d/b/a Oak Hill Health & Rehabilitation Center February 16, 2017 Resubmitted on March 28, 2017
Table of Contents: Question Number/Appendix Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Q19 Q20 A Q20 B Q20 C Q21 Q22 Q23 A Q23 B Q23 C Q24 Q25 Q26 Q27 Q28 Q29 Tab A Tab B Tab C Tab D Tab E Tab F Tab G Tab H Tab I
Page Number
Tab Number
1 2 2 2 2 3 3 3 Tab A 3 3 3 4 4 4 Tab B 4 Tab C 4 4 4 Tab D 4 5 5 5 5 5 Tab E 6 6 6 6 Tab F 6 6 Tab G 7 7 7 Consulting Agreement Executed PSA Org Chart Charity Care Policy QI P&P Executed Lease Executed Operating Agreement Medicaid Rates Working Capital Loan Commitment
1. Please provide an executive summary describing the nature and scope of the proposal. Additionally, please include the following: (1) identification of all parties, (2) description of the applicant and its licensure track record, (3) the type of transaction proposed including description of the transaction and relevant costs, (4) summary of all transfer documents, (5) summary of the organizational structure of the applicant and its affiliates, and (6) whether the facility will be accredited. Oak Hill Operations Associates, LLC d/b/a Oak Hill Center for Rehabilitation & Health Care (the “Applicant”), a Rhode Island limited liability company is seeking approval for the acquisition of the nursing home commonly known as NSL OAK HILL LLC d/b/a Oak Hill Health & Rehabilitation Center (the “Facility”). The Facility is a Rhode Island licensed skilled nursing home located at 544 Pleasant Street, Pawtucket, RI 02860 with a licensed capacity of 129 beds. Concurrent with the transaction to acquire the operating assets, a separate, yet simultaneous transaction will take place with Oak Hill Realty Associates, LLC, also a Rhode Island limited liability company to purchase the real property housing the facility. The total purchase price, as set forth in the Purchase & Sale Agreement (the “PSA”) is $6,350,000, allocated as $3,175,000for the operating assets and $3,175,000 for the real property of which $1,587,500 will be funded from owner equity and $4,762,500 from bank financing. This Facility has gone through a number of transitions in recent years. Originally a Kindred facility, upon their exiting the Rhode Island market, the Landlord, CCP Oak Hill 1231 LLC, leased it to CHOak Hill, LLC, a not-for-profit corporation with this being their first facility in Rhode Island. Within 2 years, CH-Oak Hill entered into an OTA (Operations Transfer Agreement) transferring their operational interests in the facility to a different operator, NSL Oak Hill, LLC. At this point, the Landlord has decided to sell the property on which the nursing home resides and to that end, the Applicant has entered into a purchase and sale agreement with the Landlord dated 9/26/2016 and an 2/10/2017 Operational Transfer Agreement dated ___________. The owners of the Applicant are Kenneth Rozenberg, Beth Rozenberg and Jonathan Hagler; Mr. Rozenberg has ownership interests in twenty skilled nursing facilities in New York State and three in Rhode Island, Mrs. Rozenberg, his spouse, has ownership interests in eight (seven of which are shared with her husband) and Mr. Hagler has ownership in three (all in Rhode Island) and is primarily in the real estate business with interests in the underlying properties housing many nursing facilities. Included in the interests listed above are Bannister Center for Rehabilitation and Health Care, a 95 bed Nursing Home in Providence, RI (acquired on 2/10/16), Park View Center for Rehabilitation and Health Care, a 66 bed Providence, RI Nursing Home (acquired on 5/16/16) and Kingston Center for Rehabilitation and Health Care, a 55 bed West Kingston Nursing Home (acquired on 10/1/2016) after having received Change in Effective Control Approval from the Department for each. Mr. Rozenberg is currently employed as Chief Executive Officer of Centers Health Care (“CHC), a company that provides consulting and management services to a variety of health care related companies. In addition to his nursing facility interests, Mr. Rozenberg also has ownership interests through individual special purpose LLCs, in a Licensed Home Care Agency, a Certified Home Health Agency, an Ambulance Company and a Managed Care Company that is licensed as an MLTCP (Medicaid Long Term Care Program), Medicare Advantage Plan + Part D, FIDA (Fully Integrated Dual Advantage) and an I-SNP (Institutional Special Needs Plan) – all of these companies being located and providing services in areas throughout New York State. The Applicant will have a consulting agreement with CHC to provide guidance to the Facility in the areas of clinical services, operational oversight and to handle certain financial functions on its behalf. As New York State has recently embraced Delivery System Reform Incentive Payment (“DSRIP”), CHC has been at the forefront of this evolution of health care and has its member facilities participating in twenty-one out of twenty-five Preferred Provider System (“PPSs”) in the State. In addition, as the PPSs have seen that CHC understands and appreciates the challenges to help prepare for a DSRIP world with Value Based Payments, a number of PPSs have invited senior employees of CHC to be active members of their workgroups and steering committees.
1
Most, if not all, of the nursing homes that Mr. Rozenberg owns as well as for those that CHC provides services to had been suffering financially prior to their joining the group and many had severe clinical and operational issues as well. As a seasoned owner/operator with many years of experience and an excellent management team behind him, Mr. Rozenberg has typically been able to improve the care, the level of services offered and the financial standing of these facilities within a short period of time. The management team that makes up the CHC arm consists of Directors of Operations, a Chief Clinical Officer, Corporate Directors of Therapy Services, Social Services, Clinical Reimbursement, Recreational Therapy, Food Service and Housekeeping (the “Management Team”). The ultimate goal of the Management Team and its respective Regional and Support staff is to ensure that each and every resident of their Nursing Homes receives the best care possible. CHC also has a back-office division that works together with each facility to provide support for all financial activities including: accounts receivable, accounts payable, bookkeeping, purchasing, payroll and accounting. 2.
Name and address of the applicant:
Name: Oak Hill Operations Associates, LLC Address: 4770 White Plains Road, 3rd Floor, Bronx, NY 3.
Telephone: Zip Code:
(401) 725-8888 02860
Information of the President or Chief Executive Officer of the applicant:
Name: Kenneth Rozenberg Address: 4770 White Plains Road, Bronx, NY E-Mail:
[email protected] 5.
917-468-4174 10470
Name and address of facility (if different from applicant):
Name: NSL Oak Hill, LLC d/b/a Oak Hill Health & Rehabilitation Address: 544 Pleasant Street, Pawtucket, RI 4.
Telephone: Zip Code:
Telephone: Zip Code: Fax:
917-468-4174 10470 347-547-7772
Telephone: Zip Code: Fax:
401-274-7200 02903 401-351-4607
Information for the person to contact regarding this proposal:
Name: Patricia K Rocha, Adler Pollock & Sheehan P.C. Address: One Citizens Plaza, 8th Flr, Providence, RI E-Mail:
[email protected]
2
6.
A. EXISTING ENTITY:
License category: Nursing Facility Name of Facility: NSL Oak Hill, LLC d/b/a Oak Hill Health & Rehabilitation License #: LTC00716 Address: 544 Pleasant Street, Pawtucket, RI 02860 Telephone: (401) 725-8888 Type of Ownership: ___ Individual ___ Partnership __ Corporation X Limited Liability Co. Tax Status: X For Profit __ Non-Profit B. PROPOSED ENTITY: License category: Nursing Facility Name of Facility: Oak Hill Operations Associates, LLC d/b/a Oak Hill Center for Rehabilitation and Health Care License #: LTC00716 Address: 544 Pleasant Street, Pawtucket, RI 02860 Telephone: (401) 725-8888 Type of Ownership: ___ Individual ___ Partnership ___ Corporation X Limited Liability Co. Tax Status: X For Profit ___ Non-Profit 7.
Does this proposal involve a nursing facility? Yes X No___ •
8.
If response to Question 7 is ‘Yes’, please complete Appendix C. Will the facility be operated under management agreement with an outside party? Yes X___ No _
If response to Question 8 is "Yes", please provide copies of that agreement. See Tab A. Centers Health Care is owned by Kenneth & Beth Rozenberg (each holding 50% interests). 9. Will the proposal involve the facility/ies providing healthcare services under contract with an outside party? Yes X No ___ • If response to Question 9 is "Yes", please identify and describe those services to be contracted out. The Facility will contract with outside parties for the typical array of health care services including: clinical laboratory, diagnostic imaging, pharmacy, staffing and rehabilitation. 10.
Estimate the date (month and year) for the proposed transfer of ownership, if approved:
May 2017 11. Please provide a concise description of the services currently offered by the licensed entity and identify any services that will be added, terminated, expanded, or reduced and state the reasons therefore: The Facility currently provides a full range of nursing care and social services. It also provides specialty programs including rehabilitation therapy programs (physical, occupational and speech language), health management (nutrition, diabetes care, wound care), recreational therapy and support services. The Applicant does not plan on terminating or reducing any services. 12. Please identify the long-term plans of the applicant with respect to the health care programs and health care services to be provided at the facility:
3
The Applicant will continue to provide the health care programs and services currently provided at the Facility. 13. Does the entity seeking licensure plan to participate in Medicare or Medicaid (Titles XVIII or XIX of the Social Security Act)? MEDICARE: Yes X No___ •
MEDICAID:
Yes X No___
If response to Question 13 for either Medicare and/or Medicaid is ‘No’, please explain.
14. Please provide all appropriate signed legal transfer documents (i.e. purchase and sale agreement, affiliation agreement); NOTE: these documents must cause both parties to be legally bound. See Tab B 15. Please provide organization charts of both agencies (existing entity and the applicant) for prior to transfer and post transfer, identifying all "parent" legal entities with direct or indirect ownership in or control, all "sister" legal entities also owned or controlled by the parent(s), and all "subsidiary" legal entities. See Tab C 16. If the proposed owner, operator or director owned, operated or directed a health care facility (both within and outside Rhode Island) within the past five years, please demonstrate the record of that person(s) with respect to access of traditionally underserved populations to its health care facilities. The Applicant is newly formed; however, when combining all of the nursing homes that Mr. Rozenberg has owned for more than one year the average percentage of Medicaid Residents served is above 75%, showing his dedication to the underserved populations. In addition, the Applicant’s charity care policy supports the underserved populations. 17. Please identify the proposed immediate and long-term plans of the applicant to ensure adequate and appropriate access to the program and health care services to be provided by the health care facility/ies to traditionally underserved populations. The overwhelming majority of Residents currently served by the Facility are those with Medicaid/RHODY Health with the remaining being Medicare, other HMOs, Hospice or Private Pay. The Applicant plans to continue serving the foregoing as well as other underserved populations, and will continue to follow its policies with regard to not withholding or discontinuing care for patients due to their inability to pay and will continue to follow applicable Federal & State laws and regulations. Indeed, Mr. Rozenberg serves a similar population and follows the same Federal and State laws and regulations and charity care policies at his other facilities where the average Medicaid population accounts for more than 75% of Resident days. 18.
Please provide a copy of charity care policies and procedures and charity care application form.
See Tab D 19. After the proposed change in effective control, will the facility/ies provide medically necessary services to patients without discrimination, including the patients' ability to pay for services? Yes X No___ •
If response to Question 23 is ‘No’, please explain.
4
20. Please identify and describe any and all instances and the status or disposition of each of the following within the past 5 years: A. Citations, enforcement actions, violations, charges, investigations, or similar types of actions involving the applicant and/or its affiliates (including but not limited to actions brought forward by any governmental agency, accrediting agency, or similar type of an agency.); The Applicant is a newly formed entity and, accordingly, there are none. With respect to the other nursing facilities in which Mr. Rozenberg has an ownership interest, they regularly are subject to surveys which may have resulted in deficiencies, all of which have been or will be corrected and accepted by the New York State and/or Rhode Island Departments of Health (as applicable). B. Civil proceedings (whether pending or which have resulted in a disposition or settlement) in any court of law, in which the applicant and/or its affiliates and/or any officers, directors, trustees, members, managing or general partners, or other senior management of the applicant and/or its affiliates has been a party to; None C. Convictions and/or placement on probation for any criminal offences by any state, local or federal government of any officers, directors, trustees, members, managing or general partners, or other senior management of the applicant and/or its affiliates; None 21. Please identify any planned actions of the applicant to reduce, limit, or contain health care costs and improve the efficiency with which health care services are delivered to the citizens of this state. The Applicant has access to all of CHC’s corporate resources, management team, purchasing power and expertise which will allow Applicant to realize savings on purchased goods and services as well as payroll costs through enhanced labor management systems and employee trainings as CHC has successfully implemented in their other facilities. 22. Please provide a copy of the Quality Assurance Policies (for the services) and a detailed explanation of how quality assurance for patient services will be implemented at the facility/ies by the applicant. See Tab E The Applicant’s Quality Improvement (QI) Policy is designed and conducted in accordance with State and Federal regulations and will facilitate a systematic approach to monitor and assess the quality and appropriateness of care. All QI activities will be an integral part of the Facility’s management structure and will have, as their primary goal, the identification of problems and fostering of opportunities to improve Resident care. The QI Program will describe the objectives, organization, responsibilities, scope and procedures for overseeing the effectiveness of monitoring, assessing and problem-solving activities. Professional standards development and an in-service education program will also be a part of this QI Policy, which will be comprehensive in nature and involve all levels of staff and the interdisciplinary care team. It is the Applicant’s philosophy that each Resident deserves care that meets the highest expectations. Only through comprehensive QI efforts can such care be provided. This pursuit of excellence will in turn lead to improved quality of life for every Resident.
5
23. Please provide a detailed description about the amount and source of the equity and debt commitment for this transaction. (NOTE: If debt is contemplated as part of the financing, please complete Appendix E). Additionally, please demonstrate the following: A. The immediate and long-term financial feasibility of the proposed financing plan; B. The relative availability of funds for capital and operating needs; and C. The applicant’s financial capability. The Applicant will be purchasing the operating interests of the Facility for $3,175,000. Twenty-five percent of this amount ($793,750) will be funded from owner equity with the remainder ($2,381,250) from bank financing at an interest rate of approximately 5%. Oak Hill Realty Associates, LLC, a related party, will be acquiring the real property for $3,175,000 and the Applicant will enter into a lease agreement for site control of the facility. The working capital required for the Facility is estimated at $850,000.00 based on one month of the first-year operating budget. Applicant has been approved for a loan for this full amount. Based on the Pro Forma included in Appendix A, there will be adequate revenue to cover the debt service and lease payments. The Applicant has the resources of its managing member, Mr. Rozenberg. As the successful owner/operator of twenty-two skilled nursing facilities in New York and Rhode Island, as well as other health care entities described in response to Question 1, Mr. Rozenberg has ample funds to support the Applicant’s financial capability. 24. Please provide legally binding evidence of site control (e.g., deed, lease, option, etc.) sufficient to enable the applicant to have use and possession of the subject property, if applicable. See Tab F 25. If the facility is not-for-profit and/or affiliated with a not-for-profit, please provide written approval from the Rhode Island Department of Attorney General of the proposal. Not Applicable. 26.
Please provide each of the following documents applicable to the applicant's legal status:
·Certificate and Articles of Incorporation and By-Laws (for corporations) ·Certificate of Partnership and Partnership Agreement (for partnerships) ·Certificate of Organization and Operating Agreement (for limited liability corporations) See Tab G •
If any of the above documents are proposed to be revised or modified in any way as a result of the implementation of the proposed change in effective control, please provide the present documents and the proposed documents and clearly identify the revisions and modifications.
27. If the applicant and/or one of its parent companies (or ultimate parent) is a publicly traded corporation, please provide copies of its most recent SEC 10K filing.
6
N/A 28. Please provide audited financial statements (which should include an income statement, balance sheet and cash flow statement) for the last three years for the applicant, and/or its ultimate parent, and for the existing facility. Similar to Bannister Operations Associates, LLC Park View Operations Associates, LLC and Shady Acres Operations Associates, LLC for whom the Department of Health approved change in effective control approval after finding that those applicants satisfied the criteria of financial viability, Oak Hill Operations Associates, LLC d/b/a Oak Hill Center for Rehabilitation and Health Care, is a newly formed entity created solely for the purpose of acquiring the facility and, accordingly, there are no audited financial statements to produce. See Tab I, Rockland Capital Funding, LLC’s approval for a working capital loan in the amount of $850,000 to the Applicant. In addition, the Applicant will place another $850,000 in a bank account opened by Oak Hill Operations Associates, LLC to demonstrate financial viability. Lastly, as noted during the review of the aforementioned facilities Change in Effective Control Applications and confirmed by the Department’s approvals, the Applicant has the resources of its managing member, Mr. Kenneth Rozenberg, who as the successful owner/operator of 23 skilled nursing facilities in New York and Rhode Island, as well as other health care entities described in response to question 1, has ample funds to support the Applicant’s financial capability, confirming financial viability. 29.
All applicants must complete Appendix A, D, F and G.
7
APPENDIX A All applicants must complete this Appendix. 1. Please indicate the financing mix for the capital cost of this proposal. NOTE: the Health Services Council’s policy requires a minimum 20 percent equity investment in CEC projects. Amount
Source
Percent
Interest Rate
Terms (Yrs.)
Equity*
$1,587,500
25%
Debt**
$4,762,500
75%
5%
%
%
Lease
0
TOTAL
*
$6,350,000
7
100%
Equity means non-debt funds contributed towards the capital cost related to a change in owner or change in operator of a healthcare facility which funds are free and clear of any repayment or liens against the assets of the proposed owner and/or licensee and that result in a like reduction in the portion of the capital cost that is required to be financed or mortgaged.
** If debt financing is indicated, please complete Appendix E. 2. Please identify the total number of FTEs (full time equivalents) and the associated payroll expense (with fringe benefits) for the facility. Past Three Fiscal Years FY:2013 ** PERSONELL (by major categories)
Number of FTEs
FY: 2014 ** Payroll W/Fringes
Number of FTEs
FY: 2015 Payroll W/Fringes
Number of FTEs
Payroll W/Fringes
Administrator
1.0 $
DNS
1.0 $
124,029 112,014
RNs
17.9 $
1,311,601
LPNs
11.7 $
748,314
Nursing Aides
50.6 $
1,447,832
Clerical
6.1 $
297,550
Housekeeping
0.0 $
-
Maintenance
1.0 $
71,940
13.4 $
405,817
Social Worker
Dietary
1.0 $
89,906
Recreation/Activity
2.6 $
74,631
Therapy
0.0 $
-
Totals
106.3 $
**Financials required to complete the above requested information for 2013 and 2014 are not currently available to the Applicant
1
4,683,634
Budgeted Current Year
Projected First Three Fiscal Years (if approved)
FY: 2016 PERSONELL (by major categories)
FY: 2017
Payroll W/Fring
Payroll W/Fringes
FY: 2018
Number of FTEs
FY: 2019
Payroll W/Fringes Number of FTEs Payroll W/Fringes Number of FTEs Payroll W/Fringes
Administrator
1.0 $
124,029
1.0 $
146,186.16
1.0 $
149,110
1.0 $
152,092
DNS
1.0 $
112,014
1.0 $
129,046.12
1.0 $
131,627
1.0 $
134,260
RNs
17.9 $
1,311,601
9.6 $
704,122.36
9.6 $
718,205
9.6 $
732,569
LPNs
11.7 $
748,314
24.5 $
1,570,811.20
24.5 $
1,602,227
24.5 $
1,634,272
Nursing Aides
1,536,226
50.6 $
1,447,832
51.4 $
1,476,572.26
51.4 $
1,506,104
51.4 $
Clerical
6.1 $
297,550
8.3 $
304,441.45
8.3 $
310,530
8.3 $
316,741
Housekeeping
0.0 $
-
10.2 $
276,701.16
10.2 $
282,235
10.2 $
287,880
Maintenance
1.0 $
71,940
2.0 $
85,138.82
2.0 $
86,842
2.0 $
88,578 386,564
13.4 $
405,817
11.7 $
371,553.29
11.7 $
378,984
11.7 $
Social Worker
1.0 $
89,906
1.0 $
83,171.32
1.0 $
84,835
1.0 $
86,531
Recreation/Activity
2.6 $
74,631
3.5 $
99,831.35
3.5 $
101,828
3.5 $
103,865
Therapy
0.0 $
-
13.1 $
957,811.71
13.1 $
976,968
13.1 $
996,507
137.2 $
6,205,387
137.2 $
6,329,495
137.2 $
6,456,085
Dietary
Totals
3.
106.3 $
4,683,634
Please complete the following table for the facility. Round all amounts to the nearest dollar. Past Three Fiscal Years FY: 2013 **
FY: 2014 **
FY: 2015
REVENUES Net Patient Revenue
$
9,964,312
$
10,433,046
$
4,683,634
Other:
468,734
Total Revenue EXPENSES Payroll w/Fringe Office Supplies & Expense
32,177
Utilities
123,283
Insurance
197,969
Interest
62,432
Provider Assessment
573,817
Lease/Rental of equipment
55,599
Purchased services
658,174
Communications
20,176
Other operating expenses
3,349,674
Maintenance Purchased services & Repairs
113,815
Raw Food
223,868
Rent
890,332
Total Expenses
10,984,950
OPERATING PROFIT/LOSS
$
(551,904)
**Financials required to complete the above requested information for 2013 and 2014 are not currently available to the Applicant
2
4. Please provide utilization statistics (both as a dollar value and percentage) for the existing facility by completing the table below for the requested years. Past Three Fiscal Years (Actual)
FY: 2013 ** PAYOR SOURCE:
FY: 2014 **
$
%
FY: 2015
$
%
$
%
Medicare
2,087,467
21%
Medicaid
5,792,022
58%
Managed Care
1,626,139
16%
Commercial
0%
HMO's
0%
Self Pay
458,684
Hospice
5%
-
0%
Ancillary/Retro
0% TOTAL
$ 9,964,312.00
100%
Charity Care*
**Financials required to complete the above requested information for 2013 and 2014 are not currently available to the Applicant Budgeted Current Year
Projected First Three Operating Years (if approved)
FY: 2016 PAYOR SOURCE: Medicare
$
%
FY: 2019
FY: 2018
FY: 2017 $
%
$
2,087,467
21%
1,849,734
Medicaid
5,792,022
58%
6,862,874
67%
7,000,132
Managed Care
1,626,139
16%
1,038,224
10%
1,058,989
Commercial HMO's Self Pay
-
0%
-
0%
458,684
Hospice
-
Ancillary/Retro
18%
%
0% 0%
9,964,312
18%
%
1,924,463
18%
67%
7,140,134
67%
10%
1,080,169
10%
-
0%
-
0%
-
0%
-
0%
5%
292,398
3%
298,246
3%
304,211
3%
0%
260,615
3%
265,828
3%
271,144
3%
0% TOTAL
1,886,729
$
0%
100% $ 10,303,845.98
100% $
10,509,923
0% 100% $
10,720,121
Charity Care*
*Charity Care does not include bad debt, and is based on costs (not charges). For Home Nursing Care Providers the statewide community standard shall be one percent (1%) of net patient revenue earned on an annual basis .
3
0% 100%
Appendix B Rhode Island Department of Health Office of Health Systems Development Compliance Report Oak Hill Operations Associates, LLC has applied for licensure as a healthcare facility in Rhode Island. As part of the regulatory requirements to determine the character, competence and other quality related information of the applicant, the Office of Health Systems Development is requesting the following information regarding the health care facilities operated by or affiliated with the applicant, as listed on the attached sheet. Please answer the following questions. 1. Are the agencies/facilities currently licensed and in substantial compliance with all applicable codes, rules and regulations?
Yes__
No__
If the answer to #1 is “NO”, please identify the facility(ies) and briefly explain the licensure status. 2.
Has there been any enforcement actions against these agencies/facilities in the past five years?
Yes__
No__
If the answer to #2 is “YES”, please identify the facility(ies) and include any information relevant to those enforcement actions (reason for action, stipulation, fine, etc.). In addition, please furnish a brief description of the outcome of the most recent survey, including any deficiencies cited. Additional pages may be attached, if needed.
