EXHIBIT 10.29
LEASE
for
Woodland Convalescent Center
(formerly known as Corbin Convalescent Center)
7120 Corbin Avenue
Reseda, California 91335
between
UNI-CAL ASSOCIATES,
a California limited partnership
"Landlord"
and
SUMMIT CARE CALIFORNIA, INC.,
a California corporation
"Tenant"
Commencement Date: February 1, 1995
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS................................................ 1
ARTICLE 2 DESCRIPTION................................................ 4
ARTICLE 3 TERM....................................................... 4
ARTICLE 4 WARRANTIES................................................. 4
ARTICLE 5 RENT....................................................... 5
ARTICLE 6 SECURITY DEPOSIT........................................... 9
ARTICLE 7 TAXES AND ASSESSMENTS...................................... 10
ARTICLE 8 USE........................................................ 13
ARTICLE 9 MAINTENANCE................................................ 17
ARTICLE 10 ALTERATIONS................................................ 19
ARTICLE 11 MECHANIC'S LIENS........................................... 19
ARTICLE 12 UTILITIES AND SERVICES .................................... 21
ARTICLE 13 INDEMNITY AND EXCULPATION.................................. 21
ARTICLE 14 INSURANCE.................................................. 23
ARTICLE 15 CONDEMNATION............................................... 29
ARTICLE 16 DESTRUCTION................................................ 31
ARTICLE 17 ASSIGNMENT AND SUBLETTING.................................. 38
ARTICLE 18 DEFAULTS; REMEDIES......................................... 44
ARTICLE 19 SIGNS...................................................... 51
ARTICLE 20 RIGHT OF ENTRY............................................. 51
ARTICLE 21 SUBORDINATION; ESTOPPEL; CERTIFICATION..................... 53
ARTICLE 22 WAIVER..................................................... 54
ARTICLE 23 SALE OR TRANSFER OF PREMISES............................... 55
ARTICLE 24 FINANCIAL STATEMENTS AND OPERATING INFORMATION............. 55
ARTICLE 25 LICENSING.................................................. 57
ARTICLE 26 SURRENDER OF PREMISES; HOLDING OVER........................ 57
ARTICLE 27 PRESERVATION OF PATIENT RECORDS............................ 58
ARTICLE 28 PATIENT CARE; CENSUS....................................... 58
ARTICLE 29 OPTION TO EXTEND TERM...................................... 59
ARTICLE 30 MISCELLANEOUS.............................................. 60
EXHIBITS:
Exhibit A - Description of Real Property
Exhibit B - Description of Personal Property
L E A S E
WOODLAND CONVALESCENT CENTER
This lease ("Lease") is entered into as of January 16, 1995, between UNI-
CAL ASSOCIATES, a California limited partnership ("Landlord") and SUMMIT CARE
CALIFORNIA, INC., a California corporation ("Tenant"), with reference to the
following background facts:
A. Landlord owns the premises hereinafter described, together with certain
fixtures and equipment located at the premises and described on Exhibit B
---------
attached hereto.
B. Tenant currently leases the premises described below pursuant to an
existing lease which expires January 31, 1995.
C. Tenant desires to lease the premises and personal property from
Landlord pursuant to the provisions of this Lease, for the purpose of operating
a skilled nursing facility.
D. Landlord is entering into this Lease in reliance upon the particular
skills, knowledge and experience of Tenant in the operation of healthcare
facilities.
THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS
As used in this Lease, the following words and phrases shall have the
following meanings:
1.1 "Alteration" - any addition, change or modification, structural and
nonstructural, to the Premises (as such term is
defined in Section 2.1 below) made by Tenant including, without limitation,
fixtures, but excluding Tenant's personal property.
1.2 "Authorized Representative" - any officer, agent, employee or
independent contractor retained or employed by either party, acting within
authority, actual or apparent, given him by that party.
1.3 "Encumbrance" - any land sale contract, deed of trust, mortgage, or
other written security device or agreement affecting the Premises and/or
Personal Property (as such term is defined in Section 2.1 below), and the note
or other obligation secured by it, that constitutes security for the payment of
a debt or performance of an obligation.
1.4 "Hazardous Substances" - as defined in Section 8.2.6 of this Lease.
1.5 "Hold harmless" - to defend and indemnify from all liability, losses,
penalties, damages, costs, expenses (including, without limitation, attorneys'
fees), causes of action, claims, or judgments arising out of or related to any
damage to any person or property.
1.6 "Landlord" - Uni-Cal Associates, a California limited partnership, its
successors, and any person or entity succeeding to the rights of Landlord by
reason of an ownership interest or a security interest in the Facility (as
defined in Section 2.1 below) including, without limitation, any Lender of
Landlord.
1.7 "Law" - any judicial decision, statute, constitution, ordinance,
resolution, regulation, rule, administrative order, or other requirement of any
municipal, county, state, federal, or other government agency or authority
having jurisdiction over the parties or the Facility, or both, in effect whether
at the time of
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execution of the Lease or at any time during the term, including, without
limitation, any regulation or order of a quasi-official entity or body,
including any Medicare or Medicaid fiscal intermediary.
1.8 "Lease Year" - the twelve-month period commencing on the Commencement
Date (as defined in Section 3.1 below) and on each succeeding anniversary of the
Commencement Date during the term (and any extended term) of the Lease.
1.9 "Lender" - a beneficiary, mortgagee, secured party, or other holder
of an Encumbrance in the Facility or any part thereof.
1.10 "Rent" - monthly rent, additional rent, late fees, security deposit,
utility charges, real and personal property taxes and assessments, insurance
premiums, and all other charges payable by Tenant to Landlord or any third
person pursuant to the provisions of this Lease.
1.11 "Restoration" - the reconstruction, rebuilding, rehabilitation and
repairs that are necessary to return damaged or destroyed portions of the
Facility and other property to substantially the same physical condition as they
were in immediately before the damage or destruction.
1.12 "Successor" - any assignee, transferee, personal representative,
heir, or other person or entity succeeding lawfully, and pursuant to the
provisions of this Lease, to the rights and obligations of either party.
1.13 "Tenant's Improvements" - any material addition to or modification of
the Premises made by Tenant during the term, including, without limitation,
fixtures.
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ARTICLE 2
DESCRIPTION
2.1 Subject to the terms and conditions contained herein, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the real property
located at 7120 Corbin Avenue, Reseda, California 91355 and more fully described
in Exhibit A attached hereto, together with all improvements now or hereafter
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located thereon, commonly known as the Woodland Convalescent Center (the
"Premises") and that certain personal property described on Exhibit B attached
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hereto and located in the Premises and any replacements thereof (the "Personal
Property"). The Premises and Personal Property are sometimes hereinafter
collectively referred to as the "Facility."
2.2 Landlord is informed that the Facility is presently licensed by the
state of California to operate 157 skilled nursing beds and is certified and
participates as a provider under Medicare and Medi-Cal legislation and
regulations. Reference hereinafter to the "Licensed Facility" shall mean the
Facility as so licensed and certified.
ARTICLE 3
TERM
3.1 The term of this Lease shall commence on February 1, 1995
("Commencement Date") and shall terminate at midnight on January 31, 2005.
ARTICLE 4
WARRANTIES
4.1 LANDLORD HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, NOR DOES LANDLORD MAKE ANY HEREIN REGARDING THE CONDITION OF THE
FACILITY OR ANY PART THEREOF INCLUDING WITHOUT
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LIMITATION THE STRUCTURAL SOUNDNESS THEREOF, THE PRESENCE OR ABSENCE OF
HAZARDOUS SUBSTANCES OR THE FACILITY'S FITNESS FOR ANY PARTICULAR USE OR
OCCUPANCY. LANDLORD SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS AND/OR WARRANTIES
WITH RESPECT TO THE VACATION OF THE FACILITY BY THE PRIOR OPERATOR AS DEFINED
BELOW. LANDLORD FURTHER HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS AND/OR
WARRANTIES, BOTH EXPRESS AND IMPLIED IN LAW, WITH RESPECT TO THE CONDITION,
HABITABILITY, OR SUITABILITY OF THE FACILITY, OR ANY PART THEREOF, FOR THE USE
AND PURPOSES PERMITTED HEREUNDER OR ANY OTHER PURPOSE, AND LANDLORD DOES NOT
REPRESENT OR WARRANT THAT THE FACILITY OR ANY PART THEREOF COMPLIES WITH ANY
LAWS RELATING TO THE USES AND OCCUPANCY THEREOF. TENANT FULLY UNDERSTANDS THAT
THERE MAY BE CERTAIN ALTERATIONS, REPAIRS AND REPLACEMENTS REQUIRED TO CAUSE THE
FACILITY TO COMPLY WITH APPLICABLE LAW (AS THE SAME MAY BE MODIFIED FROM TIME TO
TIME THROUGHOUT THE TERM HEREOF) AND FOR THE CONTINUED LICENSING AND/OR
CERTIFICATION OF THE FACILITY, AND TENANT SHALL BE FULLY RESPONSIBLE FOR THE
COST OF AND FOR EFFECTUATING ANY AND ALL ALTERATIONS, REPAIRS AND REPLACEMENTS
REQUIRED TO BE MADE TO CAUSE THE FACILITY TO COMPLY WITH APPLICABLE LAW AND FOR
THE CONTINUED LICENSING AND CERTIFICATION OF THE FACILITY AS WELL AS ALL
ALTERATIONS, REPAIRS AND REPLACEMENTS REQUIRED TO MAINTAIN AND PRESERVE THE
FACILITY IN THE CONDITION CALLED FOR HEREIN. TENANT ACKNOWLEDGES THAT LANDLORD
IS NOT RESPONSIBLE FOR AND TENANT SHALL HOLD LANDLORD HARMLESS IN CONNECTION
WITH ANY SUCH ALTERATIONS, REPAIRS AND REPLACEMENTS TO THE FACILITY FOR ANY
REASON WHATSOEVER.
Initials of Tenant: ___________
ARTICLE 5
RENT
5.1 Tenant shall pay to Landlord a monthly rent ("Base Monthly Rent")
during each month of the term hereof, without deduction, setoff, prior notice or
demand. Base Monthly Rent for the first Lease Year (sometimes referred to herein
as "Initial Base
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Monthly Rent") is Thirty Four Thousand Five Hundred Forty Dollars ($34,540), and
is subject to increase as set forth below.
5.2 Base Monthly Rent shall be paid in advance on the first day of each
month commencing with the month in which the term of this Lease commences. If
the Lease term commences on a day other than the first day of a month, Base
Monthly Rent for such partial month shall be prorated at the rate of 1/30th of
the Base Monthly Rent per day.
5.3 All Rent shall be paid to Landlord in care of Nigro, Karlin & Segal,
10100 Santa Monica Boulevard, 13th Floor, Los Angeles, California 90067 or at
such other address as may be designated by Landlord from time to time in writing
to Tenant. Rent not paid when due shall bear interest from the date due until
paid at the maximum rate permitted by law, or if no maximum rate is applicable,
at the rate of 18% per annum.
5.4 Tenant acknowledges that late payment of Rent will cause Landlord to
incur damages and costs not contemplated by this Lease, the exact amount of
which would be extremely difficult and impracticable to ascertain. Such costs
include, without limitation, processing and accounting charges, administrative
costs, loss of use of funds and late charges that may be imposed on Landlord by
the terms of any Encumbrance. Therefore, if any installment of Rent is not
received by Landlord within five (5) days after notice that the same is
delinquent, Tenant shall pay to Landlord an additional sum equal to five percent
(5%) of the overdue Rent as a late charge, unless applicable law requires a
lesser late charge, in which case Tenant shall pay the maximum late charge
permitted by law. The parties agree that this late charge represents a fair and
reasonable estimate of the additional costs that Landlord will incur by reason
of late payment by Tenant. Acceptance of any late charge shall not constitute a
waiver of Tenant's default with respect to the overdue amount, nor prevent
Landlord from exercising
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any of the other rights and remedies available to Landlord hereunder, at law or
in equity.
5.5 Tenant hereby agrees that if Tenant fails to pay Rent or any other sum
required to be paid by Tenant hereunder within the five-day grace period for any
two consecutive months, or for any three months during a Lease Year, Rent
hereunder for the remaining term of the Lease shall be automatically adjusted to
be quarterly rental, payable in advance, commencing on the first day of the
month following such consecutive late month, or the third late month in a Lease
Year quarter, and continuing thereafter for the remaining term of the Lease on a
quarterly basis in advance. Time is strictly of the essence with respect to the
provisions of this Article.
5.6 Base Monthly Rent provided in this Lease, as the same may be increased
pursuant to the terms hereof, shall be in addition to all other payments to be
made by Tenant as provided herein. It is the purpose and intent of Landlord and
Tenant that the Base Monthly Rent provided herein shall be absolutely net to
Landlord so that this Lease shall yield net to Landlord the Base Monthly Rent
specified in this Lease in each month during the term of this Lease and, except
as otherwise specifically provided herein, Landlord shall have no obligation or
liability to pay any amounts in connection with the ownership, operation and/or
management of the Facility or any part thereof, including but not limited to
real and personal property taxes, insurance premiums, maintenance, including but
not limited to structural or exterior maintenance, license fees, and any costs
incurred by Landlord or for which Landlord is responsible by virtue of the
existence of any financing on the Facility (including but not limited to any tax
imposed on a Lender by reason of its having made a loan to Landlord but not
including points, fees, or other costs incurred in making a new loan or
refinancing an existing loan), of any kind or nature whatsoever, but
specifically excluding payments of principal, interest and
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other costs and fees associated with Encumbrances for which Landlord is liable.
Excluding payments of principal, interest and other costs and fees associated
with Encumbrances for which Landlord is liable, all costs and expenses
including, without limitation, taxes, assessments, insurance premiums,
maintenance, license fees and obligations of every kind and nature whatsoever
relating to the use and/or management of the Facility by Tenant which may accrue
or become due during or out of the term or any renewal thereof shall be paid by
Tenant and Landlord shall be indemnified and held harmless by Tenant from and
against the same.
5.7 The Base Monthly rent shall be increased as follows:
5.7.1 The Initial Base Monthly Rent set forth in Section 5.1 shall be
increased for the second Lease Year (that is, the Lease Year commencing February
1, 1996) by a sum equal to three percent (3%) of the Initial Base Monthly Rent.
Base Monthly Rent for each successive Lease Year throughout the term hereof (as
the same may be extended pursuant to Section 29 below) shall be increased
annually by a sum equal to three percent (3%) of the Base Monthly Rent in effect
for the last month of the immediately preceding Lease Year as the same may have
been adjusted pursuant to Section 5.7.2 below ("Prior Year's Rent").
5.7.2 The parties agree that the Initial Base Monthly Rent has been
determined by taking into account the number of beds ("Licensed Beds") for which
the Facility is licensed as of the date of this Lease. If and so often as the
number of Licensed Beds increases during the term of this Lease, then, effective
as of the date of each such increase, (i) then current Base Monthly Rent (as the
same may have previously increased under this Lease, whether as the result of
any prior increase in Licensed Beds or otherwise) shall be increased by a
percentage equal to such percentage increase in Licensed Beds, and (ii) for
purposes of determining Base Monthly Rent for the succeeding Lease Year in
accord-
8
ance with Section 5.7.1 above, the Base Monthly Rent as adjusted pursuant to
this Section 5.7.2 shall be deemed the Prior Year's Rent. In no event shall Base
Monthly Rent decrease as the result of a decrease in the number of Licensed
Beds. The increases in Base Monthly Rent contemplated by this Section 5.7.2
shall be in addition to and not in lieu of the increases contemplated by Section
5.7.1 above.
