EXHIBIT 10.19
LEASE AGREEMENT
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THIS LEASE AGREEMENT entered into this 28 day of February 1989, by and
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between LLOYD HOBBS of Dallas, Texas, as LESSOR, and LEONARD MAY ENTERPRISES,
INC., and LEONARD and CATHERINE MAY of Corpus Christi, Texas as LESSEES,
W-I-T-N-E-S-S-E-T-H:
THAT for and in consideration of the covenants herein contained and the
rent hereby reserved, the Lessor has hereby let and rented to Lessees, and the
Lessees have hired and taken from the Lessor, the following described property,
consisting of one, 120-bed nursing home, commonly known as Guadalupe Valley
Nursing Center of Sequin, Texas, located on the premises in Sequin, Texas, more
particularly described in Exhibit "A" attached hereto, including all furniture,
fixtures and equipment located therein, more particularly described in Exhibit
"B" attached hereto, to have and to hold the same for the period of years and
upon the terms and conditions hereinafter stated:
1. The term of this Lease shall be for the period of fifteen (15)
years, commencing April 15, 1990 and ending April 14, 2004.
2. The rental shall be as follows: When the 120-bed home is completed,
furnished and ready for occupancy, the rental will be $34,115.25, per month,
representing one and one-eighth percent (1-1/8%) per month of the total cost to
Lessor, including construction, land, furnishing, all expenses incurred during
construction including legal fees, taxes and insurance, interim interest, travel
and etc., incurred before commencement of the Lease.
It is contemplated by an Earnest Money Contract and Extension between
Larry Voegtle and Assigns (Buyer) and Mary Bergeld Or (Seller) , whereby
purchaser of the property agrees to construct a street, or partial street along
the East side of the property. When this construction is completed by the
Lessor/Owner, the cost of the construction including interim interest during
construction, shall be amortized as Lease payments by the Lessees, on the same
basis as the original Lease.
The monthly rental will be paid to Lloyd Hobbs at P. 0. Box 126, Fort
Smith, Arkansas 72902, or to such other palce as may be directed in writing,
payable monthly in advance for the term of the Lease.
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3. Lessees agree to pay all taxes, general or special, assessed
against the land, buildings and personal property. An escrow for taxes is
required; therefore, an escrow payment of One Thousand Dollars ($1,000.00) per
month will be deposited with the Lessor for payment of taxes. This escrow
payment will be adjusted annually, to cover the taxes as levied against the real
and personal property by all taxing authorities, using the previous year as a
guide.
4. The Lessees shall be responsible for and pay for, fire and extended
coverage on the building and contents in such amount as shall be reasonably
requested by Lessor, being at least, replacement value. The insurance policy
shall designate Lessor as a named insured and loss payee. If Lessees fail or
neglect to provide this insurance as required, Lessor may obtain same and add
the premium cost to the next lease payment due.
5. In the event of partial destruction of the building and contents
(that is, destruction of less than half, in value of the building and contents)
by fire or other casualty, then the Lessees shall be entitled to the insurance
proceeds and shall be obligated to restore the premises, including furniture,
furnishings, fixtures and equipment, to at least as good condition as it was,
prior to the destruction. Any insurance proceeds, in the event of loss, will be
escrowed with Owner of the building. Owner will pay bills incurred, from
insurance proceeds, to repair damages as presented by repair contractors. If
repairs cost more than insurance proceeds, Lessee will be obligated to pay the
difference from Lessee's own funds. If destruction is 50%, or more, of value,
Lessor shall be entitled to the insurance proceeds and shall at it's option,
restore the premises as above provided or cancel the Lease. In the event of
destruction of 50% or more of value, Lessor shall advise Lessees, within sixty
(60) days following the destruction, of his election in this regard.
6. In the event of a taking of all or of part of the land and
buildings as a result of eminent domain, condemnation or other governmental
taking, the consideration paid therefor shall be paid to the Lessor, and from
the date of payment of such consideration, the rental amount shall abate and be
reduced in proportion to the relation of the amount of the consideration to
$2,000,000.00 in value.
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7. Lessees shall, as long as this Lease remains in effect, procure and
keep in effect, general public liability insurance against claims for bodily
injury or death occurring upon, in or about the demised premises and on, in or
about the adjoining streets and passageways, with limits of not less than
$3,000,000.00, any one person or incident. Lessee shall also provide for mal-
practice insurance. Lessor shall be a named insured on all policies.
8. Lessees agree that they will at all times, during the term of this
Lease or any extension thereof, indemnify, protect, defend and save harmless,
the Lessor, against any and all claims, costs, charges, liabilities, or expenses
arising from damage or injury, actual or claimed, of whatever kind or character,
to property or persons occurring in or about the demised premises, streets,
sidewalks, passageways, parking lots, and alleys adjacent thereto, and agree to
resist or defend such action or proceedings, and cause the same to be defended
at their expense.