Reviewer’s Name: __________________________________ Title: ______________________________ Department: _______________________________________________________ State: ______________ Telephone_________________________________________ E-mail _____________________________ Reviewer’s Signature: _______________________________________________ Date: ______________ If you have any questions, please contact Michael Dexter at (401) 222-2788 or e-mail,
[email protected] Please return the completed form within 15 days to the address below: Rhode Island Department of Health Office of Health Systems Development 3 Capitol Hill, Room 410 Providence, Rhode Island 02908 Thank you. Attachment
4
Appendix B (CONT.) Applicant, please provide the following information identifying each facility to the appropriate state agency as an attachment to the letter in the table below, use additional pages if necessary. Please make sure to identify yourself in the cover letter by filling in the blank for ‘Name of Applicant’. Name of Facility
Alpine Home Health Care Amazing Home Care Boro Park Center for Rehab Bronx Center for Rehab Bronx Center for Renal Dialysis Brooklyn Center for Rehab Buffalo Center for Rehab Bushwick Center for Rehab Bushwick Center for Renal Dialysis Centers Plan for Health Living Chittenango Center for Rehab Corning Center for Rehab Triboro Center for Rehab Essex Center for Rehab Fulton Center for Rehab Holliswood Center for Rehab Hope Center Indian River Northwoods Rehab & Nursing Richmond Center for Rehab Rome Center for Rehab Senior Care EMS Steuben Center for Rehab University Nursing Home Washington Center for Rehab Waterfront Center for Rehab Williamsbridge Manor
Address of Facility
City, State
Facility Type
4260 Bronx Road 1601 Bronxdale Ave 4915 10th Ave 1010 Underhill Ave 1010 Underhill Ave 1455 Coney Island Ave 1014 Delaware Ave 50 Sheffield Ave 50 Sheffield Ave 75 Vanderbilt Place 331 Russell Street 205 E. 1st Street 1160 Teller Ave 81 Park Street 847 Cohwy 122 195-44 Woodhull Avenue 1401 University Avenue 17 Madison Street 7 Keeler Ave 91 Tompkins Ave 801 North James Street 855 Brush Ave 7009 Rumsey Street Ext. 2505 Grand Ave 4573 Route 40 200 Seventh Ave 1540 Tomlinson Ave
Bronx, NY Bronx, NY Brookln, NY Bronx, NY Bronx, NY Brooklyn, NY Buffalo, NY Brooklyn, NY Brooklyn, NY Staten Island, NY Chittenango, NY Corning, NY Bronx, NY Elizabethtown, NY Gloversville, NY Hollis, NY Bronx, NY Granville, NY Moravia, NY Staten Island, NY Rome, NY Bronx, NY Bath, NY Bronx, NY Argyle, NY Buffalo, NY Bronx, NY
CHHA LHCSA Nursing Home Nursing Home Dialysis Center Nursing Home Nursing Home Nursing Home Dialysis Center Managed Care Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Ambulance Service Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home
5
State
NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY
OpCert 7000609 N/A 7001394N 7000381N 7000280R 7001388N 1401341N 7001364N 7001138R N/A 2629303N 5001300N 7000342N 1521300N 1754300N 7003409N 7000362N 5725302N 0526304N 7004324N 3201310N 31394 5022302N 7000337N 5750300N 1401337N 7000379N
Appendix C Nursing Home Proposals All change in effective control applications, which involve nursing homes, must be accompanied by responses to the questions posed herein. 1. Please provide the current patient census at the facility by payor source in the table below. 2/13 Date of Census _____________, Licensed bed capacity 129 Number of Payor Source Patients Medicaid 72 Medicare 13 Commercial 2 Private Pay 2 Other: (__________) TOTAL: 89
Percent of Total 81% 15% 2% 2% 100%
2. Please complete the following Medicaid per diem worksheet for the facility. COSTS Current First FY 2017 FY 2016 Project
Expense Pass Through Cost Center Fair Rental Cost Center Direct Labor Cost Center Other Operating Expenses TOTAL:
$
-
$
-
REIMBURSEMENT Current First FY FY 2016 2017
$
-
$
-
MAXIMUM RATE Current First FY 2017 FY 2016 Project
$
-
$
-
PLEASE NOTE: The Applicant’s understanding is that the new method of reimbursement for Medicaid Fee for Service no longer follows the methodology broken out above. Medicaid for Fee for Service is currently reimbursed under the Case Mix Adjusted System, and the rates that Facilities are paid currently are included in RUGS schedule prepared by the Medicaid Office (see attached Tab H). The Medicaid Managed Care Residents in the facility are reimbursed at the flat contracted rate with Neighborhood Health. 3. Please demonstrate that the applicant or proposed license holder shall have sufficient resources to operate the nursing facility at licensed capacity for thirty (30) days, evidenced by an unencumbered line of credit, a joint escrow account established with the Department, or a performance bond secured in favor of the state or a similar form of security satisfactory to the Department. See Tab I
6
Appendix C (CONT.) 4. Please complete the following itemization of projected utilization and net patient revenue. <-- FIRST FULL OPERATING YEAR 2017 --> CEC CEC NOT PAYOR DIFFERENCE APPROVED APPROVED MEDICAID: $ 205 $ Per Diem Revenue 205 5,224 Patient Days 33,477 28,254 1,070,852 $ 6,862,874 $ 5,792,022 $ Total Revenue MEDICARE: Per Diem Revenue Patient Days Total Revenue COMMERCIAL: Per Diem Revenue Patient Days Total Revenue PRIVATE PAY: Per Diem Revenue Patient Days Total Revenue
$
485 3,814 1,849,734 $
350 $ 5,964 2,087,467 $
135 (2,150) (237,733)
$
$ 350 300 2,966 5,420 1,038,224 $ 1,626,139 $
50 (2,454) (587,915)
$
345 200 848 292,398
$ 2,293 458,684 $
VETERANS: Per Diem Revenue Patient Days Total Revenue Hospice: Per Diem Revenue Patient Days Total Revenue
$ $
$ $
145 (1,446) (166,286)
-
205 $ 1,271 260,615 $
200.00 $ $
5 1,271 260,615
10,303,846 $
9,964,312 $
339,534
42,377
41,932
Part B: Total Revenue PATIENT TOTAL $ REVENUE: TOTAL PATIENT DAYS:
7
445
Appendix C (CONT.) 5. Based on the format below, please provide a summary of the applicant’s administrative and operational policies and procedures to provide individualized and resident-centered care, services, and accommodations, and a sense of peace, safety, and community, and clearly identify how the proposal would advance these areas: a. Resident’s physical environment: i. Accommodations for privacy vs. congregate and common areas; ii. Choice and autonomy in personal space, fixtures, furniture; iii. Access to and involvement in decentralized services, such as, community kitchen(s), laundry, activities; iv. Access to outdoors and outdoor activities (e.g., sunrooms, patios, gardens and gardening); It is the philosophy of Applicant that each Resident will receive needed services in the most homelike and comfortable setting possible, which will enhance quality of life. To effectuate this Residents are provided with privacy and private and shared-occupancy rooms. Common space, including lounge areas, provides opportunities for socialization, recreation and interaction. Residents and their family members are encouraged to decorate and personalize their rooms to their taste with personal items such as furniture, pictures, etc. While Applicant provides a full range of organized dining options including full dietary services and all meals and snacks (with a menu allowing Resident choice), community refrigerators and pantries are made available as well to store personal food items that Residents or their families and visitors may bring in from the outside. This storage area is monitored by Facility staff to ensure that the food items are consistent with the Resident’s dietary restrictions and that all items are labeled and disposed of timely, as needed. A comprehensive activities program and schedule is prepared well in advance and Residents are made aware of and encouraged to attend the various group activities that they enjoy most or that will be most beneficial to them. Should a Resident prefer solitary activities – materials for this including, television, books, movies, puzzles, card games, etc are always available as well. Activities Department personnel also visit Residents who choose to remain in their rooms to enhance their stay and activities as well. Resident laundry is done on-site. Access to outdoors is available to Residents with seating areas on the patio, terrace and balcony. b. Resident-centered systems of care: i. Security systems and care delivery systems to foster autonomy, choice, and negotiated risk; ii. Individualized daily/nightly scheduling (e.g., daily rhythm, going to bed, waking); iii. Dining flexibility (e.g., time, access to dining style and menu choice); iv. Lifestyle/activities flexibility; Offering a home-like environment and a Resident/Person centered level of care and allowing Resident’s choice in what they do is a paramount priority to Applicant, however, balancing the Resident interest in autonomy with the facility’s obligation to the maintain the health, safety and
8
well-being of a Resident community with a broad range of cognitive and/or physical abilities is a challenging dynamic. It requires great flexibility by all parties: the Residents, their families and representatives and facility staff as well as by regulators – all of whom may have different views on what is in the Residents best interest. The Applicant will assess the physical security systems of the Facility to ensure that it can maintain the health, safety and well-being of its Residents. Should improvements be needed to meet the necessary standard, they will be made. This includes wander management systems on main exits as well as alarms on all egress doors, allowing Residents to freely ambulate throughout the facility without fear of elopement. Conducting assessments of each Resident upon admissions as well as using the primary staffing model fosters strong relationships between the Residents and their Caregivers allowing them to learn each other’s preferences, routines, etc. This enhances the quality of life of the Residents and ensures that their choices are known and honored consistently. Residents are given choices as to their preferred times for waking in the morning, bathing, going to bed as well as the activities in which they can participate (throughout the day and evening). As mentioned above, by utilizing the assessments and the primary staffing – we are able to ensure the consistent honoring of these preferences. Residents are able to and are encouraged to convey their preferences related to dining times and location as well as their likes and dislikes on menu selection throughout their stay at the facility. Alternate meals are offered at each meal and the 4 week menu cycle that we have gets updated seasonally. Snacks are available throughout the day and Dietary Staff ensure that even those with the most restrictive of diets have as large a variety of food options as possible. A comprehensive activities program and schedule is prepared well in advance and Residents are made aware of and encouraged to attend the various group activities that they enjoy most or that will be most beneficial to them. Should a Resident prefer solitary activities – materials for this including, television, books, movies, puzzles, card games, etc are always available as well. Activities Department personnel also visit Residents who choose to remain in their rooms to enhance their stay and activities as well. Resident feedback is consistently solicited so that future activity schedules can incorporate more of the Residents choices. c. Workforce administration: i. How do staffing schedules and assignments ensure consistent delivery of resident services and foster relationship building? ii. Administrative status strategies for dealing with licensed staff turn-over (e.g. Registered nurses, Licenses Practical nurses, Nursing Assistants) The Applicant will institute its Primary Staffing Model which provides consistent staff with their primary Residents. This model fosters relationship building between Resident and Caregiver, enabling the staff to learn and consistently honor the preferences and routines of each individual Resident. As the Applicant recognizes that staff retention and low turnover is crucial to the success of a Nursing Home it has, in its sister facilities, instituted numerous programs to enhance the staff morale and to reduce turnover. Some programs include in-house CNA training programs, mentorships, tuition assistance for further education, continued in-service and education as well as offering opportunities for growth within the facility and overall organization.
9
Appendix D Source of Funds All applicants must complete this Appendix. I. Please provide the total expenditures necessary to implement this proposal and allocate this amount to the sources of funds categories listed below: TOTAL PROJECT COST:
$_6,350,000__________________________________*
SOURCE OF FUNDS
AMOUNT
a. Funded depreciation b. Other restricted funds (specify) __________ c. Unrestricted funds (specify) __________ d. Owner’s equity e. Sale of stock/other equity f. Unrestricted donations or gifts g. Restricted donations or gifts h. Government grant (specify) __________ i. Other non-debt funds (specify) __________
$ ____________ ____________ ____________ $1,587,500 ____________ ____________ ____________ ____________ ____________
j. Sub-Total Equity Funds
$1,587,500
k. Subsidized loan (e.g. FHA etc.) __________ l. Tax-exempt bonds (specify) __________ m. Conventional mortgage n. Lease or rental o. Other debt funds
____________ ____________ $4,762,500 ____________ ____________
p. Sub-Total Debt Funds
$4,762,500
q. Total Source of Funds
$6,350,000
* should equal the response for line “q”
1
Appendix E Debt Financing All applicants proposing debt financing must complete this Appendix. Applicants contemplating the incurrence of a financial obligation for full or partial funding of the proposal must complete and submit this appendix. 1. Please describe the proposed debt by completing the following: a.) type of debt contemplated Conventional mortgage b.) term (months or years) 7 years with 25 year amortization c.) principal amount borrowed $4,762,500 d.) probable interest rate 5% e.) points, discounts, origination fees 0.5 f.) compensating balance or reserved fund _________________ g.) likely security _________________ h.) disposition of property (if a lease is revoked) _________________ i.) prepayment penalties or call features _________________ j.) front end costs (e.g. underwriting spread, feasibility study, legal and printing expense, points etc.) _________________ k.) debt service reserve fund _________________ 2. If this proposal involves refinancing of existing debt, please indicate the original principal, the current balance, the interest rate, the years remaining on the debt and a justification for the refinancing contemplated. None 3. 3. Please present a debt service schedule for the chosen method of financing, which clearly indicates the total amount borrowed and the total amount repaid per year. Of the amount repaid per year, the total dollars applied to principal and total dollars applied to interest must be shown.
Date 2017 2018 2019 2020 2021 2022 2023 2024
Interest $ 235,895 $ 230,871 $ 225,590 $ 220,039 $ 214,203 $ 208,070 $ 201,622 $ 194,844
Principal $ $ $ $ $ $ $ $
98,198 103,222 108,503 114,055 119,890 126,024 132,471 139,249
$ $ $ $ $ $ $ $
Total Payment 334,093 334,093 334,093 334,093 334,093 334,093 334,093 334,093
1
7 Year Balloon Term Initial Amount Borrowed $4,762,500 Prinicpal Paid $ 941,612.15 Remaining Prinicpal $ 3,820,887.85
Appendix F Disclosure of Ownership and Control Interest All applicants must complete this Appendix. I. Please answer the following questions by checking either ‘Yes’ or ‘No’. If any of the questions are answered ‘Yes’, please list the names and addresses of individuals or corporations. A. Will there be any individuals (or organizations) having a direct (or indirect) ownership or control interest of 5 percent or more in the applicant, that have been convicted of a criminal offense related to the involvement of such persons or organizations in any of the programs established by Titles XVIII, XIX of the Social Security Act? Yes___ No_X__ B. Will there be any directors, officers, agents, or managers of the applicant (or facility) who have ever been convicted of a criminal offense related to their involvement in such programs established by Titles XVIII, XIX of the Social Security Act? Yes___ No_X__ C. Are there (or will there be) any individuals employed by the applicant (or facility) in a managerial, accounting, auditing, or similar capacity who were employed by the applicant's fiscal intermediary within the past 12 months (Title XVIII providers only)? Yes___ No_X__ D. Will there be any individuals (or organizations) having direct (or indirect) ownership interests, separately (or in combination), of 5 percent or more in the applicant (or facility)? (Indirect ownership interest is ownership in any entity higher in a pyramid than the applicant) Yes_X__ No___ (Note, if the applicant is a subsidiary of a "parent" corporation, the response is ‘Yes’) Name Kenneth Rozenberg Beth Rozenberg Jonathan Hagler
Home Address 3 Hunters Run, Suffern, NY 10901 3 Hunters Run, Suffern, NY 10901 1 Hunters Run, Suffern, NY 10901
E. Will there be any individuals (or organizations) having ownership interest (equal to at least 5 percent of the facility's assets) in a mortgage or other obligation secured by the facility? Yes___ No_X__ F. Will there be any individuals (or organizations) that have an ownership or control interest of 5 percent or more in a subcontractor in which the applicant (or facility) has a direct or indirect ownership interest of 5 percent or more. (Also, please identify those subcontractors.) Yes_X__ No___ Kenneth and Beth Rozenberg own Centers Health Care, a company which will provide consulting services to the Applicant primarily for bookkeeping related functions G. Will there be any individuals (or organizations) having a direct (or indirect) ownership or control interest of 5 percent or more in the applicant (or facility), who have been direct (or indirect) owners or employees of a health care facility against which sanctions (of any kind) were imposed by any governmental agency? Yes___ No_X__ H. Will there be any directors, officers, agents, or managing employees of the applicant (or facility) who have been direct (or indirect) owners or employees of a health care facility against which any sanctions were imposed by any governmental agency? Yes___ No_X__
2
Appendix G Ownership Information All applicants must complete this Appendix 1. List all officers, members of the board of directors, stockholders, and trustees of the applicant and/or ultimate parent entity. For each individual, provide their home and business address, principal occupation, position with respect to the applicant and/or ultimate parent entity, and amount, if any, of the percentage of stock, share of partnership, or other equity interest that they hold. Name Kenneth Rozenberg Beth Rozenberg Jonathan Hagler
Home Address 3 Hunters Run, Suffern, NY 10901 3 Hunters Run, Suffern, NY 10901 1 Hunters Run, Suffern, NY 10901
Business Address % Ownership 4770 White Plains Road, Bronx, NY 10470 5% None 5% 1 Hunters Run, Suffern, NY 10901 90%
2. For each individual listed in response to Question 1 above, list all (if any) other health care facilities or entities within or outside Rhode Island in which he or she is an officer, director, trustee, shareholder, partner, or in which he or she owns any equity or otherwise controlling interest. For each individual, please identify: A) the relationship to the facility and amount of interest held, B) the type of facility license held (e.g. nursing facility, etc.), C) the address of the facility, D) the state license #, E) Medicare provider #, F) any professional accreditation (e.g. JACHO, CHAP, etc.), and G) complete Appendix B ‘Compliance Report’ and submit it to the appropriate state agency. Name of Facility
Alpine Home Health Care Amazing Home Care Bannister Center for Rehab Boro Park Center for Rehab Bronx Center for Rehab Bronx Center for Renal Dialysis Brooklyn Center for Rehab Buffalo Center for Rehab Bushwick Center for Rehab Bushwick Center for Renal Dialysis Centers Plan for Health Living Chittenango Center for Rehab Corning Center for Rehab Triboro Center for Rehab Essex Center for Rehab Fulton Center for Rehab Holliswood Center for Rehab Hope Center Indian River Kingston Center for Rehab Northwoods Rehab & Nursing Park View Center for Rehab Richmond Center for Rehab Rome Center for Rehab Senior Care EMS Steuben Center for Rehab University Nursing Home Washington Center for Rehab Waterfront Center for Rehab Williamsbridge Manor
Address of Facility
City, State
Facility Type
4260 Bronx Road Bronx, NY CHHA NY 1601 Bronxdale Ave Bronx, NY LHCSA NY 135 Dodge Street Providence, R Nursing Home RI 4915 10th Ave Brookln, NY Nursing Home NY 1010 Underhill Ave Bronx, NY Nursing Home NY 1010 Underhill Ave Bronx, NY Dialysis Center NY 1455 Coney Island Ave Brooklyn, NY Nursing Home NY 1014 Delaware Ave Buffalo, NY Nursing Home NY 50 Sheffield Ave Brooklyn, NY Nursing Home NY 50 Sheffield Ave Brooklyn, NY Dialysis Center NY 75 Vanderbilt Place Staten Island, Managed Care NY Chittenango, NNursing Home NY 331 Russell Street 205 E. 1st Street Corning, NY Nursing Home NY 1160 Teller Ave Bronx, NY Nursing Home NY 81 Park Street ElizabethtownNursing Home NY 847 Cohwy 122 Gloversville, NNursing Home NY 195-44 Woodhull AvenuHollis, NY Nursing Home NY 1401 University AvenueBronx, NY Nursing Home NY 17 Madison Street Granville, NY Nursing Home NY 415 Gardner Rd West KingstonNursing Home 7 Keeler Ave Moravia, NY Nursing Home NY Providence, R Nursing Home RI 31 Parade Street 91 Tompkins Ave Staten Island, Nursing Home NY 801 North James Street Rome, NY Nursing Home NY Ambulance Ser NY 855 Brush Ave Bronx, NY 7009 Rumsey Street ExtBath, NY Nursing Home NY 2505 Grand Ave Bronx, NY Nursing Home NY 4573 Route 40 Argyle, NY Nursing Home NY 200 Seventh Ave Buffalo, NY Nursing Home NY 1540 Tomlinson Ave Bronx, NY Nursing Home NY
3
State
OpCert
KR
BR
100%
-
-
33%
-
-
LTC00600
5%
5%
90%
7001394N
99%
1%
-
7000381N
95%
5%
-
7000280R
70%
-
-
7001388N
95%
-
-
1401341N
90%
-
-
7001364N
98%
-
-
7001138R
70%
-
-
N/A
60%
-
-
2629303N
31%
-
-
5001300N
58%
-
-
7000342N
100%
-
-
1521300N
90%
-
-
7000609 N/A
JH
1754300N
81%
-
-
7003409N
88%
-
-
7000362N
95%
5%
-
5725302N
9%
-
-
LTC0068
5%
5%
90%
0526304N
-
5%
-
LTC00590
5%
5%
90%
7004324N
95%
-
-
3201310N
31%
-
-
31394
40%
-
-
5022302N
92%
-
-
7000337N
95%
5%
-
5750300N
90%
-
-
1401337N
81%
-
-
7000379N
95%
5%
-
3. If any individual listed in response to Question 1 above, has any business relationship with the applicant, including but not limited to: supply company, mortgage company, or other lending institution, insurance or professional services, please identify each such individual and the nature of each relationship. Kenneth and Beth Rozenberg own Centers Health Care, a company which will provide consulting services to the Applicant primarily for bookkeeping related functions. 4. Have any individuals listed in response to Question 1 above been convicted of any state or federal criminal violation within the past 20 years? Yes___ No_X__. • If response to Question 4 is ‘Yes’, please identify each person involved, the date and nature of each offense and the legal outcome of each incident. 5. Please list all licensed healthcare facilities (in Rhode Island or elsewhere) owned, operated or controlled by any of the entities identified in response to Question 15 of the application. For each facility, please identify: A) the entity, applicant or principal involved, B) the type of facility license held (e.g. nursing facility, etc.), C) the address of the facility, D) the state license #, E) Medicare provider #, F) any professional accreditation (e.g. JACHO, CHAP, etc.), and G) complete Appendix B ‘Compliance Report’ and submit it to the appropriate state agency. Name of Facility
Alpine Home Health Care Amazing Home Care Bannister Center for Rehab Boro Park Center for Rehab Bronx Center for Rehab Bronx Center for Renal Dialysis Brooklyn Center for Rehab Buffalo Center for Rehab Bushwick Center for Rehab Bushwick Center for Renal Dialysis Centers Plan for Health Living Chittenango Center for Rehab Corning Center for Rehab Triboro Center for Rehab Essex Center for Rehab Fulton Center for Rehab Holliswood Center for Rehab Hope Center Indian River Northwoods Rehab & Nursing Park View Center for Rehab Richmond Center for Rehab Rome Center for Rehab Senior Care EMS Steuben Center for Rehab University Nursing Home Washington Center for Rehab Waterfront Center for Rehab Williamsbridge Manor Kingston Center for Rehab
Address of Facility
City, State
Facility Type
4260 Bronx Road 1601 Bronxdale Ave 135 Dodge Street 4915 10th Ave 1010 Underhill Ave 1010 Underhill Ave 1455 Coney Island Ave 1014 Delaware Ave 50 Sheffield Ave 50 Sheffield Ave 75 Vanderbilt Place 331 Russell Street 205 E. 1st Street 1160 Teller Ave 81 Park Street 847 Cohwy 122 195-44 Woodhull Avenue 1401 University Avenue 17 Madison Street 7 Keeler Ave 31 Parade Street 91 Tompkins Ave 801 North James Street 855 Brush Ave 7009 Rumsey Street Ext. 2505 Grand Ave 4573 Route 40 200 Seventh Ave 1540 Tomlinson Ave 415 Gardner Rd
Bronx, NY Bronx, NY Providence, RI Brookln, NY Bronx, NY Bronx, NY Brooklyn, NY Buffalo, NY Brooklyn, NY Brooklyn, NY Staten Island, NY Chittenango, NY Corning, NY Bronx, NY Elizabethtown, NY Gloversville, NY Hollis, NY Bronx, NY Granville, NY Moravia, NY Providence, RI Staten Island, NY Rome, NY Bronx, NY Bath, NY Bronx, NY Argyle, NY Buffalo, NY Bronx, NY West Kingston, RI
CHHA LHCSA Nursing Home Nursing Home Nursing Home Dialysis Center Nursing Home Nursing Home Nursing Home Dialysis Center Managed Care Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Ambulance Service Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home Nursing Home
4
State
NY NY RI NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY RI NY NY NY NY NY NY NY NY RI
OpCert 7000609 N/A LTC00600 7001394N 7000381N 7000280R 7001388N 1401341N 7001364N 7001138R N/A 2629303N 5001300N 7000342N 1521300N 1754300N 7003409N 7000362N 5725302N 0526304N LTC00590 7004324N 3201310N 31394 5022302N 7000337N 5750300N 1401337N 7000379N LTC0068
6. Have any of the facilities owned, operated or managed by the applicant and/or any of the entities identified in Question 5 above during the last 5-years had bankruptcies and/or were placed in receiverships? Yes___ No_X__ • If response to Question 6 is ‘Yes’, please identify the facility and its current status.
5
Tab A
CONSULTING SERVICES AGREEMENT THIS CONSULTING SERVICES AGREEMENT (this “Agreement”) is made as of this 1 day of January, 2017 (the “Effective Date”), by and between Oak Hill Operations Associates, a Rhode Island limited liability company, having an address at 544 Pleasant St, Pawtucket, RI 02860 (the “Facility”) and Centers for Care LLC d/b/a Centers Health Care, a New York limited liability company, having an address at 4770 White Plains Road, Bronx, NY 10470 (“CHC”). st
WHEREAS, CHC provides certain business operations services to skilled nursing facilities; WHEREAS, the Facility requires assistance in connection with their business operations; and WHEREAS, CHC desires to provide such services to the Facility; NOW THEREFORE, in consideration of the premises hereof, and the covenants and obligations contained herein, CHC and the Facility agree as follows: ARTICLE I APPOINTMENT, DESIGNATION AND AFFILIATION 1.1 Engagement. The Facility hereby engages CHC to provide the services set forth in this Agreement. CHC hereby accepts such appointment and undertakes to perform such services on behalf of the Facility. Subject to the terms of this Agreement, CHC shall have the right, authority and obligation to perform the services and take the actions described in this Agreement. CHC shall provide the services in accordance with Federal, state and local statutes, rules and regulations. 1.2 Relationship of the Parties. All actions of CHC in performing its duties and providing the Services pursuant to this Agreement shall be as the Facility’s agent and for the account of the Facility.
ARTICLE II SERVICES 2.1 Services to be Provided. At the request of the Facility, CHC will provide the services described in Exhibit A, and the services described in any attachment incorporated by reference into this Agreement or any addendum or amendment to this Agreement (the “Services”). CHC may, in its sole discretion and without notice to Facility, make changes to its Services, so long as such changes do not materially alter any of the provisions of this Agreement. ARTICLE III FACILITY COOPERATION, COMPENSATION AND INDEMNIFICATION
3.1 Payment of Fees. CHC shall render a bill to the Facility in accordance with Exhibit B for the Services provided on a monthly basis. Payment of such bill shall be due and payable by the Facility to CHC by the fifteenth (15th) of each month for the preceding month. 3.2 Reasonableness. The parties hereto agree that the compensation provided in this Article III is consistent with fair market value in an arm’s-length transaction and is not and has not been determined in a manner that takes into account the volume or value of any referrals or business otherwise generated for or with respect to the Facility or between the parties or any of the respective owners thereof for which payment may be made in whole or in part under Medicare or any state health care program or under any other payor program. 3.3 Records and Liaison. The Facility shall fully cooperate towards the end of achieving the purposes of this Agreement set forth herein at the Facility’s sole cost and expense. The Facility will provide the necessary records, data, information and such software for the performance of such Services by CHC as agreed to by the parties. The Facility will have a liaison whose job responsibilities will include overseeing and communicating with CHC. 3.4 Indemnifications. The Facility hereby acknowledges that CHC is relying on the accuracy of all the records provided by the Facility, including, but not limited to, billing information, resident/patient demographics, resident assessments and RUG scores, financial data and other pertinent information in the performance of the Services contemplated under this Agreement. The Facility shall indemnify and hold CHC harmless from all claims, liabilities, losses, fines and other expenses (including reasonable attorneys’ fees) arising from any and all services performed by CHC pursuant to this Agreement to the extent these claims, liabilities, losses, fines, and/or other expenses arise from the information provided by the Facility to CHC. Without limiting any other provision contained herein, the provisions of this Section 3.4 shall survive the termination of this Agreement. ARTICLE IV TERM AND TERMINATION 4.1 Term. This Agreement shall commence on the Effective Date and shall continue for a period of one (1) year (the “Initial Term”) and thereafter shall renew automatically for successive one (1) year periods (each, a “Renewal Term” and, together with the Initial Term, the “Term”), unless terminated sooner as provided herein. 4.2 Termination. This Agreement may be terminated upon the occurrence of any of the following: (a)
the mutual written consent of the Facility and CHC;
(b)
by either party without cause, upon sixty (60) days written notice to the other party;
(c)
by either party for cause;
(i) “Cause” shall mean a material breach or default of any provision, obligation, covenant of, representation or warranty set forth in this Agreement, which breach, default or violation is not cured to the commercially reasonable satisfaction of the non-breaching party within thirty (30) days of its giving of detailed written notice of such material breach or default to the other party. Notwithstanding the foregoing, either party may terminate this Agreement immediately if the breaching party does not, within seven (7) days, cure a failure by it to comply with a material pertinent provision of any Federal, state or local statute, rule or regulation in carrying out its responsibilities hereunder; provided, however, that (i) if such failure poses a material risk of imminent harm to a patient at the Facility, the aforementioned cure period shall be reduced to twenty-four (24) hours, or (ii) if such failure does not pose a material risk of imminent harm to a patient at the Facility and cannot reasonably be cured within seven (7) days, the aforementioned cure period shall be extended for a reasonable period of time, as determined by the non-breaching party, provided that the breaching party, within such seven (7) day period, has commenced taking steps to effectuate a cure, and thereafter diligently and continuously takes reasonable steps to complete the cure; provided further that, CHC shall not be permitted to terminate this Agreement for failure of the Facility to comply with a material provision of any Federal, state or local statute, rule or regulation if such failure is a result of CHC’s recommendation or action. (d)
by either party, immediately, in writing upon the following: exclusion of either party from the Medicare or Medicaid programs and, in the case of CHC, exclusion of any of its owners or failure of either party to maintain insurance coverage as provided herein; and
(e)
by CHC, immediately, in the event the Facility fails to pay the monthly bill in accordance with Section 3.1 above within ten (10) days after its due date.