ARTICLE 6
SECURITY DEPOSIT
6.1 Landlord is presently holding the amount of Thirty Seven Thousand
Dollars ($37,000) (the "Security Deposit") previously deposited by Tenant's
wholly owned subsidiary, Summit Care-California, Inc., which Security Deposit
shall continue to serve as security for the full and timely performance by
Tenant of the provisions of this Lease and shall not be deemed advance rental.
If Tenant defaults in respect of any of the terms, covenants, provisions or
agreements of this Lease, including but not limited to the payment of Rent,
Landlord may, but shall not be obligated to, use, apply or retain the Security
Deposit, or any portion of it, to cure the default or to compensate Landlord for
all damage sustained by Landlord resulting from Tenant's default. Upon demand by
Landlord, Tenant shall immediately pay Landlord a sum equal to the portion of
the Security Deposit used, applied or retained by Landlord as provided herein so
as to maintain the Security Deposit in its total original sum. The Security
Deposit shall be the property of Landlord. However, at the expiration or
termination of this Lease, Landlord shall return the Security Deposit to Tenant
at that time unless Tenant is in default, in which event the Security Deposit
shall be returned after the default has been cured, or at Landlord's election,
the Security Deposit shall be used to cure the default, and the unused portion,
if any, shall then be returned to Tenant. Landlord may, in its
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discretion, either maintain the security deposit separate and apart from
Landlord's general funds, or commingle the Security Deposit with Landlord's
general and other funds.
6.2 Landlord shall not be required to pay Tenant interest on the Security
Deposit.
6.3 If Landlord transfers or otherwise terminates its interest in the
Facility, Landlord shall be relieved of further liability respecting the
Security Deposit or any part thereof upon assumption of such liability by its
transferee.
ARTICLE 7
TAXES AND ASSESSMENTS
7.1 Tenant shall be responsible for the payment of all taxes, assessments,
license fees, and other charges ("Personal Property Taxes") that are levied and
assessed against all personal property, including but not limited to leasehold
improvements, furniture, fixtures and equipment installed, whether by Landlord
or Tenant, or located in or about the Premises, which taxes accrue during the
term, regardless of when the same may be payable.
7.2 Tenant shall be responsible for the payment of all real property
taxes, assessments and levies, both general and special ("Real Property Taxes")
which are or are hereafter levied, assessed, or are otherwise imposed, against
the Premises during the term, regardless of when the same may be payable.
7.3 If Landlord's Lender requires Landlord to impound Personal Property
Taxes and/or Real Property Taxes on a periodic basis during the term of this
Lease, Tenant, upon notice from Landlord indicating this requirement, shall pay
a sum of money toward its liability under this Article 7 on a periodic basis in
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accordance with such Lender's requirements, and Landlord shall impound such sums
in accordance with such Lender's requirements. If Tenant defaults in the payment
of any installment of Personal Property Taxes or Real Property Taxes, Tenant
shall thereafter during the term of this Lease pay to Landlord (or to Landlord's
Lender, as Landlord may direct), together with and in addition to the monthly
payments of rental and other payments payable under the terms of this Lease, on
the dates set forth herein for the making of monthly rental payments, until the
end of the term, a sum, as estimated by Landlord, equal to the Personal Property
Taxes and Real Property Taxes (collectively "Taxes") next due on the Facility
and any personal property located therein divided by the number of months to
elapse before one month prior to the date when such Taxes will become
delinquent, such sums to be held by Landlord to pay such Taxes. Such payments,
hereinafter referred to as "Reserves", are to be held without any allowance of
interest or dividend to Tenant and need not be kept separate and apart from
other funds of Landlord. All payments mentioned in this section and all payments
to be made under the Lease shall be added together and the aggregate amount
thereof shall be paid by Tenant each month in a single payment. The arrangement
provided for in this section is solely for the added protection of Landlord and
entails no responsibility on Landlord's part beyond the allowing of due credit,
without interest, for the sums actually received by it; provided, however, that
if Tenant shall have timely met its obligations to pay all sums required
hereunder, Landlord shall be liable for any penalties incurred by reason of
Landlord's failure to pay Taxes when due and Landlord shall credit Tenant for
the amount of any such penalties paid by Tenant. Upon assignment of the Lease by
Landlord, any funds on hand shall be turned over to the successor and any
responsibility of the assignor with respect thereto shall terminate. If the
total of the Reserves hereof shall exceed the amount of payments actually
applied by Landlord, such excess may be credited by Landlord on subsequent
payments to be made by Tenant or, at the option of Landlord, refunded to Tenant
or its
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successors. If, however, the Reserves shall not be sufficient to pay the sums
required when the same shall become due and payable, Tenant shall immediately
deposit with Landlord the full amount of any such deficiency. If there shall be
a default under any of the provisions of this Lease, Landlord may use, apply or
retain, to cure such default and to compensate Landlord for all damage sustained
by Landlord as a result of such default, at any time, all or any part of the
Reserves held by Landlord, and upon demand of Landlord, Tenant shall immediately
deposit with Landlord a sum equal to the portion of the Reserves so used,
applied or retained by Landlord. If there shall be a default under any of the
provisions of this Lease, Landlord may apply, at any time, the balance then
remaining in the funds accumulated under this Section 7.3, less such sums as
will become due and payable for the upcoming tax liability, against the amounts
due and payable under the Lease.
7.4 Tenant's liability to pay Taxes shall be prorated on the basis of a
365-day year to account for any fractional portion of a tax year included in the
term at its commencement and expiration. Prorations shall be based on
assessments and Tenant shall pay such prorations when the prorated tax
installment becomes due.
7.5 Tenant shall have the right to contest or review by legal proceeding,
or in such other manner as it may deem suitable (which, if instituted, Tenant
shall conduct promptly at its own expense, and free of any expense to Landlord,
and if necessary, in the name of Landlord) any Taxes. Tenant may defer payment
of a contested item upon condition that, before instituting any such proceeding,
Tenant shall furnish to Landlord, or to any Lender Landlord may designate,
security reasonably satisfactory to Landlord and such Lender sufficient to cover
the amount of any Taxes. Notwithstanding the furnishing of any such security,
Tenant shall promptly pay such contested item if at any time the Facility or any
part thereof shall be in danger of being sold or forfeited. The
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legal proceeding herein referred to shall include an appropriate proceeding to
review tax assessments and appeals from any judgment, decree, or order in
connection therewith, but such proceeding shall be commenced as soon as possible
after the assessment of any contested item and shall be prosecuted to final
adjudication with dispatch. If there shall be any refund with respect to any
contested item based on a payment by Tenant, Tenant shall be entitled to such
refund to the extent of such payment.
7.6 Tenant shall, in addition to all other sums, pay all fees for
inspection and examination of the Facility during the term hereof which are
charged by any public authority having jurisdiction therein.
7.7 Tenant shall not be required to pay any municipal, county, state, or
federal income or franchise taxes of Landlord, or any municipal, county, state,
or federal estate, succession, inheritance, or (except as provided below)
transfer taxes of Landlord. If at any time during the term, the state in which
the Facility is located or any political subdivision of such state, including
any county, city, public corporation, district, or any other political entity or
public corporation of such state, levies or assesses against Landlord a tax,
fee, or excise on (1) rents, (2) the square footage of the Premises, (3) the act
of entering into this Lease, or (4) the occupancy of Tenant, or levies or
assesses against Landlord any other tax, fee, or excise, however described,
including, without limitation, a so-called value added tax, as a direct
substitution in whole or in part for, or in addition to, any Real Property
Taxes, Tenant shall pay before delinquency that tax, fee, or excise.
Notwithstanding the above, if a transfer tax is payable to any governmental
agency or agencies as a result of this Lease, Tenant shall, to the extent
permitted by law, pay the same directly to the taxing authority or authorities
when it is due, or at Landlord's election, Tenant shall pay same to Landlord
within ten (10)
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days after notice to Tenant from Landlord, and in such event, Landlord shall pay
the tax following receipt from Tenant.
ARTICLE 8
USE
8.1 Tenant shall use the Facility for a licensed skilled nursing facility
and for no other use without Landlord's prior written consent, which consent may
be withheld in Landlord's sole and absolute discretion.
8.2 Tenant's use of the Facility as provided in this Lease shall be in
accordance with the following:
8.2.1 Tenant shall not do, bring, or keep, or permit to be done,
brought or kept, anything in, on or about the Premises that may cause an
invalidation or cancellation of any insurance covering the Facility, and Tenant
shall comply with all requirements imposed by any company issuing such
insurance.
8.2.2 Tenant shall cause the Facility to be and remain licensed and
certified by the applicable state and/or local governmental agencies as the
Licensed Facility, and shall maintain such license(s) and certifications during
the term of this Lease. At Tenant's sole expense, Tenant shall cause the
Facility to conform to the requirements and provisions of all applicable laws
concerning the use of the Facility as licensed including, without limitation,
the obligation at Tenant's sole cost to alter, maintain, replace or restore the
Facility or any part thereof in compliance and conformity with all laws relating
to the condition, use or occupancy of the Facility as licensed. Tenant shall
deliver to Landlord, promptly following receipt thereof, copies of all "A" and
"B" Citations respecting the Facility issued during the term hereof and, if
reasonably required by any Lender or proposed lender, copies of any other
inspection reports respecting the Facility
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issued during the term hereof by any and all governmental agencies which conduct
inspections thereof.
8.2.3 Tenant shall not use the Facility in any manner that will
constitute nuisance, waste to the Facility, or cause unreasonable annoyance to
owners or occupants of adjacent properties.
8.2.4 Tenant shall not do or permit to be done anything on the
Premises that will cause damage to the Facility or any part thereof. The
Premises shall not be overloaded with furniture, equipment or machinery in such
manner that damage is caused to the Premises or any part thereof. No machinery,
apparatus or other appliance shall be used or operated in, on or about the
Premises that will in any manner injure the Facility or any part thereof.
8.2.5 Tenant shall pay all payrolls promptly when due respecting
all personnel at the Facility, and shall file all governmental reports required
pursuant thereto (including, without limitation, payroll tax returns) and shall
pay such taxes promptly and before delinquency.
8.2.6(a) Tenant shall not bring, release, use, generate, manufacture,
store or dispose of, or permit to be brought, released, used, generated,
manufactured, stored or disposed of, on, under or about the Facility, or
transfer or permit to be transferred to or from the Facility, any asbestos,
asbestos containing materials, flammable explosives, radioactive materials,
hazardous wastes, toxic substances or related materials (collectively "Hazardous
Substances"). There is excluded from this prohibition Hazardous Substances of
the type commonly used in nursing homes in the state in which the Facility is
located, subject to the condition that they are used, stored and disposed of in
accordance with all applicable law. As used in this Lease, Hazardous Substances
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shall include, but not be limited to, substances defined as "hazardous
substances", "hazardous materials", or "toxic substances" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq.; the Clean Water Act, 33 U.S.C. Section 466 et seq.;
the Safe Drinking Water Act, 14 U.S.C. Section 1401 et seq.; the Superfund
Amendment and Reauthorization Act of 1986, Public Law 99-499, 100 Stat. 1613;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., as amended;
and those materials and substances of a similar nature regulated or restricted
under any other laws now existing or hereafter adopted, and in regulations
adopted and publications promulgated pursuant to said laws.
(b) If Tenant knows, or has reasonable cause to believe, that a
Hazardous Substance, or a condition involving or relating to the same, has come
to be located in, on or about the Facility, other than as previously consented
to by Landlord, Tenant shall immediately give written notice of such fact to
Landlord.
(c) Tenant shall, at its sole cost and expense, promptly take all
investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the clean-up of any contamination of, and for
the maintenance, security and or monitoring of, the Facility, the elements
surrounding the same, or neighboring properties, that was caused or materially
contributed to by Tenant, relating to or involving any Hazardous Substances
brought onto and/or released from the Facility.
(e) Tenant shall indemnify, protect, defend and hold Landlord, its
agents, employees, partners (including, in the case of a corporate partner, such
corporation's shareholders, officers and directors) and Lenders, and the
Facility, harmless from and against any and all damages, liabilities, judgments,
costs, claims,
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liens, expenses, penalties and attorneys' and consultants' fees arising out of
or involving (i) any Hazardous Substances brought onto and/or released or
threatened to be released from or onto the Facility by any person during the
term of Tenant's tenancy at the Facility, including its tenancy at the Facility
prior to the term of this Lease and its tenancy at the Facility during the term
of this Lease and/or (ii) Tenant's failure to perform any of its obligations
under this Section 8.2.6. Tenant's obligations hereunder shall include, but not
be limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Tenant, and the cost of investigation,
removal, remediation, restoration and/or abatement thereof, or of any
contamination therein involved, and shall survive the expiration or earlier
termination of this Lease. No termination, cancellation or release agreement
entered into by Landlord and Tenant shall release Tenant from its obligations
under this Lease with respect to Hazardous Substances, unless specifically so
agreed by Landlord in writing at the time of such agreement.
8.2.7 Tenant shall comply with, and the leasehold created by this
Lease is subject to, all covenants, conditions, restrictions, easements and
rights of way affecting the Premises.
ARTICLE 9
MAINTENANCE
9.1 Tenant shall, at its sole cost and expense, at all times during the
term of this Lease, maintain the Premises and every part thereof in good, clean
working order, condition and repair including, without limitation, the
structural portions of the building and improvements thereon, the interior and
exterior thereof, foundations, roofs, plate glass, wiring, plumbing, heat and
air conditioning units, mechanical systems, parking and service areas,
landscaping, the approaches thereto and appurtenances thereof, including all
adjacent sidewalks and alleys. Tenant's
17
obligation to maintain the Premises shall specifically include, without
limitation, the obligation to make any and all repairs and to repaint and/or
restain all painted and wood surfaces and restripe the parking areas as
required. Landlord shall not have any responsibility to maintain the Premises or
any part thereof including, without limitation, any structural or mechanical
maintenance, repair or replacement. Tenant waives all rights under any laws
which may provide for Tenant's right to make repairs and deduct the expenses of
such repairs from rent or to withhold rent or terminate the Lease based upon the
condition of the Premises.
9.2 Tenant shall, at its sole cost and expense, at all times during the
term of this Lease, keep and maintain all the Personal Property including
furniture, fixtures and equipment, in good working order, condition and repair.
Tenant shall have the right to install on the Premises any and all equipment and
fixtures which Tenant desires to install thereon and which are necessary or
convenient to Tenant's use of the Premises as permitted herein, without the
consent of Landlord. All such property so installed by Tenant shall remain
Tenant's property (other than replacements for Personal Property as provided
below) and, provided Tenant is not in default hereunder, may be removed by
Tenant as provided in this Lease. Except as provided below, Tenant shall not
remove the Personal Property and/or replacements thereof or any part thereof
from the Premises, without the prior written consent of Landlord. Tenant shall
purchase and replace with substitutes of equal or higher quality any worn out or
broken items of Personal Property required to be on the Premises for continued
licensing and/or certification as the same may occur from time to time
throughout the term of this Lease at Tenant's sole cost and expense. Items
being replaced by Tenant may be removed without Landlord's prior consent and
shall become the property of Tenant, and items replacing same shall be and
remain the property of Landlord subject to removal only with consent until in
turn replaced. Tenant agrees, upon written request from Landlord, to execute any
and all
18
documents necessary to assist Landlord to fully evidence Landlord's ownership of
the Personal Property.