9. The premises shall be used as a licensed nursing home and for no
other purpose, without the written consent of Lessor. Lessees agree to maintain
the entire premises, including buildings, drives, parking area, furniture,
furnishings, fixtures, equipment and decoration in good and tenantable repair
and condition. Lessees shall, at their expense, repair or replace items as may
be necessary to comply with this covenant, and such that the premises shall at
all times, qualify for and remain, licensed as, at least, a "medicare skilled"
120-bed nursing home under the laws and regulations of the United States and of
the State of Texas. A reduction in, or loss of, this or equivalent license
rating, in the event license ratings are changed, will be considered a default
in this lease.
10. Lessees, with the prior written consent of the Lessor, which
consent shall not be unreasonably withheld, shall have the right to make such
additions, alterations, changes and improvements on the demised premises as
Lessees shall deem necessary or desirable; provided that no such addition,
alteration, change or improvement shall be made which will weaken the structural
strength of the building, diminish its utility or value, and all additions,
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alterations, changes and improvements shall be made in a workmanlike manner in
full compliance with all building laws and ordinances applicable thereto, and
shall become part thereto upon termination of this Leave. Lessees may erect and
maintain such signs upon the premises as they may desire, and as may be
permitted by laws or ordinances pertaining thereto, but at their sole expense
and responsibility.
11. Lessees shall keep the demised premises in a clean, safe and
sanitary condition, and shall comply with all municipal, county, state and
federal laws and regulations governing the conduct of the activities conducted,
suffered or permitted by the Lessees on the demised premises and the Lessees
shall obtain appropriate permits from all such authorities when required.
12. Lessees shall have the right to sub-lease any or all of the
leased premises, with the prior written consent of Lessor, first obtained, which
consent will not be unreasonably withheld, provided that the Lessees will remain
liable for the performance of the covenants and obligations of this Lease. If
the property is sub-leased, the Lessor will have the right to a reasonable
adjustment in the rent.
13. Lessees agree to permit Lessor, or it's authorized representative
to enter the demised premises at all reasonable times during usual business
hours for the purpose of inspecting the same, provided that this shall not be
construed to obligate. Lessor to notify Lessees of any defect observed therein.
14. Lessees shall not do or suffer anything to be done whereby the
demised premises, or any part thereof, may be encumbered by a mechanic's or
similar lien, and in the event such a lien is filed against the demised
premises, or any part thereof, purporting to be for or on account of any labor
done or material or services furnished in connection with any work in or about
the demised premises, Lessees shall discharge the same of record within ten days
after the date of such claim, or if Lessees desire to contest the validity or
amount of such claim, they may do so provided that they first post security
acceptable to Lessor, fully indemnifying Lessor and the premises from any claim,
charge, or demand arising from such claim or expenses incurred in connection
therewith.
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15. The occurrence of any one or more of the following events shall
constitute an "event of default" in the performance of the covenants of the
Lessees:
a. The Lessees shall fail or neglect to pay the rentals when due,
or to pay any other sums of money which they are required by this Lease to pay,
and such non-payment shall continue on the tenth day after written notice of the
same has been posted to Lessees. In the event of default of this Lease, Lessee's
will forfeit any rights, or ownership of contracts and ownership of Certificate
of Need at this location, with the State of Texas or the United States
Government, to Lessor.
b. The Lessees shall fail, refuse or neglect to perform or observe
any other covenant required of them herein, and such non-performance or non-
observance shall continue on the thirtieth (30th) day (unless a later date be
stated in the notice) after written notice of the same has been posted to the
Lessees.
c. This Lease, or the premises itself, or any property of the
Lessees is levied upon by process of law, and such levy be not completely
discharged, or secured to the satisfaction of the Lessor, within fifteen (15)
days after service of the process.
d. Lessees become involved in financial difficulties as evidenced
by (1) an admission in writing of their inability to pay their debts generally
as they become due, (2) becoming petitioner in any voluntary debtor or
bankruptcy proceedings, whether asking arrangement, composition, reorganization,
liquidation or other relief suspension or modification of their obligations, (3)
becoming a party respondent to any involuntary proceeding the purpose of which
is to subject the assets of the Lessees to the control of a court of creditor's
committee (4) making an assignment of all or of a substantial part of their
property for the benefit of their creditors, or (5) seeking, consenting to or
failing to avert the appointment of a receiver or a trustee for all or a
substantial part of their property, or of the demised premises, or of their
interest in this Lease.