4.3 Effect of Termination. The termination or expiration of this Agreement shall not affect (i) the obligations, claims and liabilities of any party accruing prior to such termination or expiration if such obligations remain unsatisfied at the date of termination or expiration, including without limitation, any amounts due and owing from one party to the other pursuant to the terms hereof, and (ii) obligations, promises or covenants contained herein which are expressly made to extend beyond the Term of this Agreement. ARTICLE V INDEPENDENT CONTRACTOR RELATIONSHIP 5.1 Independent Contractor. This Agreement is not intended, and shall not be construed to create a joint venture, partnership or association between CHC and the Facility. Each party hereto is an independent contractor of the other.
5.2 Independent Contractor Relationship. CHC’s relation to the Facility during the Term of this Agreement shall be that of an independent contractor, and the amounts being paid hereunder shall not be subject to withholding taxes or other employment taxes as required with respect to compensation paid by an employer to an employee. CHC shall indemnify and hold harmless the Facility to the extent permitted by law from and against any and all liabilities, claims, and demands for all payments required by any applicable unemployment and disability insurance, self-employment taxes, social security, income tax and other withholdings, deductions, and payments required by Federal, state or local laws, or otherwise authorized from or based upon payments made to CHC in connection with its providing the Services to the Facility pursuant to this Agreement. 5.2 Waiver of Right to Benefits. CHC, its employees and agents shall not be considered under the provisions of this Agreement or otherwise as having an employee status with the Facility, or as being entitled to participate in any plans, arrangements, or distribution of the Facility, pertaining to, or in connection with, any pension, profit-sharing, health, medical or similar benefits for its regular employees, and the execution of this Agreement by CHC shall constitute a waiver of participation by it, its employees and agents in any pension, profit-sharing, health, medical or similar plans established by the Facility for its employees. 5.3 Independence of the Parties. It is understood that each party will remain independent and continue to be responsible for its own assets, operations and liabilities, and neither party nor its governing boards will have any legal authority over the assets or operations nor any legal responsibility for the liabilities of the other party. CHC, on the one hand, and the Facility on the other, will continue their separate corporate existences and, except as set forth herein, their respective corporate powers shall not be enlarged, impaired or otherwise affected by this Agreement. Their respective endowments, as applicable, and all other funds shall remain separate and be managed separately. Neither party has the authority to enter into contracts or assume any obligations for the other party, nor to make any warranties or representations on behalf of the other party, except as specifically provided herein. Each party shall take reasonable efforts to prevent third parties from misconstruing their relationship. ARTICLE VI COMPLIANCE 6.1 Access to Records. To the extent that the services provided under this Agreement are deemed by the Secretary of the Department of Health and Human Services, the U.S. Comptroller General, or the Secretary’s or Comptroller’s delegate, to be subject to the provisions of 42 C.F.R. §420.300-304, the parties to this Agreement, until the expiration of six (6) years subsequent to the furnishing of the Services under this Agreement, shall make available upon written request of the Secretary, the Comptroller, or any of its or their duly authorized representatives, this Agreement, and the books, documents, and records of the parties that are necessary to certify the nature and extent of the costs of the Services provided under this Agreement. To the extent permitted hereunder if any party carries out any of its duties under this Agreement through a subcontract, deemed to be subject to the provisions of 42 C.F.R. §420.300-
304, with a related organization (as defined in 42 C.F.R. §413.17(1), such subcontract shall contain a clause to the effect that until the expiration of six (6) years after the furnishing of such services pursuant to such subcontract, the related organization upon written request shall make available to the Secretary, the Comptroller, or any of its or their duly authorized representatives, the subcontract, and books, documents, and records of such organization that are necessary to verify the nature and extent of the costs of the services provided under the subcontract. In the event that any party, its successor or assigns, is requested to provide or disclose any books, documents or records relevant to this Agreement for the purpose of an audit or investigation, the party subject to such request shall notify the other party of the nature and scope of such request and shall make available to the other party, upon its request, all such books, documents or records. 6.2
Compliance with NYCRR.
(a) Notwithstanding any other provision in this Agreement, the Facility remains responsible for ensuring that any of the Services provided by it pursuant to this Agreement complies with all pertinent provisions of Federal, state and local statutes, rules and regulations. Notwithstanding the foregoing, this provision shall not serve nor be construed in any manner to limit, eliminate, amend or modify CHC’s obligations contained in this Agreement. 6.3 Professional Responsibility. The Facility retains professional and administrative responsibility for obtaining services that meet professional standards and principles that apply to professionals providing services in the Facility. Notwithstanding the foregoing, this provision shall not serve nor be construed in any manner to limit, eliminate, amend or modify CHC’s obligations contained in this Agreement. 6.4 Compliance with Anti-Discrimination Laws. The parties to this Agreement shall comply with all applicable federal, state and local, laws or regulations, in that no person shall, on the grounds of race, color, creed, religion, sexual orientation, national origin, age, sex, marital status, blindness, source of payment or sponsorship, or disability, be excluded from participation in, be denied benefits of, or otherwise be subjected to discrimination under any program, service, employment relationship or activity offered by any party. 6.5
Reserved.
6.6 Facility Personnel. The Facility shall direct and supervise, in its sole discretion, all personnel of the Facility. 6.7
Reserved.
6.8 Retention of Ownership and Control. The Facility shall hold all necessary licenses and permits to operate. In providing the Services under this Agreement, CHC shall have reasonable and necessary use of the Facility, to the extent necessary, to perform the Services hereunder and as permitted by applicable law. Notwithstanding any other provision of this Agreement, the Facility shall remain responsible for ensuring that any of the Services provided pursuant to this Agreement complies with all pertinent provisions of Federal, state, and local laws, rules, regulations and ordinances, and standards of accreditation. The Facility, acting through its operators, retains the ultimate authority for the overall policy, operation and assets of the Facility. The Facility shall not delegate to CHC, and CHC will not be responsible for, any powers and responsibilities not specifically allocated to CHC in this Agreement. Specifically, notwithstanding anything in this Agreement to the contrary, the Facility retains and shall not delegate authority and responsibility over the following: (a)
The Facility retains direct, independent authority over the appointment and/or dismissal, in its sole discretion, of the Facility’s personnel, including without limitation, key management employees and the Administrator.
(b)
The Facility retains the right to adopt and approve, in its sole discretion, the Facility’s operating and capital budgets.
(c)
The Facility retains independent control over the Facility’s books and records.
(d)
The Facility retains the right to independently adopt, approve and enforce, in its sole discretion, the Facility’s operating policies and procedures.
(e)
The Facility retains the right to independently adopt, approve and enforce, in its sole discretion, policies affecting the Facility’s delivery of health care services.
(f)
The Facility retains authority, in its sole discretion, over the disposition of assets and authority to incur debts.
(g)
The Facility retains the right to approve, in its sole discretion, certificate of need applications filed by or on behalf of the Facility.
(h)
The Facility retains the right to approve, in its sole discretion, contracts for management or clinical services.
(i)
The Facility retains the right to approve, in its sole discretion, Facility debt.
(j)
The Facility retains the right to approve, in its sole discretion, settlements of administrative proceedings or litigation to which the Facility is a party.
(k)
No powers specifically reserved to the Facility may be delegated to, or shared with, CHC.
6.9 Business Associate. CHC and the Facility agree to maintain the confidentiality of patient identifying information and records and not to disclose such information except as may be required or permitted by applicable law. The parties acknowledge that CHC will use, and the Facility will disclose to CHC, certain confidential information of patients of the Facility. CHC hereby assures the Facility that it will safeguard protected health information made available to it or obtained by the Facility. In furtherance of these requirements, the parties shall enter into a Business Associate Agreement in the form attached hereto as Exhibit C. Without limiting any other provision contained herein, this Section 6.9 shall survive the termination or expiration of this Agreement. 6.10 The Facility Policies. CHC acknowledges and agrees that it will comply with all oral or written rules, regulations, by-laws, practices and policies of the Facility as it may adopt from time to time. CHC acknowledges that all medical records, files and charts, as well as any financial and other records pertaining to the Services rendered hereunder are the property of the Facility and that same may not be duplicated or removed from the Facility’s offices during the Term hereof or upon termination or expiration of this Agreement without the express written consent of the Facility. 6.11 Responsibility for Liabilities. Each party hereto agrees that it shall be solely responsible for all liabilities, claims, lawsuits, judgments and expenses arising out of the acts or omissions of its respective employees, agents and other persons under its supervision and control, except to the extent such acts or omissions of such employees, agents or other persons are the result of the gross negligence or willful misconduct of the other party, its employees or agents. ARTICLE VII NONDISCLOSURE 7.1 Nondisclosure of Proprietary Information. Each party acknowledges and agrees that during the Term it will have access to Confidential Information (as defined below) and other proprietary information of the other party. Neither party shall, nor shall its members, managers, shareholders, directors, officers, employees, representatives and agents, except as may be required under applicable law or by any lawful subpoena, court order or legal process, at any time without the other party’s prior written consent (i) disclose any Confidential Information and/or proprietary information to any third party, or (ii) reproduce or utilize any Confidential Information and/or proprietary information in furtherance of any other business venture. If a party is required under applicable law or by lawful subpoena, court order, or legal process to disclose any Confidential Information and/or other proprietary information of the other, such disclosing party shall provide sufficient notice thereof to the other to enable such party to seek a protective order or other appropriate legal or equitable remedy to prevent such disclosure; provided that each party shall be permitted to disclose the Confidential Information and/or proprietary information to its legal and other advisers. Furthermore, CHC shall also keep medical records of the Facility confidential in accordance with all applicable state and Federal laws, including, but not limited to, Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its related regulations and shall execute and abide by the Business Associate Agreement, annexed hereto and incorporated herein as Exhibit C. For purposes of this Article VII, the term “Confidential Information” shall mean the non-public information of a party, or
any entity with which a party contracts to provide any of the Services, including, but not limited to, formulae, patterns, compilations, programs, devices, methods, systems, techniques, processes, financial information, business strategies, costing data, patient lists, payor lists, patient surveys, manuals, policies and procedures, forms, and contractual arrangements. Confidential Information shall not include information which: (w) is known to the receiving party prior to receiving it from the other party; (x) is generally known to the public; (y) is disclosed to one party at any time by a third party who had the legal right to disclose it; or (z) is independently developed by the other party in compliance with law. The provisions of this Article VII shall survive the termination or expiration of this Agreement. 7.2 Reasonableness of Restrictions. The parties acknowledge that the restrictions in Article VII, Section 7.1 are reasonable and necessary to protect the legitimate interests of the parties and that any violation would result in irreparable injury to the non-disclosing party. The parties further acknowledge that, in the event of a violation of any such restrictions, the non-disclosing party shall be entitled to preliminary and permanent injunctive relief without having to prove actual damages or immediate or irreparable harm or to post a bond. The non-disclosing party shall also be entitled to an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies to which the non-disclosing party may be entitled to at law or in equity. Notwithstanding the foregoing, if the restrictions specified in Article VII, Section 7.1 are adjudged unreasonable in any court proceeding, the parties hereby agree to the reformation of such restriction by the court to such limits as it finds reasonable, and neither party will assert that such restrictions should be eliminated in their entirety by such court. ARTICLE VIII INSURANCE 8.1
Insurance.
(a) During the Term, each party agrees to maintain in full force and effect adequate policies of the following insurance: malpractice or professional liability, general liability, automobile liability, workers’ compensation, employer’s liability and all risk property coverage. (b) On or before the Effective Date (and thereafter upon request by one party to the other), each party shall provide the other with certificates of insurance evidencing the insurance required to be maintained under this Agreement. The certificates of insurance required hereunder shall state that each party shall be provided with thirty (30) days’ notice of changes in carriers or material terms of the coverage. Each party shall also arrange for appropriate levels of coverage for all subcontractors, shall maintain in its files evidence of all subcontractors’ insurance coverage, and shall provide proof of such coverage to the other party upon request. Each party agrees to maintain any insurance required hereunder for a period of not less than three (3) years following the termination or expiration of this Agreement that is underwritten on a claims made rather than on an occurrence basis, unless such continuing coverage is not required in order for the parties to maintain adequate coverage. The terms of this Section shall not be deemed to limit the liability of the parties, or to limit any rights the parties may have, including, without limitation, rights of indemnity and contribution.
(c) The Facility shall name CHC as an additional insured on its professional and general liability insurance policies. ARTICLE IX MISCELLANEOUS 9.1 Limitation of Claims. Except as provided herein, no claim may be made by either party against the other party for affiliation costs arising out of this Agreement, except for affiliation costs that have been agreed to by a separate, written agreement between CHC and the Facility. Any program or arrangement that may be developed or result from this Agreement, and the financial arrangements relating thereto, shall be undertaken only after the prior written approval, in each instance, by CHC and the Facility. No provision of this Agreement shall commit either party to make any investment or expenditure except as so authorized in each instance. 9.2 Exhibits Incorporated by Reference. The Exhibit(s) to this Agreement are a part of this Agreement as if set forth at length verbatim where reference is made to them in this Agreement. 9.3 Change in Law. If there is a change in Medicare, Medicaid or other Federal or state statutes or regulations or in the interpretation thereof, which renders any of the material terms of this Agreement unlawful or unenforceable, this Agreement shall be amended by the parties hereto as a result of good faith negotiations to the least extent necessary in order to carry out the original intention of the parties in compliance with such law or regulation. In the event such law or regulation is subsequently amended or interpreted in such a way as to make any provision of this Agreement that was formerly invalid valid, such provision shall be considered valid from the effective date of such interpretation or amendment. The Facility and CHC further agree that the benefits to CHC hereunder do not require, are not payment for, and are not in any way contingent upon, the referral (as that term is defined in 42 USC §1395nn or 42 USC1320a-7(b)), admission, or any other arrangement for the provision of any item or service offered by CHC to the Facility in any facility or health care operation controlled managed, or operated by the Facility. 9.4 Approvals. Where the agreement, approval, acceptance or consent by either party is required under this Agreement, such action shall not be unreasonably delayed or withheld, except as otherwise specifically provided herein. 9.5 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Rhode Island, without giving effect to its conflicts of law provisions. 9.6 Severability. The provisions of this Agreement shall be severable, and if any provisions shall be prohibited by law, or invalid, or unenforceable in whole or in part for any reason, the remaining provisions shall remain in full force and effect. 9.7 Non-Waiver. Failure of any party to this Agreement to object to or take affirmative action with respect to any conduct of the other which is violative of the terms hereof, shall not be construed as a waiver thereof or of any future breach or subsequent misconduct.
9.8 Section Headings. The section headings used herein are for convenience of reference only and shall not limit or otherwise affect any of the terms or provisions hereof. 9.9 Gender and Number. Whenever the context of this Agreement requires, the gender of all words herein shall include the masculine, feminine, and neuter, and the plural of all words shall include the singular and plural. 9.10 Assignment. No party hereto shall assign this Agreement or delegate its obligations hereunder without the prior written consent of the other party hereto in each instance. Notwithstanding, the foregoing, all covenants, conditions, and obligations contained herein shall be binding upon, and shall inure to the benefit of, the permitted successors and assigns of CHC and the Facility. 9.11 Notices. All notices and other communications required or permitted hereunder shall be in writing. Notices and such other communications may be delivered either (a) personally, against written receipt therefore or (b) by means of (i) recognized overnight courier service (such as Federal Express, UPS, Airborne Express or U.S.P.S. Express Mail), (ii) postage paid, certified or registered mail, return receipt requested, or (iii) electronically confirmed facsimile or e-mail transmission. Notices shall be addressed as follows: If to CHC: Centers Health Care 4770 White Plains Road Bronx, New York 10470 Email:
[email protected] With a copy to: Erlichman Law PC 101 Lawrence Avenue Lawrence, New York 11559 Email:
[email protected]
If to the Facility: Oak Hill Operations Associates, LLC Attention-Administrator 544 Pleasant St Pawtucket, Rhode Island 02860 or, in the case of any of the parties hereto, at such other address as such party shall have furnished to each of the other parties hereto in accordance with this Section 9.11. Each such notice, demand, request or other communication shall be deemed given (x) on the date of personal delivery, (y) on the first business day following the date of delivery to the overnight
courier or facsimile or e-mail transmission, or (z) three business days following such certified or registered mailing. 9.12 Amendment; Modification. This Agreement shall not be modified or amended except by a written document executed by both parties. 9.13 Authorization. Each party acknowledges that the execution of this Agreement and all other documents of even date have been duly authorized. 9.14 Counterparts; Faxed or E-Mailed Signatures. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. Any executed signature page delivered by facsimile or e-mail transmission shall be binding to the same extent as an original executed signature page, with regard to any agreement subject to the terms hereof or any amendment thereto. 9.15 Entire Agreement. This Agreement contains the entire Agreement between CHC and the Facility with respect to the subject hereof and supersedes any prior agreements between the parties regarding the subject matter hereof. CHC and the Facility expressly agree that there are no promises, agreements, conditions, undertakings, warranties, or representations, oral or written, expressed or implied between them, other than as set forth herein. 9.16 Voidable Terms. Except as otherwise provided herein, any provision in this Agreement that is inconsistent with any laws, statutes, and/or regulations shall be deemed null and void. 9.17 Third Party Beneficiaries. Nothing in this Agreement shall create or be deemed to create any third-party beneficiary rights in any person or entity not a party to this Agreement. 9.18 Confidentiality of Agreement. The terms and conditions of this Agreement, as well as any documents or information (not publicly available) provided in connection with the negotiation and preparation of this Agreement, are to be considered confidential information. 9.19 Representation by Counsel. The parties agree that each has had the benefit of representation by legal counsel in negotiating this Agreement. No party is to be construed as the drafter of this Agreement for purposes of determining the meaning of any provision of this Agreement, or for allocating the benefit of any future ambiguity. 9.20 Compliance with Law. Notwithstanding any other provision in this Agreement, the Facility remains responsible for ensuring that the ownership and operation of the Facility and any of the Services provided pursuant to this Agreement comply with all pertinent provisions of Federal, state and local statutes, rules and regulations. CHC and the Facility agree that it shall each comply with all pertinent provisions of Federal, state and local statutes, rules and regulations in carrying out its responsibilities hereunder, including, but not limited to HIPAA. 9.21 Compliance Programs. CHC acknowledges that it has reviewed the Facility’s compliance policies and procedures, including its Corporate Compliance Program, Code of Conduct, and its HIPAA policies and procedures (collectively referred to as the “Compliance
Programs”) and CHC agrees to comply with the Compliance Programs and to use its best efforts to assist the Facility in the implementation and continued operation of the Compliance Programs. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written. THE FACILITY: Oak Hill Operations Associates
By: Name: Kenneth Rozenberg Title: CEO
CHC: CENTERS FOR CARE LLC D/B/A CENTERS HEALTH CARE
By: Name: Kenneth Rozenberg Title: CEO
EXHIBIT A SERVICES 1. Consulting and Advisory Services. At the request of the Facility, CHC shall provide consulting and advisory services related to administration and operational functions, including, but not limited to, advice and assistance with regard to the following: (a) Operational Consulting. CHC shall provide the following advice and consultation in connection with the overall operations of the Facility: (i) System policy and procedure review and recommendations; (ii) Strategic and tactical recommendations related to operations, which shall include marketing and purchasing; (iii) Advice and consultation in connection with the Facility’s admissions, accounts receivable, accounts payable, billing, human resources, labor management, plant operations and payroll systems and operations.
(b) Accounts Receivables: Subject to Facility’s ultimate authority over maintenance and control of Facility books and records, and subject to monthly review and approval by Facility, CHC shall be responsible for the operation, supervision and oversight of all functions related to accounts receivables. This will include the necessary assistance and supervision of staff providing the following services: (i) Medicaid application process which will include assisting and supervising the staff in interacting with families, collection of NAMI, collection of private funds, submission of award letters, and preparation of applications for representative payee; (ii) Maintenance of resident/patient billing files, financial information, census, payor sources, and bed assignment maintenance in the computer system; (iii) Monitoring timely payments to the Facility by all payor sources including Medicaid, Medicare, private insurance, HMOs, private pay agreements, NAMI collections, patients/residents; and (iv) Pursuing payments for delinquent resident/patient accounts and assisting the Facility, at the Facility’s sole expense, to take any necessary legal actions, including, but not limited to, guardianships, in order to secure payments to the Facility. (c) Billing: Subject to Facility’s ultimate authority over maintenance and control of Facility books and records, and subject to monthly review and approval by Facility, CHC shall be
responsible for the operation, supervision and oversight of all functions related to billing. This will include the necessary assistance to and supervision of staff performing and providing the following services: (i) All billing functions for all payor sources, including Medicare Part A and Part B, Medicaid, private insurance, HMOs, and private pay agreements; and (ii) Maintenance of all billing and posting records, overall accounts receivables and resident/patient ledgers.
(d) Accounts Payables: Subject to Facility’s ultimate authority over maintenance and control of Facility books and records, and subject to monthly review and approval by Facility, CHC shall be responsible for the operation, supervision and oversight of all functions related to accounts payables. This will include the necessary assistance and supervision of staff performing accounts payable functions. The Facility will provide, on a pre-arranged basis, CHC with all invoices, along with the purchase order and packing slip, if applicable; and all approved payables shall be the obligations and liabilities of the Facility and checks will be prepared by CHC, and signed by Authorized Facility Official and issued in accordance with the mutual agreement of the parties. (e) Payroll: Excluding any responsibility, obligation or liability for payroll payments to the Facility staff, which shall remain the sole obligations, responsibilities and liabilities of the Facility, CHC will be responsible for the operation, supervision and oversight of all functions related to the payroll process. CHC’s operation, supervision and oversight of all functions related to the payroll process will be subject to Facility’s ultimate authority over maintenance and control over books and records, and subject to monthly review and approval by Facility. CHC’s responsibility to functions related to the payroll process will include the necessary assistance to and supervision of staff performing and providing the following services: (i) Establishment of payroll budgets; (ii) Schedule coordination with Nursing and other departments– managing and monitoring hours, processing hours and payroll, processing of payroll reports, communication of time clock data to all pertinent parties. (f)
Reports: (i) CHC will be responsible for the preparation of health facility assessment filing on a monthly basis. CHC’s role in preparation of health facility assessment filing shall only be advisory in nature, and Facility shall retain full control and authority over assessment filing obligations; (ii) CHC will assist the Facility with the preparation of RHCF 4 and Medicare cost reports. CHC’s role in preparation of RHCF 4 and Medicare cost reports shall only be advisory in nature, and Facility shall retain full control and authority over RHCF 4 and
Medicare cost reports; (iii) CHC will assist the Facility in reviewing of rate sheets as made available by the State Department of Health; and (iv) CHC will assist the Facility in filing of necessary appeals in concert with Facility’s Certified Public Accountant/Consultant at the Facility’s expense. (g) Bookkeeping: Subject to Facility’s ultimate authority over maintenance and control over books and records, and subject to monthly review and approval by Facility, CHC will be responsible for: (i) Reconciliation of billing records against accounts receivables and cash receipts; (ii) Maintenance of electronic resident/patient billing files; (iii) Maintenance and reconciliation of resident/patient fund records and accounts; (iv) Preparation of monthly operating cash flow projections; (v) Preparation of monthly bank reconciliations; and (vi) Preparation of Medicare credit balance report, provided, however, an Officer of the Facility will execute the Medicare credit balance report. (h) Pharmacy Assistance: (i) (ii)
CHC will audit Facility’s monthly pharmacy bills and request credits, as appropriate from Pharmacy Vendor CHC will assist Facility in implementing formulary management as well as other cost containment processes to lower monthly pharmacy costs. This may include attending pharmacy meetings, review of rx orders, discussions with Facility Physicians and Nursing Staff.
(i) Human Resources: (i) CHC will check all Facility employees against the various Excluded Persons Databases to ensure Facility is in compliance with relevant OMIG rules: and (ii) CHC will monitor employees’ eligibility for Family Medical Leave Act and will act as the liaison between Facility and Employees to discuss any questions that arise related to this. (j)
Miscellaneous. (i) All billings for clinical consulting services shall be “in the name, on behalf, and for the benefit of,” the Facility.
(ii) The Facility’s bank accounts shall be maintained “in the name, on behalf, and for the benefit of,” the Facility. (iii) The Facility retains responsibility for the Facility’s financial oversight. (iv) CHC shall provide the Facility, no less frequently than monthly, a detailed accounting of all billings, receivables and payables with respect to this agreement handled by CHC.
2. Clinical Consulting Services. CHC shall provide clinical consulting services to the Facility. The clinical consulting services shall include and not be limited to: (a) Providing advice and assistance to the Facility with respect to the administrative functioning of the following departments: Therapy, Social Services and Nursing. (b) In consultation with the Facility, develop operating policies and procedures, rules and methods of operation appropriate to such departments. (c)
Subject to the Facility’s approval, training and orientation of staff.
(d) As part of the Facility’s overall performance improvement program, CHC shall recommend procedures to ensure the consistency and quality of all the Services to be provided by CHC and shall additionally participate in the Facility’s overall performance improvement program in accordance with the Facility’s policies and the policies of accrediting organizations. Such participation shall include, but shall not be limited to, attendance at monthly departmental meetings. (e) CHC shall cooperate with the Facility in connection with surveys and inspections related to the Facility and in the implementation of any corrections or recommendations. (f) CHC shall assist the Facility with respect to its CMI, Medicare and case-mix reimbursement and shall advise the Facility in connection with administering controls and systems for appropriately recording and capturing revenues of the Facility. Additionally, CHC shall provide staff training on use of assessment tools and accuracy and reliability of Minimum Data Set (MDS) assessment data. (g) CHC shall assist the Facility in connection with its implementation of an Electronic Medical Records program, as well as, maintenance of such program after implementation. 3. Marketing. CHC shall assist the Facility to develop and implement a marketing plan, including but not limited to, print advertising, logo and trademark design, marketing strategies and media purchases. CHC and the Facility may participate in joint marketing efforts to increase public awareness of services being provided by the Facility along with the services provided by other Affiliated Providers, provided this will not preclude either CHC or the Facility from conducting its own marketing efforts independent from the other.