9.3 Tenant shall, throughout the term of this Lease, make all repairs,
alterations, replacements and additions to the Facility required by law and/or
as necessary to obtain and maintain licensing and certification as the Licensed
Facility.
ARTICLE 10
ALTERATIONS
10.1 Tenant shall not make or allow to be made any Alterations to the
Premises or any part thereof in excess of $50,000 during any Lease Year without
Landlord's prior written consent. Any Alterations made shall remain on and be
surrendered with the Premises on expiration or termination of the term. Failure
of Landlord to respond within ten (10) days after Tenant notifies Landlord of
its request for Landlord's consent to Alterations shall be deemed consent.
Landlord's consent shall not be necessary for emergency repairs, or Alterations
required for continued licensing and/or certification of the Facility.
10.2 Except in the event of emergency Alteration, if Tenant makes any
Alterations to the Premises as provided in this Article, the Alterations shall
not be commenced until at least ten (10) days after Landlord has received notice
from Tenant stating the date the installation of the Alterations is to commence.
If any structural modifications are to be made, then to the extent applicable,
the provisions of Sections 16.9 and 16.10 shall apply to any requested
Alterations as if the Alteration project was a Restoration. Landlord may impose
such further conditions to its consent as it deems reasonably necessary.
19
ARTICLE 11
MECHANIC'S LIENS
11.1 Tenant shall pay, when due, all costs for construction done by it or
caused to be done by it on the Premises. Tenant shall keep the Premises free and
clear of all mechanic's liens and other liens by reason of work, labor, services
or materials supplied or claimed to have been supplied to or for Tenant, or
anyone holding the Premises or any part thereof through or under Tenant.
11.2 If Tenant shall, in good faith, contest the validity of any such
lien, then Tenant shall, at its sole cost and expense, indemnify, defend and
hold harmless Landlord, its agents, employees, partners (including, in the case
of a corporate partner, such corporation's shareholders, officers and directors)
and Lenders, and the Facility against the same and shall pay and satisfy any
adverse judgment that may be rendered thereon before the enforcement thereof
against such parties or the Facility. Tenant shall furnish to Landlord a surety
bond satisfactory to Landlord in an amount equal to one and one-half times the
amount of the contested lien, indemnifying Landlord against liability for the
same, as required by law for the holding of the Facility free from the effect of
such lien or claim, or such other reasonable security as may be required by
Landlord or its Lender. In addition, Landlord may require Tenant to pay
Landlord's actual and reasonable attorneys' fees and costs in participating in
such action if Landlord shall reasonably decide it is in its best interest to do
so.
11.3 If Tenant shall fail to discharge any such lien within twenty (20)
days of its being filed or fails to furnish reasonable security therefor as may
be required by Landlord or Landlord's Lender, then, in addition to any other
right or remedy of Landlord resulting from Tenant's said default, Landlord may,
but shall not
20
be obligated to, discharge the same either by paying the amount claimed to be
due or by procuring the discharge of such lien by giving security or in such
other manner as is or may be prescribed by law or practice of the state in which
the Facility is located. Tenant shall repay to Landlord, as additional rent, on
demand, all sums disbursed or deposited by Landlord pursuant to the foregoing
provisions of this section plus interest thereon at the then maximum rate of
interest permitted by law, or if no maximum rate then applies, at the rate of
18% per annum. Nothing contained herein shall imply any consent or agreement on
the part of Landlord to subject Landlord's estate to liability under any
mechanic's or other lien law.
ARTICLE 12
UTILITIES AND SERVICES
12.1 Tenant shall make all arrangements for, and prior to delinquency pay
for, all utilities and services furnished to the Facility or used by it,
including, without limitation, gas, electricity, water, telephone service, and
trash collection, and for all connection charges and deposits required by any of
said utilities. Landlord shall not be liable for any interruption in the
provision of any such utility services to the Facility.
ARTICLE 13
INDEMNITY AND EXCULPATION
13.1 Tenant hereby agrees to defend, indemnify and hold harmless Landlord,
its partners (including the shareholders, officers and directors of any
corporate partner), agents, employees, successors and Lenders (for purposes of
this Article, the foregoing shall be referred to collectively as "Landlord") and
the Facility from each and every claim, demand, lien, loss, penalty, cost
(including attorneys' fees and costs of litigation), judgment and damage of any
kind or nature whatsoever at any time
21
made by reason of any injury or death to any person or persons, including
Tenant, or damage or destruction to property of any kind whatsoever and to
whomsoever belonging including, without limitation, Tenant, from any cause or
causes, (including without limitation Tenant's arranging or failure to arrange
for competent medical care, or to render competent dietary and sanitary care to
patients and occupants), resulting or arising directly or indirectly, out of
Tenant's possession, occupancy, maintenance, repair and/or use of the Facility,
the conduct of Tenant's business at the Facility, any act, omission or neglect
of Tenant, its agents, contractors, employees or invitees, any default or breach
by Tenant in the performance of its obligations hereunder, or the condition, use
or misuse of the Facility and the approaches and appurtenances thereto,
including, without limitation, all adjacent sidewalks, alleys, and the parking
area. The foregoing shall include without limitation the defense or pursuit of
any claim or any action or proceeding involved therein, and whether or not (in
the case of claims made against Landlord) litigated and/or reduced to judgment,
and whether well founded or not. Excluded from Tenant's obligations set forth in
this section are damages which are the sole, direct and proximate result of
Landlord's gross negligence, willful acts or omissions, or Landlord's material
breach of this Lease, except to the extent that insurance coverage for
Landlord's protection is required by the provisions of Article 14.
13.2 Tenant hereby agrees that Landlord (as such term is defined for
purposes of Section 13.1 above) and the Facility shall not be liable for, and
Tenant hereby agrees during the term of this Lease to defend, indemnify and hold
harmless Landlord and the Facility from and against any and all claims, demands,
obligations, liabilities, penalties, cause or causes of action and any and all
costs and expenses, including, without limitation, attorneys' fees and costs of
litigation, which arise out of or are incurred in connection with, injury to
Tenant's business or any loss of income
22
therefrom or for damages to the goods, wares, merchandise or other property of
Tenant, Tenant's employees, agents, invitees, patients, occupants, or any other
person in or about the Facility, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures of the same, or from
any other cause, whether the said damage or injury results from conditions
arising at the Facility or elsewhere and regardless of whether the cause of such
damage or injury or the means of repairing the same is inaccessible to Tenant.
Excluded from Tenant's obligations set forth in this section are damages which
are the sole, direct and proximate result of Landlord's negligence, willful acts
or omissions, or Landlord's material breach of this Lease, except to the extent
that insurance coverage for Landlord's protection is required by the provisions
of Article 14.
ARTICLE 14
INSURANCE
14.1 Tenant, at its sole cost and expense, shall maintain at all times
during the term of this Lease comprehensive public liability and property damage
insurance, hospital (professional liability) insurance, and owned and non-owned
automobile liability insurance in an amount of not less than $2,000,000 combined
single limits, insuring against bodily injury and/or death to persons, damages
to property and all liability of Tenant and its authorized representatives
arising out of and in connection with Tenant's use or occupancy of the Facility,
and insuring Landlord and its Lenders with respect to the ownership,
maintenance, operation and use or occupancy of the Facility, including, without
limitation, the sole negligence and strict liability of Landlord. All such
insurance shall insure performance by Tenant of the indemnity provisions of this
Lease. Both parties and any Lender designated by Landlord
23
shall be named as additional insureds, and the policy shall contain personal
injury and contractual liability endorsements. A "claims made" insuring form
shall not be used.
14.2 Not more frequently than every three (3) years, if in the sole
discretion of any Lender or the reasonable and good faith opinion of Landlord
the amount of public liability and property damage insurance coverage at that
time should be increased, or if the insurance requirements of this Lease should
be expanded or otherwise modified, Tenant shall increase or modify the insurance
coverage as required by any Lender or Landlord and, in such event, Tenant's
monthly insurance impound amount, if any, shall be increased accordingly.
14.3 Tenant, at its sole cost and expense, shall maintain at all times
during the term of this Lease on all Tenant's personal property, Improvements
and Alterations in, on, or about the Premises, a policy of insurance with "all
risks" or "special form" coverage of direct physical loss, including flood (if
the Premises are located within a flood plain) and earthquake. Such insurance
shall contain a replacement cost endorsement to the extent of 100% of their full
replacement value. The proceeds from any such policy shall be used by Tenant for
the replacement of personal property or the restoration of Tenant's Improvements
or Alterations, subject to the rights of any lender.
14.4 At all times during the term of this Lease, Tenant at its sole cost
and expense shall maintain on all the Personal Property described in Exhibit B,
---------
and all replacements thereof, and on the building and other improvements that
are a part of the Premises, during the term of this Lease a policy or policies
of insurance with "all risks" or "special form" coverage of direct physical
loss, including flood (if the Premises are located within a flood plain) and
earthquake. Such insurance shall contain sprinkler
24
leakage coverage and earthquake sprinkler leakage endorsements. The property to
be insured under this section shall be continually insured in an amount not less
than 100% current replacement cost, provide for replacement cost valuation in
the event of an insured loss, and contain not less than a 90% average clause,
25% for earthquake sprinkler leakage. Tenant shall obtain a stipulated amount
endorsement from the insurance carrier if such endorsement is available. The
policy shall also contain provisions for, or endorsements shall be obtained for,
earthquake sprinkler leakage, demolition cost coverage of not less that ten
percent (10%) of the face amount of hazard insurance carried on the building and
other improvements, contingent liability from operation of building laws
coverage (to cover an undamaged portion of an insured improvements that is
required to be removed), and increased cost of construction coverage (for
upgrading to current building codes, if necessary). The insurance policy or
policies shall insure both Landlord and Tenant, as their interests appear, with
lender endorsements as required by any Lender. In case this Lease is terminated,
the insurance policy (if other than blanket) and all rights under it or the
insurance proceeds shall be assigned to Landlord or its Lender(s) at Landlord's
or any Lender's election. Tenant shall pay the premiums for maintaining the
insurance required hereunder while the Lease is in force. If (1) any Lender
requires Landlord to escrow (impound) insurance premiums on a periodic basis
during the term, or (2) in the event Tenant has defaulted in performance of any
material provisions of this Article 14, Tenant, on notice from Landlord
indicating this requirement shall pay sums of money toward its liability under
this Article 14 to Landlord on a periodic basis in accordance with (1) the
Lender's requirements, or (2) Landlord's requirements, as applicable.
14.5 In order to assure that the building and other improvements that are
part of the Premises and the Personal Property are continually insured to their
full value with replacement cost insurance, the full replacement value of the
insurable improvements
25
shall be determined by the company issuing the insurance policy at the time the
policy is initially obtained. Not more frequently than once every three (3)
years, or sooner if required by any Lender, Landlord shall have the right to
notify Tenant that it elects to have the replacement value redetermined by an
insurance company, or by appraisal. The redetermination shall be made promptly
and in accordance with Marshall & Swift or similar appraisal company recognized
and generally accepted by the insurance industry, and each party shall be
promptly notified of the results by the company. The insurance policy shall be
adjusted according to the determination. Tenant shall be obligated to forthwith
increase the insurance coverage and pay the premiums therefor in accordance
with any such determination.
14.6 At all times during the term of this Lease, Tenant at its sole cost
and expense shall maintain rent or rental value "all risks" or "special form"
coverage of direct physical loss including earthquake and flood (if in a flood
plain) and also including sprinkler leakage coverage and earthquake sprinkler
leakage endorsements, in an amount equal to nine (9) months' Base Monthly Rent,
as the same may be adjusted from time to time, plus the estimated annual cost of
real and personal property taxes and assessments and the annual premiums for
insurance policies required to be carried by Tenant hereunder. Such insurance
shall name Landlord and Tenant as insureds as their respective interests may
appear and shall provide for monthly payments to Landlord to the extent of
Tenant's monthly obligations hereunder plus such amounts of taxes and insurance
premiums as would be payable to Landlord if the same were being impounded
monthly. Such insurance shall provide for 60% contribution or coinsurance, or
stipulated amount if this clause if reasonably available.
14.7 The parties release each other, and their respective owners,
officers, directors, partners (including the shareholders, officers and
directors of any corporate partners) and agents, from
26
any claims for damage to any person or to the Facility or any part thereof,
Tenant's Improvements, and alterations of either Landlord or Tenant in, on or
about the Premises, that are caused by or result from risks insured against
under any insurance policies carried by the parties and in force at the time of
any such damage. Each party shall cause each insurance policy obtained by it to
provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by any
policy. Neither party shall be liable to the other for any damage caused by fire
or any of the risks insured against under any insurance policy required by this
Lease. If any insurance policy cannot be obtained with a waiver of subrogation,
or is obtainable only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of subrogation,
the party undertaking to obtain the insurance shall notify the other party of
this fact. The other party shall have a period of ten (10) days after receiving
the notice either to place the insurance with a company that is reasonably
satisfactory to the other party (and, in the case of insurance required to be
carried by Tenant hereunder, complying with the provisions of Section 14.8
below) and that will carry the insurance with a waiver of subrogation, or to
agree to pay the additional premium if such a policy is obtainable at additional
cost. If the insurance cannot be obtained or the party in whose favor a waiver
of subrogation is desired refuses to pay the additional premium charged, the
other party is relieved of the obligation to obtain a waiver of subrogation
rights with respect to the particular insurance involved.
14.8 All insurance policies required under this Lease shall:
14.8.1 Be issued by insurance companies authorized to do business
in the state in which the Facility is located with a policyholders and financial
rating of at least A:Class X status (or such other status as may be acceptable
to Landlord in Landlord's
27
sole discretion) as rated in the most recent edition of Best's Reports Guide;
14.8.2 Be issued as a primary policy; however, Tenant may carry the
insurance under a blanket policy if the policy specifically provides that the
amount of insurance required under this Lease will be in no way prejudiced by
other losses covered by the policy; and
14.8.3 Contain an endorsement requiring thirty (30) days written
notice from the insurance company to all parties including, without limitation,
Landlord's Lenders, before cancellation or material change in the coverage,
scope, or amount of any policy.
14.9 The policy, or a certificate of the policy itemizing all coverages
and extensions of coverage along with a copy (not certified) of the policy and
evidence of payment of premiums, shall be deposited with Landlord at the
Commencement Date, and on renewal of the policy, not less than twenty (20) days
before expiration of the term of the policy. Landlord (and Landlord's Lenders,
if required) shall be named as an insured (or additional insured) in the policy
and all renewals and replacements thereof.
14.10 Deductible or retention provisions per loss contained for all
insurance policies required by this Lease shall be for the account of and
payable by Tenant and shall not exceed an aggregate amount of $5,000, except for
the earthquake coverage deductible, which shall be subject to Landlord's
reasonable approval.
14.11 Subject to the provisions of Article 16, the proceeds from any and
all hazard insurance policies carried by Landlord shall be used solely for the
purpose of repair, reconstruction, remodeling and replacement of the Facility or
any part thereof
28
damaged or destroyed, and shall be held by Landlord in trust for such purposes.