16. If an event of default occurs, Lessor shall have the
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option to:
a. Terminate this Lease by service of written notice of
termination, and Lessees' right to the possession of the premises shall cease
upon the date stated in such notice, without prejudice to Lessors' right to
recover all sums due as of the date possession is surrendered, plus any damage
or loss suffered on or prior to such date, including any expenses such as court
costs, attorney's fees and similar expenses incurred by Lessor in recovering
possession, rent, and/or damages due from Lessees; or
b. Re-enter and take possession of the premises without further
demand or notice, and expel Lessees, or those claiming under it, and remove the
effects of both, or either (forcibly if necessary) without being deemed guilty
of any manner of trespass and without prejudice to Lessor's further rights under
this Lease. In such event, the obligations of the Lessees under this Lease shall
continue, but Lessor may from time to time upon such terms and conditions, and
for such bona fide rental as they may be able reasonably to negotiate, sub-let
the premises for the account of Lessees, and all sums received by Lessor shall
be credited to the account of Lessees, less all reasonable expenses actually
incurred by Lessor, including, but not limited to brokerage fees advertising
expense, preparation including re-decoration of the premises for sub-letting,
legal expenses, cost of performing such of Lessees obligations as Lessor finds
it necessary to perform at it's expense, and all other items necessary and
proper to procure suitable tenants for the premises. Lessees shall remain liable
to Lessor for any deficiency between the amounts properly credited to Lessees,
and the amount due Lessor under this Lease.
c. If Lessor, after taking possession of the premises pursuant to
subparagraph (b) above, is unable to make a bona fide sub-lease with a new
tenant for a term which equals or exceeds the balance of the period for which
Lessees are then obligated, Lessor shall have the right forthwith to demand and
recover from Lessees, the present value of the difference between the amount to
be received by Lessor under the new sub-lease, and the amount which would have
been payable by Lessees under this Lease for the
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remainder of the term hereof, plus the expenses of Lessor as defined above.
d. Notwithstanding any election by XXXXXXXX possession pursuant to
subparagraph (b) above, Lessor may at any time thereafter, upon written notice
to Lessees, terminate this Agreement in all respects, and in such event, Lessees
shall have no further liability, obligation or responsibility after the date of
such termination.
e. In order that Lessor may be indulgent when it deems the
circumstances warrant without prejudicing it's right under this Lease, Lessees
now expressly agree that no indulgence or extension, waiver or forgiveness,
variation by practice, nor any neglect or abstention by Lessor in strictly
enforcing the covenants of Lessees on any one or more occasions shall ever be
deemed a waiver of or estoppel against the right of Lessor to insist upon strict
compliance with each and every covenant herein, without any further or special
notice or warning, the existence of a covenant in this Lease and the provisions
of this paragraph, being deemed adequate notice of the rights of the Lessor. No
property belonging to the Lessees shall ever be removed from the premises at any
time when there exists any default in the payment of any part of the rent due
under this Lease, nor after notice of default in the performance of any other
covenant or obligation assumed herein by Lessees.
17. Lessees agree to execute any instrument reasonably required by
Lessor reflecting attornment to their prior interest which may be required by
Lessor in connection with mortgaging their interest in the demised premises,
and/or refunding or refinancing in the future of any mortgage which Lessor may
place upon the premises, subject to right of Option of even date herewith.
18. Upon any termination of this Lease, whether by lapse of time,
cancellation pursuant to an election provided for therein, forfeiture, or
otherwise, Lessees shall surrender immediately, possession of the demised
premises and all buildings and improvements then on the same to Lessor in good
and tenantable repair,
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reasonable wear and tear and damage from fire or other casualty or peril
excepted. If possession be not immediately surrendered, Lessor XXXXXXXXXXXXXX
said premises and repossess the same, and expel and remove therefrom, using such
force as may be necessary, all persons and property, without being deemed guilty
of any unlawful act and without prejudice to any other legal remedy available to
Lessor.
19. Lessor has the right to assign all or any part of this Lease.
Lessor will notify Lessee in the event of an Assignment.
20. It is the intention of the parties that this is to be a net, net,
net Lease.
21. In the event a certificate of need is later issued, Lessees agree
to assign an undivided one-half interest in the Certificate of Need issued to
Leonard May Enterprises Inc., dated October 1989, to the Lessor as part of the
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consideration for leasing. Lessees agree that if a default on this Lease occurs,
resulting in foreclosure or assignment, Lessees remaining interest in the
Certificate of Need will be assigned to Lessor immediately and forthwith.
22. This Lease shall be construed and interpreted in accordance with
the laws of the State of Texas.