4. Staffing. CHC shall furnish and have available to furnish sufficient part-time temporary licensed skilled professional staff for the health care activities described herein, and as otherwise required by Facility. The parties expressly agree that all Temporary Staff shall diligently devote such time and best efforts as is reasonably required in the performance of their services. Temporary Staff will perform their services conscientiously, efficiently and to the best of their ability. Nothing contained herein shall preclude Temporary Staff from engaging in other business activities unrelated to the Facility, provided that such activities do not interfere in any way with the performance of their obligations under this Agreement. All Temporary Staff employed by CHC under this Agreement shall render their services to the Facility pursuant to the instruction and direction of the CHC and be subject to all applicable policies and procedures of Facility. (a) Facility agrees that it shall be its own responsibility to ensure that all Temporary Staff provided to Facility are licensed, qualified and competent to perform skilled licensed professional services appropriately and in accordance with Federal, State and local law, Facility’s job descriptions and established standards of care. (b) Facility agrees to provide to the Temporary Staff the appropriate Facility identification while they are providing services “on duty” at Facility. (c) Facility agrees to ensure that all Temporary Staff have submitted, and Facility has retained, evidence of: (i)
appropriate licensure and current registration to practice in Rhode Island;
(ii) compliance with the personnel requirements required by the Department of Health in rule and regulation, including but not limited to, 10 NYCRR §415.26, as may be amended (“Personnel/Health Requirements”). The Facility shall also ensure that all Temporary Staff has had a physical exam within 6 months before providing any services at the Facility and all recommended inoculations in accordance with the Department of Health Memorandum dated October 18, 1994 regarding the management of communicable diseases among employees. (iii)
Compliance with the Immigration Reform and Control Act of 1986.
(d) Facility agrees to advise all Temporary Staff of the Facility’s policies and procedures governing the performance of work by Temporary Staff including all proper clinical record documentation requirements, identification requirements, HIPPA policies and procedures, and all other applicable policies and procedures. (e) CHC represents that it has included in its initial employment application, a requirement that each applicant disclose any criminal conviction. Further, CHC represents that it has performed a reasonable and prudent background investigation of all Temporary Staff, for the purpose of disclosing any criminal convictions or convictions of other offenses which would preclude their employment in a nursing facility, the results of said background checks shall be
made available to Facility upon their request. (f) The selection and employment or retention of any Temporary Staff, to provide services hereunder, shall be at all times subject to the reasonable approval of the Facility. Notwithstanding anything to the contrary herein, the Facility shall have the right to require the removal of any Temporary Staff from the Facility for any grounds, and upon such removal, CHC shall provide a replacement for such removed individual, subject to the approval of the Facility. Notwithstanding the foregoing, nothing in this Section shall be construed to mean that the Facility is an employer of the Temporary Staff, or that any of the Temporary Staff is an employee of the Facility. (g) Facility agrees to compensate CHC based upon the agreed upon schedule of wages listed in in a corresponding attachment incorporated by reference into this Agreement or addendum or amendment to this Agreement. 5.
Affiliation.
(a) It is agreed that the Facility and CHC shall affiliate to accomplish the goals described in this Agreement. During the Term of this Agreement, the Facility (i) shall be entitled to refer to itself as “Affiliated with Centers Health Care” or “Member of Centers Health Care”, (ii) may use the CHC’s logo on its letterhead and marketing material, and (iii) may have signage that states “Affiliate Provider of Centers Health Care or “Member of Centers Health Care”.” During the Term of this Agreement, CHC may list the Facility on its website, as well as printed material, as an affiliated healthcare provider or as a member of its network of providers. The foregoing rights set forth in this Section, shall terminate upon the termination or expiration of this Agreement and shall not be transferred, sold, assigned, licensed or otherwise conveyed in any manner whatsoever, to any other third party, related entity or related facility, without the prior written consent of the Facility or CHC, as appropriate, which consent may be withheld for any reason at such party’s sole and absolute discretion. Except as otherwise provided herein, neither CHC nor the Facility shall make use of the other’s name or logo, either jointly or singly, except in such manner as may be agreed upon in writing by the party whose name or logo is to be used. (b) Except as otherwise set forth herein, the affiliation between the Facility and CHC will be limited to marketing efforts and the identification of professionals, consultants, vendors and healthcare providers and other resources that can assist the Facility in the provision of quality care to its residents in the most efficient and effective manner.
EXHIBIT B FEES 1. Fees for Services and Affiliation. It is the intent of CHC to pass along to the Facility the actual cost of providing the Services set forth herein to the Facility. It is not the intention of CHC to profit from the provision of the Services set forth herein. The Facility and CHC have common, but not identical, ownership. The intention of the arrangement set forth herein is to improve the quality of the Services provided by the Facility, reduce costs and improve efficiencies. CHC provides the Services to other facilities, some of which have a common ownership to the Facility. The fees for the Services shall, to the maximum extent possible, represent the actual costs incurred by CHC in providing the Services to the Facility. Common costs, including, but not limited to, utilities, rent and the salaries of the Corporate Compliance Liaison, shall be allocated to each facility, including the Facility, that CHC provides the Services to in proportion to each facility’s bed size.
EXHIBIT C BUSINESS ASSOCIATE AGREEMENT This Business Associate Agreement (the “Agreement”) is entered into on this 1st day of January, 2017 (the “Effective Date”), between Oak Hill Operations Associates LLC (the “Covered Entity”) and Centers for Care LLC (the “Business Associate”). This Business Associate Agreement is entered into pursuant to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and the regulations promulgated by the United States Department of Health and Human Services thereunder (“HIPAA regulations”), the Health Insurance Technology for Economic and Clinical Health Act, Title XIII of the American Recovery and Reinvestment Act of 2009 (the “HITECH Act”), and the Omnibus Rule enacted in 2013 (all collectively referred to herein as “HIPAA”). WITNESSETH: WHEREAS, Covered Entity has entered into a Consulting and Affiliation Agreement (the “Agreement”) with Business Associate. WHEREAS, Business Associate will have access to, receive, maintain, create, or transmit certain Protected Health Information (“PHI”) and Electronic Protected Health Information (“EPHI”) as those terms are defined in 45 C.F.R. §160.103, in connection with goods or services that are being provided by Business Associate to Covered Entity, that is confidential and subject to protection under HIPAA. WHEREAS, Covered Entity and Business Associate desire to define and identify their permitted use and disclosure of PHI and to define how to maintain the confidentiality, integrity and availability of EPHI. NOW, THEREFORE, in consideration of the mutual agreements, undertakings, representations and warranties hereinafter set forth, the parties hereby agree as follows: 1.
DEFINITIONS
1.1. General. Terms used, but not otherwise defined, in this Agreement shall have the same meaning given to those terms by HIPAA in effect or as amended from time to time. Any reference in this Agreement to a section in the Privacy Rule or Security Rule means the section as in effect or as amended, and for which compliance is required. 1.2.
Specific. a. Breach. “Breach” shall have the same meaning as the term “breach” in 45 CFR §164.402. b. Business Associate. “Business Associate” shall have the same meaning as the term “business associate” in 45 CFR 160.103, and in reference to the party to this Agreement.
c. Covered Entity. “Covered Entity” shall have the same meaning as the term “covered entity” in 45 CFR 160.103, and in reference to the party to this Agreement. d. Electronic Health Record. “Electronic Health Record” shall have the same meaning as the term “electronic health record” in 45 CFR §170.102. e. Electronic Protected Health Information. “Electronic Protected Health Information” or “EPHI” shall have the same meaning as the term “electronic protected health information” in 45 CFR § 160.103, limited to the information that Business Associate creates, receives, maintains, or transmits from or on behalf of Covered Entity. f. HIPAA Rules. “HIPAA Rules shall mean the Privacy, Security, Breach Notification, and Enforcement Rules in 45 CFR Part 160 and Part 164. g. Protected Health Information. “Protected Health Information” or “PHI” shall have the same meaning as the term “protected health information” in 45 CFR § 160.103, limited to the information created or received by Business Associate from or on behalf of Covered Entity. h. Unsecured Protected Health Information. “Unsecured Protected Health Information” shall have the same meaning as the term “unsecured protected health information” in 45 CFR § 164.402. 2.
PERMITTED USE AND DISCLOSURES BY BUSINESS ASSOCIATE
2.1. Business Associate agrees to not use or further disclose PHI provided or made available to it by Covered Entity for any purpose other than as permitted or required by this Agreement or as required by law. Business Associate shall comply with the provisions of this Agreement relating to privacy and security of PHI and all present and future provisions of HIPAA that relate to the privacy and security of PHI and that are applicable to Covered Entity and/or Business Associate. 2.2. Business Associate shall be permitted to use or disclose PHI to perform its obligations under the License Agreement as long as such agreement is in effect. 2.3. Business Associate shall be permitted to use PHI that it receives in its capacity as Business Associate if necessary, for its proper management and administration or to carry out its legal responsibilities provided that such disclosure is permitted under state and federal confidentiality laws. 2.4. Business Associate shall be permitted to use and disclose PHI that it receives in its capacity as Business Associate if necessary, to provide data aggregation services relating to the health care operations of Covered Entity. 2.5. Business Associate shall be permitted to disclose to third parties PHI that it receives in its capacity as a Business Associate, for its proper management and administration or to carry out its legal responsibilities provided it receives reasonable assurances from the person to whom the information is disclosed that: (i) the information will be held confidentially and used or further disclosed only as required by law or, for the purpose for which the information was disclosed and (ii) it shall notify Covered Entity immediately of any instance that it is aware that the
confidentiality of the information has been breached. 3.
RESPONSIBILITIES OF THE PARTIES
3.1. Business Associate agrees to use appropriate safeguards to prevent the use or disclosure of the PHI other than as permitted by this Agreement. Business Associate shall maintain and implement appropriate administrative, physical and technical safeguards to prevent unauthorized use or disclosure of PHI to prevent unauthorized parties from having access to or, modifying or copying PHI and to reasonably and appropriately protect the confidentiality, integrity and availability of the EPHI that it creates, receives, maintains, or transmits on behalf of Covered Entity and to comply with Subpart C of 45 CFR Part 164 with respect to such EPHI. 3.2. Business Associate, in accordance with 45 CFR 164.502(e)(1)(ii) and 164.308(b)(2), if applicable, shall require all of its subcontractors and agents that receive, maintain, create, transmit or use or have access to PHI and EPHI under this Agreement and/or the License Agreement, to agree, in writing, to adhere to the same restrictions and conditions on the use and/or disclosure of PHI and EPHI that apply to Business Associate pursuant to this Agreement. 3.3. Business Associate shall require its subcontractors to notify Business Associate immediately of any potential breach of unsecured PHI and Business Associate shall immediately notify Covered Entity in writing of any such potential breach of unsecured PHI. Business Associate shall require its subcontractors to cooperate with Business Associate in all investigations related to any potential or certain breach of unsecured PHI and provide any and all information concerning such breach to Covered Entity and/or Federal or State regulatory or investigative agency. 3.4. Business Associate shall report immediately in writing to Covered Entity of its discovery of any unauthorized use or disclosure of PHI not permitted or required by this Agreement or of any security incident relating to EPHI, of which it becomes aware, including breaches of unsecured PHI as required at 45 CFR 164.410. 3.5. Business Associate agrees to promptly notify Covered Entity following the discovery of a Breach of Unsecured PHI. A Breach is considered “discovered” as of the first day on which the Breach is known, or reasonably should have been known, to Business Associate or any employee, officer or agent of Business Associate, other than the individual committing the Breach. Any notice of a security incident or Breach of Unsecured PHI shall include the identification of each Individual whose PHI has been, or is reasonably believed by Business Associate to have been accessed, acquired, or disclosed during such security incident or Breach as well as a description of what happened, the type of Unsecured PHI that were involved, what Business Associate is doing to investigate the Breach, or the security incident and the steps taken by Business Associate to mitigate any harmful effect known by it to have occurred as a result of the breach of this Agreement. 3.6. Upon Business Associate’s breach or violation of its obligations, Business Associate shall take reasonable steps to cure the breach or end the violation, as applicable. 3.7. Business Associate agrees to mitigate, to the extent practicable, any harmful effect that is known to Business Associate or its employees, officers or agents in violation of the requirements
of this Agreement (including, without limitation, any security incident or Breach of Unsecured PHI) and to protect against any further Breaches. Business Associate agrees to reasonably cooperate and coordinate with Covered Entity in the investigation of any violation of the requirements of this Agreement and/or any security incident or Breach. Business Associate shall also reasonably cooperate and coordinate with Covered Entity in the preparation of any reports or notices to the individual, a regulatory body or any third party required under HIPAA or any other Federal or State laws, rules or regulations, provided that any such reports or notices shall be subject to the prior written approval of Covered Entity. Notwithstanding anything in this section to the contrary, Business Associate may delay notification of a Breach of Unsecured PHI to Covered Entity in the event Business Associate is instructed to do so by a law enforcement official. 3.8. Notwithstanding anything in the Consulting Agreement to the contrary, Covered Entity may terminate the Consulting Agreement immediately if any term under this Agreement is violated or breached and such violation or breach cannot otherwise be cured within the time specified by Covered Entity. If neither termination nor cure is feasible, Covered Entity shall report the violation to the Secretary of the United States Department of Health and Human Services (the Secretary). 3.9. Business Associate agrees that upon termination of the Consulting Agreement, it shall return or destroy all PHI received from Covered Entity or created by Business Associate for Covered Entity, regardless of the form of such data. Business Associate shall retain no copies of the PHI unless return or destruction is not reasonably feasible. If such return or destruction is not feasible, Business Associate will extend the protections of this Agreement to the PHI and limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible. If Business Associate elects to destroy the information, it shall certify in writing to Covered Entity that the information has been destroyed. This provision shall also apply to the PHI that is in the possession of subcontractors or agents of Business Associate. 3.10. If Business Associate is maintaining PHI in a designated record set as that term is defined under 45 CFR §164.501 (“Designated Record Set”), Business Associate agrees to provide access to an Individual or Covered Entity, at the request of Covered Entity, in order to meet the requirements under 45 CFR §164.524. 3.11. If Business Associate is maintaining PHI in a Designated Record Set, Business Associate agrees to incorporate any amendments or corrections to PHI at the request of Covered Entity or an Individual in accordance with 45 CFR 164.526, or take other measures as necessary to satisfy covered entity’s obligations under 45 CFR 164.526. 3.12. Business Associate shall make available to Covered Entity or an Individual the information required for an accounting of disclosures of PHI and EPHI in accordance with HIPAA and as necessary to satisfy Covered Entity’s obligations under 45 CFR 164.528. 3.13. Covered Entity agrees to provide Business Associate with any changes in, or revocation of, permission by an individual to disclose PHI, if such changes affect Business Associate’s permitted uses and disclosures and Business Associate agrees to comply with such changes.
3.14. Business Associate agrees upon prior written request, to make available within two (2) days, during normal business hours at Business Associate’s offices all records, books, amendments, policies and procedures relating to the use or disclosure of PHI to Covered Entity for purposes of enabling Covered Entity to determine Business Associate’s compliance with the terms of this Agreement. 3.15. Business Associate agrees to make its internal books, records and practices relating to the use and disclosure of PHI received from or, created by or, received by Business Associate on behalf of Covered Entity available to the Secretary for the purpose of determining Covered Entity’s compliance with HIPAA. 3.16. Business Associate does not acquire any ownership or any other right or title in the PHI or EPHI data (other than its non-exclusive right of possession for purposes of fulfilling its legal obligations under the Consulting Agreement). 3.17. Business Associate shall disclose to its subcontractors, agents or third parties, and request from Covered Entity, only the minimum amount of PHI or EPHI necessary to perform or fulfill a specific function required or permitted hereunder and as necessary to perform the services set forth in the License Agreement. 3.18. Business Associate agrees and understands that it must develop and implement a system of sanctions for any employee, subcontractor or agent who violates this Agreement or HIPAA. 3.19. Covered Entity agrees not to request Business Associate to use or disclose PHI and EPHI in any manner that would not be permissible under HIPAA. 3.20. To the extent Business Associate is to carry out one or more of Covered Entity’s obligation(s) under Subpart E of 45 CFR Part 164, Business Associate shall comply with the requirements of Subpart E that apply to Covered Entity in the performance of such obligation(s). 3.21. Business Associate represents, warrants, and covenants, that it is, and shall continue to be, in compliance with the Security Rule to the extent applicable. 4.
MISCELLANEOUS
4.1. The parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for Covered Entity to comply with the requirements of HIPAA. 4.2. The respective rights and obligations of Business Associate and Covered Entity hereunder shall survive termination of this and the License Agreement. 4.3. Business Associate will indemnify and hold harmless Covered Entity including, as applicable, its shareholders, officers members, managers, employees, and agents, from and against all claims, demands, costs, damages, penalties, liabilities, loss, and expenses, including reasonable attorney’s fees which may arise, directly or indirectly, against Covered Entity as a result of any violation of this Agreement or HIPAA. Business Associate shall require all of its subcontractors to indemnify and hold Covered Entity harmless for and against all claims, demands, costs, damages, penalties, liabilities, loss, and expenses including reasonable attorney’s
fees which may arise against Covered Entity as a result of any violation of the Business Associate agreement between Business Associate herein and its subcontractors. 4.4. This Agreement may not be modified, nor shall any provision hereof be waived or amended, except in writing duly signed by authorized representatives of the Parties. A waiver with respect to one event shall not be construed as continuing, or as a bar to, or, a waiver of any right or remedy as to subsequent events. 4.5. It is expressly understood and agreed by the parties that any inconsistency or conflict between this Agreement and the Consulting Agreement shall be determined in every instance in favor of this Agreement except as otherwise set forth herein. Any ambiguity in this Agreement shall be resolved in favor of a meaning that permits Covered Entity to comply with HIPAA. In all other respects, the Consulting Agreement, as previously entered into, shall continue in full force and effect according to its terms. In the event that any portion of this Agreement shall be determined to be invalid or unenforceable, the remainder of this Agreement shall be deemed to continue to be binding upon the parties hereto in the same manner as if the invalid or unenforceable provision were not a part of this Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective the day, month and year first above written. Covered Entity
By:
Business Associate
By:
Print name & title: Kenneth Rozenberg, CEO
Print name & title: Kenneth Rozenberg, CEO
Tab B
Tab C
Post Transaction Organizational Chart
Oak Hill Operations Associates, LLC d/b/a Oak Hill Center
A Rhode Island limited liability company whose members include Kenneth Rozenberg (5%), Beth Rozenberg (5%) and Jonathan Hagler (90%). The Members have ownership interest in the following health care facilities: Name of Facility
Alpine Home Health Care Amazing Home Care Bannister Center for Rehab Boro Park Center for Rehab Bronx Center for Rehab Bronx Center for Renal Dialysis Brooklyn Center for Rehab Buffalo Center for Rehab Bushwick Center for Rehab Bushwick Center for Renal Dialysis Centers Plan for Health Living Chittenango Center for Rehab Corning Center for Rehab Triboro Center for Rehab Essex Center for Rehab Fulton Center for Rehab Holliswood Center for Rehab Hope Center Indian River Kingston Center for Rehab Northwoods Rehab & Nursing Park View Center for Rehab Richmond Center for Rehab Rome Center for Rehab Senior Care EMS Steuben Center for Rehab University Nursing Home Washington Center for Rehab Waterfront Center for Rehab Williamsbridge Manor
Address of Facility
City, State
Facility Type
4260 Bronx Road Bronx, NY CHHA NY 1601 Bronxdale Ave Bronx, NY LHCSA NY Providence, R Nursing Home RI 135 Dodge Street 4915 10th Ave Brookln, NY Nursing Home NY 1010 Underhill Ave Bronx, NY Nursing Home NY 1010 Underhill Ave Bronx, NY Dialysis Center NY 1455 Coney Island Ave Brooklyn, NY Nursing Home NY 1014 Delaware Ave Buffalo, NY Nursing Home NY 50 Sheffield Ave Brooklyn, NY Nursing Home NY 50 Sheffield Ave Brooklyn, NY Dialysis Center NY Staten Island, Managed Care NY 75 Vanderbilt Place Chittenango, Nursing Home NY 331 Russell Street 205 E. 1st Street Corning, NY Nursing Home NY 1160 Teller Ave Bronx, NY Nursing Home NY ElizabethtownNursing Home NY 81 Park Street Gloversville, NNursing Home NY 847 Cohwy 122 195-44 Woodhull AvenuHollis, NY Nursing Home NY 1401 University AvenueBronx, NY Nursing Home NY 17 Madison Street Granville, NY Nursing Home NY 415 Gardner Rd West KingstonNursing Home 7 Keeler Ave Moravia, NY Nursing Home NY Providence, R Nursing Home RI 31 Parade Street 91 Tompkins Ave Staten Island, Nursing Home NY 801 North James Street Rome, NY Nursing Home NY Ambulance Ser NY 855 Brush Ave Bronx, NY 7009 Rumsey Street ExtBath, NY Nursing Home NY 2505 Grand Ave Bronx, NY Nursing Home NY 4573 Route 40 Argyle, NY Nursing Home NY 200 Seventh Ave Buffalo, NY Nursing Home NY 1540 Tomlinson Ave Bronx, NY Nursing Home NY
State
OpCert
KR
BR
JH
7000609
100%
-
-
N/A
33%
-
-
LTC00600
5%
5%
90%
7001394N
99%
1%
-
7000381N
95%
5%
-
7000280R
70%
-
-
7001388N
95%
-
-
1401341N
90%
-
-
7001364N
98%
-
-
7001138R
70%
-
-
N/A
60%
-
-
2629303N
31%
-
-
5001300N
58%
-
-
7000342N
100%
-
-
1521300N
90%
-
-
1754300N
81%
-
-
7003409N
88%
-
-
7000362N
95%
5%
-
5725302N
9%
-
-
LTC0068
5%
5%
90%
0526304N
-
5%
-
LTC00590
5%
5%
90%
7004324N
95%
-
-
3201310N
31%
-
-
31394
40%
-
-
5022302N
92%
-
-
7000337N
95%
5%
-
5750300N
90%
-
-
1401337N
81%
-
-
7000379N
95%
5%
-
Tab D
CHARITY CARE POLICY & PROCEDURE
Oak Hill Center for Rehabilitation & Health Care
Purpose: It shall be the policy of Oak Hill Center for Rehabilitation & Health Care to provide free care to Residents on a case-by-case basis, based on facility financial ability. Qualifying Residents: Provider will provide free care to those Residents who have a medical need for Provider’s services and who meet the charity care guidelines as outlined herein (“Qualifying Residents”). Accordingly, Qualifying Residents will be those uninsured or underinsured Residents with incomes up to 125% of the Federal Poverty Limits and who are without readily available funds that could be used to pay for their care. (Qualifying Residents must have applied for any governmental assistance programs for which they qualify. If a Qualifying Resident is not eligible for governmental assistance or is denied governmental assistance, such Resident may apply for charity care.) Charity Care Policy: Provider agrees it will neither bill Qualifying Residents for services directly supplied by Provider nor collect any fees for provision of such services. Services that are provided under contract with an outside provider shall not be eligible for charity care and will be billed in the customary manner, unless otherwise explicitly agreed to in writing by the outside provider. Monitoring: A summary of charity care provided will be drafted and provided to management on an annual basis.
APPLICATION FOR FINANCIAL AID
Any approval of this request is temporary and expires 6 months from the date of approval
Oak Hill Center for Rehabilitation & Health Care – 544 Pleasant St, Pawtucket, RI 02860
Patient Name: Date of Birth: Social Security #(if issued): Home Phone #: Home Address: Work Phone #: Occupation/Employer:
Address:
Guarantor: Social Security # (if issued): Home Phone #: Work Phone #: Relation to Patient: Address:
Please provide the following information for ALL members of the family unit, EXCEPT the Patient and Guarantor Name & Relationship to Patient: Social Security # (if issued): Date of Birth: Home Address: Employer Name, Address & Phone: Name & Relationship to Patient: Social Security # (if issued): Date of Birth: Home Address: Employer Name, Address & Phone: Name & Relationship to Patient: Social Security # (if issued): Date of Birth: Home Address: Employer Name, Address & Phone:
MONTHLY INCOME
ASSETS
Patient's Salary and Wages: Spouse's Salary and Wages: Guarantor's Salary and Wages: Self-Employment Income: Child Care Income: Rental Income: Unemployment Compensation: Temporary Disability Insurance: Child Support: Alimony: Workers' Compensation: VA Benefits: Social Security Payments: Dividend & Interest Income: Royalties: Pensions: Public Assistance: Other: TOTAL MONTHLY INCOME:
Savings: Checking: Certificates of Deposit (CDs): Money Market Accounts: Savings Bonds: Stocks: Bonds: Mutual Funds: IRAs: 401(k)s: 403(b)s: 457s: Cash-In Value Life Insurance: Personal Property: 2nd Home & Rental Property: 2nd Motor Vehicle: TOTAL ASSETS:
Signature:
Date:
Reviewer Signature: Maximum Income Allowed: Denial Comments:
Approval Discount %: Approved Amount: $ % of Federal Poverty Level:
TOTAL ANNUAL INCOME:
I request that Oak Hill make a determination of eligibility for financial aid. I understand that this information is confidential and subject to verification by Oak Hill. I also understand that if the information I provided is false, I may be denied financial aid and be liable for payment for the services provided. I hereby attest that the information in this application is complete and correct to the best of my knowledge and that I understand the process and my responsibilities.
Tab E
Policy: Continuous Quality Improvement And Assurance Plan Date Initiated:
Pawtucket Center
Date Revised:
Highlights
Policy Statement This facility shall develop, implement, and maintain an ongoing, facility-wide Quality Improvement and Assurance Plan designed to monitor and evaluate the quality of resident care, pursue methods to improve care quality, and resolve identified problems.
Policy Interpretation and Implementation Purposes of the Quality Improvement and Assurance Plan
The primary purposes of the Quality Improvement and Assurance plan are: 1.
To provide a means to identify and resolve present and potential negative outcomes related to resident care and safety;
2.
To reinforce and build upon effective systems of services and positive care measures;
3.
To provide a structure and process to correct identified quality deficiencies;
4.
To establish and implement plans to correct deficiencies, and to monitor the effects of these action plans on resident outcome;
5.