14.12 In the event Tenant does not maintain any of the foregoing policies
of insurance, Landlord may, but shall not be obligated to, pay the premiums
therefor, and such amounts plus interest at the maximum rate permitted by law,
or if no maximum rate applies, at the rate of 18% per annum, from the date
Landlord paid until the date of reimbursement shall be additional rent due
hereunder and payable on the next payment date for monthly rent. Landlord's
election to make said payments shall not be deemed a waiver of any other
remedies, or an election of remedies by Landlord, nor as liquidated damages.
14.13 Tenant, at its sole cost and expense, shall further obtain and
maintain adequate worker's compensation insurance (or evidence of an adequate
self-insurance program if permitted by the laws of the state in which the
Facility is located) covering all workmen, employees, servants and others
engaged in or upon the Premises.
ARTICLE 15
CONDEMNATION
15.1 Definitions:
15.1.1 "Condemnation" means (1) the exercise of any governmental or
governmentally-derived power, whether by legal proceedings or otherwise, by a
Condemnor (as defined below), and (2) a voluntary sale or transfer by Landlord
to any Condemnor, either under threat of condemnation or while legal proceedings
for condemnation are pending.
15.1.2 "Date of Taking" means the date the Condemnor has the right to
possession of the property being condemned.
29
15.1.3 "Award" means all compensation, sums, or anything of value
awarded, paid, or received on a total or partial Condemnation.
15.1.4 "Condemnor" means any public or quasi-public authority, or
private entity or individual, having the power of Condemnation.
15.2 If during the term there is any taking of all or any part of the
Premises or any interest in this Lease by Condemnation, the rights and
obligations of the parties shall be determined pursuant to the provisions of
this Article 15.
15.3 If the Premises are totally taken by Condemnation, this Lease shall
terminate on the Date of Taking.
15.4 If the Premises are partially taken by Condemnation, this Lease shall
remain in effect, except that Tenant can elect to terminate this Lease if the
remaining portion of the building or other improvements or the parking area that
are a part of the Premises is rendered unsuitable for Tenant's continued use of
the Premises. If Tenant elects to terminate this Lease, Tenant must exercise its
right to terminate by giving notice ("Termination Notice") to Landlord within
thirty (30) days after the nature and extent of the taking have been finally
determined. The Termination Notice shall state the date of termination, which
date shall not be earlier than thirty (30) days nor later than ninety (90) days
after Tenant has notified Landlord of its election to terminate (except that
this Lease shall terminate on the Date of Taking if the Date of Taking falls on
a date before the date of termination as designated by Tenant in the Termination
Notice). If Tenant does not terminate this Lease within the thirty (30) day
period, this Lease shall continue in full force and effect, except that Base
Monthly Rent shall be reduced pursuant to Section 15.5 below.
30
15.5 If any portion of the Premises (other than that portion consisting of
land upon which no buildings, improvements, parking areas, driveways, walkways
or recreation areas are located, hereinafter referred to as Excluded Premises)
is taken by Condemnation and this Lease remains in full force and effect, on the
date of taking the Base Monthly Rent shall be reduced by an amount that is in
the same ratio to Base Monthly Rent as the value of the area of the portion of
the Premises taken (but excluding therefrom the area of the Excluded Premises)
bears to the total value of the Premises immediately before the Date of Taking.
If any portion of the Excluded Premises is taken by Condemnation and this Lease
remains in full force and effect, and if such taking materially and adversely
affects the operation of the Facility, Tenant shall be entitled to an equitable
abatement of Base Monthly Rent in a total amount not exceeding the cost of
replacing the Excluded Premises by acquiring rights in off-site improvements,
but such abatement shall be reduced by any benefit received by Tenant from such
taking by way of increased or extraordinary payments from governmental agencies
or otherwise.
15.6 If there is a partial taking of the Premises and this Lease remains
in full force and effect, Landlord at its cost shall accomplish all necessary
restoration. Base Monthly Rent shall be abated or reduced during the period from
the date of taking until the completion of restoration, but all other
obligations of Tenant under this Lease shall remain in full force and effect.
The abatement or reduction of Base Monthly Rent shall be based on the extent to
which the restoration interferes with Tenant's use of the Premises. If the award
is not sufficient to pay for restoration, Landlord may elect to furnish the
deficiency, or Landlord may elect to terminate this Lease, at Landlord's
discretion, in which latter event, Tenant may elect to furnish the deficiency by
written notice to Landlord within ten (10) days following Landlord's notice to
Tenant of Landlord's election to terminate hereunder, and upon
31
Landlord's receipt of such notice and the deficiency, Landlord shall accomplish
all necessary restoration.
15.7 If the Lease remains in full force and effect, the entire Award shall
belong to and be paid to Landlord. If the Lease terminates, the Award shall
belong to and be paid to Landlord, except that Tenant shall receive from the
award any sum awarded for relocation, plus any sum awarded for Tenant's
Improvements or Alterations made to the Premises by Tenant in accordance with
this Lease, which Tenant's Improvements or Alterations Tenant has the right to
remove from the Premises pursuant to the provisions of this Lease but elects not
to remove.
ARTICLE 16
DESTRUCTION
16.1 If during the term the Premises or any part thereof are totally or
partially destroyed from a risk required to be covered by the insurance
described in Article 14 of this Lease, Tenant shall restore the Premises to
substantially the same condition as they were in immediately before destruction,
whether or not the insurance proceeds are sufficient to cover the actual cost of
restoration. Such destruction shall not terminate this Lease. If the existing
laws do not permit the restoration, either party can terminate this Lease
immediately by giving notice to the other party.
16.2 Subject to the provisions set forth below, if during the term the
Premises or any part thereof are totally or partially destroyed from a risk not
required to be covered by the insurance described in Article 14 of this Lease,
Tenant shall restore the Premises to substantially the same condition as they
were in immediately before destruction. Such destruction shall not terminate
this Lease. If the existing laws do not permit the restoration, either party can
terminate this Lease immediately by giving
32
notice to the other party. If the cost of restoration exceeds Three Hundred
Thousand Dollars ($300,000) (the "Replacement Limit"), Tenant can elect to
terminate this Lease by giving notice to Landlord within twenty (20) days after
determining the restoration cost or replacement cost, which Tenant agrees to
promptly and diligently obtain. If Tenant elects to terminate this Lease,
Landlord, within thirty (30) days after receiving Tenant's notice to terminate,
can elect to pay the actual cost of restoration in excess of the Replacement
Limit, in which case Tenant shall restore the Premises. On Landlord's making its
election to contribute, each party shall deposit immediately the amount of its
contribution with the Insurance Trustee provided for in Section 16.6 below. If
the cost of restoration does not exceed the Replacement Limit, Tenant shall
immediately deposit the cost of restoration with the Insurance Trustee.
16.3 As used in Sections 16.4 and 16.12 hereof:
16.3.1 "Index" shall mean the Consumer Price Index for All Urban
Consumers, Los Angeles/Anaheim/Riverside Metropolitan Area, 1982-1984 = 100,
published by the Bureau of Labor Statistics of the U.S. Department of Labor.
16.3.2 "Adjustment Date" shall mean each anniversary of the
Commencement Date during the term of this Lease.
16.3.3 "Percentage Change of Index" shall mean the percentage of
increase or decrease in the Index on the Adjustment Date equal to a fraction,
the numerator of which shall be the Index on such Adjustment Date less the Index
on the Commencement Date, and the denominator of which shall be the Index on the
Commencement Date. In the event the Index shall hereafter be converted to a
different standard reference base or otherwise revised, the Index for each
Adjustment Date shall be the one reported in the U.S. Department of Labor's
newest comprehensive official index then in
33
use and most nearly answering the description of the foregoing Index. If it is
calculated from a base different from 1982-1984 = 100, the determination of
Percentage Increase of Index shall be made using a formula supplied by the
Bureau of Labor Statistics, or if the Bureau shall not publish the same, it
shall be determined by using any other nationally recognized publisher of
similar statistical information on which the parties may agree. If they are
unable to agree within thirty (30) days after demand by either party, a
substitute index shall, on application of either party, be selected by the chief
officer of the San Francisco regional office of the Bureau, or its successor.
16.4 The Replacement Limit figure set forth above in Section 16.2 shall be
increased or decreased, as appropriate, on each Adjustment Date for the Lease
Year commencing on such Adjustment Date by an amount equal to such figure
multiplied by the Percentage Change of Index.
16.5 If during the term any portion of the Premises are damaged or
destroyed from a risk covered by the insurance described in Article 14 of this
Lease, and the total amount of loss does not exceed $5,000, Tenant shall make
the loss adjustment with the insurance company insuring the loss. The proceeds
shall be paid directly to Tenant for the sole purpose of making the restoration
of the Premises in accordance with Sections 16.9 et seq. of this Lease.
16.6 If during the term any portion of the Premises are damaged or
destroyed from a risk covered by the insurance described in Article 14 of this
Lease, and the total amount of loss exceeds $5,000, Tenant shall, with
Landlord's approval, make the loss adjustment with the insurance company
insuring the loss, and on receipt of the proceeds, the parties shall immediately
pay them to a bank, savings and loan association, or other person or company
furnishing construction disbursement control services acceptable to
34
Landlord ("Insurance Trustee") to act as insurance trustee hereunder.
16.7 All sums ("Trust Funds") deposited with the Insurance Trustee
(including insurance proceeds) shall be held for the following purposes and the
Insurance Trustee shall have the following powers and duties:
16.7.1 The Trust Funds shall be paid in installments by the Insurance
Trustee to the contractor retained by Tenant as construction progresses, for
payment of the cost of restoration. A 10% retention fund shall be established
that will be paid to the contractor on the last to occur of (i) completion of
restoration, (ii) payment of all costs thereof, (iii) receipt of all necessary
governmental inspection approvals, (iv) expiration of all applicable lien
periods, and (v) proof that the Premises are free of all mechanics' liens and
lienable claims.
16.7.2 Payments shall be made on presentation of certificates or
vouchers from the architect, engineer, or other inspection agency retained by
the Insurance Trustee or Tenant showing the amount due. If the Insurance
Trustee, or Landlord, in its reasonable discretion, determines that the
certificates or vouchers are being improperly approved, either shall have the
right to appoint an architect, engineer, or inspection agency to supervise
construction and to make payments only on certificates or vouchers approved by
such person. The expenses and charges of the person retained by Landlord or
Insurance Trustee shall be paid out of the Trust Funds.
16.7.3 If after deposit by the parties of all sums required by this
Article 16, the sums held by the Insurance Trustee are not sufficient to pay the
actual cost of restoration, Tenant and/or Landlord (as applicable) shall deposit
the amount of the deficiency with the Insurance Trustee within seven (7) days
after
35
request by the Insurance Trustee indicating the amount of the deficiency.
16.7.4 Insurance proceeds not disbursed by the Insurance Trustee
after restoration has been completed and final payment has been made to Tenant's
contractor shall be delivered within seven (7) days (after demand made by either
party on the Insurance Trustee, with a copy to Landlord's Lender) by the
Insurance Trustee to Landlord's Lender and shall be applied by Landlord's Lender
to reduce the balance of the loan held by the Lender.
16.7.5 Any undisbursed funds after compliance with the provisions of
this Article 16 shall be delivered to Landlord. All actual costs and charges of
the Insurance Trustee shall be paid by Tenant.
16.7.6 If the Insurance Trustee resigns or for any reason is
unwilling to act or continue to act, the parties shall jointly substitute a new
trustee meeting the requirements of Section 16.6 above in the place of the
designated Insurance Trustee.
16.8 If Landlord is required to or elects to restore the Premises as
provided in this Article 16, Landlord shall not be required to restore Tenant's
Improvements, Alterations, trade fixtures, equipment or personal property, such
excluded items being the sole responsibility of Tenant to restore.
16.9 Promptly following the date that Tenant is obligated to restore the
Premises, Tenant at its cost shall prepare final plans and specifications and
working drawings (collectively "Plans") complying with applicable laws that will
be necessary for restoration of the Premises. The Plans shall be subject to
approval by Landlord. Landlord shall have twenty (20) days after receipt of the
Plans to either approve or disapprove the Plans and return them to
36
Tenant. If Landlord disapproves the Plans, Landlord shall notify Tenant of its
objections, and Tenant shall submit required Plans responding to Landlord's
objections. The process shall continue until Landlord has approved the Plans.
Any unresolved controversy arising out of or relating to this Section 16.9 shall
be settled by arbitration in accordance with the then-prevailing rules of the
American Arbitration Association, and judgment upon the award may be entered in
any Court having jurisdiction thereof. Tenant acknowledges that the Plans shall
be subject to approval of the appropriate government bodies and that they will
be prepared in such a manner as to obtain that approval.
16.10 The restoration shall be accomplished as follows:
16.10.1 Tenant shall complete the restoration as promptly as
possible after final Plans have been approved by Landlord and all appropriate
government bodies and all required permits have been obtained (subject to a
reasonable extension for delays resulting from causes beyond Tenant's reasonable
control).
16.10.2 Tenant shall retain a licensed general contractor that is
bondable. The contractor shall be required to carry public liability and
workers' compensation insurance, and such other coverages as may be reasonably
required by Landlord or its Lender, during the period of construction. Landlord,
Landlord's Lender if required and Tenant shall be named as additional insured's
on the contractor's general liability insurance policy. Such insurance shall
contain a waiver of subrogation clause in favor of Landlord and Tenant. The
contract for restoration between Tenant and its contractor shall be approved by
Landlord, in advance, which approval shall not be unreasonably withheld. During
restoration, Tenant, at its sole cost and expense, shall take out a course of
construction policy that includes Landlord (and Landlord's Lender, if required)
as an insured. Such policy shall provide for "special form" perils coverage, but
shall exclude
37
earthquake, in an amount sufficient to protect an estimated amount to complete
the restoration, including transit and installation coverage.
16.10.3 Tenant shall notify Landlord of the date of commencement of
the restoration at least ten (10) days before commencement of the restoration.
The contractor retained by Tenant shall not commence construction until a
performance bond and a labor and material payment bond in the full amount of the
cost of restoration have been delivered to Landlord to insure completion of the
construction.
16.10.4 Tenant shall accomplish the restoration in a manner that
will cause the least inconvenience, annoyance, and disruption to the Premises.
16.10.5 Prior to commencement of construction of the restoration and
upon completion of the restoration, Tenant shall immediately furnish Landlord
evidence satisfactory to Landlord that the restoration complies with all
applicable statutes, ordinances, codes and law and that all necessary and
applicable permits and approvals have been obtained for the restoration.
16.10.6 The restoration shall not be commenced until sums sufficient
to cover the cost of restoration are placed with the Insurance Trustee.
16.11 In case of damage or destruction to the Premises or any part thereof,
there shall be no abatement or reduction of Rent.
16.12 If damage or destruction to the Premises occurs during the last Lease
Year of the term, the cost of repairing which exceeds Fifty Thousand Dollars
($50,000), (the "Termination Limit"), either party may terminate this Lease by
giving notice to the other not more than thirty (30) days after the event of
damage
38
or destruction. The Termination Limit figure set forth herein shall be increased
or decreased, as appropriate, on each Adjustment Date by an amount equal to such
figure multiplied by the Percentage Change in Index (as defined in Section 16.3
above).
16.13 The provisions of this Article 16 assume that the insurance proceeds,
in the event of an insurable loss, are made available to the parties for the
purpose of restoration of the Premises. In the event that Landlord's Lender(s)
refuse(s) to make the proceeds available for such purpose, having the right to
do so, and/or as a condition of making the proceeds available alter(s) the terms
of any obligations secured by encumbrance(s) affecting the Premises so as to
materially change the cost of or the manner in which such obligation(s) is/are
to be paid or discharged, Landlord shall have the right to terminate this Lease
by giving notice to Tenant not later than thirty (30) days after determination
of such condition(s).