23. Any notice or demand required or permitted by law or by any of the
provisions of this Lease shall be in writing. All notices or demands by Lessor
to or upon Lessee shall be deemed to have been properly given when sent by
certified mail, addressed to Leonard May Enterprises, Inc., and Leonard and
Catherine May, 4733A Baldwin, Corpus Christi, Texas 78408, or such other place
as Lessees may from time to time, designate in a written notice to Lessor; and
to Lessor by Lessees, addressed to Lloyd Hobbs, P. 0. Box 126, Fort Smith,
Arkansas 72902, or at such other place as Lessor may from time to time,
designate in a written notice to Lessees.
24. This Lease and all provisions herein shall be binding upon and
inure to the benefit of the parties hereto, their heirs, legal representatives,
successors and assigns.
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25. Time is of the essence in this Lease.
XXXXXXXXXX be properly executed the day and year first above written.
/s/ Lloyd Hobbs
------------------------------------------
Lloyd Hobbs - Lessor
LEONARD MAY ENTERPRISES, INC.
ATTEST: /s/ Leonard May
/s/ Catherine May ------------------------------------------
- -------------------- Leonard May - Lessee
Secretary
/s/ Leonard May
------------------------------------------
Leonard May - Individually Lessee
/s/ Catherine May
------------------------------------------
Catherine May - Individually Lessee
ACKNOWLEDGMENT
--------------
STATE OF ARKANSAS
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COUNTY OF XXXXXXX
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On this the 28th day of February, 1989, before me the undersigned
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officer, personally appeared Lloyd Hobbs, known to me to be the person whose
name is subscribed to the within instrument and acknowledged that he executed
the same for the purposes therein contained.
In Witness Whereof I hereunto set my hand and official seal.
/s/ [SIGNATURE APPEARS HERE]
------------------------------------------
Notary Public
My Commission Expires:
12/1/90
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ACKNOWLEDGMENT
--------------
STATE OF XXXXXXXXX
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COUNTY OF XXXXXXXX
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On this the 23 day of February 1989, before me the undersigned
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officer, personally appeared Leonard May, who acknowledged himself to be the
President of Leonard May Enterprises, Inc., a corporation, and that he, as such
president, being authorized so to do, executed the foregoing instrument for the
purposes therein contained, by signing the name of the corporation by himself as
president.
In Witness Whereof, I hereunto set my hand and official seal.
/s/ Flo A. Chubbs
------------------------------------------
Notary Public
My Commission Expires:
7-30-90
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STATE OF TEXAS
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COUNTY OF XXXXXX
------
On this the 23 day of February, 1989, before me the undersigned
-- --------
officer, personally appeared Leonard May and Catherine May, known to me to be
the persons whose names are subscribed to the within instrument and acknowledged
that they executed the same for the purposes therein contained.
In Witness Whereof, I hereunto set my hand and official seal.
/s/ Flo A. Chubbs
------------------------------------------
Notary Public
My Commission Expires:
7-30-90
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EXHIBIT A
5.188 ACRE TRACT
----------------
Field notes describing 5.188 acre tract situated in the John Sowell Survey,
A-35, Seguin, Guadalupe County, Texas. Said 5.188 acre tract is part of a tract
called 15.97 acres in conveyance from Maxine Halm, et al, to Mary Louise Orr
recorded in volume 472 at page 180 of the Deed Records of said county and being
described by metes and bounds, as follows:
BEGINNING at a two-way fence corner marking the southwest corner of the tract
herein described, same being the southeast corner of a tract called 60 x 415.5
feet in conveyance from Virginia Bergfield, et vir, to A.I. Orr, et ux, recorded
in volume 313 at page 360;
THENCE with the fence along the west line of the tract herein described, same
being a segment of the common line of said 15.97 acre and said 60 x 415.5 foot
strip, as follows:
N 04(degrees)55'49" W, 331.93 feet to a fence post and;
N 11(degrees)02'34" W, 99.71 feet to a two-way fence corner marking
the northwest corner of the tract herein described;
THENCE with the north line of the tract herein described, S 89(degrees)34'13" E,
557.85 feet to the northeast corner of the tract herein described. Said point
bears, S 37(degrees)34'51" W, 288.63 feet and N 89(degrees)34'13" W, 30 feet
from a 1/2 inch diameter iron stake found marking the northeast corner of said
15.97 acre tract;
THENCE with the east line of the tract herein described, as follows:
S 00(degrees)25'47" W, 380.78 feet to a 1/2 inch diameter iron stake
found and;
S 45(degrees)25'47" W, 70.71 feet to a 1/2 inch diameter iron stake
found marking the southeast corner of the tract herein described and
lying in a fence along the common line of said 15.97 acre tract and the
north line of F.M. Highway No.466 (Capote Road);
THENCE with the common line of the tract herein described and said north line of
Capote Road, as follows:
N 89(degrees)34'13" W, 237.00 feet to a 1/2 inch diameter iron stake
found and;
N 88(degrees)53'49" W, 220.02 feet to the place of beginning and
containing 5.188 acres of land.
