LEASE AGREEMENT
This lease agreement made and entered into this 5 day of May, 1996, by and
between PHEO MED LIMITED PARTNERSHIP a partnership organized under the laws of
the State of Georgia, hereinafter referred to as LESSOR and LAKE FOREST HEALTH
CARE CENTER, INC., a corporation organized under the laws of the State of
Georgia, hereinafter referred to as LESSEE;
perty damages and personal injury limits of at least one million ($1,000,000)
dollars, and Lessor may require of the Lessee that said limits be adjusted
upward in such amounts as may be required by law, ordinance, state or federal
rules and regulations. In the event the Lessee fails to obtain the insurance
hereinabove mentioned, then, the Lessor may obtain the same at the expense of
and to the charge of the Lessee or the Lessor may at its option treat such
failure as a breach of this lease and terminate the same and take possession
of the premises and fixtures and hold the Lessee liable for such damages as
the Lessor may show itself entitled to as a result of such breach. The Lessee
agrees to and shall hold the Lessor harmless on account of any or all
liability which may result as a result of the use, occupancy, and operation
of the nursing home on the premises. The Lessee agrees to carry workers
compensation insurance on all employees of the Facility.
(b) The Lessee shall furnish and carry at its expense, fire and extended
coverage insurance with Lessor as named insured in the amount of $1,950,000 on
the building, equipment and furnishings in an amount sufficient to replace the
entire building, equipment and furnishings in the same condition as before
they were destroyed or damaged with not more than Five Thousand ($5,000)
Dollars deductible and shall insure the Lessor's interest therein and furnish
a copy of the policy to the Lessor. The Lessee shall be liable to the Lessor
for any losses occasioned by the Lessor resulting from the Lessee's failure to
provide and maintain such insurance. Upon the failure of the Lessee to provide
such insurance, the Lessor may at its option terminate the original lease and
the lease as herein amended or may purchase such insurance at the charge and
expense of the Lessee.
(c) Lessee shall furnish, at its expense, use and occupancy insurance in an
amount sufficient to pay Lessor its monthly rental fee for up to not less than
twelve months should Lessee experience the loss of use of any part or all of
the facility caused by the perils covered by fire and extended coverage
insurance. A copy of said policy shall be furnished to Lessor.
SECTION 8. Maintenance. The Lessee assumes responsibility to maintain and
repair the building, including the roof and outside structure, equipment,
fixtures and furnishings in a good state of repair during the entire period of
this lease and shall bear the expense of all the same except those expenses
that may be compensated for by insurance carried by either party hereto. At
the expiration or termination of this lease, the Lessee will return the
premises to the Lessor in as good a condition as that which existed at the
commencement of this lease, except for ordinary and usual wear and tear.
SECTION 9. Property Taxes. The Lessee shall be responsible for any real
estate, personal property, or intangible taxes during the term of this lease.
Taxes for the year 1993 shall be prorated between Lessor and Lessee with each
paying for their respective share.
SECTION 10. Fees and Charges. All fees and charges due and owing to any
agency, firm, city, county, state, or federal government on account of any
required inspection made of the facility or the leased premises by any officer
or employee of such inspection shall be paid by the Lessee.
SECTION 11. Utilities. The Lessee hereby covenants and agrees to pay all
charges for heat, lights, water, telephone and all other utilities which shall
be used in or charged against the leased premises during the entire term of
this lease.
SECTION 12. Access to Property. Lessee will allow Lessor or Lessor's agent
free access at all reasonable times to said premises for the purpose of
inspecting the buildings and premises or any allegations made by a governing
agency. This right shall not be construed as an agreement on the part of the
Lessor to make any repairs, all of such repairs to be made by Lessee as
aforesaid.
SECTION 13. Damage by Casualty. In the event the nursing home is damaged
by
fire, windstorm, or other casualty to the extent of not more than fifty (50%)
percent of the value of the facility, the Lessee shall rebuild, remodel,
repair, and restore said facilities to the condition existing immediately
preceding said fire or casualty within a reasonable time. In the event the
premises are destroyed by fire, windstorm, or other casualty in excess of
fifty (50) percent of its value, it shall be optional with the Lessor as to
whether it rebuilds, repairs, or restores the facilities. If the facility is
so repaired, rebuilt, or repaired, then it is agreed that during any period of
time within which the premises may be untenable and after such restoration the
term of this lease herein provided for shall be extended over and above the
original term or any extension thereof by the amount of time necessary to
restore the premises. If the Lessor does not elect to rebuild, repair, or
restore the same, then, in such event this lease shall terminate and be of no
force and effect except for the rights and obligations which shall have
accrued prior to the date of such termination.
SECTION 14. Assignment and Subletting. Lessee shall not let, sublease, or
sublet the whole leased premises, or any part thereof, or assign this lease
without the written consent of Lessor which shall not be unreasonably
withheld.
SECTION 15. Waivers. (a) Failure of Lessor to insist upon strict
performance
of any of the covenants and agreements of this lease, or to exercise any
option herein conferred in any one or more instances, shall not be construed
to be a waiver or relinquishment of any such or any other covenants or
agreements, but the same shall be and remain in full force and effect.