ARTICLE 17
ASSIGNMENT AND SUBLETTING
17.1 Tenant shall not voluntarily assign or otherwise transfer or encumber
its interest in this Lease or in the Premises, including but not limited to,
entering into a management agreement or contract with anyone to operate the
Facility (collectively an "assignment"), or sublease all or any part of the
Premises or allow any other person or entity (except Tenant's agents, invitees
and patients) to occupy or use all or any part of the Premises (collectively a
"sublease"), without first obtaining Landlord's written consent. Any assignment
or sublease without Landlord's written consent shall be voidable and, at
Landlord's election, shall constitute a default under this Lease. No consent to
any assignment or sublease shall constitute consent to any future assignment,
encumbrance or sublease or a further waiver of the provisions of this Article
17. If Tenant is a partnership, a withdrawal or
39
change, voluntary, involuntary, or by operation of law, of a partner or partners
owning 51% or more of the partnership, or the dissolution of the partnership,
shall be deemed a voluntary assignment. If Tenant consists of more than one
person, a purported assignment, voluntary, involuntary, or by operation of law,
from a majority of persons to the others shall be deemed a voluntary assignment.
If Tenant is a corporation, any dissolution, merger, consolidation, or other
reorganization of Tenant, or (except by the voluntary act of Landlord) the sale
or other transfer of a controlling percentage of the capital stock of Tenant, or
the sale of 51% of the value of the assets of Tenant, shall be deemed a
voluntary assignment; provided, however, that the assignment of this Lease to a
subsidiary corporation of Tenant shall not require the consent of Landlord so
long as prior to or concurrently with such assignment, Landlord shall be
provided with written notice of the same and any guarantor of this Lease shall
confirm to Landlord in writing its continuing liability under its guaranty of
this Lease, notwithstanding such assignment; and provided, further, that a
transfer of control of any public parent corporation of Tenant shall not require
the consent of Landlord. The phrase "controlling percentage" means the ownership
of, and the right to vote, stock possessing at least 51% of the total combined
voting power of all classes of Tenant's capital stock issued, outstanding, and
entitled to vote for the election of directors. Consent of Landlord to an
assignment or sublease shall not be unreasonably withheld, provided that it
shall be reasonable for Landlord to condition its consent upon any of the
following factors:
17.1.1 At the time of Tenant's request for Landlord's consent to such
assignment or subletting, and upon the effective date of such assignment or
subletting, Tenant is not in default in the performance and observance of any of
the covenants and conditions of this Lease;
40
17.1.2 The proposed assignee or sublessee of Tenant shall expressly
assume in writing all of Tenant's obligations under this Lease; and
17.1.3 The proposed assignee or sublessee shall be reputable person
or entity of good character, having sufficient experience, assets and income, in
Landlord's reasonable judgment, to bear the financial responsibilities of Tenant
under this Lease. Tenant shall provide Landlord with data on the proposed
assignee or sublessee sufficient to enable Landlord to evaluate and consider
such proposed assignee's or sublessee's background, experience, reputation,
ability to perform its obligations, financial responsibility, credit rating,
capitalization and such other factors as Landlord shall deem relevant. Tenant
shall also furnish to Landlord in writing all of the terms and conditions upon
which the proposed assignment or sublease is to be made.
17.2 Notwithstanding anything to the contrary contained herein, Landlord's
acceptance of rent from any person or entity other than Tenant shall not be
deemed, in and of itself, to be a waiver of any of the provisions of this Lease
or a consent to an assignment or subletting.
17.3 No sublease entered into by Tenant shall be effective unless and until
it has been approved in writing by Landlord. In entering into any sublease,
Tenant shall use only such form of sublease as is satisfactory to Landlord, and
once approved by Landlord, such sublease shall not be changed or modified
without Landlord's prior written consent.
17.4 Any assignee or sublessee shall, by reason of entering into an
assignment or sublease under this Lease, be deemed, for the benefit of Landlord,
to have assumed and agreed to conform and comply with each and every obligation
under this Lease to be performed by Tenant other than such obligations as are
contrary to or incon-
41
sistent with provisions contained in an assignment or sublease to which Landlord
has expressly consented in writing.
17.5 If Tenant's obligations under this Lease have been guaranteed by
third parties, then an assignment or sublease (and Landlord's consent thereto)
shall not be effective unless said guarantors give their written consent to such
assignment or sublease and the terms thereof and acknowledge their continued
liability hereunder.
17.6 The consent by Landlord to any assignment or sublease shall not
release Tenant or guarantor(s) (if any) from their obligations under this Lease
and/or any guaranties or alter the primary liability of Tenant or guarantor(s)
to pay the Rent and perform and comply with all of the obligations of Tenant to
be performed under this Lease.
17.7 If Tenant requests Landlord to consent to a proposed assignment or
sublease, Tenant shall pay to Landlord (whether or not consent is ultimately
given) a reasonable sum not exceeding (i) fifteen percent (15%) of one month's
then-current Base Monthly Rent in the case of an assignment or sublease between
Tenant and any parent or subsidiary corporation of Tenant, or (ii) one-half of
one month's then-current Base Monthly Rent in the case of any other assignment
or sublease, on account of Landlord's costs, expenses and attorneys' fees in
connection with such request.
17.8 No interest of Tenant in this Lease shall be assignable by operation
of law (including, without limitation, the transfer of this Lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment:
17.8.1 If Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors, or institutes a proceeding under the
Bankruptcy Code in which Tenant is the debtor;
42
17.8.2 If a writ of attachment or execution is levied on this Lease;
17.8.3 If, in any proceeding or action to which Tenant is a party, a
receiver is appointed with authority to take possession of the Premises.
17.9 An involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this Lease, in which case
this Lease shall not be treated as an asset of Tenant. If a writ of attachment
or execution is levied on this Lease, Tenant shall have sixty (60) days in which
to cause the attachment or execution to be removed.
17.10 Bankruptcy:
17.10.1 If this Lease is assigned to any person or entity pursuant
to the provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code"), any and all monies or other considerations payable or
otherwise to be delivered in connection with such assignment shall be paid or
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code.
17.10.2 If Tenant assumes this Lease and proposes to assign the same
pursuant to the provisions of the Bankruptcy Code to any person or entity who
shall have made a bona fide offer to accept an assignment of this Lease on terms
acceptable to Tenant, then notice of such proposed assignment setting forth (i)
the name and address of such person, (ii) all of the terms and conditions of
such offer, and (iii) the adequate assurance to be provided Landlord to assure
such person's further performance under the Lease, including, without
limitation, the assurance referred to in Section 365(f)(3)(B) of the Bankruptcy
Code, shall be given to Landlord by
43
Tenant no later than twenty (20) days after receipt by Tenant, but in any event
no later than ten (10) days prior to the date that Tenant shall make application
to a court of competent jurisdiction for authority and approval to enter into
such assignment and assumption, and Landlord shall thereupon have the prior
right and option, to be exercised by notice to Tenant given at any time prior to
the effective date of such proposed assignment, to accept an assignment of this
Lease upon the same terms and conditions and for the same consideration, if any,
as the bona fide offer made by such person, less any brokerage commissions which
may be payable out of the consideration to be paid by such person for the
assignment of this Lease.
17.10.3 Any person or entity to which this Lease is assigned
pursuant to the provisions of the Bankruptcy Code shall be deemed without
further act or deed to have assumed all of the obligations arising under this
Lease on and after the date of such assignment. Any such assignee shall upon
demand execute and deliver to Landlord an instrument confirming such assumption.
17.11 Tenant immediately and irrevocably assigns to Landlord, as
security for Tenant's obligations under this Lease, all payments of Rent from
any subletting of all or part of the Premises as permitted by this Lease;
however, Landlord's security interest in such Rent payments is limited to the
extent of Tenant's payment obligations under this Lease. Landlord, as successor
and as attorney-in-fact for Tenant, or a receiver for Tenant appointed on
Landlord's application, may collect such Rent and apply it toward Tenant's
obligations under this Lease. However, until the occurrence of an act of default
by Tenant, Tenant shall have the right to collect such Rent. Nothing herein is
intended to abrogate or affect the provisions of Section 17.8.
17.12 Following the consent to an assignment or sublease, Landlord may,
but shall not be obligated to, consent to subsequent
44
subleases or assignments of the sublease or any amendments or modifications
thereto without notifying Tenant, any guarantors, or any other persons liable on
the Lease or any sublease and without obtaining their consent, and such action
shall not relieve such persons from liability under this Lease or any sublease.
ARTICLE 18
DEFAULTS; REMEDIES
18.1 DEFAULTS. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:
18.1.1 Failure to pay Rent or any other sums required to be paid
under this Lease when due if the failure continues for five (5) days after
notice of delinquency; provided, however, that any such notice shall be in lieu
of, and not in addition to, any notice of default required under applicable law.
18.1.2 Abandonment, except for emergencies, of the Facility
(failure to operate the Facility for eight (8) consecutive hours shall be deemed
an abandonment); vacation of the Facility due to acts of God, natural
catastrophes, war, riot or other similar events beyond Tenant's control, shall
not be deemed an abandonment.
18.1.3 Tenant or any guarantor of Tenant's obligations hereunder
fails to pay its debts as they become due, or admits in writing its inability to
pay its debts, or makes a general assignment for the benefit of creditors.
18.1.4 Commencement by Tenant or any guarantor of Tenant's
obligations hereunder of any case, proceeding or other action seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of
45
debtors, or seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its property.
18.1.5 Tenant or any guarantor of Tenant's obligations hereunder taking
any corporate action to authorize any of the actions set forth above.
18.1.6 Commencement of any case, proceeding or other action against Tenant
or any guarantor of Tenant's obligations hereunder seeking to have an order for
relief entered against it as debtor, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and such case,
proceeding or other action (i) results in the entry of an order for relief
against it which is not fully stayed within seven (7) business days after entry
thereof or (ii) remains undismissed for a period of sixty (60) days.
18.1.7 Notwithstanding any other provisions of this Lease, the failure of
Tenant to comply with any of the provisions of the Lease or any other act or
omission by Tenant (whether occurring at the Facility or elsewhere) which, in
the reasonable and good faith judgment of Landlord, places in imminent jeopardy
the continued licensing and/or certification of the Facility as then currently
licensed, and/or its certification as either a Medicare or Medicaid provider (if
then currently certified as such), and if, within twenty-four (24) hours after
written notice thereof from Landlord to Tenant, Tenant shall not have either (1)
cured such failure, or (2) obtained an injunction or other order preventing
revocation or suspension of licensing and/or decertification of the Facility by
virtue of such failure or alleged failure, or (3) provided Landlord with
assurances
46
satisfactory to Landlord that the Facility will not be subject to license
suspension or revocation and/or decertification as a result of such failure or
alleged failure.
18.1.8 Notwithstanding any other provisions of this Lease, a release,
generation or disposal of Hazardous Substances from the Premises or onto the
Premises, except in accordance with law.
18.1.9 Failure by Tenant to observe or perform any other covenants,
conditions, or provisions of this Lease to be observed or performed by Tenant
(except where a different period of time is specified in this Lease) where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Landlord to Tenant. If the nature of Tenant's default is such that
more than thirty (30) days are reasonably required for its cure, Tenant shall
not be deemed to be in default if Tenant commences such cure within said thirty
(30) day period and thereafter diligently prosecutes such cure to completion.
18.2 REMEDIES. Landlord shall have the following remedies without
further notice to Tenant if Tenant commits a default. These remedies are not
exclusive and are in addition to any other remedies provided hereunder or
allowed at law or equity:
18.2.1 Landlord can continue this Lease in full force and effect,
and the Lease will continue in effect as long as Landlord does not terminate
Tenant's right to possession, and Landlord shall have the right to collect Rent
and other amounts from Tenant when due. During the period Tenant is in default,
Landlord can enter the Facility and relet it, or any part of it, to third
parties for Tenant's account. Tenant shall be liable immediately to Landlord for
all costs Landlord incurs in reletting the Facility, including, without
limitation, brokers' commissions, expenses of remodeling the Facility required
by the reletting, and attor-
47
neys' fees incurred in connection with repossession and reletting of the
Facility. Reletting can be for a period shorter or longer than the remaining
term of this Lease. Tenant shall pay to Landlord the Rent due under this lease
on the dates the Rent is due, less the Rent Landlord receives from any
reletting. No act by Landlord allowed by this paragraph shall terminate this
Lease unless Landlord notifies Tenant in writing that Landlord elects to
terminate this Lease. After Tenant's default and for as long as Landlord does
not terminate Tenant's right to possession of the Facility, if Tenant obtains
Landlord's consent, Tenant shall have the right to assign or sublet its interest
in this Lease, but Tenant shall not be released from liability. Landlord's
consent to a proposed assignment or subletting shall not be unreasonably
withheld.
18.2.2 Landlord can terminate Tenant's right to possession of the Facility
at any time. No act by Landlord other than giving written notice to Tenant shall
terminate this Lease. Acts of maintenance, efforts to relet the Facility, or
the appointment of a receiver on Landlord's initiative to protect Landlord's
interests under this Lease shall not constitute a termination of Tenant's right
to possession. On termination, Landlord has the right to recover from Tenant:
(a) The worth at the time of the award of the unpaid rent that had
been earned at the time of termination of this Lease;
(b) The worth at the time of the award of the amount by which the
unpaid rent that would have been earned after the date of termination of this
Lease until the time of award exceeds the amount of the loss of rent that Tenant
proves could have been reasonably avoided;
48
(c) The worth at the time of the award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of the loss of rent that Tenant proves could have been
reasonably avoided; and
(d) Any other amount, and court costs, necessary to
compensate Landlord for all detriment proximately caused by Tenant's default.
"The worth at the time of the award" as used in (a) and (b) of this paragraph
18.2.2 is to be computed by allowing interest at 10% per annum. "The worth at
the time of the award" as referred to in (c) of this paragraph 18.2.2 is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of the award, plus 1%.
18.2.3 If Tenant is in default of this Lease Landlord shall have
the right to have a receiver appointed to collect rent and conduct Tenant's
business. Neither the filing of a petition for the appointment of a receiver nor
the appointment itself shall constitute an election by Landlord to terminate
this Lease.
18.2.4 If Landlord elects to relet the Facility as provided in this
Section 18.2, Rent that Landlord receives from reletting shall be applied to the
payment of: First, any indebtedness from Tenant to Landlord other than Rent due
from Tenant; second, all costs, including for maintenance, incurred by Landlord
in reletting; and third, Rent due and unpaid under this Lease. After deducting
the payments referred to in this paragraph, any sum remaining from the Rent
Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess Rent received by Landlord. If, on the date
Rent is due under this Lease, the Rent received from the reletting is less than
the Rent due on that date, Tenant shall pay to Landlord, in
49
addition to the remaining Rent due, all costs, including for maintenance,
Landlord incurred in reletting that remain after applying the Rent received from
the reletting as provided in this Section 18.2.
18.2.5 In the event of a material default under Section 18.1.8 above,
Landlord may, in addition to all other remedies which it may pursue, elect to
shut down Tenant's operations and require cleanup of the contamination at
Tenant's expense while still enforcing the remaining terms of this Lease. In
such event, Landlord shall have no liability to Tenant for any damages arising
out of the shutdown of operation. If Landlord elects to terminate the Lease on
account of such default, Landlord shall be entitled to collect as an item of its
damages cost of cleanup of the contamination.