ASSIGNMENT OF LEASE
-------------------
Lessor. Lloyd Hobbs, of Dallas Texas, and Lessee Leonard May
Enterprises, Inc. and Leonard and Catherine May of Corpus Christi, Texas, hereby
agree to an assignment of that certain Lease, dated February 28, 1989, between
Lloyd Hobbs, as Lessor and Leonard May Enterprises, Inc. and Leonard and
Catherine May of Corpus Christi, Texas, as Lessees, covering the nursing home in
Sequin, Texas known as Guadalupe Valley Nursing Center, (legal description
attached)
Lloyd Hobbs to S & H, Inc., an Arkansas Corporation, at 4120 Rogers
Avenue, Fort Smith, Arkansas 72902.
S & H, Inc. agrees to accept the assets and liabilities of the Lessor
and to perform the Lease, as if it were the original Lessor.
The Lessee agrees to pay the rent and perform its obligations of the
Lease to S & H, Inc., as Lessor.
Executed this 6th day of June, 1989.
S & H, INC.
/s/ Lloyd Hobbs
-----------------------------------
Lloyd Hobbs - President
Assignee-Lessor
/s/ Lloyd Hobbs
-----------------------------------
Lloyd Hobbs - Assignor
LEONARD MAY ENTERPRISES, INC.
/s/ Leonard May
-----------------------------------
Leonard May - President
Lessee
ATTEST:
/s/ Catherine May
- --------------------------
Secretary
/s/ Leonard May
-----------------------------------
Leonard May - Individually
Lessee
/s/ Catherine May
-----------------------------------
Catherine May - Individually
Lessee
EXHIBIT 2
OPTION AGREEMENT
----------------
For and in consideration of the sum of Ten Dollars cash in hand paid,
receipt of which is hereby acknowledged, and for other good and valuable
considerations , LLOYD HOBBS, of Dallas, Texas, hereinafter called "Grantor",
does hereby give and grant unto
LEONARD MAY ENTERPRISES, INC.
- --------------------------------------------------------------------------------
and Leonard and Catherine May of Corpus Christi, Texas, an option to purchase
the following described real estate, together with all improvements now or
hereafter constructed upon the same, and including all personal property shown
upon Exhibit "B" attached hereto, and in addition, any renewals, substitutions,
replacements or additions thereto, which may be on the premises and belonging to
Grantor at the time of the exercise of this Option, To-Wit:
Legal description attached hereto as Exhibit "A".
All upon the following terms and conditions:
1. This Option may be exercised by Grantees at the end of the 120 month
period after the 120 bed nursing home is complete and occupied and 120 monthly
rental payments have been made of ____________ each, conditioned upon the
Grantees, their successors or assigns being in possession of the home at the
time of exercise, and upon the express condition and understanding that the
Grantees herein have fully performed all of the terms and conditions contained
in a certain Lease Agreement dated the 28 day of Feb, 1989, to be kept and
performed by the Lessees therein and more particularly, are current in the
payment of all sums due under the terms of said Lease Agreement. If at any time,
the above Lease shall be terminated, this Option will immediately become null
and void. This Option may be exercised by means of Grantees giving written
notice by certified mail, return receipt requested, of such election to Lloyd
Hobbs, at P. O. Box 126, Fort Smith, Arkansas, 72902, or such other place as may
be directed in writing, accompanied by $10,000.00 earnest money deposit. The
earnest money deposit will be applied on the purchase price if purchase is
concluded.
2. The price for the assets to be sold shall be __________________, being
the same as the original cost to Lloyd Hobbs. The purchase price is payable in
cash unless a financing agreement is worked out at the time of purchase with
Seller.
The purchase price herein stated shall include the personal property
consisting of furniture, furnishings, fixtures and equipment located on said
premises as of the date of execution of this Agreement, and such as may
thereafter be placed upon the premises by way of substitution for or addition to
such furniture, furnishings, fixtures and equipment, less any furniture and
equipment removed or replaced during the Lease term by Lessor or Lessee.
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3. Upon receipt of notice of intent to exercise this Option, Grantor
shall promptly furnish to Grantees, a Warranty Deed, subject only to recorded
easements, rights-of-way, mineral interests ??????????????????????????????????
to impair title.
4. Closing shall be at a time and place mutually agreeable. In the
absence of agreement, Grantor may obligate Grantees to perform by giving written
notice that he is ready, willing and able to execute the Deed and Bill of Sale.