To help departments, consultants, and ancillary services that provide direct or indirect care to residents to communicate effectively, and to delineate lines of authority, responsibility, and accountability;
6.
To provide a means to centralize and coordinate comprehensive Quality Improvement and Assurance activities in order to meet the needs of the residents and the facility; and
7.
To establish a system and process to maintain documentation relative to the Quality Improvement and Assurance Program, as a basis for demonstrating that there is an effective ongoing program.
Authority
Authority
Implementation of the Quality Improvement and Assurance Plan
1.
The owner and/or governing board (body) of our facility shall be ultimately responsible for the Quality Improvement and Assurance Program.
2.
The Administrator is responsible for assuring that this facility’s Quality Improvement and Assurance Program complies with federal, state, and local regulatory agency requirements.
Implementation 1.
The Quality Improvement and Assurance Committee shall oversee implementation of our Quality Improvement and Assurance Plan. A Quality Improvement and Assurance Coordinator shall coordinate Quality Improvement and Assurance Committee activities, including documentation.
2.
This committee shall meet quarterly to review reports, evaluate the significance of data, and monitor quality-related activities of all departments, services, or committees.
Evaluation of the Quality Improvement and Assurance Program
Quality Improvement and Assurance Coordinator
3.
The Quality Improvement and Assurance Committee shall oversee and authorize Quality Improvement and Assurance activities, including data-collection tools, monitoring tools, and the basis for and appropriateness and effectiveness of Quality Assurance activities.
4.
The committee shall approve any corrective actions, including changes in policies and/or procedures, employment practices, standards of care, etc., and shall also monitor all corrective activities for appropriateness and/or the need for alternative measures.
5.
The committee may recommend ways to reinforce and expand identified positive approaches and outcomes to various departments or services.
6.
Individual departments or services shall develop quality indicators for programs and services in which they are involved and which affect their function.
7.
Information regarding Quality Improvement and Assurance activities is confidential and may be disclosed only in accordance with applicable laws and regulations.
8.
Departments, services, and committees shall submit their reports to the Quality Improvement and Assurance Committee as directed by the committee.
Evaluation 1.
The facility shall evaluate the effectiveness of its Quality Improvement and Assurance Program at least annually and shall present their conclusions to the owner/governing board for review.
2.
The Quality Improvement and Assurance Committee, Administrator, and the governing board shall review and approve a summary of problems and corrective measures.
Coordinator 1.
The Quality Improvement and Assurance Coordinator shall attend and/or review minutes of meetings of other committees or departments as needed.
2.
The Quality Improvement and Assurance Coordinator will help other committees, individuals, departments, and/or services develop quality indicators, monitoring tools, criteria, and assessment methodologies, and help them identify and evaluate concerns impacting resident care and safety.
3.
The Quality Improvement and Assurance Coordinator will act as a liaison among committees, individuals, services, and/or departments regarding Quality Improvement and Assurance activities.
Focus Focus of the Quality Improvement and Assurance Program
1.
The following areas are monitored for quality and appropriateness of resident care, and any trends in performance and outcomes: Resident Rights Admissions, Transfers, and Discharges Resident Behavior and Facility Practices Physical Environment Administration Resident Assessments and Care Plans Nursing Services Disaster Preparedness
Dental Services Pharmacy Services Infection Control Quality of Life Quality of Care Nurse Aide Training Activity Services Safety
Staff Development Utilization Review (as applicable) Specialized Rehabilitative Services
Associated Policies References
Dietary Services Medical Records Physician Services
2.
Each department or service will review its approaches to monitoring performance and outcomes and provide a summary of its findings to the Quality Improvement and Assurance Committee at least annually.
3.
Each department or service will identify and adopt indicators that pertain to its services. It may adapt these indicators from pertinent standards of practice of professional organizations or regulatory requirements. The Quality Improvement and Assurance Committee shall review and approve such indicators.
4.
The Quality Improvement and Assurance Committee shall evaluate these various reports to help define issues, plan and implement actions, and ensure monitoring and follow-up. Quality Improvement and Assurance Committee Operations Policy and Procedure Manual, Med-Pass, Inc , Revised December 2009
Policy: Quality Improvement And Assurance Committee
Pawtucket Center
Date Initiated:
Date Revised
Highlights
Policy Statement This facility shall establish and maintain a Quality Improvement and Assurance Committee that oversees the identification and handling of quality issues.
Policy Interpretation and Implementation Administration of the Quality Improvement and Assurance Program by the Quality Improvement and Assurance Committee
5.
The Administrator shall delegate the necessary authority for actions and processes to the Quality Improvement and Assurance Committee.
6.
The committee shall be a standing committee of the facility, and shall provide reports to the Administrator and governing board (body).
Goals of the Committee Goals of the Committee
The primary goals of the Quality Improvement and Assurance Committee are: 1.
To monitor and evaluate the appropriateness and quality of care provided within the framework of the Quality Improvement and Assurance Plan;
2.
To oversee facility systems and processes related to improving quality of care and services;
3.
To promote consistent facility systems and processes and appropriate practices in resident care;
4.
To help identify negative outcomes relative to resident care and resolve them appropriately;
5.
To help departments, consultants and ancillary services implement plans to correct identified issues in quality of care;
6.
To coordinate the development, implementation, monitoring, and evaluation of action plans to achieve specified quality goals;
7.
To help departments, consultants and ancillary services establish effective accountability for care quality; and
8.
To coordinate and facilitate communication regarding the delivery of quality resident care within and among departments and services, and between facility staff, residents, and family members.
Committee Authority Committee Authority
The Quality Improvement and Assurance Committee advises the Administrator and owner and/or governing board (body). The committee has the full authority to oversee the implementation of the Quality Improvement and Assurance Program, including, but not limited to, the following: 9. 10.
Identifying negative and positive outcomes of care and services; Establishing quality indicators and identifying pertinent standards of practice; and
11.
Meeting with the owner/governing board (body) to review quality-related items.
Committee Chairperson
Committee Chairperson The Quality Improvement and Assurance Coordinator shall coordinate the activities of the Quality Improvement and Assurance Committee.
Committee Membership
Committee Membership 12.
The Administrator shall appoint both permanent and rotating members of the committee.
13.
The Administrator shall appoint individuals to fill any vacancies occurring on the committee.
14.
The following individuals will serve on the committee: a. b. c. d. e. f. g. h. i. j. k. l. m. n.
Committee Meetings
Committee Meetings
Committee Reports and Records
Committee Chairperson; Administrator; Director of Nursing Services; Medical Director; Dietary Representative; Pharmacy Representative; Social Services Representative; Activities Representative; Environmental Services Representative; Infection Control Representative; Rehabilitative/Restorative Services Representative; Staff Development Representative; Safety Representative; and Medical Records Representative.
15.
The committee will meet quarterly at an appointed time.
16.
Special meetings may be called by the coordinator as needed to address issues that cannot be held until the next regularly scheduled meeting.
Committee Reports and Records 17.
The committee shall maintain minutes of all regular and special meetings that include at least the following information: a. b. c. d. e. f.
18.
The date and time the committee met; The names of committee members present and absent; A summary of the reports and findings; A summary of any approaches and action plans to be implemented; Conclusions and recommendations from the committee; and The time the meeting adjourned.
The Quality Assurance Coordinator shall ensure that meeting minutes are distributed to all committee members and others as needed.
Committee Actions
Committee Actions 19.
The committee will oversee the development and implementation of actions to correct quality concerns and promote overall quality of care and services in the facility.
20.
Examples of actions that may be implemented to help address quality issues may include, but are not limited to: g. h. i. j. k. l.
Confidentiality of Information
Confidentiality of Information 21.
All Quality Improvement and Assurance minutes, reports, findings, plans of corrections, etc., are confidential and shall be filed separately from other committee documentation to maintain such confidentiality.
22.
Committee members shall keep confidential all information that they obtain as a result of their participation in/on the committee.
23.
The Administrator may authorize sharing of summaries or periodic evaluations of the Quality Improvement and Assurance Program with residents and/or other interested persons or organizations. These should not include confidential information.
Committee Audit Process
Committee Audit Process
Annual Review of the Quality Improvement and Assurance Plan
Educational training programs; New or revised policies and procedures; Staffing changes; Equipment changes; Adjustment in admission, transfer, and/or discharge practices; and Adjustment in employment practices.
24.
The Quality Improvement and Assurance Committee will scrutinize all department reports and summarize the findings in the committee minutes.
25.
The Quality Improvement and Assurance Committee shall help various departments/committees/disciplines/individuals develop and implement plans of correction and monitoring approaches. These plans and approaches should include specific time frames for implementation and follow-up.
26.
The committee shall track the progress of any active plans of correction.
27.
The committee shall advise the administration of the need for policy or procedural changes and, as appropriate, monitor to ensure that such changes are implemented.
Annual Review The Quality Improvement and Assurance Committee shall review the Quality Improvement and Assurance Plan at least annually for necessary revisions, and shall document any such changes.
Associated Policies
Quality Improvement and Assurance Plan
References
Operations Policy and Procedure Manual, Med-Pass, Inc , Revised December 2009
Tab F
AGREEMENT OF LEASE AGREEMENT OF LEASE MADE as of the 1st day of January 2017, by and between OAK HILL REALTY ASSOCIATES a limited liability company organized under the laws of the State of Rhode Island (hereinafter referred to as “Lessor”), and, OAK HILL OPERATIONS ASSOCIATES a limited liability company organized under the laws of the State of Rhode Island (hereinafter referred to as “Lessee”). WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, the premises hereinafter described upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the payment by Lessee to Lessor of the rents and the covenants and agreements hereinafter reserved, mentioned and contained on the part of Lessee, its successors and permitted assigns, to be paid, kept and performed, Lessor hereby leases, rents, lets and demises unto Lessee, and Lessee does hereby take and hire the premises hereinafter described, upon and subject to the terms, covenants and conditions hereinafter expressed. ARTICLE I- DEMISED PREMISES The premises forming the subject matter of this Lease are all of those lots or parcels of land more particularly described in Schedule "A" annexed hereto, also known as 544 Pleasant St, Pawtucket, Rhode Island 02860, together with (i) all buildings, nonmoveable equipment, fixtures, structures and the improvements thereon consisting of a residential health care facility and (ii) all appurtenances thereto, and all alterations, replacements, additions, improvements, betterments and substitutions thereof. Said premises shall also include the easements, if any, appurtenant to the ownership of said land and all rights, title and interest of Lessor in and to the land lying in the streets and roads in front of and adjoining said premises to the center line thereof. Said premises are leased subject to the following: (a)
applicable zoning regulations and ordinances.
(b) consents, if any, for the erection of any structure or structures on, under or above any street or streets on which said premises abut. (c) encroachments of stoops, areas, cellar steps, trim and cornices, if any, upon any street or highway. rights of governmental authorities to require the removal of any vaults, vault spaces, areas chutes or other spaces or projections beyond the building lines or any 1
curb cut; (d) rights, easements and licenses, if any, in favor of, and agreements, if any, with any public utility company, including but not limited to gas, electricity, telephone and telegraph service, and pipe lines and private sewer agreements, if any. (e) except as otherwise expressly provided herein, such physical condition of said premises and of the appurtenances, fixtures and other personal property attached to the premises. (f)
party walls and party wall agreements, if any.
(g)
covenants and restrictions of record, if any.
(h) any state of facts which an accurate survey of the Demised Premises may show. ARTICLE II- DEFINITIONS When used herein, and unless the context clearly requires otherwise: (a) “Lessor” and “Lessee” shall mean not only the original parties hereto, but their successors in interest and assigns. (b) “Demised Premises” shall mean the real property herein described, including all buildings, nonmoveable equipment, fixtures, structures and improvements placed thereon, all appurtenances thereto, and all alterations and substitutions thereof. (c) “Facility” shall mean the aggregate 95-bed residential health care facility operated on and/or from the Demised Premises.
ARTICLE III- TERM OF LEASE The term of this Lease shall commence on the Closing Date as defined in the Purchase and Sale Agreement between Oak Hill Operations Associates, Inc., a Rhode Island for-profit corporation and Lessor. The term of this Lease shall expire at the end of the month in which the thirtieth (30th) anniversary of the date of commencement of this Lease shall occur, unless sooner terminated as provided herein.
2
ARTICLE IV- RENT (a) Basic Rent: Lessee shall pay to Lessor during the term of this Lease a net annual basic rent (over and above the other additional payments to be made by Lessee as provided in this Lease) i n a n amount equal to the annual debt service payment(s) of Lessor. (b) Monthly Payment: The net annual basic rent shall be paid in equal monthly
installments in advance of the first day of each and every month during the term hereof without any abatement, deduction or set-off whatsoever, except as otherwise provided in this Lease. Should the obligation to pay net annual basic rent commence on any day other than the first of the month, then net annual basic rent for such month shall be prorated on a per diem basis. (c) Late Charges: If payment of any sums required to be paid or deposited by
Lessee to Lessor under this Lease, and payments made by Lessor under any provision hereof for which Lessor is entitled to reimbursement by Lessee, shall become overdue for a period of twenty (20) days beyond the date on which they are due and payable as in this Lease provided, a late charge of two per cent (2%) on the sums so overdue shall become immediately due and payable to Lessor as liquidated damages for Lessee’s failure to make prompt payment and said late charge shall be payable on the first day of the month next succeeding the month during which such late charges become payable. If non-payment of any late charges shall occur, Lessor shall have, in addition to all other rights and remedies, all the rights and remedies provided for herein and by law in the case of non-payment of rent. No failure by Lessor to insist upon the strict performance by Lessee of Lessee’s obligations to pay late charges shall constitute a waiver by Lessor of its rights to enforce the provisions of this Article IV in any instance thereafter occurring. (d) Rental Absolute. Lessee and Lessor acknowledge that the use and occupancy of the Demised Premises for the purposes herein contemplated are subject to the regulations of the Department of Health concerning the operation of like facilities. However, it is understood that the obligation of Lessee to pay the net basic rent, and any overage or additional rents as herein provided, shall not be conditioned upon any right of Lessee to seek or obtain reimbursement of such sums from any occupant of the Facility or of any third party or other governmental or non-governmental payor. Such obligations shall be the absolute and unconditional obligation of Lessee. If any such rent payment (net basic overage or additional rent) shall be delinquent by more than ten (10) days Lessor may, in addition to any other rights and remedies available hereunder, commence summary proceedings to dispossess Lessee, subject only to regulatory and statutory notice requirements.
ARTICLE V- PAYMENT OF TAXES, ASSESSMENTS, ETC. (a) It is the purpose and intent of Lessor and Lessee that the net basic rent required to be paid under this Lease shall be fully net to Lessor over and above any 3
and all taxes and other costs, expenses, charges and obligations of every kind and nature related to the Demised Premises. Lessee shall pay or cause to be paid, as additional rent before any fine, penalty, interest or cost may be added thereto for the nonpayment thereof, all taxes, assessments, water and sewer rents, rates and charges, charges for public utilities, excises, levies, license and permit fees and other governmental charges, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind and nature whatsoever, which at any time during the term of this Lease may have been or may be assessed, levied, confirmed, imposed upon, or grow or become due and payable out of or in respect of, or become a lien on, the Demised Premises or any part thereof or any appurtenance thereto (referred to herein as "Imposition" or "Impositions"). (b) Despite the foregoing, if the provisions of any mortgage covering the
Demised Premises shall require that Lessor make real estate tax or insurance premium escrow deposits, then Lessee shall pay such deposits. (c) It is the intention of the parties that the provisions of Paragraph (b) and
any other Lease requirements with respect to the prepayment of such Impositions and insurance premiums shall conform to the customary requirements of any mortgage covering the Demised Premises, and if any of the requirements set forth in this Lease are in conflict with those of the mortgage, the latter shall control. (d) Nothing herein contained shall require Lessee to pay income taxes
assessed against Lessor, capital levy, franchise, estate, succession, inheritance or transfer taxes of Lessor, or any other expense of Lessor which does not arise out of the ownership, operation and control of the Demised Premises; provided, however, that if, at any time during the term of this Lease, the present method of taxation or assessment shall be changed so that the whole or any part of the taxes, assessments, levies, Impositions or charges now levied, assessed or imposed on real estate and the improvements thereon shall be levied, assessed and imposed wholly or partially as (i) a capital levy or otherwise on the rents received therefrom, or as (ii) any tax, corporate franchise tax, assessment, levy, Imposition or charge, or any part thereof which shall be measured by or based, in whole or in part, upon the present buildings on or constituting a portion of the Demised Premises, and shall be imposed upon Lessor, then all such taxes, assessments levies, Impositions or charges or the part thereof so measured or based shall be deemed to be included with the term “Impositions” for the purposes hereof, to the extent that such tax would be payable, if the Demised Premises were the only property of the Lessor subject to such tax, and Lessee will pay and discharge the same as herein provided in respect of the payment of Impositions. (e) Lessee, upon request of Lessor, will furnish to Lessor and, if requested by Lessor, to any fee mortgagee, within ten (1 0) days before the date when any Imposition would become delinquent, official receipts of the appropriate taxing
4
authority, or other evidence satisfactory to Lessor or such mortgagee, evidencing the payment thereof. (f) Lessee shall have the right to contest the amount, applicability or validity,
in whole or in part, of any Imposition by appropriate proceedings diligently conducted in good faith, but only after payment of such Imposition, unless such payment would operate as a bar to such contest or interfere materially with the prosecution thereof, in which event, Lessee may postpone or defer payment of such Imposition if: (1) neither the Demised Premises nor any part thereof would by
reason of such postponement or deferment be in danger of being forfeited or lost, and (2) Lessee shall have deposited with Lessor, to be held in trust by Lessor in an
interest bearing savings account for the benefit of Lessee at a federally insured institution designated by Lessee but subject to this ARTICLE V, the amount so contested and unpaid, together with all interest and penalties in connection therewith and all charges that may or might be assessed against or become a charge on the Demised Premises or any part thereof in such proceedings. If the amount thus deposited with Lessor shall reasonably be deemed insufficient by Lessor during the prosecution of the proceedings, Lessee shall deposit additional amounts with Lessor, as herein provided, so as to fully protect Lessor and the Demised Premises from any lien arising from such disputed Imposition. Upon the termination of any such proceedings, Lessee shall pay the amount of such Imposition, or part thereof as finally determined in such proceedings, the payment of which may have been deferred during the prosecution of said proceedings, together with any costs, fees, interest, penalties or other liability in connection therewith and upon such payment. Lessor shall, provided Lessee is not in default hereunder for which Lessor has served a notice, return with earnings thereon, any amount deposited with Lessor with respect to such Imposition as aforesaid, or, at Lessee’s request, payment shall be made directly by Lessor from the deposited amount to the extent that such amount, together with accumulated interest, is sufficient therefor, and the balance due, if any, shall be paid by Lessee. (g) Lessor shall not be required to join in any proceedings referred to in Paragraph (f) of this ARTICLE V unless the provisions of any law, rule or regulation at the time in effect shall require that such proceedings be brought by and/or in the name of Lessor or any owner of the Demised Premises, in which event Lessor shall join in such proceedings or permit the same to be brought in its name. Lessor shall not ultimately be subjected to any liability for the payment of any costs or expenses in connection with any proceedings, and Lessee will indemnify and save
5
harmless Lessor from any such costs and expenses. Lessee shall be entitled to a refund of any Imposition and penalties or interest thereon received by Lessor which have been previously paid by Lessee. ARTICLE VI- OCCUPANCY Lessee covenants and agrees that, during the term of this Lease, the Demised Premises shall only be used and occupied in connection with the operation of a residential health care facility or other health related program or facility, or any institution caring for or catering to the sick, aged, infirm, disabled or any other class of people unable fully to take care of themselves without some assistance or supervision, and for no other purpose. In the event, for reason unforeseen at this time and not caused by the acts of Lessee, the use of the Demised Premises for the purposes stated herein shall become unlawful, not possible of performance or uneconomical, Lessor agrees that it will not unreasonably withhold its consent for the use of the premises for any other lawful purpose. ARTICLE VII -INSURANCE (a) Lessee, at its sole cost and expense, will, throughout the entire term of this Lease, keep the buildings erected upon the Demised Premises insured for the mutual benefit of Lessor and Lessee, during the term of this Lease, against loss or damage by fire and against loss or damage by other risks now embraced by “Extended Coverage”, so-called, and such other risks or hazards as are customarily insured against at the time in connection with buildings of similar type in the locality, with due regard to the type of construction, use and occupancy, as Lessor from time to time reasonably may designate, in amounts sufficient to prevent Lessor from becoming a co-insurer under the terms of the applicable policies but in any event in an amount not less than eighty percent (80%) of the then full insurable value of such buildings. The term “full insurable value” shall mean the actual replacement value, less physical depreciation. Such "full insurable value" shall be ascertained from time to time (but not more frequently than once in any twelve (12) calendar months) at the written request of Lessor by an appraiser, engineer, architect or contractor designated by Lessee and approved in writing by Lessor and, if required to obtain insurance required hereunder, paid by Lessee. If Lessee shall fail to designate such appraiser, engineer, architect or contractor within twenty (20) days of Lessor's written notice of Lessee's failure to do so, then Lessor shall have the right to make such designation with all costs and expenses incurred being borne by Lessee. If Lessor shall fail to approve the designee of Lessee, Lessor shall promptly notify Lessee of such disapproval and the name of its proposed designee. Lessee shall have ten (10) days from receipt of such notice within which to notify Lessor of its approval of Lessor's designee or to allow Lessee’s and Lessor’s designees together to name a third designee. The resulting determination by the appraiser, engineer, architect or contractor designated in accordance with the foregoing procedure shall bind the parties. No omission on the part of Lessor to request any such ascertainment shall relieve Lessee of any of its obligations under this Article. 6
(b) Lessee, at its sole cost and expense, but for the mutual benefit of Lessor and Lessee, will throughout the entire term of this Lease, maintain:
(1) General liability insurance against claims for bodily injury, death or property damage, occurring upon, in or about the Demised Premises or the elevators or any escalator thereon and on, in or about the vacant and parking spaces, if any, such insurance to afford immediate protection, at the time of the commencement of the term of this Lease, and continuing during the term of this Lease, to the limit of not less than One Million Dollars ($1,000,000) in respect of bodily injury or death to any one person, and to the limit of not less than Two Million Dollars ($2,000,000) in respect of any one accident, and to the limit of not less than Two Hundred Thousand Dollars ($200,000) for property damage. (2) Boiler and pressure vessel insurance, including pressure pipes, in such amount or amounts as Lessor may from time to time reasonably require but not less than Two Hundred Thousand Dollars ($200,000) per occurrence. (3) War risk insurance upon the Demised Premises as and when such is obtainable and a state of war or national or public emergency exists, and in the reasonable judgment of the Lessor, such state of war or national or public emergency threatens, in an amount not less than the full insurable value thereof. (4) Rent insurance for an amount equal to the net basic rent and all additional rent payable by Lessee hereunder for the current lease year; in the event that the buildings upon the Demised Premises shall be destroyed or damaged, Lessee shall assign said insurance to Lessor and the amount thereof and all proceeds, when collected by the Lessor, shall be applied towards payment of such net basic rent and the additional rent hereunder as the same shall be due and payable by Lessee; (5) During the whole period of making each and every construction, alteration and improvement, contingent or protective liability insurance covering any claim not covered by or under the terms and provisions of the general public liability insurance policy and covering Lessor and Lessee. If any of the insurance provided for in this Paragraph (b) should be unobtainable through no act or omission on the part of Lessee and if Lessee shall obtain the maximum insurance obtainable and shall promptly give notice to Lessor of the extent of Lessee’s inability to obtain any insurance required to be maintained hereunder, then the failure of Lessee to procure and maintain such insurance as is unobtainable as aforesaid shall be excused; provided, however, that Lessor shall have the right to procure such insurance up 7
to the maximum limits provided for herein and to charge Lessee with the customary and prevailing cost and premiums therefor incurred by Lessor in the open market as additional rent payable by Lessee under this Lease. (c) All insurance provided for in this Article shall be effected under valid and enforceable policies of insurers of recognized responsibility, in such forms and, in such cases not expressly provided for as aforesaid, in amounts, as may from time to time be reasonably satisfactory to Lessor. Simultaneously with the commencement of the term of this Lease and thereafter not less than fifteen (15) days prior to the expiration dates of the expiring policies theretofore furnished pursuant to this Article, originals of the policies (or, in the case of general public liability insurance, certificates of the insurers satisfactory to Lessor) bearing notations evidencing the payment of premiums or accompanied by other evidence satisfactory to Lessor of such payment, shall be delivered by Lessee to Lessor. (d) Lessee shall not take out separate insurance concurrent in form or contributing in the event of loss with that required in this Article to be furnished by or which may reasonably be required to be furnished by Lessee, unless Lessor is included therein as an insured party, with loss payable as in this Lease provided. Lessee shall immediately notify Lessor of the taking out of any such separate insurance and shall cause the same to be delivered as in this Article required. (e) All policies of insurance provided for in Paragraphs (a) and (b) of this Article shall be carried in favor of Lessee, Lessor as additional insured, and, to the extent that the holder of any mortgage covering the Demised Premises shall require such insurance coverage, such policies shall also name the mortgagee, as its interests may appear. (f) Each such policy or certificates therefor issued by the insurer shall, to the extent obtainable, provide that: (i) any loss shall be payable to Lessor and, if required by the holder of any mortgage covering the Demised Premises, such mortgagee, notwithstanding any act or negligence of Lessor or Lessee which might otherwise result in forfeiture of insurance, and (ii) each such policy shall not be cancelled without at least ten (1 0) days prior written notice to Lessor and to any mortgagee to whom loss thereunder may be payable. Subject to the rights of Lessor or any mortgagee to receive and retain insurance loss proceeds or to cause such proceeds to be deposited in escrow as herein otherwise provided, insurance company checks in payment of loss proceeds shall be endorsed without recourse to the order of Lessee upon request. ARTICLE VIII- LESSOR’S RIGHT TO PERFORM LESSEE’S COVENANTS 8
(a) If Lessee shall at any time fail to pay an Imposition at the time and in the
manner provided above, or to secure, pay for, maintain or deliver any of the insurance policies provided for in ARTICLE VII hereof, or shall fail to make any other payment or perform any other act on its part to be made or performed, then Lessor, after ten (10) days written notice to Lessee (and without notice in case of an emergency), and without waiving or releasing Lessee from any obligation contained in this Lease, may (but shall be under no obligation to) (1) pay any Imposition payable by Lessee hereunder, or (2) secure, pay for and maintain any of the insurance policies provided for in ARTICLE VII hereof, or (3) make any other payment or perform any other act on Lessee’s part to be made or performed as in this Lease provided, and may enter upon the Demised Premises for any such purpose, and take all such action thereon, as may be necessary therefor. (b) All sums so paid by Lessor and all reasonable costs and expenses incurred by Lessor in connection with the performance of any such act, together with interest thereon at the maximum rate permitted by the applicable Law of the State of Rhode Island or by any superseding statute, from the respective dates of Lessor’s making of each such payment or incurring of each such cost and expense, shall constitute additional rent payable by Lessee under this Lease and shall be paid by Lessee to Lessor on written demand, and Lessor shall not be limited in the proof of any damages which Lessor may claim against Lessee arising out of or by reason of Lessee’s failure to provide and keep in force insurance as aforesaid, to the amount of the insurance premium or premiums not paid or incurred by Lessee and which would have been payable upon such insurance but Lessor shall also be entitled to recover as damages forsuch breach the uninsured amount of any loss, to the extent of any deficiency in the insurance required by the provisions of this Lease, reasonable damages, costs and expenses of suit suffered or incurred by reason of damage to, or destruction of, any building on the Demised Premises occurring during any period when Lessee shall have failed or neglected to provide insurance as aforesaid. ARTICLE IX- REPAIRS AND MAINTENANCE (a) Throughout the term of this Lease, Lessee, at its sole cost and expense, will take good care of the Demised Premises, all alleyways and passageways, parking areas and sidewalks, curb cuts, curbs and vaults adjoining the Demised Premises and will keep the same in good order and condition, and make all necessary repairs thereto, interior and exterior, structural and nonstructural, ordinary and extraordinary, and foreseen and unforeseen. When used in this Article, the term "repairs" shall include all necessary replacements and renewals. All repairs made by Lessee shall be equal in quality and class to the original construction. Lessee will do or cause others to do all necessary shoring of 9
foundations and walls of the buildings and every other act or thing for the safety and preservation thereof which may be necessary by reason of any excavation or other building operation upon any adjoining property or street, alley or passageway. Lessee shall make all repairs necessary to avoid any structural damage or injury to the Demised Premises. (b) The necessity for and adequacy of repairs to any building on the Demised Premises pursuant to Paragraph (a) of this ARTICLE shall be measured by the standard which is appropriate for buildings of similar construction, use and class.