18.2.6 Landlord, at any time after Tenant commits a default, can cure
the default at Tenant's cost. If Landlord at any time, by reason of Tenant's
default, pays any sum or does any act that requires the payment of any sum, the
sum paid by Landlord shall be due immediately from Tenant to Landlord at the
time the sum is paid, and if repaid at a later date, shall bear interest at the
rate of 10% per annum, from the date the sum is paid by Landlord until Landlord
is reimbursed by Tenant.
18.2.7 In the event that the Facility is excluded from participating
in the Medicaid program for the state in which the Facility is located, such
exclusion shall be deemed a breach of this Lease unless such exclusion is as a
result of the imposition of a change in regulations that affects all providers,
or a class of providers, generally. In addition to all remedies available to
Landlord under the Lease and under applicable law, Landlord shall have the
right, following written demand to Tenant, to require Tenant to deliver
possession of the Facility to Landlord or to a nursing home operator of
Landlord's choice, and Tenant agrees to
50
promptly comply with any such demand. Unless expressly set forth by Landlord
in writing, no such demand, nor change of possession pursuant thereto, shall be
deemed a termination of this Lease or a release of Tenant from any of its
obligations under the Lease. Unless and until this Lease (or the Guaranty, as
the case may be) is terminated by Landlord, Tenant and each guarantor of
Tenant's performance, shall remain liable under the terms of this Lease and such
Guaranty respectively. It is agreed that an action excluding the Facility from
participation in a Medicaid program shall not be deemed to have occurred until
such action is final in the sense that all appeal rights have expired. No action
to exclude shall be deemed to have occurred unless the period of exclusion
exceeds sixty (60) days.
18.2.8 Should Landlord require Tenant to deliver possession of the
Facility to Landlord or to another nursing home operator following a breach of
the Lease by Tenant, Tenant agrees to fully cooperate with Landlord and/or such
new operator in effecting a transition in the operation of the Facility that
will least disrupt the continuing operation and the comfort and welfare of the
patients. Such cooperation shall include, to the extent deemed necessary by
Landlord and permitted under applicable law, permission by Tenant for such new
operator (1) to operate for his own account under Tenant's license pursuant to a
management agreement, and (2) to bill under Tenant's Medicare and Medicaid
numbers, until new licenses and provider agreements are obtained.
18.3 If Landlord is in default of this Lease, and as a consequence
Tenant recovers a money judgment against Landlord, the judgment shall be
satisfied only out of (1) the proceeds of sale received by voluntary sale of, or
on execution of the judgment against, the right, title and interest of Landlord
in the Facility or (2) Rent or other income from the Facility receivable by
Landlord. Neither Landlord nor any of the partners comprising any partnership
designated as Landlord (including, in the case of a
51
corporate partner, the shareholders, directors and officers thereof) shall be
personally liable for any deficiency.
ARTICLE 19
SIGNS
19.1 Subject to Landlord's prior written approval, Tenant at its cost
shall have the right to place, construct, and maintain on the Premises one or
more signs advertising its business at the Premises. Any sign that Tenant has
the right to place, construct, and maintain shall comply with all laws,
ordinances, regulations and covenants, conditions and restrictions affecting the
Premises, and Tenant shall obtain any approval required thereby. Landlord makes
no representation with respect to Tenant's ability to obtain such approval.
Upon the expiration or sooner termination of this Lease, Tenant shall, at the
option of Landlord, either remove any signs erected by Tenant and repair the
Premises to the same condition it was in prior to the installation or
construction of the sign(s), or leave such signs in place for Landlord's
benefit. Upon expiration or termination of this Lease, Tenant hereby consents to
the use by Landlord, at Landlord's election, of the name of the Facility and
Tenant hereby presently assigns to Landlord the right, title and interest of
Tenant in the name of the Facility, provided that as long as Tenant is not in
default hereunder and/or until the expiration or termination of this Lease,
Landlord consents to Tenant's use of said name and signs for the benefit of the
Facility. Said name shall not be changed without Landlord's prior written
consent.
ARTICLE 20
RIGHT OF ENTRY
20.1 Landlord and its authorized representatives shall have the right to
enter the Premises at all reasonable times in order to:
52
20.1.1 Determine whether the Facility is in good condition and
whether Tenant is complying with its obligations under this Lease;
20.1.2 Do any necessary maintenance and to make any restoration to
the Premises that Landlord has the right or may have the obligation to perform;
provided, that nothing herein contained shall constitute an obligation on the
part of Landlord or its designated representative to maintain or restore the
Premises or any part thereof;
20.1.3 Serve, post, or keep posted any notices required or allowed
under the provisions of this Lease or applicable law;
20.1.4 Post "for rent" or "for lease" signs during the last six (6)
months of the term, or during any period while Tenant is in default; and
20.1.5 Upon not less than 48 hours prior notice to Tenant, show the
Premises to prospective brokers, agents, buyers, tenants, or persons interested
in an exchange, eat any time during the term; provided, that Tenant shall use
reasonable efforts to exercise the foregoing right in a manner which imposes the
least disruption on Tenant's operations at the Facility.
20.2 Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance, or other damage arising out of
Landlord's entry on the Premises as provided in this Article 20, except damage
resulting from the negligent or intentional acts or omissions of Landlord or its
authorized representatives.
20.3 Tenant shall not be entitled to an abatement or reduction of Rent or
any part thereof if Landlord exercises any rights
53
reserved in this Article 20. Landlord shall conduct its activities on the
Premises as allowed in this Article 20 in a manner that will cause as little
inconvenience, annoyance, or disturbance to Tenant as reasonably practicable.
ARTICLE 21
SUBORDINATION; ESTOPPEL; CERTIFICATION
21.1 This Lease is and shall be subordinate to any Encumbrance now or
hereafter recorded affecting all or any part of the Premises including all
advances made or to be made thereunder, and all renewals, replacements,
consolidations and extensions thereof. Such subordination is effective without
any further act of Tenant. Tenant shall from time to time, on request of
Landlord, execute and deliver any documents or instruments that may be required
by a Lender to effectuate any subordination. If Tenant fails to execute and
deliver any such documents or instruments, Tenant irrevocably constitutes and
appoints Landlord as Tenant's special attorney-in-fact to execute and deliver
any such documents or instruments.
21.2 Notwithstanding the above, if a Lender requires that this Lease be
subordinate to any such encumbrance, this Lease shall be subordinate to that
Encumbrance if Landlord obtains from the Lender a written agreement providing,
substantially, that as long as Tenant performs its obligations under this Lease,
no foreclosure of, deed given in lieu of foreclosure of, or sale under the
Encumbrance shall affect Tenant's rights under this Lease. Such agreement shall
further provide that the provisions of this Lease concerning disposition of
insurance proceeds on destruction of Premises, and disposition of condemnation
awards, shall prevail over any conflicting provisions in the Encumbrance.
21.3 Tenant shall attorn to any purchaser at any foreclosure sale, or
to any grantee or transferee designated in any deed given in lieu of
foreclosure. Tenant shall execute upon demand any and
54
all documents required by Lender(s) to accomplish the purpose of this Article
21.
21.4 Either party hereto ("Obligated Party"), within ten (10) days after
notice from the other party hereto (the "Requesting Party") shall execute and
deliver to the Requesting Party a certificate in recordable form stating that
this Lease is unmodified and in full force and effect, or in full force and
effect as modified, and stating the modifications. The certificate also shall
state the amount of Base Monthly Rent then applicable, the dates to which the
Base Monthly Rent has been paid in advance, and the amount of any security
deposit or prepaid Rent. Failure to deliver the certificate within the ten (10)
days shall be conclusive upon the Obligated Party that this Lease is in full
force and effect and has not been modified, that no Base Monthly Rent other than
for the current month has been paid in advance, that the security deposit is in
the amount set forth in this Lease and that there is no other prepaid Rent, all
except as may be represented otherwise by Landlord in the certificate. If the
Obligated Party fails to deliver the certificate within the ten (10) days, the
Obligated Party irrevocably constitutes and appoints the Requesting Party as its
special attorney-in-fact to execute and deliver the certificate to any third
party.
ARTICLE 22
WAIVER
22.1 No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant shall impair such right or remedy or be
construed as a waiver.
22.2 The receipt and acceptance by Landlord of delinquent Rent or any
other amounts due hereunder shall not constitute a waiver of such default or any
other default or a waiver to demand timely performance in the future.
55
22.3 No act or conduct of Landlord including, without limitation, the
acceptance of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by Tenant before the expiration of the term. Only a
written notice from Landlord to Tenant shall constitute acceptance of the
surrender of the Premises and accomplish a termination of the Lease.
22.4 Either party's consent to or approval of any act by the other
requiring such party's consent or approval shall not be deemed to waive or
render unnecessary such party's consent to or approval of any subsequent act by
the other.
22.5 Any waiver by Landlord or Tenant of any default must be in writing
and shall not be a waiver of any other default concerning the same or any other
provision of the Lease.
ARTICLE 23
SALE OR TRANSFER OF PREMISES
23.1 If Landlord sells or transfers the Facility or any interests therein,
Landlord, on consummation of the sale or transfer, shall be released from any
liability thereafter accruing under this Lease provided the transferee assumes
all obligations of Landlord hereunder.
ARTICLE 24
FINANCIAL STATEMENTS AND OPERATING INFORMATION
24.1 During the term of this Lease, Tenant shall provide Landlord a copy
of (i) Tenant's and each of Tenant's guarantors hereunder true and complete
income statements, prepared by an independent certified public accountant in
accordance with generally accepted accounting principles, reflecting Tenant's
and such guarantors' operations as a whole, for each fiscal year of
56
Tenant falling totally or partially within the term of this Lease, (ii) balance
sheets as of the end of each fiscal year prepared in like manner for Tenant and
each of Tenant's guarantors hereunder as a whole, and (iii) an operating
statement reflecting Tenant's operations at the Premises for each fiscal year
prepared in a like manner, which statements shall be delivered to Landlord
within ninety (90) days following the expiration of Tenant's fiscal year.
Notwithstanding the foregoing, in the event that Tenant does not regularly
employ its independent certified public accountants to prepare, audit or review
the operating statements for the Premises, Tenant shall deliver its internally
prepared operating statements for the Premises prepared in accordance with
generally accepted accounting principles and certified as true and correct by
Tenant. In addition, Tenant shall provide Landlord a copy of (i) Tenant's and
each of Tenant's guarantors' quarterly income statement reflecting Tenant's and
each such guarantor's operations as a whole for each calendar quarter falling
totally or partially within the term of this Lease together, (ii) a balance
sheet as of the end of each such quarter for Tenant and each such guarantor as a
whole, and (iii) an operating statement reflecting Tenant's operations at the
Premises for each such quarter, which shall be delivered to Landlord within
thirty (30) days following the expiration of each calendar quarter and which
statements shall be prepared in accordance with generally accepted accounting
principles and certified as true and correct by Tenant. With each of the
foregoing income statements and balance sheets furnished by Tenant, statements
of cash flow for the same periods for the Premises and for Tenant as a whole
shall also be provided to Landlord.
24.2 For any period that Tenant is not operating the Premises, and the
same are being operated by a permitted subtenant or successor of Tenant (other
than an assignee of this Lease), Tenant shall obtain financial statements of
such subtenant/successor equivalent to those required of Tenant pursuant to
Section 24.1 above not less often than quarterly, and shall
57
forward copies of same to Landlord promptly upon receipt. Nothing herein shall
relieve Tenant from the obligation to furnish the financial statements required
pursuant to Section 24.1 above.
24.3 From time to time during the term of this Lease, upon the written
request of Landlord, Tenant shall provide Landlord with a census report
detailing current and projected occupancy for the Facility including information
regarding Medicare and Medicaid reimbursements. Such reports shall be delivered
to Landlord within ten (10) days following Landlord's request for the same.
ARTICLE 25
LICENSING
25.1 Tenant shall maintain at all times during the term hereof and any
extensions or holdover period all governmental licenses, permits and
authorizations necessary for the establishment and operation of the Licensed
Facility in the city, county and state in which the Facility is located, and
shall qualify and comply with all applicable laws as they may from time to time
exist, including those applicable to certification and participation as a
provider under Medicare and Medicaid legislation and regulations. Tenant shall
not, without the prior written consent of Landlord (which it agrees not to
unreasonably withhold), effect any change in the license category or status of
the Facility or any part thereof.
ARTICLE 26
SURRENDER OF PREMISES; HOLDING OVER
26.1 On the earlier to occur of the expiration of the term hereof or ten
(10) days after sooner termination of the term, Tenant shall surrender to
Landlord the Facility and all Tenant's Improvements and Alterations thereto in
good condition, free of all violations and citations, and fit for use by
Landlord as the
58
Licensed Facility (except for ordinary wear and tear and insured casualty),
excluding alterations that Tenant has the right to remove or is obligated to
remove under the provisions of Article 10, but including, without limitation,
any and all patients, patient records, and any and all documents of every kind
whatsoever necessary to enable Landlord to continue operation and including at
least a three (3) day supply of necessary inventory and operational items.
26.2 If Tenant fails to surrender the Facility as required by this Article
26, Tenant shall hold Landlord harmless from all damages resulting from Tenant's
failure to surrender the Facility, including, without limitation, claims made by
a succeeding tenant resulting from Tenant's failure to surrender the Facility.
26.3 If Tenant, with Landlord's written consent, remains in possession of
the Facility after expiration or termination of the term, or after the date in
any notice given by Landlord to Tenant terminating this Lease, such possession
by Tenant shall be deemed to be a month-to-month tenancy terminable on thirty
(30) days notice given at any time by either party. All provisions of this Lease
except those pertaining to term, option to extend (if any), and option to
purchase (if any) shall apply to the month-to-month tenancy.
26.4 Tenant shall fully cooperate with Landlord in turning the Facility
over to Landlord so as to assure to Landlord and patients uninterrupted patient
care.
59
ARTICLE 27
PRESERVATION OF PATIENT RECORDS
27.1 Tenant shall preserve all patient charts and records as required by
applicable law and deliver them to Landlord on expiration or sooner termination
of this Lease.
ARTICLE 28
PATIENT CARE; CENSUS
28.1 Tenant shall take all steps appropriate to maintain a high level of
quality patient care, and to promote and maintain a high patient census at the
Facility consistent with law and ethical standards governing the operation of
nursing homes. Except as otherwise permitted by law, Tenant shall not transfer
patients from the Facility except for reasons of health, family request and/or
convenience or request of the patient, and shall not transfer patients to
another facility or facilities owned or operated directly or indirectly by
Tenant, or in which Tenant has any interest, except in cases where an
alternative facility is not available, or pursuant to a request by the patient
or family.