Grantees shall have ten (10) business days to execute the instruments required
to consummate this transaction, and to pay the purchase price. Grantees shall
designate some place in Austin or Corpus Christi, Texas, at which they will
appear prepared to perform, and Grantor shall have ten (10) business days after
receipt of such demand in which to execute and deliver the documents required by
this Option. If Grantor fails, neglects or refuses to perform, Grantees shall
have the right to seek specific performance of this Option.
5. This Option may not be assigned by Grantees without the written consent
of the Grantor.
6. Notices required or permitted by this Option may be given to Grantor by
certified mail, return receipt requested, addressed to Lloyd Hobbs at P. O. Box
126, Fort Smith, Arkansas, 72902, and to Grantees by certified mail, return
receipt requested to Leonard and Catherine May, ______________________________,
4733-A. Baldwin Blvd., Corpus Christi, Texas, 78408. Either party may change the
person to whom or the place to which notice is to be given by written request.
7. This Agreement shall be binding upon the heirs, legal representatives,
successors and assigns of the parties hereto.
/s/ Lloyd Hobbs
--------------------------------
Lloyd Hobbs - Grantor
LEONARD MAY ENTERPRISES, INC.
/s/ Leonard May
--------------------------------
Leonard May - Grantee
/s/ Leonard May
--------------------------------
Leonard May, Individually
/s/ Catherine May
--------------------------------
Catherine May, Individually
EXHIBIT 3
FIRST AMENDMENT TO OPTION
This Amendment to Option entered into this 1st day of February, 1991,
amending the Option agreement dated February 28, 1989 on Guadalupe Valley
Nursing Center between Lloyd Hobbs, as Grantor, later assigned to S & H, Inc.,
and
Leonard May Enterprises, Inc., Leonard May and Catherine May as Grantees.
S & H, INC., entered into an option to sell Guadalupe Valley Nursing
Center in Sequin, Texas, to Leonard and Catherine May for $3,032,465.94 after
120 rental payments of $34,115.25 have been made.
Now, Lessor and Lessees have agreed to add an addition of thirty-two
(32) beds to the Seguin, Texas home, increasing the monthly rent by 6,204.75 per
month, making the rent 40,320.00 per month. After 120 total rent payments, the
amended option price will be increased to 3,584,000.39, exercisable after 120
total rent payments are made. The option price will be increased by the cost of
the thirty-two (32) bed addition.
All other parts of the Option, dated February 28, 1989, will remain
the same as originally written.
S & H, INC.
/s/ C. David Curry
---------------------------------------
C. David Curry, President - Grantor
ATTEST:
/s/ Janice H. Powell
- -------------------------------
SECRETARY
LEONARD MAY ENTERPRISES, INC.
/s/ Leonard May
---------------------------------------
Leonard May, President - Grantee
ATTEST:
/s/ Catherine J. May
- -------------------------------
Secretary
/s/ Leonard May
---------------------------------------
Leonard May, Individually - Grantee
/s/ Catherine J. May
---------------------------------------
Catherine May, Individually - Grantee
THE STATE OF TEXAS *
*
????????
This instrument was acknowledged before me on September 30th, 1994, by
Derwin L. Williams, Vice President - Finance of Summit Care Corporation, a
California corporation, on behalf of said corporation.
[NOTARY PUBLIC SEAL /s/ Odette Garza
APPEARS HERE] --------------------------------
Notary Public, State of Texas
AFTER RECORDING RETURN TO:
FRANK S. OSEN
ATTORNEY AT LAW
9454 WILSHIRE BLVD.
SUITE 800
BEVERLY HILLS, CA
90212-2988
RE: SUMMIT CARE CORP.
ASSIGNMENT OF LEASE WITH OPTION TO PURCHASE
-------------------------------------------
This Agreement is made this 30th day of September, 1994, by and
between LEONARD MAY ENTERPRISES, INC., a Texas corporation, and LEONARD MAY and
CATHERINE MAY, hereinafter called "Assignor", and Summit Care Corporation,
hereinafter called "Assignee".
Recitals
A. LLOYD HOBBS, as Lessor, and Assignor as Lessee, executed a lease
(the "Lease") on February 28, 1989. By the terms of the Lease, [a copy of which
is attached hereto as Exhibit 1], upon the property therein described
("Property") was leased to Assignor as Lessee for a term of fifteen (15) years
commencing on April 15, 1990, and ending on April 14, 2004, and an option to
purchase the Property (the "Option to Purchase") on the terms set forth in
Option Agreement and Amendment to Option Agreement [copies of which are attached
hereto as Exhibits 2 and 3, respectively].
B. Assignor now desires to assign the Lease and the Option to
Purchase to Assignee, and Assignee desires to accept the assignment thereof.
