each
takedown.
3. Formal approval of the Section by LINC Capital
Partner's Commitments Committee.
Commitment: This proposal is valid until the close of business April
2, 1997.
If you are in agreement with the terms and conditions of this proposal,
please indicate your acceptance by signing and returning it to my attention
with a check made payable to LINC Capital Partners in the amount of $5,000.
Upon receipt of this signed proposal and check, together with the requested
financial information, we will immediately commence documentation.
Please do not hesitate to call if you have any questions. We took forward to
working with you in the future.
Sincerely,
Xxxxxx X. Xxxxxxxxx
MEZ/mec
Acknowledged and Agreed:
PIONEER HEALTH CARE, INC.
By: ___________________________
Title: __________________________
Date: __________________________