(c) Lessor shall not be required to furnish any service or facilities or to make any repairs or alterations in or to the Demised Premises, Lessee hereby assuming the full and sole responsibility for the condition, operation, repair, replacement, maintenance and management of the Demised Premises.
ARTICLE X- CHANGES AND ALTERATIONS BY LESSEE (a) In addition to those changes and alterations required to be made by Lessee as in ARTICLES IX and XI hereof, Lessee may make any other changes or alterations in or to the buildings upon the Demised Premises which it desires (expressly excluding therefrom any right to erect and build any addition to the buildings upon the Demised Premises or any new improvement upon the Demised Premises) if: (1) At the time of commencement of such desired change or alteration Lessee
shall not be in default in the payment of basic rent reserved herein or any item of additional rent and an “Event of Default” as defined in ARTICLE XXI shall not have occurred for which notice has been given Lessee; and (2) No such change or alteration would change the character of the structure or
unreasonably diminish the usable area of any building on the Demised Premises or affect its use for the purposes authorized by ARTICLE VI of this Lease. (b) Lessee shall in no event make any change or alteration to the Demised Premises or improvements thereon, whether required or desired by Lessee, unless Lessee complies with all of the following conditions: (1) Lessee shall have procured and paid for, so far as the same may be required
from time to time, all permits and authorizations of all municipal departments and governmental subdivisions having jurisdiction; (2) Any change or alteration involving an estimated cost of Five Hundred
Thousand Dollars ($500,000) or more, unless otherwise provided in any 10
institutional mortgage to which this Lease is subject, shall be conducted under the supervision of a licensed professional architect or engineer selected by Lessee, and no such change or alteration shall be made except in accordance with detailed plans and specifications and cost estimates prepared and approved in writing by such architect or engineer and bearing the prior written approval of Lessor (such approval not to be unreasonably withheld); (3) The change or alteration shall, when completed, be of such a character as not to reduce the value of the Demised Premises below its value immediately before such change or alteration; (4) Lessee shall, at its sole cost and expense, obtain and maintain at all times when any work is in process in connection with any change or alteration general liability insurance for the mutual benefit of Lessee and Lessor against claims for bodily injury, death or property damage in the sums as specified by Lessor. All such insurance shall be in a company or companies satisfactory to Lessor, and all policies or certificates therefor issued by the respective insurers, bearing notations evidencing the payment of premiums or accompanied by other evidence satisfactory to Lessor of such payment, shall be delivered to Lessor before any work is commenced. (5) If the proposed change or alteration be in violation of provisions of any
mortgage to which this Lease is subordinate, the consent thereto in writing shall be obtained by Lessee from said mortgagee(s), before the commencement of any such change or alteration. (c)
In making any change or alteration, as in this Article provided, Lessee agrees that: (1) Lessee will at all times fully comply and continue to comply with the
foregoing conditions; (2) Any such change or alteration shall be made promptly and in good and workmanlike manner and in compliance with all applicable permits and authorizations and building and zoning laws and with all other laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, departments, commissions, boards and officers, and in accordance with the orders, rules and regulations of the National Board of Fire Underwriters, the relevant state Board of Fire Underwriters and any other body or bodies hereafter exercising similar functions; and (3) The cost of any such change or alteration, including but not limited to all
insurance premiums, labor and material, shall be paid by Lessee so that the Demised Premises shall at all times be free of liens for labor and materials supplied or claimed to have been supplied to the Demised Premises or for any 11
other item or matter in connection with the making of said alteration and repair. ARTICLE XI- COMPLIANCE WITH LAWS, ORDINANCES, ETC. (a) Throughout the term of this Lease, Lessee, at its sole cost and expense, will promptly comply with all present and future laws, ordinances, orders, rules, regulations and requirements of federal, state and municipal governments, departments, commission boards and officers and all orders, rules and regulations of the National Board of Fire Underwriters, the relevant state Board of Fire Underwriters or any other body or bodies exercising similar functions, foreseen or unforeseen, ordinary as well as extraordinary, which may be applicable to the Demised Premises including, but not limited to, the sidewalks, alleyways, passageways, vacant land, parking areas, curb cuts, curbs and vaults adjoining the Demised Premises whether or not such law, ordinance, order, rule, regulation or requirement shall necessitate structural changes or improvements or interfere with the use and enjoyment of the Demised Premises. (b) Lessee shall likewise observe and comply with the requirements of all
policies of public liability and fire insurance and all other policies of insurance at any time in force with respect to the Demised Premises. ARTICLE XII- DISCHARGE OF LIENS (a) Lessee will not create or permit to be created or to remain, and will discharge,
any lien, encumbrance or charge levied on account of any Imposition or any mechanic’s, laborer’s or materialman’s lien or any mortgage, conditional sale, title retention agreement or chattel mortgage, or otherwise, which might be or become a lien, encumbrance or charge upon the Demised Premises, or any part thereof, having any priority or preference over or ranking on a parity with the estate, rights and interest of Lessor in the Demised Premises or any part thereof or the income therefrom, and Lessee will not suffer any other matter or thing whereby the estate, rights and interest of Lessor in the Demised Premises might be impaired; provided that any Imposition may, after the same becomes a lien on the Demised Premises, be paid or contested in accordance with ARTICLE V hereof and any mechanic’s, laborer’s or materialman’s lien may be discharged in accordance with Paragraph (b) hereof. SATISFACTION OF LIENS BY LESSEE OR LESSOR (b) If any mechanic’s, laborer’s or materialman’s lien shall at any time be filed
against the Demised Premises or any part thereof, Lessee, within thirty (30) days after notice of the filing thereof, shall cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. If Lessee shall fail to cause such lien to be discharged within the period aforesaid then, in addition to any other right or remedy, Lessor may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge of such lien by 12
deposit or by bonding proceedings, and in any such event Lessor shall be entitled, if Lessor so elects, to compel the prosecution of an action for the foreclosure of such lien by the lienor and to pay the amount of the judgment in favor of the lienor with interest, costs and allowances. Any amount so paid by Lessor and all customary and prevailing costs and expenses incurred by Lessor in connection therewith, together with interest thereon at the highest rate permitted by the applicable Law of the State of Rhode Island or by any superseding statute from the respective date of Lessor’s making of the payment or incurring of the cost and expenses shall constitute additional rent payable by Lessee under this Lease and shall be paid by Lessee to Lessor within ten (10) days after written demand. NON-LIABILITY OF LESSOR (c) Nothing in this Lease contained shall be deemed or construed in any way as constituting the consent or request of Lessor, express or implied, by inference or otherwise, to any contractor, sub-contractor, laborer or materialman for the performance of any labor or the furnishing of any material for any specific improvement, alteration to or repair of the Demised Premises or any part thereof. Notice is hereby given that Lessor shall not be responsible for any labor or materials or personal property furnished or to be furnished to Lessee upon credit, and that no mechanic’s or other lien for any such labor, materials or personal property shall attach to or affect the reversionary or other estate or interest of Lessor in and to the Demised Premises. ARTICLE XIII- NO WASTE Lessee will not do or suffer any waste or damage, disfigurement or injury to any portion of the Demised Premises. ARTICLE XIV- USE OF PROPERTY Lessee shall use the Demised Premises solely for the uses set forth in ARTICLE VI hereof, and Lessee will not use or allow the Demised Premises, or any part thereof, to be used or occupied for any unlawful purpose or in violation of any Certificate of Occupancy or certificate of compliance covering the use of the Demised Premises or any part thereof, or in violation of any permit or license connected with the use of the Demised Premises or any part thereof in connection with the operation of a residential health care facility or other health care facility, and will not suffer any act to be done or any condition to exist on the Demised Premises or any part thereof or any article to be brought thereon which may be dangerous (unless safeguarded as required by law), or which may, in law, constitute a nuisance, public or private, or which may make void or voidable any insurance then in force with respect thereto. 13
ARTICLE XV- ENTRY ON PROPERTY BY LESSOR, ETC. (a) Lessee will permit Lessor and its authorized representative to enter the Demised Premises at all reasonable times and after reasonable notice for the purpose of: (1) inspecting the same; and (2) making any necessary repairs thereto, and performing any work therein that may be necessary by reason of Lessee's failure to make any such repairs or perform any such work or to commence the same after written notice from Lessor. Nothing herein shall imply any duty upon the part of Lessor to do any such work after Lessee's default in failing to perform the same.
(b) Lessor may, during the progress of any work at the Demised Premises, keep and store in the building or elsewhere upon the Demised Premises all necessary materials, tools, supplies and equipment. Lessor shall not be liable for reasonable inconvenience, annoyance, disturbance, loss of business or other damage to Lessee or any other person by reason of making such repairs or the performance of any such work, or on account of bringing materials, tools, supplies and equipment into or through the Demised Premises or the building thereon during the course thereof and the obligations of Lessee under this Lease shall not be affected thereby. (c) Lessor shall have the right to enter the Demised Premises at all reasonable times and after reasonable notice during usual business hours for the purpose of showing the same to prospective purchasers or mortgagees of the Demised Premises and at any time within eighteen (18) months prior to the expiration of the term of this Lease for the purpose of showing the same to prospective tenants.
ARTICLE XVI- INDEMNIFICATION OF LESSOR Lessee shall indemnify and save harmless Lessor against and from all liabilities, obligations, damages, penalties, claims, costs, charges and expenses (“claims”) including reasonable architects’ and attorneys’ fees, which may be imposed upon or incurred by or asserted against Lessor, or against Lessor’s fee in the Demised Premises, by reason of any of the following occurring during the term of this Lease: (a) Any work or thing done in, on or about the Demised Premises or any part thereof by Lessee, its agents, contractors, servants, employees, licenses or invitees; (b) Any use, non-use, possession, occupation, condition, operation, maintenance 14
or management by Lessee, its agents, contractors, servants, employees, licensees or invitees of the Demised Premises or any part thereof, or any street, alley, parking area, sidewalk, curb, vault, passageway or space adjacent thereto; (c) Any negligence on the part of Lessee or any of its agents, contractors, servants, employees, licensees or invitees; (d) Any accident, injury or damage to any person or property occurring in, on or about the Demised Premises or any part thereof, alley, parking area, sidewalk, curb, vault, passageway or space adjacent thereto; or (e) Any other failure on the part of Lessee to perform, observe or comply with any of the covenants, agreements, terms or conditions contained in this Lease on its part to be performed, observed or complied with. In case any action or proceeding is brought against Lessor by reason of any such claim, Lessee upon written notice from Lessor shall at Lessee’s expense resist or defend such action or proceeding. If the entire complaint or claim shall be covered under a policy(ies) of insurance provided by Lessee as otherwise required hereunder, then Lessee’s insurer(s) shall have the right to designate counsel to undertake Lessor’s defense. If any portion of the complaint or claim shall not be covered by such insurance, then Lessee shall nonetheless be responsible for all costs and expenses of defense incurred by Lessor with respect to such Claims and Lessee shall have the right to designate counsel for such defense provided that such counsel has the prior written approval of Lessor, such approval not to be unreasonably withheld. ARTICLE XVII- DAMAGE OR DESTRUCTION BY FIRE OR OTHER CASUALTY (a) In case of damage or destruction of all or part of the Demised Premises, occurring during the term of this Lease, except as provided in the following Paragraph (b), by fire, explosion, windstorm or other casualty, Lessee shall promptly proceed, at its sole cost and expense (less insurance proceeds applicable thereto in accordance with the provisions of this Article) to repair, restore, replace or rebuild the Demised Premises, and every part thereof, as nearly as possible to the condition and quality immediately prior to such damage or destruction and in accordance with plans and specifications prepared by an architect or professional engineer selected by Lessee and approved by Lessor, such approval not to be unreasonably withheld, and will prosecute said repairs, restorations, replacement or rebuilding with due diligence until completion. (b) If the estimated cost of repair exceeds $500,000.00, all monies received by 15
Lessor and by Lessee for fire or other insurance covering the damage to the Demised Premises and every part thereof shall be deposited in an interest bearing account with a bank or trust company designated by Lessee authorized to do business in the State of Rhode Island (such account being insured under FSLIC or FDIC insurance) in the name of a person, company or institution mutually designated by the parties in writing (herein referred to as "Escrowee") and the funds in said account shall be held by the Escrowee as hereinafter provided. If the estimated cost of repair is $500,000.00 or less, the proceeds of insurance realized as a result of any such damage or partial destruction payable to Lessor and/or Lessee, and provided the consent of any insured institutional mortgagee holding a mortgage to which this Lease is subordinate is obtained, the extent of the amount received from the insurance carriers but not in excess of $500,000.00, shall be paid directly to Lessee and said proceeds, to that extent, are hereby assigned by Lessor to Lessee; upon receipt of said proceeds, Lessee shall hold the same as a trust fund to be used as provided in the following Paragraph (c)). (c)The insurance proceeds held by the Escrowee or received by Lessee, as aforementioned, shall be paid out by it or him from time to time as such work progresses. Upon the written request of Lessee, which shall be accompanied by a certificate of the architect or engineer in charge and approved in writing by Lessor (which approval shall not be unreasonably withheld), stating that the sum requested either has been paid by Lessee or is justly due contractors, subcontractors, materialmen or laborers for unpaid services or materials performed or furnished, the Escrowee shall be directed to pay such properly presented draw request within ten (10) days of receipt. (d) In no event shall more than 90% of the amount requested from the
Escrowee, and approved as aforementioned, be paid, and Escrowee shall retain at least 10% of the funds deposited with Escrowee, until the work has been completed and final formal approval has been received from all governmental agencies having jurisdiction over said work. (e) To the extent that any insurance money which would otherwise be payable hereunder is paid to the holder of any mortgage on the fee and applied in payment or reduction of the sums secured by any such fee mortgage on the Demised Premises, Lessor shall cause to be made available for the use of Lessee, and shall cause all documents that may be required to remortgage the premises previously covered to be executed, and shall assist Lessee in obtaining financing in the amount received by the fee mortgagee and applied in reduction thereof, and upon the request of Lessee, shall execute and deliver a mortgage or mortgages covering the same premises theretofore covered by the previous fee mortgage provided that Lessee shall be responsible for all costs and expenses associated with such refinancing and no personal liability shall be required of Lessor or of any of the shareholders, directors, officers, members or partners of Lessor on the new mortgage.
16
(f) No destruction of or damage to the building or buildings hereafter erected upon the Demised Premises, or any part thereof, by fire or any other casualty whatsoever, whether such destruction or damage be partial or total or otherwise shall permit Lessee to surrender or terminate this Lease or shall relieve Lessee from its liability to pay the full basic rent, additional rent and other charges payable under this Lease or from any of its other obligations under this Lease. Except to the extent to which Lessor shall have received and retained a net sum in excess of rents due as proceeds of any rent insurance, Lessee waives any rights now or hereafter conferred upon it by statute or otherwise to quit or surrender this Lease or the Demised Premises or any part thereof, or to any suspension, diminution, abatement or reduction of rent on account of any such destruction or damage. (g) In the event that Lessee erects any new building in accordance with the
provisions of this ARTICLE XVII, all of the provisions of this Lease, with respect to the obligations of Lessee in connection with the existing buildings on the Demised Premises shall apply with equal force and effect to such new building. (h) Upon certification by Lessor’s counsel that a final order of dispossession from the Demised Premises has been made against Lessee, and the time to appeal from said order has expired without an appeal having been taken or that no appeal may be taken therefrom, or that this Lease has been otherwise finally terminated, all such insurance proceeds, or the balance thereof then in the possession of the Escrowee, shall be paid over to Lessor, but in such case the liability of Lessee to perform its obligations under this ARTICLE XVII shall survive and continue. ARTICLE XVIII- EMINENT DOMAIN (a) Forthwith, upon the receipt by either Lessor or Lessee of any notice of the institution of any proceeding for the taking of the Demised Premises or any part thereof by the exercise of any power of eminent domain or by the exercise by any public or quasi-public authority of any right of purchase, hereinafter sometimes referred to as the “Proceeding”, the party receiving such notice will promptly give written notice thereof to the other party. Lessee, in cooperation with Lessor, shall have the right to participate in the Proceeding for the purpose of protecting Lessee's interest hereunder. (b) If the Demised Premises or any part thereof shall be taken for any public or quasi public use under any statute or by right of eminent domain or purchase in lieu thereof the award or awards for any properties so taken under any statute or by right of eminent domain or the proceeds of any such purchase (such award or awards and/or proceeds being hereinafter sometimes referred to as “the award”) shall be dealt with as provided in this ARTICLE XVIII. (c) If at any time during the term of this Lease or any renewal or extension thereof any lesser portion of the premises than that described in the following Paragraph (d) of 17
this ARTICLE, shall be taken in any eminent domain or condemnation proceeding, then this Lease shall continue and the rent shall be proportionately reduced in accordance with any diminution of the certified bed capacity of the Facility, if any, for the remainder of the term. The net proceeds of any condemnation award (after payment of the reasonable fees and expenses of collecting the same) shall be deposited in the name of the Escrowee as provided in ARTICLE XVII hereof, as trust fund, and shall be applied to pay for the repair and restoration of the remaining portion of the premises as provided in ARTICLE XVII hereof. Any portion of the award remaining with the Escrowee after such repair and restoration shall belong to Lessor subject to the rights of the holder of any mortgage to which this Lease is subject and subordinate, and subject to the rights of Lessee to assert and recover for its own benefit a separate award for damage to its leasehold estate. (d) If at any time during the term of this Lease all or materially all of the Demised Premises, or so much of the Demised Premises that the remaining area can no longer properly be used for the purpose for which the same was being used prior to such condemnation shall be taken by the exercise of the right of condemnation or eminent domain, this Lease shall terminate and expire on the date of such taking, and the net rent and additional rent provided to be paid by Lessee shall be apportioned and paid to the date of such taking. In such event, any award received or sum accepted by a compromise disposition on or as a result of such condemnation or taking, shall be distributed and allocated as follows: (1) All reasonable fees and expenses incurred by Lessor in the processing, presentation and collection of such award shall first be paid. (2) An amount equal to the principal amount originally owed by Lessor on any
loan or loans obtained by Lessor as permanent financing for the Demised Premises as improved by buildings and appurtenances thereon less the amount of any portion of the award or awards which may be payable directly to Lessor’s creditor mortgagees by the condemning authority with respect to such loan or loans, shall then be paid to Lessor. (3) If the condemnation occurs during the first year after the date of this Lease,
then from the balance of the award received by Lessor 20% thereof shall be paid to Lessee. The percentage of the total condemnation award to be received by Lessee shall be reduced by 1/25th at the beginning of each successive year of the Lease term. (e) “Materially all of the Demised Premises” shall be deemed to have been taken if the portion of the premises not so taken cannot be so repaired or reconstructed as to constitute suitable space and facilities for the operation of the nursing home as was operated prior to the taking (or, if immediately prior to the taking the Demised Premises was not used for nursing home purposes, a complete operating structure similar in type to the structure then on the premises). If Lessor and Lessee cannot 18
agree as to whether “materially all of the Demised Premises” has been taken, or whether the remaining area can be properly used, then the dispute shall be resolved as provided in ARTICLE XXVIII hereof. (f) Lessee shall be given at least ten (10) days prior written notice before any settlement of the condemnation award is made by Lessor.
ARTICLE XIX-VAULT SPACE (a) Vaults and areas, if any, now or hereafter built extending beyond the building line of the Demised Premises, are not included with the Demised Premises, but Lessee may occupy and use the same during the term of this Lease, subject to such laws, permits, orders, rules and regulations issued or promulgated by appropriate governmental authorities with respect thereto. (b) No revocation on the part of any governmental department or authority of any license or permit to maintain and use any such vault and areas shall in any way affect this Lease or the amount of the rent or any other charge payable to Lessee hereunder. If any such license or permit shall be revoked, Lessee shall, at its sole cost and expense, do and perform all such work as may be necessary to comply with any order revoking the same.
ARTICLE XX- ASSIGNMENT. SUBLETTING (a) Lessee shall not assign or sublet this Lease or any portion of the
Demised Premises without in each case the prior written consent of Lessor. (b) If a governmental approval or license is required, the underletting, assignment or subletting provided for in Paragraph (a) of this ARTICLE XX shall in no event become effective unless (1) at least two (2) days prior to the filing of any application or other papers seeking said governmental approval or license, true, executed copies of said application or other papers are forwarded to Lessor as provided in ARTICLE XXV of this Lease, and (2) said under-tenant, sublessee or assignee shall have received the requisite approval and/or license from the governmental authorities having jurisdiction.
ARTICLE XXI- CONDITIONAL LIMITATIONS- EVENTS OF DEFAULT (a) If any one or more of the following events (herein sometimes called “Event(s) of Default”) shall happen:
If default shall be made by Lessee in the performance of or compliance with any of the covenants, agreements, terms or conditions contained in this (1)
19
Lease (other than the covenants for the payment of basic rent or additional rent), or if the premises become vacant or deserted (except by reason of fire or other catastrophe beyond the control of Lessee), and such default shall continue for a period of twenty (20) days after written notice thereof from Lessor to Lessee stating the nature of said default or in the case of a default or a contingency which cannot with due diligence be cured within such period of twenty (20) days, Lessee fails to proceed with all due diligence to cure the same and thereafter to prosecute the curing of such default with all due diligence (it being intended that in connection with a default not susceptible of being cured with due diligence within twenty (20) days that the time of Lessee within which to cure the same shall be extended for such period as may be necessary to complete the same with all due diligence); or (2) If Lessee or any permitted sublessee in possession shall file a voluntary petition in bankruptcy, or shall file any petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future United States Bankruptcy Code or any other present or future applicable federal, state or other statute or law, or shall seek, or consent to or acquiesce in the appointment of any trustee, receiver (under the Public Health Law or otherwise) or liquidator of Lessee or of all or any substantial part of its properties or of the operation of the Demised Premises as a nursing home or residential health care facility; or (3) If within thirty (30) days after the commencement of any proceeding
against Lessee or any permitted sublessee in possession seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the present or any future United States Bankruptcy Code or any other present or future applicable federal, state or other statute or law, such proceeding shall not have been dismissed, or if, within thirty (30) days after the appointment, without the consent or acquiescence of Lessee, of any trustee, involuntary receiver (under the Public Health Law or otherwise) or liquidator of Lessee or any permitted sublessee in possession or of all or any substantial part of its properties or of the operation of the Demised Premises as a nursing home or residential health care facility, such appointment shall not have been vacated or stayed on appeal or otherwise, or if, within thirty (30) days after the expiration of any such stay, such appointment shall not have been vacated; or (4) If at any time after Lessee or any permitted successor or sublessee shall receive Establishment approval from the Public Health Council and an Operating Certificate from the relevant State Department of Health, such Establishment or Operating Certificate, any provider agreement issued to Lessee (or such permitted successor) under Title XVIII or Title XIX of the Federal Social Security Act, shall be withdrawn, revoked, suspended, surrendered, annulled, cancelled or not 20
renewed, or any of the certified beds existing at the Facility shall be decertified without the prior written approval of Lessor; then, and in any one or more of such events, Lessor may serve a written ten (10) day notice of cancellation of this Lease upon Lessee, and upon the expiration of said ten (10) days, this Lease and the term hereby demised and all rights of Lessee under this Lease shall end and expire as fully and completely as if the expiration of such ten ( 10) day period were the day herein definitely fixed for the end and expiration of this Lease and the term thereof and Lessee shall then quit and surrender the Demised Premises to Lessor, but Lessee shall remain liable as hereinafter provided. (b) Upon any such expiration or termination of this Lease pursuant to Paragraph (a) of this Article, or if Lessee shall default in the payment of basic rent reserved herein or any item of additional rent herein mentioned or any part of either or in making any other payment herein required; then and in any of such events, Lessee shall quit and peacefully surrender the Demised Premises and the then buildings thereon to Lessor, without any payment therefor by Lessor, and Lessor, upon or at any time after any such events may, without further notice, enter upon and reenter the Demised Premises and possess and repossess itself thereof by force, summary proceedings, ejectment or otherwise, and may dispossess Lessee and remove Lessee and all other persons and property from the Demised Premises and may have, hold and enjoy the Demised Premises and the buildings thereon and the right to receive all rental income of and from the same.