ARTICLE 29
OPTION TO EXTEND
29.1 Tenant is given the option ("First Option") to extend the term of
this Lease on all the provisions contained in this Lease (inclusive of the
provisions concerning the increases in Base Monthly Rent as set forth in Section
5 above) for a single five (5) year period ("First Extended Term") immediately
following expiration of the initial term of the Lease (the "Initial Term"), by
giving notice of exercise of the First Option ("Option Notice") to Landlord at
least nine (9) months but not more than one (1) year before the expiration of
the Initial Term. However, if Tenant is in default on the date of giving of the
Option Notice, the Option
60
Notice shall be totally ineffective; if Tenant is in default on the date the
First Extended Term is to commence, the First Extended Term shall not commence
and this Lease shall expire at the end of the Initial Term. If Tenant timely
exercises the First Option, Tenant is given the further option ("Second Option")
to extend the term on all the provisions contained in this Lease (inclusive of
the provisions concerning the increases in Base Monthly Rent as set forth in
Section 5 above) for a second five (5) year period ("Second Extended Term")
following expiration of the First Extended Term, by giving notice of exercise of
the Second Option to Landlord at least nine (9) months but not more than one (1)
year before the expiration of the First Extended Term. However, if Tenant is in
default on the date of giving the Option Notice, the Option Notice shall be
totally ineffective; if Tenant is in default on the date the Second Extended
Term is to commence, the Second Extended Term shall not commence and this Lease
shall expire at the end of the First Extended Term. The First Extended Term and
the Second Extended Term are sometimes hereinafter referred to individually as
an "Option Term" and collectively as the "Option Terms."
29.2 Tenant shall have no other right to extend the term beyond the Second
Extended Term.
ARTICLE 30
MISCELLANEOUS
30.1 Time is of the essence of each provision of this Lease.
30.2 Each party represents that it has not had dealings with any real
estate broker, finder, or other person, with respect to this Lease in any
manner. Each party shall hold harmless the other party from all damages
resulting from any misrepresentations hereunder.
61
30.3 All exhibits referred to are attached to this Lease and
incorporated by reference.
30.4 All provisions, whether covenants or conditions on the part of
Tenant, shall be deemed to be both covenants and conditions.
30.5 This Lease together with the Lease Guaranty attached hereto (if any)
contains all the agreements of the parties and cannot be amended or modified
except by a written agreement.
30.6 Any notice, demand, request, consent, approval or communication that
either party desires or is required to give to the other party or any other
person shall be in writing and either served personally or sent by registered or
certified United States mail, or by courier mail. Any notice, demand, request,
consent, approval or communication that either party desires or is required to
give to the other party shall be addressed to the other party at the address
appearing on the signature page of this Lease. Either party may change its
address by notifying the other party of the change of address. Notice shall be
deemed communicated within three (3) business days from the time of deposit in
the United States mail if mailed as provided in this section, or upon delivery
if delivered personally or by courier mail.
30.7 In the event of default hereunder by either party, and the other
party engages an attorney to prepare a notice or notices and/or to otherwise
communicate with the defaulting party, then the defaulting party shall be liable
to the other party for its reasonable attorneys' fees incurred by it for such
services.
30.8 If any party brings an action or proceeding to enforce the terms
hereof or declare rights hereunder, the prevailing party (as hereinafter
defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys' fees. Such
62
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term
"prevailing party" shall include, without limitation, a party who substantially
obtains or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other party of its claim or
defense. The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred. Landlord shall be entitled to attorneys' fees, costs and
expenses incurred in the preparation and service of notices of default and
consultations in connection therewith if such default or resulting breach is
cured by Tenant or if such notices are ultimately adjudged to be valid. If
either party or its authorized representatives ("Passive Party") becomes a party
to any litigation concerning the Lease, or the Facility, by reason of any act or
omission of the other party or its authorized representatives ("Active Party")
and not by any act or omission of the Passive Party or any act or omission of
its authorized representatives, the Active Party shall be liable to the Passive
Party for reasonable attorneys' fees and court costs incurred by the Passive
Party in that litigation.
30.9 This document shall, in all respects, be governed by the laws of the
state in which the Facility is located applicable to agreements executed and to
be wholly performed within such state. Nothing contained herein shall be
construed so as to require the commission of any act contrary to law, and
wherever there is any conflict between any provision contained herein and any
present or future statute, law, ordinance or regulation contrary to which the
parties have no legal right to contract, the latter shall prevail, but the
provision of this Lease which is affected shall be curtailed and limited only to
the extent necessary to bring it within the requirements of the law without
invalidating or affecting the remaining provisions of this Lease.
63
30.10 Each of the parties hereto shall execute and deliver any and all
additional papers, documents, and other assurances, and shall do any and all
acts and things reasonably necessary in connection with the performance of their
obligations hereunder and to carry out the intent of the parties hereto.
30.11 No amendment, change or modification of this document shall be valid
unless in writing and signed by all of the parties hereto.
30.12 All of the terms and provisions contained herein shall inure to the
benefit of and shall be binding upon the parties hereto and their successors
except as provided in Article 17.
30.13 This document may be executed in one or more separate counterparts,
each of which, when so executed, shall be deemed to be an original. Such
counterparts shall together constitute and be one and the same instrument.
30.14 The captions appearing at the commencement of the articles hereof
are descriptive only and for convenience in reference. Should there be any
conflict between any such caption and the article, the article and not such
caption shall control and govern in the construction of this document.
30.15 As long as Tenant is not in default of any of the terms, covenants
and conditions of this Lease, Landlord covenants that Tenant, during the term
hereof, shall have the quiet use and enjoyment of the Facility.
30.16 In the event that this Lease or any other financial obligation owed
at present or in the future by Tenant to Landlord shall have been or will be
guaranteed, such guaranty (the "Guaranty") shall be in the form attached hereto
and shall be delivered to Landlord concurrently with the execution and delivery
of this
64
Lease by Tenant. Any guaranty executed concurrently herewith or subsequent to
the date hereof shall be deemed a material part of the consideration for
Landlord's execution of this Lease. In the event that any guarantor under the
Guaranty is or becomes bankrupt or insolvent, makes an assignment for the
benefit of creditors, or institutes or is the subject of any proceeding under
the Bankruptcy Act or other similar law for the protection of creditors (or, if
the guarantor is a partnership or consists of more than one person or entity, if
any partner or the partnership or other such person or entity is or becomes
bankrupt or insolvent, institutes any such proceeding, or makes an assignment
for the benefit of creditors), then Landlord shall have the option to terminate
this Lease upon thirty (30) days written notice unless Tenant, within such
thirty-day period, provides Landlord with either (1) a substitute or additional
guarantor satisfactory to Landlord and Landlord's Lender(s), or (2) adequate
assurance of the performance of each and every obligation of Tenant hereunder,
satisfactory to Landlord and Landlord's Lender.
30.17 In the event that Tenant is not an individual(s), the persons
executing this Lease on behalf of Tenant represent and warrant to Landlord that
(1) if Tenant is a partnership, Tenant's partnership agreement authorizes such
persons to execute this Lease on behalf of Tenant, and (2) if Tenant is a
corporation, such persons are executing this Lease pursuant to a resolution of
Tenant's board of directors. Concurrently with Tenant's execution of this Lease,
Tenant shall deliver to Landlord a copy of Tenant's partnership agreement, or
statement of partnership, or certificate of limited partnership, or certified
copy of a board of directors resolution, as the case may be, confirming the
foregoing authority.
30.18 Whenever under any provision of this Lease or any exhibit thereto,
Tenant shall be obligated to make any payment or expenditure, or to do any act
or thing, or to incur any liability whatsoever, and Tenant fails, refuses or
neglects to perform as
65
herein provided, Landlord shall be entitled but shall not be obligated to make
such payment or expenditure, or do any such act or thing, or to incur any such
liability, all on behalf of and at the cost and for the account of Tenant,
together with interest at the maximum rate of interest permitted by law, or if
no maximum rate then applies, at the rate of 18% per annum.
66
SIGNATURE PAGE FOR LEASE OF WOODLAND CONVALESCENT CENTER DATED AS OF JANUARY 16,
1995 BETWEEN UNI-CAL ASSOCIATES (LANDLORD) AND SUMMIT CARE OF CALIFORNIA, INC.
(TENANT)
"Landlord"
UNI-CAL ASSOCIATES, L.P.,
a California limited partnership
/s/ Martin Jacobs
---------------------------------
Martin Jacobs, General Partner
/s/ Gary Kading
---------------------------------
Gary Kading, General Partner
Address: c/o Nigro, Karlin and Segal
10100 Santa Monica Boulevard
13th Floor
Los Angeles, CA 90067
Attention: Michael D. Karlin, CPA
With a copy to:
Rosenfeld & Wolff
A Professional Corporation
2049 Century Park East, Suite 600
Los Angeles, CA 90067
Attention: Steven G. Wolff, Esq.
"Tenant"
SUMMIT CARE OF CALIFORNIA, INC.,
a California corporation
By: [SIGNATURE ILLEGIBLE]
------------------------------
Its: President
----------------------------
Address: 2600 West Magnolia Boulevard
Burbank, California 91505
67
[LETTERHEAD OF CHRISTENSEN, WHITE, MILLER, FINK, JACOBS, GLASER & SHAPIRO
APPEARS HERE]
December 11, 1995
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
- ------------------------
Summit Care - California, Inc.
2600 West Magnolia Boulevard
Burbank, California 91505
Re: Uni-Cal Associates
Woodland Convalescent Center
----------------------------
Ladies and Gentlemen:
As you know, we represent Uni-Cal Associates, a California limited
partnership. Pursuant to the Lease for the above referenced facility, monthly
rent for the twelve (12) month period commencing February 1, 1996 will increase
by three percent (3%) from $34,540.00 to $35,576.20.
As usual, the address for payment of all remittances is: Uni-Cal
Associates, c/o Nigro, Karlin & Segal, 10100 Santa Monica Boulevard, Suite
1,300, Los Angeles, California 90067.
Very truly yours,
/s/ Paul R. Rosenbaum
---------------------
Paul R. Rosenbaum
for Christensen, White, Miller, Fink, Jacobs, Glaser & Shapiro
PRR/ad
cc: Summit Care Corporation (via certified mail)
Mr. Gary Kading
Peter M. Weil, Esq.
Ms. Sheryl Thompson
Ms. Suzanne Sullivan
[LETTERHEAD OF CHRISTENSEN, WHITE, MILLER, FINK, JACOBS, GLASER & SHAPIRO
APPEARS HERE]
December 11, 1995
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
- ------------------------
Summit Care - California, Inc.
2600 West Magnolia Boulevard
Burbank, California 91505
Re: Uni-Cal Associates
Woodland Convalescent Center
----------------------------
Ladies and Gentlemen:
As you know, we represent Uni-Cal Associates, a California limited
partnership. Pursuant to the Lease for the above referenced facility, monthly
rent for the twelve (12) month period commencing February 1, 1996 will increase
by three percent (3%) from $34,540.00 to $35,576.20.
As usual, the address for payment of all remittances is: Uni-Cal
Associates, c/o Nigro, Karlin & Segal, 10100 Santa Monica Boulevard, Suite 1300,
Los Angeles, California 90067.
Very truly yours,
/s/ Paul R. Rosenbaum
-----------------------
Paul R. Rosenbaum
for Christensen, White, Miller, Fink, Jacobs, Glaser & Shapiro
PRR/ad
cc: Summit Care Corporation (via certified mail)
Mr. Gary Kading
Peter M. Weil, Esq.
Ms. Sheryl Thompson
Ms. Suzanne Sullivan
[LETTERHEAD OF NIGRO, KARLIN & SEGAL APPEARS HERE]
December 16, 1996
Summit Care - California, Inc.
2600 West Magnolia Boulevard
Burbank, California 91505
Re: Uni-Cal Associates, L.P.
Woodland Convalescent Center
Dear sir or madam:
In connection with financing requirements, we are requesting from you the
following documents:
a) Financial statements for the above facility for
the calendar years 1994 and 1995 (or for
fiscal years ending in 1994 and 1995)
b) The most recent financial statement for the
above facility rendered in 1996.
If you have any problems complying with the above or have questions that need to
be answered, please notify us with 10 days of receipt of this letter.
Thank you for your cooperation in this matter.
Very truly yours,
/s/ Samuel I. Weisz
Samuel I. Weisz
cc: Mr. Gary Kading
Carolyn Jordan, Esq.
Mr. Michael D. Karlin, CPA
[LETTERHEAD OF CHRISTENSEN, WHITE, MILLER, FINK, JACOBS, GLASER & SHAPIRO
APPEARS HERE]
December 13, 1996
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
------------------------
Summit Care - California, Inc.
2600 West Magnolia Boulevard
Burbank, California 91505
Re: Uni-Cal Associates -
Woodland Convalescent Center, Reseda, California
------------------------------------------------
Dear Tenant:
As you are aware, we represent Uni-Cal Associates, a California limited
partnership. Pursuant to the lease for the above referenced facility, Base
Monthly Rent for the twelve (12) month period commencing February 1, 1997
shall increase by three percent (3%) from $35,576.20 to $36,643.49.
As usual, the address for payment of all remittances are: Uni-Cal
Associates, c/o Nigro, Karlin & Segal, 10100 Santa Monica Boulevard, Suite
1300, Los Angeles, California 90067.
Very truly yours,
/s/ Paul R. Rosenbaum
--------------------------
Paul R. Rosenbaum
for Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP
PRR/lvl
cc: Mr. Gary Kading
Summit Care Corporation (via certified mail)
Alisa J. Freundlich, Esq.
Michael D. Karlin, CPA
Ms. Candace Dziubinski
Ms. Suzanne Sullivan
-----------
SUMMIT CARE CORPORATION W A R N I N G CHECK NO.
------------------------------------------------------ -----------
2600 Magnolia Boulevard DO NOT CASH UNLESS YOU CAN VERIFY THE WORDS SAFE ON 29-7 59092
Burbank, CA 91505 THE FACE & SECURITY WATER MARK ON THE BACK HOLD AT A --------
(818) 841-8750 45 DEGREE ANGLE TOWARD OR AWAY FROM LIGHT, OR MARK WITH 213
THE EDGE OF A COIN OR DARK HIGHLIGHTER.
------------ -------------
KEY BANK OF NEW YORK DATE AMOUNT
66 SOUTH PEARL STREET ------------ -------------
ALBANY, NEW YORK 12207 2/24/97 *** 36643.49
------------ -------------
THIRTY-SIX THOUSAND SIX HUNDRED FORTY-THREE DOLLARS AND FORTY-NINE
CENTS
PAY UNI-CAL ASSOC.C/O NIGRO, KARLIN & SEGAL /s/ [SIGNATURE ILLEGIBLE]
TO THE 10100 STA MONICA BL, ----------------------------
ORDER ATT: IRIS KARNI Authorized Signature
OF STE# 1300 L.A. CA 90067
/s/ [SIGNATURE ILLEGIBLE]
----------------------------
Authorized Signature
-----------------------------------
DATE CHECK NO. SUMMIT CARE CORPORATION
----------------------------------- 2600 Magnolia Boulevard
2/24/97 59092 Burbank, CA 91505
-------------------------------------------------------- (818)841-8750 PAGE 1
VENDOR NAME
--------------------------------------------------------
UNI-CAL ASSOC.C/O NIGRO, KARLIN & SEGAL
--------------------------------------------------------
INVOICE DATE INVOICE NO. CO.CODE VOUCHER AMOUNT
-----------------------------------------------------------------------------------------------------------------
3/01/97 RENT CJ CJ 61478 36643.49
SUMMIT CARE CORPORATION
2600 W. Magnolia Boulevard, Burbank, California 91505-3031
(818) 841-8750 . FAX (818) 841-5847
January 3, 1997
Mr. Samuel I. Weisz
Nigro, Karlin & Segal
10100 Santa Monica Blvd.
Suite 1300
Los Angeles, CA 90067
Re: Uni-Cal Associates, L.P.