THEREFORE, Assignor and Assignee agree as follows:
Assignment
For value received, receipt of which is hereby acknowledged, Assignor
hereby assigns and transfers to Assignee all of its right, title and interest in
and to the Lease and the Option to Purchase hereinbefore described, and Assignee
hereby agrees to and does accept the assignment, and Assignee expressly assumes
and
agrees to keep, perform, and fulfill all the terms, covenants, conditions, and
obligations required to be kept, performed, and ???????????????????????????????
all payments due to or payable on behalf of Lessor under said Lease when due and
payable.
Executed at Corpus Christi, Texas, on the day and year first above
written.
ASSIGNOR
LEONARD MAY ENTERPRISES, INC.
By /s/ Leonard May
-------------------------------------
Leonard May, President
/s/ Leonard May
-------------------------------------
Leonard May
/s/ Catherine May
-------------------------------------
Catherine May
ASSIGNEE
??????????????????????
By /s/ Derwin L. Williams
---------------------------------
Derwin L. Williams
---------------------------------
Its Vice President-Finance
------------------------------
ACKNOWLEDGMENT
THE STATE OF TEXAS *
*
COUNTY OF NUECES *
This instrument was acknowledged before me on September 30th, 1994,
by Leonard May, President of Leonard May Enterprises, Inc., a Texas corporation,
on behalf of said corporation.
[NOTARY PUBLIC SEAL /s/ Odette Garza
APPEARS HERE] --------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS *
*
COUNTY OF NUECES *
This instrument was acknowledged before me on September 30th, 1994,
by Leonard May.
[NOTARY PUBLIC SEAL /s/ Odette Garza
APPEARS HERE] --------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS *
*
COUNTY OF NUECES *
This instrument was acknowledged before me on September 30th, 1994,
by Leonard May.
[NOTARY PUBLIC SEAL /s/ Odette Garza
APPEARS HERE] --------------------------------
Notary Public, State of Texas
CONSENT TO ASSIGNMENT OF LEASEHOLD ESTATE
OF GUADALUPE VALLEY NURSING CENTER, SEGUIN, TEXAS
On February 28, 1989, Leonard May Enterprises, Inc., and Leonard and
Catherine May entered into a Lease Agreement as Lessees, with Lloyd Hobbs, the
Owner (Lessor) of the Guadalupe Valley Nursing Center in Seguin, Texas. Legal
Description attached as "Exhibit "A".
On June 6, 1989, Lloyd Hobbs assigned his interest in Guadalupe Valley
Nursing Center to S & H, Inc.
The Lease Agreement, dated February 28, 1989, was amended by First
Amendment, dated February 1, 1991, which increased the original monthly rental
payments from Thirty-Four Thousand One Hundred Fifteen Dollars and Twenty-Five
Cents ($34,115.25) each, to Forty Thousand Three Hundred Twenty Dollars
(40,320.00), each.
Now comes SUMMIT CARE CORPORATION of Burbank, California, agreeing to
assume and perform all of the terms, covenants and conditions, as Lessee, under
this Lease, and further agreeing to keep the Certificate and License in full
force and effect during the term of this Lease.
This Lease will be considered in default if the Lessee (Summit Care
Corporation) shall fail or neglect to pay the rentals when due, or to pay any
other sums of money which they are required by this Lease to pay, and such
non-payment shall continue on the tenth day after written notice of the same has
been posted to Lessees. In the event of default of this Lease, Lessee will
forfeit and transfer any rights, or ownership of contracts and ownership of the
Certificate of Need at this location, with the State of Texas or the United
States Government, to Lessor
Summit Care Corporation (Lessee) agrees to assume all other terms,
covenants and conditions of this Lease as originally written and amended.
Leonard May and Catherine May agree to remain liable to the Lessor on
this Lease if Summit Care Corporation should default.
Subject to the above terms and conditions, and any other terms and
conditions of the Lease, S & H, Inc. hereby agrees to consent to the Assignment
of this Lease and Option of the Guadalupe Valley Nursing Center in Seguin, Texas
to Summit Care Corporation.
The next rental payment of $40,320.00 will be due August 15, 1994 and
monthly thereafter through April 14, 2005.
The Option may be exercised on ?????? 15, 2000, ???????? twenty
??????? lease payments have been made and the lease is in full force in effect.
The amended option price will be Three Million Five Hundred Eighty-Four Thousand
Dollars and Thirty-nine Cents ($3,584,000.39).
WITNESS our hands this 15th day of August, 1994.
SUMMIT CARE CORPORATION
BY: /s/ [ILLEGIBLE SIGNATURE]
----------------------------------
President
ATTEST:
/s/ [ILLEGIBLE SIGNATURE]
- -----------------------------
Secretary
LEONARD MAY ENTERPRISES, INC.