(c) At any time or from time to time after any such expiration or termination pursuant to Paragraph (a) of this Article, or any termination by summary proceedings or otherwise, Lessor may relet the Demised Premises, or any part thereof, in the name of Lessor or otherwise for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the term of this Lease) and on such conditions (which may include concession or free rent) as Lessor, in its uncontrolled discretion may determine and Lessor may collect and receive the rents therefor. Lessor shall in no way be responsible or liable for any failure to relet the Demised Premises or any part thereof, or for any failure to collect any rent due upon any such reletting. (d) Subject to the provisions of Article XLI of this Lease, no expiration or termination of this Lease pursuant to Paragraph (a) of this Article, or any termination by summary proceedings or otherwise, shall relieve Lessee of its liability and obligations under this Lease and such liability and obligations shall survive any such expiration or termination. In the event of any such expiration or termination, whether or not the Demised Premises or any part thereof have been relet, Lessee shall pay to Lessor the net rent and all additional rent and other charges required to be paid by Lessee up to the time of such expiration or termination of this Lease, and thereafter Lessee, until the end of what would have been the term of this Lease in the absence of such expiration or termination, shall be liable to Lessor for, and shall pay to Lessor, as and for liquidated and agreed current damages for Lessee's default, the equivalent of the amount of the 21
basic rent and additional rent and charges which would be payable under this Lease by Lessee if this Lease were still in effect, less the net proceeds of any reletting effected pursuant to the provisions of Paragraph (c) hereof, after deducting all Lessor's expenses in connection with such reletting, including, without limitation, all reasonable repossession costs, brokerage and management commissions, operating expenses, reasonable attorneys' fees, alteration costs and expenses of preparation for such reletting. Lessee shall pay such current damages (herein called “deficiency”) to Lessor monthly on the first day of each month as the same would have been payable under this Lease if this Lease were still in effect, and Lessor shall be entitled to recover from Lessee each monthly deficiency as the same shall arise. At any time after any such expiration or termination, whether or not Lessor shall have collected any monthly deficiencies as aforesaid, Lessor at its option shall be entitled to recover from Lessee, and Lessee shall pay to Lessor on demand, as and for liquidated and agreed final damages for Lessee's default, an amount equal to the then present worth of the excess of the basic rent reserved under this Lease from the date of such expiration and termination for what would be the then unexpired term of this Lease if the same had remained in effect, and the then fair rental value of the Demised Premises for the same period. (e) Except where a third party demands trial by jury and the court does not permit a bifurcation of the trial as to the complaint, cross claims and counterclaims presented, Lessor and Lessee hereby waive trial by jury in any action, proceeding or counterclaim brought by either of them against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Lessor and Lessee, Lessee’s use or occupancy of the Demised Premises and/or any claim of injury or damage and any emergency statutory or any other statutory remedy. The terms “enter”, “re-enter”, “entry” or “reentry”, as used in this Lease are not restricted to their technical legal meaning. (f) No failure by Lessor to insist upon the strict performance of any covenant, agreement, term or condition of this Lease or to exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial rent during the continuance of any such breach, shall constitute a waiver of any such breach or of such covenant, agreement, term or condition. No covenant, agreement, term or condition of this Lease to be performed or complied with by either party, and no breach thereof, shall be waived, altered or modified, except by a written instrument executed by the other party. No waiver of any breach shall affect or alter this Lease but each and every covenant, agreement, term and condition of this Lease shall continue in full force and effect with respect to any other existing or subsequent breach thereof. (g) In the event of any breach or threatened breach by Lessee of any of the covenants, agreements, terms or conditions contained in this Lease, Lessor shall be entitled to enjoin such breach or threatened breach and shall have the right to invoke any right and remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary proceedings, and other remedies were not provided for in this 22
Lease. (h) Each right and remedy of Lessor provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by Lessor of any one or more of the rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise, shall be in addition to and shall not preclude the exercise by Lessor of any other right or remedy provided for in this Lease or nor or hereafter existing at law or in equity or by statute or otherwise.
ARTICLE XXII- SUBORDINATION (a) This Lease shall be subject and subordinate to any mortgages which may affect the Demised Premises on the date hereof and/or thereafter, and to all renewals, modifications, consolidations and extensions, or replacements there of ("Mortgages"). Lessor shall extend its best efforts to have any such Mortgages contain:
(1) a covenant on the part of the holder thereof substantially to the effect that Lessee shall be permitted to quietly enjoy the Demised Premises and be entitled to Lessee's rights, privileges and options hereunder so long as Lessee is not in default under the provisions of this Lease during the Lease term and any extensions or renewals thereof; and (2) a provision (A) that the holder thereof shall give Lessee at least ten (10) days written notice prior to declaring any Mortgages in default, during which time Lessee may cure such default by making any payments or performing any act required to cure such default, and (B) that the holders thereof shall not at any time join Lessee as a party defendant to any action which may be brought to foreclose said Mortgages or disturb Lessee’s possession of the Demised Premises so long as Lessee is not in default under this Lease. Despite the foregoing provisions requiring Lessor's best efforts, the procurement of the terms described in Paragraphs (a)(1) and (a) (2) above shall not be a condition precedent to the placement of any new Mortgages upon the Demised Premises nor to any renewal, modification, consolidation or extension thereof. (b) The provisions of this entire ARTICLE XXII shall be self-operative and no further instrument of subordination need be required by any mortgagee. In confirmation of such subordination, Lessee shall promptly, upon Lessor’s demand, and without expense to Lessor, execute, acknowledge and deliver any certificate or other written instrument to the foregoing effect, and Lessee hereby constitutes and appoints Lessor 23
Lessee’s attorney-in-fact to execute any such certificate or certificates for and on behalf of Lessee in the event that Lessee shall fail to deliver an executed certificate or other instrument so demanded by Lessor within ten (10) days of receipt of such demand. ARTICLE XXIII- LESSEE’S RIGHT TO CURE DEFAULT If there shall be a default by Lessor in the payment of either the principal or interest of any mortgage or mortgages now or hereafter affecting the Demised Premises, Lessee shall have the right and privilege to pay the amount so in default, and the cost and expense, if any, of any foreclosure action or other suit or proceeding instituted by the mortgagee upon such default, and upon making such payment Lessee shall, in addition to other remedies, be entitled to deduct the amount so paid, with interest thereon at the maximum rate permitted by applicable Law of the State of Rhode Island or by any superseding statute, from any installment or installments of annual rent then due, or thereafter falling due, until the amount of such payment, with said interest, shall have been repaid therefrom to Lessee.
ARTICLE XXIV- INVALIDITY OF PARTICULAR PROVISIONS If any term of provisions of this Lease, or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provisions to the persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law. ARTICLE XXV- NOTICES (a) All notices, demands and requests which may or are required to be given hereunder, shall be in writing and shall be sent by United States certified mail, return receipt requested, postage prepaid, or by nationally recognized overnight delivery service, as provided in this Article under Paragraph (b) hereof. (b) All notices, demands and requests by Lessor to Lessee shall be deemed to
have been properly given if sent addressed to Lessee at the Premises, or to such other address as Lessee may from time to time designate by written notice to Lessor. All notices, demands and requests by Lessee to Lessor shall be deemed to have been properly given if sent addressed to OAK HILL REALTY ASSOCIATES c/o Ari Erlichman 101 Lawrence Avenue, Lawrence, New York 11559 or to such other address(es) as Lessor may from time to time designate by written notice to Lessee. A copy of all notices, demands and requests by Lessor to Lessee shall be sent to OAK HILL OPERATIONS 24
ASSOCIATES, 544 Pleasant St, Pawtucket, RI 02860. ARTICLE XXVI- QUIET ENJOYMENT Lessee, upon paying the basic rent and all additional rent and other charges herein provided for and observing and keeping all covenants, agreements and conditions of this Lease on its part to be kept, shall peaceably and quietly have and enjoy the Demised Premises during the term of this Lease, subject, however, to the exceptions, reservations and conditions of this Lease, including, but not limited to, ARTICLE XXII hereof. Upon the expiration of the Lease term, Lessee shall quit and peacefully surrender the Demised Premises, and the then buildings thereon, to Lessor without any payment therefor by Lessor. At the time of surrender of possession, Lessee shall deliver possession of the Demised Premises as the same shall have been improved by any improvements made in good working order and condition (reasonable wear and tear excepted) and in full compliance with the minimum standards and requirements of governmental agencies having jurisdiction for the continued conduct of the operation of the Facility on the Demised Premises. ARTICLE XXVII- EXCAVATION, SHORING If any excavation shall be made or contemplated to be made for building or other purposes upon property or streets adjacent to or nearby the Demised Premises, Lessee either: (a) shall afford to the person or persons causing or authorized to cause such excavation the right to enter upon the Demised Premises for the purpose of doing such work as such person or persons shall consider to be necessary to preserve any of the walls or structures of any building on the Demised Premises from injury or damage and to support the same by proper foundation; or (b) shall, at Lessee’s expense, do or cause to be done such work as may be necessary to preserve any of the walls or structures of any building on the Demised Premises from injury or damages and to support the same by proper foundation. ARTICLE XXVIII- DISPUTES In the event of any dispute between Lessor and Lessee with regard to any provision or issue contained in this Lease (the manner of resolution of which dispute is not otherwise herein provided), either party, Lessor or Lessee, may make application to the Supreme Court of the State of Rhode Island, placing venue in Providence County, for a determination of any and all issues involved. The substantive and procedural law of the State of Rhode Island shall apply and the parties may seek any and all statutory, procedural or equitable remedies available to them under the laws of the State of Rhode Island. The prevailing party in any such litigation shall be entitled to include in any such 25
favorable final award, judgment, order or decree all costs and disbursements incurred in maintaining the litigation including reasonable counsel fees. For purpose of settling any dispute under the terms of this Article, the parties hereto hereby submit to the jurisdiction of any court federal or state sitting in the State of Rhode Island, County of Providence, hereby waive any and all objections as to the venue in any such courts, and hereby expressly waive trial by jury. ARTICLE XXIX- LESSOR’S RIGHT TO ASSIGN Lessor shall have the right, without selling its interest in the Demised Premises or assigning its interest in this Lease, to assign from time to time the whole or any portion of the basic rent at any time payable hereunder to persons, firms, corporations, trusts or other entities designated by Lessor in a written notice to Lessee and in any such case, Lessee shall pay the basic rent, or the portion thereof so assigned, subject to the terms of this Lease, to Lessor’s said designee or designees at the address or addresses set forth in any such notice.
ARTICLE XXX- FINANCIAL STATEMENTS AND REPORTS Not later than one hundred fifty (150) days after the end of each calendar year during the Lease term, Lessee shall deliver to Lessor a copy of the certified financial statements issued by the certified public accountants then servicing the operation of the Facility with respect to the preceding calendar year. Simultaneously with the filing by the Facility of an annual report with the State Department of Health, a copy of such report shall be delivered by Lessee to Lessor. Not more than ten (10) days after the Facility’s receipt of any rate notification schedule or audit report from governing State agencies concerning Medicaid rates applicable to the Facility, Lessee shall deliver to Lessor a copy thereof. Not more than ten (10) days after the Facility’s receipt of a written report of any governing agency covering an annual or other survey of the operation of the Facility, a statement of deficiencies, or delivery by the Facility of a plan of correction for deficiencies, Lessee shall deliver a copy of each such receipt or submission to Lessor. ARTICLE XXXI- MEMORANDUM OF LEASE TO BE EXECUTED Upon demand by either party, Lessor and Lessee agree to execute and deliver a short-form Memorandum of Lease in recordable form so that the same may be recorded by either party. ARTICLE XXXII- LEASE STATUS CERTIFICATE TO BE GIVEN Each party agrees at any time, and from time to time, upon not less than twenty (20) days prior written request from the other party, to execute, acknowledge and deliver 26
to the other party a statement in writing certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified, and stating the modifications), the dates to which the basic rent has been paid and the amount of the additional rent held by Lessor, if any, it being intended that any such statement delivered pursuant to this Article may be relied upon by any prospective assignee, mortgagee or purchaser of the fee interest in the premises or of this Lease. ARTICLE XXXIII- PROVISIONS DEEMED CONDITIONS AND COVENANTS All of the provisions of this Lease shall be deemed and construed to be “conditions” and “covenants” as though the words specifically expressing or importing covenants and conditions were used in each separate provisions hereof. ARTICLE XXXIV- REFERENCES TO TERMINATION Any reference herein to the termination of this Lease shall be deemed to include any termination hereof by expiration or pursuant to Articles referring to earlier termination. ARTICLE XXXV- HEADINGS AND TITLES The headings and titles in this Lease are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or intent of this Lease, nor in any way affect this Lease. ARTICLE XXXVI- ORAL CHANGE OR TERMINATION This Lease contains the entire agreement between the parties and any executory agreement hereafter made shall be ineffective to change, modify or discharge it in whole or in part unless such executory agreement is in writing and signed by the party against whom enforcement of the change, modification or discharge is sought. This Lease cannot be changed orally or terminated orally. ARTICLE XXXVII- SUCCESSORS AND ASSIGNS The covenants, conditions and agreements in this Lease shall bind and inure to the benefit of Lessor and Lessee and their respective heirs, successors and permitted assigns. ARTICLE XXXVIII-VARIATIONS IN PRONOUNS All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or 27
persons, firm or firms, corporation or corporations, company or companies may require. ARTICLE XXXIX- RESERVED
ARTICLE XL- ENVIRONMENTAL MATTERS (a) For purposes of this Article, the following terms shall have the following meaning: (1) “Environmental Activity” means any storage, presence, existence, release, threatened release, use, generation, abatement, removal, disposal, handling or transportation of any Hazardous Material in, to, on, under, from or about the Demised Premises. (2) “Environmental Laws” means any Laws which govern Environmental Activities on the Demised Premises, Hazardous Materials thereon, or any other matter pertaining to the physical environmental condition of the Demised Premises. (3) “Environmental Reports” means studies, reports, analyses, information, data or written records in Lessee's possession, or available to Lessee or prepared at the request of Lessee, regarding any Hazardous Materials in, at, on, under or near the Demised Premises, including, without limitation, any analytical results and interpretative conclusions based upon an investigation of the Demised Premises. (4) “Governmental Agency” means any federal, state or local authority having jurisdiction over the Demised Premises with respect to Environmental Activities conducted, or alleged to be conducted, thereon or Hazardous Materials located, or alleged to be located thereon. (5) “Hazardous Material” means any substance whose nature and/or quantity or existence, use, manufacture or effect render it subject to federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare. (6) “Laws” means, collectively, all federal, state and local laws, rules, regulations, ordinances and codes now or hereafter applicable to the Demised Premises or the Use of the Demised Premises, including, without limitation, the requirements of all permits, licenses, authorizations, judgments, decrees, agreements and other governmental restrictions and requirements relating to the Demised Premises or the Use of the Demised Premises. (7) “Demised Premises”, in addition to meaning the premises referred to in Article I hereof, shall include all structures, fixtures, transformers, underground 28
storage tanks, soil, groundwater, surface water and airspace at, in, on or under the Demised Premises and improvements. (8) “Underground Storage Tank” has the meaning set forth for such term in Subtitle I of the Hazardous and Solid Waste Act Amendments of 1984, as amended from time to time (42 U.S.C. 6991) and the regulations promulgated pursuant thereto from time to time. (9) “Use” means use, ownership, development, construction, maintenance, management, operation or occupancy. (b) Lessor makes no covenant, representation or warranty as to the suitability of the Demised Premises for any purpose whatsoever or as to the physical condition thereof. Lessee acknowledges that it has inspected the Demised Premises, observed its physical characteristics and existing conditions, and has had the opportunity to conduct such investigation and study on and of said Demised Premises as it deems necessary for its intended use and occupancy under this Lease, and hereby waives any and all objections to or complaints about physical characteristics and existing conditions of the Demised Premises, including, without limitation, subsurface conditions and Hazardous Materials in, at, on or under the Demised Premises. Lessee further acknowledges and agrees that the Demised Premises is to be leased to, and accepted by, Lessee in its present condition, "AS IS" and with all faults, and hereby assumes the risk that adverse physical characteristics and existing conditions may not have been revealed by its inspection or investigation. (c) Lessee, on behalf of itself and its heirs, successors and assigns, hereby waives, releases, acquits and forever discharges Lessor, its principals, officers, directors, partners, members, shareholders, employees, agents, representatives and any other person acting on behalf of Lessor, and the successors and assigns of any of the preceding, of and from any and all claims, actions, causes of action, demands, rights, damages, costs, expenses or compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, which Lessee or any of its heirs, successors or assigns now has or which may arise in the future on account of or in any way related to or in connection with any past, present or future physical characteristic or condition of the Demised Premises, including, without limitation, any Hazardous Materials, in, at, on, under or related to the Demised Premises, or any violation or potential violation of any Laws applicable thereto. (d) Lessee shall, at Lessee's sole cost and expense, comply with any and all Environmental Laws affecting Lessee's occupancy or use of the Demised Premises or otherwise arising in connection with the lease, sublease, surrender or other transfer of the Demised Premises by or to Lessee and shall maintain the Demised Premises in compliance with any Environmental Laws, whether such law is enacted prior or subsequent to the date of commencement of this Lease. Without limiting the foregoing, Lessee's obligations under this paragraph shall include (1) promptly providing Lessor 29
with true, accurate and complete copies of all required or requested permits, variances, approvals, notices, submissions, reports and other information to and from any and all Governmental Agencies having authority over the Demised Premises and environmental matters with respect thereto, (2) preparing all reports and providing all information requested by any applicable governmental authority having jurisdiction over the Demised Premises, (3) preparing appropriate plans for the approval of such authorities and Lessor with respect to the cleanup of any Hazardous Materials on the Demised Premises, (4) conducting the cleanup of such Hazardous Materials in accordance with all applicable Laws, and (5) otherwise fully cooperating with such authorities and with Lessor in bringing the Demised Premises and Lessee's occupancy and use thereof into compliance with all Environmental Laws. Lessee authorizes Lessor to communicate with any Governmental Agency regarding the Demised Premises or Lessee's activities or processes thereon. (e) Lessee shall not cause, permit or suffer any Hazardous Material to be brought upon, treated, stored, disposed of, discharged, released, produced, manufactured, generated, refined or used upon, about or beneath the Demised Premises or any portion thereof by Lessee, its agents, employees, contractors, subtenants or invitees other than Hazardous Materials, if any, of a nature and in amounts which are incidental to and customarily present at similar health care facilities. Such Hazardous Materials may only be brought upon, kept and used in or about the Demised Premises by such parties in strict compliance with all applicable Laws.
(f) Should Lessee fail to perform or observe any of its obligations or agreements pertaining to Hazardous Materials or Environmental Activities under this Lease or under applicable Laws, then Lessor shall have the right, but not the duty, without limitation upon any of the rights of Lessor under this Lease, to enter the Demised Premises personally or through its agents, consultants or contractors and perform the same. Lessee agrees to indemnify, reimburse, protect, defend and hold harmless Lessor for the costs thereof and liabilities arising or resulting therefrom or in connection therewith. (g) Lessor shall have the right in its sole and absolute discretion, but not the duty, to enter and inspect the Demised Premises at any time to determine whether Lessee is complying with the terms of this Lease, including, but not limited to, the compliance of the Demised Premises and the activities thereon with applicable Laws. Lessee hereby grants to Lessor, its agents, employees, consultants and contractors the right to enter the Demised Premises and to perform such tests on the Demised Premises, the cost of which shall be payable solely by Lessee, as are reasonably necessary to conduct such reviews and investigation. Lessor shall use reasonable efforts to minimize interference with the business of Lessee but Lessor shall not be liable for any interference caused thereby. (h) In the event Lessor discovers any breaches under this Lease or any violations of applicable Laws pursuant to the foregoing inspections or otherwise, including, without 30
limitation: (1) any contamination of the Demised Premises from Hazardous Materials caused or permitted to be on the Demised Premised by Lessee, its agents, employees, contractors, licensees or invitees (such parties being collectively referred to as “Lessee” for purposes of this ARTICLE XL); (2) a violation of any Laws with respect to any Hazardous Materials or any Environmental Activity conducted or permitted by Lessee at the Demised Premises; or (3) a breach by Lessee of its covenants and obligations under this Lease, then Lessee shall immediately cease all operations on the Demised Premises involving the use of Hazardous Materials found not to be in compliance with applicable Laws until such operations are brought into compliance therewith. To the extent of any Hazardous Material contamination of the Demised Premises or other properties caused or permitted by Lessee, Lessee shall promptly commence and pursue to completion, at Lessee's sole cost and expense, a remediation program with respect to such Hazardous Materials; provided, however, Lessor may at its option (but in no event shall be obligated to) elect to conduct the remediation program at Lessee's sole cost and expense, the design and scope of which shall be determined solely by Lessor and Lessor’s environmental consultants. (i) If any Environmental Laws or any permits, variances, licenses or similar entitlements, authorizations or approvals involve or contain closure or post-closure requirements or conditions, Lessee shall comply with and satisfy all such requirements and conditions prior to the expiration or earlier termination of this lease, and in no event later than Lessee's vacating the Demised Premises. Lessee shall, upon Lessor's request, provide Lessor with security reasonably acceptable to Lessor to secure Lessee's obligations to comply with and satisfy such closure and post-closure requirements and conditions. If Lessor reasonably determines that Lessee will not or will be unable to comply with and satisfy such requirements and conditions prior to the expiration or earlier termination of this Lease or prior to Lessee's vacating the Demised Premises, Lessor may, but shall not be obligated to, comply with or satisfy such requirements and conditions on Lessee's behalf and may apply the security provided by Lessee for such purposes. Any such action by Lessor shall not be deemed a waiver or excuse of any default by Lessee in the performance of its obligations under this ARTICLE XL, but shall be in addition to and not in lieu of any other rights or remedies available to Lessor at law or in equity with respect to Lessee's default in such obligations. (j) If Lessee fails to comply with the provisions of this ARTICLE XL prior to the expiration or earlier termination of the Lease term, or prior to Lessee’s vacating the Demised Premises, then, upon the expiration or earlier termination of the Lease term or Lessee’s vacation of the Demised Premises, Lessor shall have the option either to consider the Lease as having ended or to treat Lessee as a holdover tenant in possession of the Demised Premises. If Lessor considers the Lease as having ended, then Lessee shall not be released from its obligations set forth in this ARTICLE XL. If Lessor treats Lessee as a holdover tenant in possession of the Demised Premises, then Lessee shall pay monthly to Lessor double the net annual basic rent and additional payments which Lessee would otherwise have paid, until 31
such time as Lessee fulfills its obligations under this ARTICLE XL, and during such holdover period all of the terms of this Lease and Lessee’s obligations hereunder shall remain in full force and effect. (k) Lessee shall promptly notify Lessor as to any liens threatened or attached against the Demised Premises pursuant to any Environmental Law. In the event that such a lien is filed against the Demised Premises, then Lessee shall, within thirty (30) days from the date that the lien is filed against the Demised Premises, and at any rate prior to the date any Governmental Agency or other party commences proceedings to foreclose on such lien, either: (1) pay the claim and remove the lien from the Demised Premises; or (2) furnish either (i) a bond satisfactory to Lessor in the amount of the claim out of which the lien arises, (ii) a cash deposit in the amount of the claim out of which the lien arises, or (iii) other security satisfactory to Lessor in an amount sufficient to discharge the claim out of which the lien arises. (l) Lessee agrees to protect, indemnity, defend, reimburse and hold harmless: (1) Lessor; (2)any other person who acquires an interest in this Lease whether by an assignment of Lessor's interest in this Lease or otherwise; (3) any other person who acquires all or a portion of the Demised Premises at a foreclosure sale or by a conveyance in lieu of foreclosure or otherwise through the exercise of the rights and remedies of Lessor under this Lease; and (4) the principals, directors, officers, shareholders, members, partners, employees, successors, assigns, agents, contractors, subcontractors, experts, licensees and invitees of such persons listed in (1) through (2) above (any or all of which are referred to herein as an “Indemnitee”) from and against any and all loss, cost, penalty, fine, liability, damage or expense (including, without limitation, attorneys' fees and costs) arising or resulting from or in any way connected with: the presence of any Hazardous Materials in, at, on, under or about the Demised Premises; (i)
(ii) any Environmental Activity conducted or permitted by Lessee or any other party on the Demised Premises during the Lease term;
any violation of any Laws pertaining to the condition of the Demised Premises or any Environmental Activity thereon to the extent caused by Lessee at any time or caused by anyone else during the Lease term; (iii)
the breach of any warranty or covenant or the inaccuracy of any representation of Lessee contained in this Lease; or (iv)
(v) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which directly or indirectly relates to, arises from or is based upon any of the 32
matters described in this ARTICLE XL. This obligation shall survive the expiration or earlier termination of this Lease, the discharge of all other obligations owed by the parties to each other, and any transfer of title to the Demised Premises (whether by sale, foreclosure, deed in lieu of foreclosure or otherwise). (m) Lessee's obligations under Section XL of this Lease shall survive the expiration or earlier termination of this Lease term, the discharge of all other obligations owed by the parties to each other, and any transfer of title to the Property (whether by sale, foreclosure, deed in lieu of foreclosure or otherwise).
ARTICLE XLI- LIMITATION OF LESSEE’S LIABILITY Notwithstanding any provision to the contrary elsewhere contained in this Lease, none of the covenants or agreements contained herein are intended as personal covenants or agreements on the part of Lessee’s members, shareholders, directors or officers and all such covenants are intended solely for the purpose of binding Lessee, the leasehold estate and any security that may be given. No personal liability shall at any time be asserted or enforced against Lessee's members, shareholders, directors, officers, members or partners, any such personal liability being hereby expressly waived and released by Lessor and all persons claiming by, through or under Lessor. SIGNATURE PAGE FOLLOWS
33
SCHEDULE "A" Description of Property
IN WITNESS WHEREOF, the parties hereto have hereto set their hands and seals, with the intention of being legally bound hereby the day and year first above written.
LESSOR:
LESSEE:
OAK HILL REALTY ASSOCIATES
OAK HILL ACRES OPERATIONS ASSOCIATES
By:___________________________ NAME: DARYL HAGLER
By:__________________________ NAME: KENNETH ROZENBERG
Tab G
OPERATING AGREEMENT OF OAK HILL OPERATIONS ASSOCIATES LLC OPERATING AGREEMENT (the “Agreement”) of Oak Hill Operations Associates, LLC (the “Company”) made as of the 1st day of January, 2017 by and between Kenneth Rozenberg, Beth Rozenberg, Jonathan Hagler and such additional parties who shall hereafter become a member of the Company (hereinafter collectively the “Members” and individually as a “Member”). WITNESSETH WHEREAS, the Company has been formed pursuant to the provisions of the Rhode Island Limited Liability Company Act (the “Act”), by having its articles of organization (the “Articles of Organization”) filed with the Secretary of State of the State of Rhode Island on May 19, 2016; and WHEREAS, the Members desire to adopt this Operating Agreement (the “Agreement”) for the operation and management of the Company. NOW, THEREFORE, in consideration of the agreements and obligations set forth herein, the Members hereby agree as follows: 1. Formation, Name and Place of Business. A.
This Agreement shall become effective upon the execution hereof.