Woodland Convalescent Center
Dear Mr. Weisz:
Per your letter to us of December 16, 1996, attached please find the following
documentation:
a) Financial statements for Woodland Care Center for the fiscal years
1994 and 1995, and
b) The most recent financial statement for Woodland Care Center dated
November, 1996.
If you have any questions, please do not hesitate to give us a call.
Sincerely,
SUMMIT CARE CORPORATION
/s/ Melodye Stok
- -----------------
Melodye Stok,
Vice President-Controller
and Chief Accounting Officer
MS:das
Attachment
cc: Mr. Gary Kading
Carolyn Jordan, Esq.
Mr. Michael D. Karlin, CPA
PAGE 1
CL43
FUNCTIONAL COA CJ W 0 0 D L A N D
PROCESS #: 07
I N C 0 M E S T A T E M E N T
1 2 P E R I O D S E N D E D 0 6 / 3 0 / 9 4
******************* CURRENT ************************ *************** Y E A R T 0 D A T E *************
OVER ACTUAL BUDGET OVER ACTUAL BUDGET
ACTUAL BUDGET UNDER PPD PPD ACTUAL BUDGET UNDER PPD PPD
REVENUE
424040 384364 39676 97.48 81.16 ROOM AND BOARD REVENUE 4958948 4649819 309129 93.54 86.66
204106 169958 34148 46.92 38.54 ANCILLARY REVENUE 2669407 2067835 601572 50.35 38.54
12003 2494 950? 2.16 .57 OTHER INCOME 57951 29928 28023 1.09 .56
56175 79767- 135942 12.91 18.09- DEDUCTIONS FROM REVENUE 1340049- 960823- 379226- 25.28- 17.91-
- ------ -------- ------- ------- -------- -------- ------- ------ ------ ------
696324 477049 219275 160.07 108.18 TOTAL REVENUE 6346257 5786759 559498 119.70 107.85
- ------ -------- ------- ------- -------- -------- ------- ------ ------ ------
DIRECT EXPENSE
113027 97099 15928 25.98 22.02 ANCILLARY EXPENSES 1458083 1181364 276179 27.50 22.02
10160 2492 7668 2.34 .57 OTHER EXPENSES 47599 29904 17695 .90 .56
- ------ -------- ------- ------- -------- -------- ------- ------ ------ ------
123187 99591 23596 28.32 22.59 TOTAL DIRECT COSTS 1505682 1211268 294414 28.40 22.58
- ------ -------- ------- ------- -------- -------- ------- ------ ------ ------
573137 377458 195679 131.15 85.59 GROSS PROFIT 4840575 4575491 265084 91.30 85.27
- ------ -------- ------- ------- -------- -------- ------- ------ ------ ------
OPERATING EXPENSES
175303 175456 153- 40.30 39.79 SALARIES AND WAGES 2108726 2093484 15242 39.78 39.02
11791 55775 43978- 2.7l 12.65 BENEFITS 618410 726145 107735- 11.66 15.53
12136 13525 1389- 2.79 3.07 SUPPLIES 156308 164402 8094- 2.95 3.06
14281 14112 169 3.28 3.20 FOOD 169915 171693 1778- 3.21 3.20
12522 12?80 42 2.88 2.83 UTILITIES 163146 154050 9096 3.08 2.87
3553 4?35 582- .82 .94 PURCHASED SERVICES 45143 49620 4477- .85 .92
51447- 11?72 63119 11.83- 2.65 OTHER OPERATING EXPENSES 64690 140064 75314- 1.22 2.61
- ------ -------- ------- ------- -------- -------- ------- ------ ------ ------
178145 287155 109010- 40.95 65.13 TOTAL OPERATING EXPENSES 3326338 3499458 173120 62.75 65.21
- ------ -------- ------- ------- -------- -------- ------- ------ ------ ------
394992 90303 304689 90.80 20.46 OPERATING 1NCOME 1514237 1076033 438204 28.55 20.06
- ------ -------- ------- ------- -------- -------- ------- ------ ------ ------
FIXED EXPENSES
6573 6424 149 1.51 1.46 DEPRECIATION AND AMORTIZATION 83289 77088 6201 1.57 1.44
24076 23975 101 5.53 5.44 RENT 287821 287700 121 5.43 5.36
1983 2?26 643- .46 .60 INSURANCE 23607 29602 5995- .45 .55
1991 1844 141 .46 .42 TAXES 22912 22128 784 .43 .41
24133 24133 0 5.55 5.47 OVERHEAD ALLOCATION 289596 289596 0 5.46 5.40
- -------- ------- ------- ------- -------- -------- ------- ------ ------ ------
58756 59102 246- 13.51 13.39 TOTAL FIXED EXPENSES 707225 706114 1111 13.34 13.16
- -------- ------- ------- ------- -------- -------- ------- ------ ------ ------
336236 31301 304935 77.29 7.07 NET INCOME(LOSS) BEFORE TAX 807012 369919 437093 15.21 6.90
- -------- ------- ------- ------- -------- -------- ------- ------ ------ ------
336236 31301 304935 77.29 7.07 NET INCOME(LOSS) AFTER TAX 807012 369919 437093 15.21 6.90
$$$$$$ $$$$$$$ $$$$$$$ $$$$$$$ $$$$$$$$ $$$$$$$$ $$$$$$$ $$$$$$ $$$$$$ $$$$$$
4350 4410 FACTOR FOR PPD 53015 53655
$$$$$$$ $$$$$$$$ $$$$$$ $$$$$
DATE RUN ??/04/?? TIME 23.??.23
GL4351 Page 2
FUNCTIONAL COA
PROCESS #: 07 CJ W00DLAND
INC0ME STATEMENT
12 PERIODS ENDED 06/30/94
******************C U R R E N T ****************** *************** Y E A R T 0 D A T E *************
OVER ACTUAL BUDGET OVER ACTUAL BUDGET
ACTUAL BUDGET UNDER PPD PPD ACTUAL BUDGET UNDER PPD PPD
REVENUE
446489 438434 8055 102.85 98.08 ROOM AND BOARD REVENUE 5213077 5299744 86667- 98.84 97.45
232243 198598 33645 53.50 44.43 ANCILLARY REVENUE 2712788 2416362 296426 51.43 44.43
2570 4203 1633- .59 .94 OTHER INCOME 42487 51130 8643- .81 .94
84979- 115215- 30236 19.58- 25.78- DEDUCTIONS FROM REVENUE 1475943- 1391168- 84775- 27.98- 25.58-
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
596323 526020 70303 137.36 117.67 TOTAL REVENUE 6492409 6376068 116341 123.10 117.24
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
DIRECT EXPENSE
145766 109272 36494 33.58 24.45 ANCILLARY EXPENSES 1591880 1329532 262348 30.18 24.45
29 3352 3323- .01 .75 OTHER EXPENSES 31607 40787 9180- .60 .75
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
145795 112524 33171 33.59 25.20 TOTAL DIRECT COSTS 1623487 1370319 253168 30.78 25.20
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
450528 413396 37132 103.77 92.47 GROSS PROFIT 4868922 5005749 136827- 92.32 92.04
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
OPERATING EXPENSES
187098 190202 3104- 43.10 42.55 SALARIES AND WAGES 2195879 2269442 73563- 41.63 41.73
41992 53466 13474- 9.67 12.41 BENEFITS 595264 718308 123044- 11.29 13.21
14752 15801 1049- 3.40 3.53 SUPPLIES 179697 192073 12376- 3.41 3.53
14030 14528 498- 3.23 3.25 FOOD 172840 176761 3921- 3.28 3.25
11405 15070 3665- 2.63 3.37 UTILITIES 142978 169102 26124- 2.71 3.11
4217 5420 1203- .97 1.21 PURCHASED SERVICES 54481 65040 10559- 1.03 1.20
11297 11820 523- 2.60 2.64 OTHER OPERATING EXPENSES 120429 141840 21411- 2.28 2.61
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
284791 303307 23516- 65.60 68.96 TOTAL OPERATING EXPENSES 3461568 3732566 270998- 65.63 68.64
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
165737 105089 60648 38.17 23.51 OPERATING INCOME 1407354 1273183 134171 26.69 23.40
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
FIXED EXPENSES
6015 8?80 2265- 1.39 1.85 DEPRECIATION AND AMORTIZATION 81975 92782 10807- 1.55 1.71
35040 2??26 10114 8.07 5.58 RENT 343729 294112 49617 6.52 5.41
1565 2445 880- .36 .55 INSURANCE 22044 27576 5532- .42 .51
1884 1938 54- .43 .43 TAXES 22935 23256 321- .43 .43
25704 25704 0 5.92 5.75 OVERHEAD ALLOCATION 308448 308448 0 5.85 5.67
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
70208 6?293 6915 16.17 14.16 TOTAL FIXED EXPENSES 779131 746174 32957 14.77 13.73
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
95529 41796 53733 22.00 9.35 NET INCOME(LOSS) BEFORE TAX 628223 527009 101214 11.92 9.67
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
95529 41796 53733 22.00 9.35 NET INCOME(LOSS) AFTER TAX 628223 527009 101214 11.92 9.67
$$$$$$ $$$$$$ $$$$$$ $$$$$$ $$$$$$ $$$$$$$ $$$$$$$ $$$$$$$$ $$$$$$ $$$$$
4341 4470 FACTOR FOR PPD 52744 54387
$$$$$$ $$$$$$ $$$$$$ $$$$$$
DATE RUN 7/13/95 TIME 22.48.20
GL4351 Page 1
FUNCTIONAL COA
PROCESS #: 07 CJ W 0 0 D L A N D
I N C 0 M E S T A T E M E N T
5 P E R I O D S E N D E D 1 1 / 3 0 / 9 4
******************C U R R E N T ****************** ************* Y E A R T 0 D A T E *************
OVER ACTUAL BUDGET OVER ACTUAL BUDGET
ACTUAL BUDGET UNDER PPD PPD ACTUAL BUDGET UNDER PPD PPD
REVENUE
433780 487114 53334- 103.92 115.16 ROOM AND BOARD REVENUE 2425144 2484281 59137- 113.48 115.16
190780 268080 77300- 45.71 53.38 ANCILLARY REVENUE 1239747 1367205 127458- 58.01 63.38
2600 2876 276- .62 .68 OTHER INCOME 10425 14671 4246- .49 .68
113820- 157795- 43975 27.27- 37.3O- DEDUCTIONS FROM REVENUE 689322- 797402- 108080 32.26- 36.96-
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
513340 600275 86935- 122.98 141.92 TOTAL REVENUE 2985994 3068755 82761- 139.72 142.26
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
DIRECT EXPENSE
98019 150232 52213- 23.48 35.52 ANCILLARY EXPENSES 711091 766190 55099- 33.28 35.52
2380 2623 243- .57 .62 OTHER EXPENSES 8345 13379 5034- .39 .62
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
100399 152855 52456- 24.05 36.14 TOTAL DIRECT COSTS 719436 779569 60133- 33.67 36.14
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
412941 447420 34479- 98.93 105.78 GROSS PROFIT 2266558 2289186 22628- 106.05 106.12
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
OPERATING EXPENSES
197953 200241 2288- 47.43 47.34 SALARIES AND WAGES 1000414 1013860 13446- 46.81 47.00
50668 52515 1847- 12.14 12.41 BENEFITS 233673 248797 15124- 10.93 11.53
14712 14805 93- 3.52 3.50 SUPPLIES 80194 75396 4798 3.75 3.49
13863 13959 96- 3.32 3.30 FOOD 71481 71190 291 3.34 3.30
10426 12547 2121- 2.50 2.97 UTILITIES 57959 64820 6861- 2.71 3.00
3510 3705 195- .84 .88 PURCHASED SERVICES 19308 18525 783 .90 .86
1501 1480 21 .36 .35 PROVISION FOR DOUBTFUL ACCOUNTS 4415 7550 3135- .21 .35
3329 2369 960 .80 .56 INSURANCE 16689 11644 5045 .78 .54
1984 1984 0 .48 .47 TAXES 9920 9920 0 .46 .46
12883 12480 403 3.09 2.95 OTHER OPERATING EXPENSES 61906 62400 494- 2.90 2.89
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
310829 316085 5256- 74.48 71.73 TOTAL OPERATING EXPENSES 1555959 1584102 28143- 72.79 73.42
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
102112 131335 29223- 24.45 ?1.05 OPERATING INCOME 710599 705084 5515 33.26 32.70
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
FIXED EXPENSES
8567 9377 810- 2.05 2.22 DEPRECIATION AND AMORTIZATION 50403 41646 8757 2.36 1.93
35576 36226 650- 8.52 8.56 RENT 178531 181130 2599- 8.35 8.40
21258 21258 0 5.09 5.03 OVERHEAD ALLOCATION 106290 106290 0 4.97 4.93
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
65401 66861 1460- 15.66 15.81 TOTAL FIXED EXPENSES 335224 329066 6158 15.68 15.26
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
36711 64474 27763- 8.79 15.24 NET INCOME(LOSS) BEFORE TAX 375375 376018 643- 17.58 17.44
- ------ ------ ----- ------ ------ ------- ------- ------ ------ ------
36711 64474 27763- 8.79 15.24 NET INCOME(LOSS) AFTER TAX 375375 376018 643- 17.58 17.44
$$$$$$ $$$$$$ $$$$$ $$$$$$ $$$$$$ $$$$$$$ $$$$$$$ $$$$$$ $$$$$$ $$$$$$
4174 4230 FACTOR FOR PPD 21370 21573
$$$$$$ $$$$$$ $$$$$$ $$$$$$
DATE RUN 12/15/96 TIME 19.12.42
[LETTERHEAD OF NIGRO, KARLIN & SEGAL APPEARS HERE]
December 16, 1996
Summit Care - California, Inc.
2600 West Magnolia Boulevard
Burbank, California 91505
Re: Uni-Cal Associates, L.P.
Woodland Convalescent Center
Dear sir or madam:
In connection with financing requirements, we are requesting from you the
following documents:
a) Financial statements for the above facility for the calendar years
1994 and 1995 (or for fiscal years ending in 1994 and 1995)
b) The most recent financial statement for the above facility
rendered in 1996.
If you have any problems complying with the above or have questions that need to
be answered, please notify us with 10 days of receipt of this letter.
Thank you for your cooperation in this matter.
Very truly yours,
/s/ Samuel I. Weisz
Samuel I. Weisz
cc: Mr. Gary Kading
Carolyn Jordan, Esq.
Mr. Michael D. Karlin, CPA
[LETTERHEAD OF NIGRO, KARLIN & SEGAL APPEARS HERE]
December 16, 1996
Summit Care - California, Inc.
2600 West Magnolia Boulevard
Burbank, California 91505
Re: Uni-Cal Associates, L.P.
Woodland Convalescent Center
Dear sir or madam:
In connection with financing requirements, we are requesting from you the
following documents:
a) Financial statements for the above facility
for the calendar years 1994 and 1995 (or for
fiscal years ending in 1994 and 1995)
b) The most recent financial statement for the
above facility rendered in 1996.
If you have any problems complying with the above or have questions that need to
be answered, please notify us with 10 days of receipt of this letter.
Thank you for your cooperation in this matter.
Very truly yours,
/s/ Samuel I. Weisz
Samuel I. Weisz
cc: Mr. Gary Kading
Carolyn Jordan, Esq.
Mr. Michael D. Karlin, CPA