BY: /s/ Leonard May
----------------------------------
President
ATTEST:
/s/ Catherine May
- -----------------------------
Secretary
/s/ Leonard May
----------------------------------
Leonard May
/s/ Catherine May
----------------------------------
Catherine May
S & H, INC.
/s/ C. David Curry
----------------------------------
C. David Curry - President
AFTER RECORDING
RETURN TO:
FRANK S. OSEN
ATTEST: ATTORNEY AT LAW
9454 WILSHIRE BLVD.
SUITE 800
/s/ Janice H. Powell BEVERLY HILLS, CA
- ----------------------------- 90212-2988
Secretary
RE: SUMMIT CARE CORP.
ASSIGNMENT AND
--------------
ASSUMPTION OF LEASE
-------------------
This Assignment and Assumption of Lease Agreement ("Assignment") dated
as of the 1st day of September, 1997, is entered into by and between Summit
Care Corporation, a California corporation ("Assignor") and Summit Care Texas,
L.P., a Texas limited partnership ("Assignee").
RECITALS
--------
WHEREAS, on September 1, 1997, Assignor conveyed all of its assets to
Assignee, in accordance with the terms and conditions of that certain
Conveyance, Contribution and Bill of Sale effective September 1, 1997;
WHEREAS, Assignor is a party to that certain Lease Assignment dated
February 28, 1989 by and between Lloyd Hobbs, as lessor, and Leonard May
Enterprises, Inc., and Leonard and Catherine May, as lessees, as assigned by
that certain Assignment of Lease dated June 6, 1989 by and among S&H, Inc., as
assignee, Lloyd Hobbs, as assignor, Leonard May Enterprises, Inc., Leonard May
and Catherine May, that certain Option Agreement between Lloyd Hobbs and Leonard
May Enterprises, Inc. and Leonard and Catherine May, as amended by that certain
First Amendment to Option dated February 1, 1991 by and among S&H, Inc., Leonard
May Enterprises, Inc., Leonard May and Catherine May, as assigned by that
certain Assignment of Lease with Option to Purchase dated September 30, 1994 by
and among Leonard May Enterprises, Inc., Leonard May and Catherine May,
collectively as assignor, and Summit Care Corporation, as assignee, as consented
to by S&H, Inc., as lessor, and evidenced by that certain Consent to Assignment
of Leasehold Estate of
Guadalupe Valley Nursing Center, Seguin, Texas dated August 15, 1994 by and
among Summit Care Corporation, Leonard May Enterprises, Inc., Leonard May,
Catherine May and S&H, Inc. (the "Lease" and the "Option Agreement"
respectively);
WHEREAS, the parties desire to enter into this Assignment to further
evidence the transfer by Assignor to Assignee and Assignee's assumption of all
rights and obligations of Assignor arising under the Lease and the Option
Agreement; and
WHEREAS, pursuant to and in accordance with Section 12 of the Lease,
S&H, Inc., as lessor, has consented to Assignor's assignment of the Lease as
evidenced by that certain Letter Agreement dated January 3, 1997 from Assignor
and signed by S&H, Inc. on January 15, 1997.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
AGREEMENTS
----------
1. The recitals set forth above are incorporated herein for all
purposes.
2. Assignor does hereby irrevocably transfer and assign to Assignee all
of its rights, interest, liabilities, obligations and duties arising under the
Lease and the Option Agreement and Assignee hereby assumes and agrees to pay,
perform and discharge when due all of the liabilities, obligations, and duties
of Assignor arising under the Lease and the Option Agreement.
3. The parties hereby agree to perform, execute and/or deliver or cause
to be performed, executed and/or delivered any and all such further agreements
and assurances as either of the parties hereto may reasonably require to
consummate the transaction contemplated hereunder.
4. All notices to Lessee under the Lease and the Option Agreement shall
be addressed to Assignee at the following address:
2
2600 W. Magnolia Boulevard,
P.O. Box 1486
Burbank, California 91505-3130
IN WITNESS WHEREOF, each party has caused this Assignment to be duly
executed and delivered in its name and on its behalf, as of the date first above
written.
SUMMIT CARE CORPORATION
a California corporation
By: /s/ John Farber
--------------------------------------
Name: JOHN FARBER
------------------------------------
Title: SECRETARY
-----------------------------------
SUMMIT CARE TEXAS, L.P.,
a Texas limited partnership
By: Summit Care Texas Management, Inc.,
its general partner
By: /s/ John Farber
--------------------------------------
Name: JOHN FARBER
------------------------------------
Title: SECRETARY
-----------------------------------
3
S&H, Inc. executes this Assignment to evidence its consent and approval
to this Assignment including the assignment of the Option Agreement by Assignor
to Assignee.
CONSENTED TO, APPROVED AND ACCEPTED:
S&H, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
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