B. The terms and provisions hereof will be construed and interpreted in accordance with the terms and provisions of the Act and, if any of the terms and provisions of this Agreement should be deemed inconsistent with those of the Act, the Act shall be controlling. C. The business of the Company will be conducted, subject to regulatory approval, under such assumed name, subject to regulatory approval, if any, as designated by the Managing Member hereinafter mentioned. D. The place of business of the Company will be at 4770 White Plains Road, Bronx, New York 10470. E. The parties hereto shall execute such certificates and documents, and the Members shall file and record such certificates and documents, as may be necessary or appropriate to comply with the requirements for the continuance and operations of a limited liability company under the Act. The parties hereto shall also execute such certificates and documents, and the Members shall file, record and publish such certificates and documents, as
1
the Members, upon advice of counsel, deem necessary or appropriate to comply with requirements of applicable laws governing the formation and operation of a limited liability company in all other jurisdictions where the Company desires to conduct business. 2. Term. The Company commenced doing business on the date on which the Articles of Organization were filed with the Secretary of State of the State of Rhode Island. The Company shall continue in existence unless sooner dissolved and wound up pursuant to the Act or any provisions of this Agreement. 3. Purposes and Powers. The purposes of the Limited Liability Company are to conduct or promote, within Rhode Island or any other jurisdiction, any lawful businesses or purposes that it is legally allowed to. If this Company intends to engage in business activities outside the state of its formation that require the qualification of the Company in other states, it shall obtain such qualification before engaging in such out-of-state activities; and to carry on any other activities necessary to, in connection with or incidental to the foregoing, as the Members in their discretion may deem desirable. 4. Members. The names and addresses of the Members and their initial respective Percentage Interests in the Company are set forth on Schedule A, attached hereto. 5. Management. A. The business and affairs of the Company shall be exclusively managed by Kenneth Rozenberg, the managing member of the Company (the “Managing Member”). The Managing Member of the Company cannot be removed without the unanimous consent of the Members. The Managing Member of the Company must be a Member of the Company. The Managing Member shall have full and complete authority, power, and discretion to manage and carry out the business of the Company, to make all decisions regarding those matters and to perform any and all other acts or activities customary to or incident to the day-today management of the Company’s business. The Managing Member shall not receive a management fee for acting as the Managing Member or managing the business of the Facility. B. Notwithstanding the foregoing, the following actions shall require the vote or consent of at least fifty (50%) percent of all the Percentage Interests held by all the Members: (i)
Amend the Company's Certificate of Formation or this Agreement in any material manner or waive any material provision of this Agreement, subject to 5A above requiring unanimous consent to remove the Managing Member.
(ii)
Borrow money or incur any indebtedness or assume or guarantee
2
any indebtedness of any other entity, other than normal trade accounts incurred in the ordinary course of business, or grant consensual liens on the Company's property. (iii)
Dissolve or liquidate the Company, in whole or in a substantial part.
(iv)
Consolidate or merge with, or into any other entity or convey or transfer or lease its property and assets substantially as an entirety to an entity.
(v)
Sell, assign, transfer, exchange, grant leasehold estates in, or otherwise dispose of the Company's assets, any portion thereof, or any interest therein, except in the ordinary course of the Company's day-today business or except involving assets having a fair market value of $100,000.00 or less in the aggregate.
(vi)
Institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of Bankruptcy or insolvency proceedings against it, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to Bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or make any assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take Company action in furtherance of any such action.
(vii)
Lend funds belonging to the Company to any third party or extending to any person, firm or corporation credit on behalf of the Company, except in the ordinary course of business.
(viii)
Commit any other Member to guarantee or assume any debt or obligation of the Company.
(ix)
Create any lien, mortgage covenant or easement affecting, encumbering or burdening the Company's property, except in the ordinary course of business or except having a value of $100,000.00 or less.
(x)
Appoint or remove the external auditors of the Company.
(xi)
Hold property acquired by the Company in a name other than the Company name.
(xii)
Admission of new members or, except as set forth in Section 5.A., the replacement of the Managing Member.
(xiii)
Engage in any business or activity other than those set forth in
3
Section 3. (xiv)
The payment of a management fee in respect of the operation of the business of the Company, or the payment of any fees or salaries to Members, affiliates of Members or family members of Members.
6. Capital Contribution; Additional Capital Contributions. A. The amounts set forth on Schedule A, if any, shall constitute the initial capital of the Company. The Company shall maintain a capital account for each Member (a “Capital Account”). The opening balance of each Capital Account shall consist of such Member’s initial capital contribution. Each Capital Account shall be adjusted by the amount of any additional contributions of capital by, or distributions to, such Member and any allocation of profits and losses pursuant to Section 8 hereof. B. The Members acknowledge that the Company may require additional capital for the necessary and required operation of the Company. If such determination is made by those Members holding a majority in interest of the Percentage Interests, the Company shall send a notice to each Member stating the aggregate amount of the additional capital required (the “Capital Call”) and the amount required to be contributed by each Member, determined by multiplying (1) each Member’s Percentage Interest by (2) the aggregate amount of the Capital Call (“Capital Call Share”). No Member shall be obligated to make any additional capital contributions. C. If a Member shall not contribute an amount equal to his Capital Call Share (the “Failing Member”), and if the other Member(s) (the “Non-Failing Member(s)”) have made their entire required contributions, then the Non-Failing Member(s) may make the additional contribution that the Failing Member was to make to the Company, pro rata in accordance with each Non-Failing Member’s Percentage Interest(s) (the “Additional Contributions”). In such event the Non-Failing Member(s) shall be entitled to receive the return of their Additional Contributions before the Failing Member shall receive any distributions. D. A Member shall not be entitled to withdraw any part of such Member’s Capital Account or to receive any distribution from the Company, except as provided in this Agreement. Except as set forth in C above, no Member shall have priority over any other Member either for the return of Capital Contributions or for distributions of All Cash Available for Distribution (as hereinafter defined). 7. Distributions. A. “All Cash Available for Distribution” shall mean all cash receipts of the Company remaining after the payment of (i) operating expenses, (ii) outstanding Member loans (if any), including the interest thereon, and (iii) such reasonable reserves the Managing Member may set aside for working capital requirements.
4
B. Subject to the provisions of 6.C. above, All Cash Available for Distribution shall be distributed to the Members in accordance with their respective Percentage Interests at such time and in such amount as the Managing Members shall determine in his sole discretion.
8. Allocation of Profits and Losses. A. Except as herein otherwise expressly provided, for purposes of this Agreement the terms “Profits” and “Losses” shall mean the net profits and losses of the Company as determined separately, and not cumulatively, for each fiscal year of the Company by the Company’s accountants in accordance with the accounting methods followed by the Company for Federal income tax purposes. B. Except as herein otherwise expressly provided, the Profits and Losses of the Company (including each item of income, gain, loss, deduction or credit entering into the computation thereof) shall be allocated for each year by crediting the Capital Account of each Member with any Profits in accordance with such Member’s Percentage Interest, and charging the Capital Account of each Member with any Losses as follows: first to all Members with positive Capital Accounts proportionately until such Capital Accounts are reduced to zero, then to each Member in accordance with such Member’s Percentage Interest. C. Except as herein otherwise expressly provided, allocations of Profits and Losses upon the liquidation and dissolution of the Company shall be made, to the extent possible, so as to create balances in the Members’ Capital Accounts equal to zero. D. Notwithstanding the foregoing, to the extent that Section 704(b) and (c) of the Internal Revenue Code of 1986, as amended (the “Code”), requires allocations of income or loss of the Company in a manner different than that set forth above, the Company shall use any permissible method contained in the Treasury Regulations promulgated under Code Section 704(b) and (c) that is selected by the Managing Members. E. All allocations of Profits and Losses shall be made as of the last day of each fiscal year of the Company; provided, however, that if during any fiscal year of the Company or any portion thereof there is for any reason a change in any Member’s interest in the Company, then Profits and Losses for such year shall be allocated among the Members based upon the number of days during such period that such Member was registered as the owner of such interest or in such other manner as the Managing Members deem appropriate in accordance with requirements of the Code and of regulations issued pursuant thereto. 9. Transfer of Percentage Interests. A. Except as provided in this Agreement, a Member may not gift, sell, assign, pledge, encumber, hypothecate, exchange, transfer or otherwise dispose some or all of his Percentage Interest in the Company. A Member may gift, transfer and assign some or all of his Percentage Interest in the Company, in the case of a natural Member, to such Member’s
5
Immediate Family Members and in the case of an entity Member, to such entity Member’s affiliates or the majority member of such Member. Except as set forth hereinabove, a Member desiring to assign, transfer, sell or otherwise dispose of some or all of his Percentage Interest (the “Selling Member”) shall first obtain a bona fide written offer from a prospective purchaser of such Percentage Interest stating the terms and conditions upon which the proposed purchase is to be made. The Selling Member shall then give the other Members (the “Remaining Members”) written notice (the “Offer Notice”) of his intention to so sell to such proposed purchaser along with a copy of such bona fide written offer. Each Remaining Member, other than the Selling Member, on a basis pro rata to the Percentage Interests of each Remaining Member exercising his right of first refusal, shall have the right to exercise a right of first refusal to purchase all (but not less than all) of the Percentage Interests proposed to be sold by the Selling Member upon the same terms and conditions as stated in the bona fide written offer by giving written notification to the Selling Member of his intention to do so within sixty (60) days after receiving the written notice from the Selling Member. The failure of any Remaining Member to so notify the Selling Member of a desire to exercise such right of first refusal within such sixty (60) day period shall result in the termination of such Remaining Member’s right of first refusal and the Selling Member shall be entitled to consummate the sale of his Percentage Interests with respect to which such first right of refusal has not been exercised to the proposed purchaser offering to do so pursuant to the bona fide written offer to purchase and upon no other terms or conditions. Any changes in any of the terms or conditions of the written bona fide offer shall require the Selling Member to re-offer the Percentage Interests to the Remaining Members who shall again have the right of first refusal pursuant to the provisions of this Section. If the Selling Member does not sell his Percentage Interests in accordance with the written bona fide offer within thirty (30) days after receiving the right to do so, his right to do so terminates and the terms and conditions of this Section shall again be in effect with respect to his Percentage Interests. If a Remaining Member gives written notice to the Selling Member of his desire to exercise his right of first refusal and to purchase the Selling Member’s offered Percentage Interest upon the same terms and conditions as are stated in the bona fide written offer, such Remaining Member shall have the right to designate the time, date and place of closing for the closing to occur within ninety (90) days after receipt of written notification from the Selling Member of the bona fide offer. C. Except for transfers to Immediate Family Members or in the case of an entity Member, to such entity Member’s affiliates or the majority member of such Member, no person acquiring a Percentage Interest, other than a Member, shall become a Member unless such person is approved by the vote or consent of at least fifty (50%) percent of all the Percentage Interests (excluding the Percentage Interests acquired by such person). If no such approval is obtained, such person’s Percentage Interests shall only entitle such person to receive the distributions and allocations of profits and losses to which the Member from whom such person received such Percentage Interests would be entitled. Any such approval may be subject to any terms and conditions imposed by the Members. It shall be an additional condition of any transfer that the transferee (if not already a party to this Agreement) become a party to this Agreement by delivering to each of the Members a counterpart of this Agreement signed by such transferee. D. Notwithstanding anything in this Agreement to the contrary, but
6
subject to the provisions of 6 C hereof, no additional Percentage Interests shall be issued and no Member’s Percentage Interests shall be reduced without the consent of at least fifty (50%) percent of all the Percentage Interests. E. For purposes of this Agreement, the term “Immediate Family Members” shall mean a spouse, sibling, parent or child, or a trust for which any of the foregoing are beneficiaries thereof. F. Notwithstanding anything in this Agreement to the contrary and subject to this Section 9, no sale of all or substantially all of the assets of the Company may occur without the consent of at least fifty (50%) percent of all the Percentage Interests.
10. Dissolution and Winding Up. A. The Company shall be dissolved upon the earliest to occur of (i) the expiration of the term set forth in Section 2; (ii) the agreement of those Members holding sixty-six (66%) percent of the Percentage Interests to dissolve the Company; (iii) death, dissolution, insolvency, incompetence, or bankruptcy of a Member, unless the remaining Members consent to continue the business of the Company within 90 days after such event affecting a Member; (iv) the sale of all or substantially all of the assets of the Company and the collection and distribution of the proceeds of sale; (v) any event which makes it impossible, unlawful, or impractical to carry on the business of the Company; or (vi) entry of a decree of judicial dissolution of the Company under the Act. B. Upon the dissolution of the Company, it will be wound up and liquidated, and the assets shall be distributed as follows: (i) all of the Company’s debts and liabilities to persons other than the Members shall be paid and discharged; (ii) the Managing Member (or a trustee if one is appointed) may set up any reserve he deems reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company to persons other than the Members arising out of or in connection with the Company. Such reserve shall be paid over by the Managing Member (or such trustee) to a bank or trust company to act as escrow agent or to a reputable person selected by the Managing Member (or such trustee). Any such escrow agent shall hold such reserve for payment of any of the aforementioned contingencies, and, at the expiration of such period as the Managing Member (or such trustee) designate, distribute the balance thereafter remaining in the manner hereinafter provided; (iii) all of the Company’s indebtedness to the Members shall be paid and discharged; (iv) subject to the provisions of 6 C above, the Members shall be paid the value of their Capital Accounts; and (v) a proportionate share of each class of asset of the Company that may be divided among the Members, and an undivided interest in each and every other asset of the Company, shall be distributed to the Members in accordance with their Percentage Interests after allocation of Profits and Losses attributable to, or arising from, liquidation of the Company, treating the Company as if all assets not sold had been sold for their fair market value immediately prior to a distribution upon dissolution of the Company, all Profits and Losses had been allocated in accordance with the provisions of this Agreement and all items of income, deduction or loss had been credited or charged to the Capital Accounts of the Members as provided in Section 8 hereof.
7
C. The winding up of the Company’s affairs and liquidation and distribution of its assets shall be conducted exclusively by the Managing Member (or a trustee, if one is appointed), who are authorized to do any and all acts and things authorized by law for these purposes. 11. Banking. The Managing Member at any time and from time to time on behalf of the Company, may open such bank accounts, make such deposits therein and acquire for investment such certificates of deposit, United States Treasury Bills, commercial paper and other similar short-term debt obligations as he shall determine in their sole and absolute discretion. All withdrawals from any bank accounts so maintained may be made only upon the signatures of the Managing Member or his designee(s). 12. Liability and Indemnification. A. Except as otherwise provided by law, the Members, including the Managing Member, shall not be liable, responsible, or accountable in any way for damages or otherwise to the Company or to any of the Members for any act or failure to act pursuant to this Agreement or otherwise unless there is a judicial determination that (i) such person acted in bad faith, (ii) the conduct of such person constituted intentional misconduct or a knowing violation of law, (iii) such person gained a financial benefit to which he or she was not legally entitled, or (iv) such person failed to perform his or her duties, specifically with respect to distributions under section 508(a) of the Act, in good faith and with that degree of care that an ordinarily prudent person in a like position would use under similar circumstances. B. The Company shall indemnify, defend, and hold harmless each of the Members, including the Managing Member, (severally, the “Indemnitee” and collectively, the “Indemnitees”), from and against any claims, losses, liabilities, damages, fines, penalties, costs, and expenses (including, without limitation, reasonable fees and disbursements of counsel and other professionals) arising out of or in connection with any act or failure to act by an Indemnitee pursuant to this Agreement, or the business and affairs of the Company to the fullest extent permitted by law; provided, however, that an Indemnitee shall not be entitled to indemnification hereunder if there is a judicial determination that (a) such Indemnitee’s actions or omissions to act were made in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or (b) such Indemnitee personally gained a financial benefit to which the Indemnitee was not legally entitled. C. No Member, including Managing Member, shall be liable for any debts, obligations or liabilities of the Company or each other, whether arising in tort, contract or otherwise, solely by reason of being such Member or acting (or omitting to act) in such capacity or participating in the conduct of the business of the Company. 13. Books and Records.
8
Proper and complete books and records of account of the Company shall be kept at its principal place of business or such other place as determined by the Managing Member and shall be open for inspection and copying by any Member in person or by his duly authorized representatives, upon reasonable notice provided to the Managing Member during regular business hours at such principal place of business. The Company shall deliver to each of the Members an annual statement reflecting the financial affairs of the Company in reasonable detail, shall prepare the Company’s income tax returns and shall distribute to each of the Members information with respect to the Company necessary for each Member to prepare his individual Federal and State income tax returns. 14. Basis Adjustment. In the event of a transfer of an interest in the Company or the distribution of any property to a Member, upon the request of the transferee or distributee, the Managing Member may elect on behalf of the Company under Code Section 754 to cause the basis of the Company’s property to be adjusted for Federal income tax purposes in the manner provided in Code Sections 734 or 743, as the case may be. 15. Communications. Any notice, request or demand required or permitted under this Agreement shall be deemed to have been duly given or made if in writing and (i) delivered in person or (ii) five days after deposit in the U.S. mail if sent postage prepaid by registered or certified mail, return receipt requested, or (iii) if sent by overnight courier service, in the case of a Member, to the address of such Member then shown on the books and records of the Company. 16. Severability. If any provision of this Agreement shall be determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby and shall continue to be enforceable to the fullest extent permitted by law. 17. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties, their heirs, devisees, personal representatives, successors and assigns. 18. Completeness and Modifications. This Agreement embodies the entire understanding and agreement among the Members concerning the Company, and supersedes any and all prior negotiations, understandings or agreements in regard thereto. No waiver or modification of the terms hereof shall be valid unless in writing and signed by those Members to be charged and only to the extent therein set forth.
9
19. Tax Matters Partner. Kenneth Rozenberg is hereby designated as the “Tax Matters Partner” under the Code. 20. Gender and Number. Where appropriate, the masculine gender shall be deemed to include the feminine, the feminine gender shall be deemed to include the masculine, the singular number shall be deemed to include the plural and the plural number shall be deemed to include the singular. 21. Construction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Rhode Island. 22. Creditors. Except as specifically set forth in this agreement, none of the provisions of this Agreement shall be for the benefit of, or enforceable by, any creditor of the Company or any creditor of any Member or any other third party. 23. Counterparts. This Agreement may be executed in one or more original, facsimile or PDF counterparts, all of which taken together shall constitute a single agreement. 24. Legal Representation. The Members acknowledge that this Agreement has been prepared on behalf of the Company by the Company’s counsel and that such counsel has not represented any of the individual Members in connection therewith. Each Member further acknowledges and certifies that they have thoroughly read and fully understand all the provisions contained herein and have been advised and had the opportunity to have this Agreement reviewed by independent and separate counsel of their own selection and have done so prior to the execution of this Agreement. As such, no preference or weight shall be given to who prepared or drafted this Agreement, as it is the understanding of the parties hereto that all parties had a full right to negotiate and discuss the preparation, drafting and revisions and signing of this Agreement between themselves and their respective attorneys and have done so.
SIGNATURE PAGE FOLLOWS
10
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the day and year first above written.
Kenneth Rozenberg
Beth Rozenberg
Jonathan Hagler
11
SCHEDULE “A”
Member Kenneth Rozenberg Beth Rozenberg Jonathan Hagler
Address Initial Contribution 3 Hunters Run Suffern, New York, $10 10901 3 Hunters Run Suffern, New York, $10 10901 1 Hunters Run Suffern, New York, $180 10901
12
Percentage Interest 5% 5% 90%
Tab H
Tab I
ROCKLAND CAPITAL FUNDING, LLC 2 Cara Drive Suffern, New York 10901 February 1, 2017
Kenneth Rozenberg, Managing Member Oak Hill Operations Associates, LLC 4770 White Plains Rd Bronx, New York 10470 Re: Oak Hill Operations Associates, LLC (“Facility”). Dear Sir: In reliance upon the accuracy and completeness of the financial statements and material submitted to Rockland Capital Funding, LLC (“Lender”) Lender is pleased to approve and extend a working capital loan to the Facility in the amount of $850,000.00 at an annual interest rate of 5.00% on the basis of a five (5) year self-amortizing loan (“WC Loan”) subject to the following terms, provisions and conditions contained in this commitment letter (hereinafter, this “Commitment”). The WC Loan is hereinafter referred to as the “Loan”. This Commitment includes only a brief description of the principal terms of the Loan. The documentation for the Loan shall include customary security agreements as may be applicable, promissory notes, guaranty agreements, collateral assignments of certain documents, Uniform Commercial Code financing statements, an opinion of Borrower’s and Guarantors’ counsel, all satisfactory in form and substance to Lender and its counsel, and such other documents as Lender may require all of which shall be satisfactory in form and substance to Lender and its counsel (collectively, the “Loan Documents”). When accepted, this Commitment will evidence the intent of the parties to proceed in good faith to negotiate the terms, conditions and documentation required in order to close the Loan. Borrower acknowledges that the closing of the Loan is subject to Lender’s completion of due diligence to its satisfaction, as it may in its sole discretion determine, and agree that Lender, in its sole discretion, may determine whether any matters discovered by its further investigation are of such a nature as to cause Lender to decline to close, or to modify, the Loan contemplated herein. Additionally, Borrower, by accepting this Commitment, acknowledges and agrees that this Commitment is subject to completion and execution by Borrower of documentation which is satisfactory to Lender. Such documentation may contain other conditions and covenants as may be required by Lender or by its counsel. The issuance of this Commitment by Lender and its acceptance by Borrower and the Guarantor and its references to specific terms and conditions, shall
1
not be deemed to be a waiver of the right of Lender to require other terms and conditions, whether or not material.
Borrower:
Oak Hill Operations Associates, LLC
Guarantor:
Kenneth Rozenberg Payment of Borrower’s obligations in connection with the Loan shall be jointly and severally unconditionally guaranteed by Guarantor pursuant to a guaranty agreement in form and substance satisfactory to Lender.
WC Loan Amount:
$850,000.00
Interest Rate:
5.00%
Loan Term:
60 months
Amortization Period:
60 months
Security:
all accounts receivable of Borrower related to the Facility. Guarantor shall guaranty the obligations of Borrower.
Indemnification:
The Loan Documents to provide for the general indemnification by Borrower and Guarantor against all losses, liabilities, claims, damages and expenses (other than those attributable to the gross negligence or willful misconduct of Lender).
Representation and Warranties:
Appropriate for facilities of this type, size and purpose including, but not limited to, organization and authority, qualification, financial statements, litigation, title to personal property, maintenance of insurance, enforceability and validity of documents, no events of default, governmental and third party consents, payment of taxes, no material adverse change, environmental matters and full disclosure.
2
Financial Reporting:
Audited annual financial statements for Borrower; quarterly unaudited financial reporting for Borrower.
Closing Costs and Fees:
All closing costs, including, but not limited to, recording taxes, recording charges and Borrower own legal fees and expenses along with all costs and expenses incurred by Lender in connection with the Loan from time to time, including without limitation, its counsel fees incurred in preparing loan documents, recording and filing fees, lien searches and all other out of pocket expenses and costs in connection with the preparation, negotiation, delivery and closing of the Loan will be paid by Borrower. Borrower will reimburse Lender for all expenses incurred whether or not a closing occurs with respect to the proposed Loan.
Termination Date:
March 31, 2017. Lender’s obligations under this Commitment, if accepted by Borrower, shall terminate on this date at the sole option of Lender if the Loan has not closed by such Termination Date, unless the time of closing has been extended in writing and signed by Lender.
It is understood and agreed that Lender’s issuance of this Commitment is based upon, among other things, the accuracy of (a) the representations and statements made to Lender by or on behalf of Borrower and/or Guarantor, and (b) all additional information, representations, exhibits and other matter submitted to Lender, and that Lender shall have the option, in addition to other options elsewhere specified, to terminate this Commitment by written notice to Borrower if there has been any misrepresentation(s) or misstatement(s) or any error(s) in any materials or financial statements delivered by or on behalf of Borrower or Guarantor if prior to the disbursement of funds pursuant to the Loan herein described, (i) there has been substantial damage to any of the security or collateral, or (ii) any of Borrower or Guarantor has become insolvent, bankrupt, deceased or incapacitated, or (iii) any of Borrower or Guarantor is in default under an existing loan obligation, or (iv) any representation, statement, exhibit or other materials submitted to Lender on behalf of Borrower or Guarantor has materially adversely changed since the time the information was submitted to Lender, or (v) that any Borrower or Guarantor has failed to maintain a satisfactory financial condition, or (vi) there is a material adverse
3
change in the business, assets, obligations, financial condition or business prospects of any of Borrower or Guarantor, or with respect to any aspect of the collateral securing the Loan. The closing of the Loan contemplated herein shall occur at such place as Lender may designate, at such time and date specified by Lender, after Borrower has complied with all of the terms and conditions required by Lender. This Commitment is for Borrower’s confidential use only. It may not be disclosed by Borrower without Lender’s prior written consent to any person (including any financial institution) other than your accountants, attorneys and other advisors, and then only in connection with the transactions contemplated by this Commitment and on a confidential basis. Borrower agrees that any and all disputes arising out of or under this Commitment shall be governed by the laws of the State of New York and they knowingly and voluntarily and intentionally waive any right to a trial by jury in any such suit, action or proceeding. Furthermore, all parties hereto waive any rights they may have to claim or recover, in any suit, action or proceeding, any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damage. All parties agree that this section is a specific and material aspect of this Commitment and that Lender would not issue or deliver this Commitment if the waivers set forth herein were not a part hereof. No modification or waiver of any terms contained herein will be valid and binding unless agreed to in writing by Lender. This Commitment is for Borrower only and no other person may obtain any rights hereunder or be entitled to rely or claim reliance hereupon. This Commitment may not be assigned by Borrower and no rights hereunder may be transferred by Borrower without Lender’s prior written consent. However, Lender may assign, in whole or in part, any or all of its rights and obligations hereunder to other parties and/or lenders as Lender may determine, and upon any such assignment Lender shall have no further rights and obligations hereunder with respect to the portion so assigned. Lender’s waiver of any breach, or failure to enforce any of the terms and conditions contained herein, at any time, shall not in any way affect, limit or waive Lender’s right thereafter to enforce and compel strict compliance with every term and condition hereof. This Commitment may be executed in any number of counterparts and by different parties on separate counterparts. Each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same
4
Commitment. This Commitment may be executed and exchanged by exchange of facsimile signatures which shall be deemed original signatures for purposes hereof or otherwise. This Commitment shall be deemed to have been executed and delivered when Lender has received counterparts hereof executed by all parties hereto and Lender has countersigned and delivered a fully signed copy hereof to Borrower. To accept this Commitment, kindly sign below. Please return an executed copy hereof by February 10th, 2017, otherwise this Commitment is null and void. Very truly yours, ROCKLAND CAPITAL FUNDING, LLC
By:________________________________ Beverly Schiffer, President
ACCEPTED THIS 2nd DAY OF FEBRUARY, 2017 Oak Hill Operations Associates, LLC
By:________________________________ Name: Kenneth Rozenberg Title: Managing Member
5