(b) In the event of any suit or action instituted on account of any default
or to enforce any provisions of this agreement, both Lessor and Lessee agree
that the court may award to the prevailing party such amount as the court may
consider necessary and reasonable as the attorney fees, together with court
costs, and this provision shall also apply in connection with any appeal
thereof.
SECTION 16. Defaults. If the Lessee shall default in payment of any rent,
additional rent, or other sum required by this lease, and Lessee fails to cure
such default for a period of ten (10) days after receipt by Lessee of written
demand by Lessor for payment, Lessee shall immediately return the leased
property back to Lessor. In the event Lessee defaults in the performance of
any other provision of this lease, for a period of thirty (30) days after
Lessee's receipt of written demand by Lessor for performance of such other
provision of this lease (provided, however, that if such non-monetary default
may not be reasonable cured within thirty (30) days after Lessee receives
Lessors written demand therefor, Lessee shall immediately cure said default
with due diligence, unless by mutual written agreement said time is extended),
Lessor may cancel this lease by giving a fifteen (15) day written notice to
Lessee, whereupon the expiration of the said fifteen (15) day notice period,
Lessee shall return the leased property to Lessor. Lessor may immediately
reenter property at the end of fifteen (15) day period without legal process
if Lessor has not remitted proper payment. No further notice to Lessee shall
be necessary before reentry by Lessor or commencement of legal actions.
SECTION 17. Binding Effect. Subject to the provisions hereof pertaining to
assignment and subletting, the covenants and agreements of this lease shall be
binding upon the heirs, legal representatives, successors, and assigns of any
or all of the parties hereto.
SECTION 18. Notices. Any notice required to be served in accordance with the
terms of this lease shall be sent by registered mail, to the last known
address of either the Lessor or the Lessee, or their agents or
representatives, and such notice shall be deemed and treated as notice to all
of them, their heirs, legal representatives or assigns. Lessee will forward
within fifteen (15) days of receipt of any State Licensure Inspection a copy
of such Licensure inspection as well as plans of corrections to Lessor.
SECTION 19. Regulatory Approval. This lease is subject to approval and
continued approval of all applicable state and federal regulatory agencies.
SECTION 20. Right of First Refusal to Purchase. Lessee has the first
right of refusal to purchase this facility from Lessor at any time during the
period of this lease provided Lessor receives a bona fide offer for the
Facility. Lessee has thirty days to respond in writing to Lessor of its
intentions of exercising its Right of Refusal to purchase the Facility. In
any event if Lessor chooses to sell this Facility the new purchaser is bound
by this Lease.
SECTION 21. Acceptance of the Premises. Lessee has inspected the
facility and the operations thereof, and herewith agree to accept the
facility in its current condition, as is, and subject only to the terms of
this Lease Agreement. Lessee agrees to hold Lessor, its Agents, Officers, and
Directors harmless for any acts or omissions of actions arising out of or in
connection with this Lease Agreement so long as it shall remain in full force
and effect.
IN TESTIMONY WHEREOF, the parties hereunto have executed this contract
in duplicate originals as of the day and date first above mentioned.
PHEO MED LIMITED PARTNERSHIP
By: Winter Haven Homes, Inc.
Its General Partner
By: /s/ Edward E. Lane
Its President (Lessor)
[Corporate Seal]
LAKE FOREST HEALTH CARE CENTER, INC.
By: /s/ Chris Brogdon
Its President (Lessee)
[Corporate Seal]
ADDITIONAL LEASE AGREEMENTS WITH AFFILIATES
The Registrant has additional Lease Agreements with affiliates
substantially identical to the foregoing. The material details of such
agreements which differ are as follows:
Owner Date of
Name of Facility Location <FN1> Agreement Lease Lease Payment
- ---------------- -------- ----- --------- ----- ------------------------
Summer's Landing Douglas, GJ 9/1/96 5 years $300,000 on execution of
- - Douglas GA <FN2> the lease plus debt pay-
ment on existing mort-
gage each month <FN3>
Jackson Oaks Jackson, WHH 6/30/96 15 years $1,500,000 on execution
TN <FN4> of the lease plus
$50,000 per month
Lake Forest Health Jackson- WHH 5/5/96 10 years $25,000 per month
Care Center ville, FL <FN5> <FN6>
- --------------
<FN>
<FN1>
The names of the owners are abbreviated as follows: Gordon Jensen Health Care
Associates, Inc. - GJ and Winter Haven Homes, Inc. - WHH.
<FN2>
The Registrant may extend up to two additional terms of five years each.
<FN3>
Beginning in year two there will be an additional payment of $500 per month;
in year three $750 per month; in year four $1,000 per month and in year five
$1,250 per month. During any extensions the additional amount will be $1,250
per month.
<FN4>
Winter Haven Homes, Inc. is general partner of Retirement Village of Jackson,
Ltd., the owner of Jackson Oaks.
<FN5>
Winter Haven Homes, Inc. is general partner of Pheo Med Limited Partnership,
the owner of Lake Forest Health Care Center.
<FN6>
The Registrant may extend the lease an additional ten years at a rate to be
mutually agreed upon.
</FN>