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EXHIBIT 10.16
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PIONEER HOSPITAL LEASE
BY AND BETWEEN
AHP OF UTAH, INC.
"LANDLORD"
AND
XXXXXXXXXX PIONEER VALLEY HOSPITAL, INC.
"TENANT"
DATED AS OF MAY 15, 1996
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TABLE OF CONTENTS
Page
PIONEER HOSPITAL LEASE
This LEASE is executed as of May 15, 1996, by and between AHP
OF UTAH, INC., a Utah corporation, having its principal office at 0000 Xxxxx
Xxxxxxx'x Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000, as Landlord,
("Landlord"), and XXXXXXXXXX PIONEER VALLEY HOSPITAL, INC. a Utah Corporation,
and a wholly owned subsidiary of Xxxxxxxxxx Healthcare Corporation, a California
corporation ("PHC"), having its principal office at 000 Xxxxx Xxxx Xxxxxx, Xxxxx
0000, Xxxxxxxx, Xxxxxxxxxx 00000, as Tenant ("Tenant").
RECITALS
A. Landlord and Tenant have entered into the Purchase
and Sale Agreement of even date herewith (the "Purchase Agreement") pursuant to
which Landlord has agreed to purchase from the Tenant certain real property
utilized in connection with the operations of "Pioneer Valley Hospital," a
general acute care hospital located in West Valley City, Utah and licensed by
the Health Facility Licensure Bureau to operate 139 beds, and related
facilities, including but not limited to, the Property (as defined in Article
II). Landlord's interest in the Property will be subject to the terms and
provisions of the Existing Leases.
B. As an inducement to Landlord to enter into the
Purchase Agreement, Tenant has agreed hereby to lease the land and improvements
comprising the facility from Landlord and to secure its obligations to Landlord
under this Lease as provided herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Lease, unless otherwise expressly provided in
this Agreement or the context in which such term is used indicates a contrary
intent, (a) the terms defined in this Article shall have the meanings ascribed
to them in this Article, (b) all accounting terms not otherwise defined in this
Article shall have the meanings ascribed to them in
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accordance with generally accepted accrual method accounting principles at the
time applicable, (c) all references in this Lease to designated "Articles",
"Section" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Lease and (d) the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Lease as a whole and
not to any particular Article, Section or other subdivision.
"ABSOLUTE ASSIGNMENT OF SUBLEASES AND RENTS" shall mean the
Absolute Assignment of Subleases and Rents of even date herewith by and between
Landlord and Tenant.
"ADDITIONAL CHARGES" shall have the meaning ascribed to such
term in Section 4.7.
"AFFILIATE" of any person or entity (the "Subject") shall mean
(a) any person which, directly or indirectly, controls or is controlled by or is
under common control with the Subject, (b) any person owning, beneficially,
directly or indirectly, ten percent (10%) or more of the outstanding capital
stock, shares or equity interests of the Subject or (C) any officer, director,
employee, general partner or trustee of the Subject or any person controlling,
controlled by or under common control with the Subject (excluding trustees and
persons serving in similar capacities who are not otherwise an Affiliate of the
Subject). As used in this definition, the term "person" means and includes
governmental agencies and authorities, political subdivisions, individuals,
corporations, limited liability companies, general partnerships, limited
partnerships, stock companies or associations, joint ventures, associations,
trusts, banks, trust companies, land trusts, business trusts and any other
entity of any form whatsoever, and "control" (including the correlative meanings
of the terms "controlled by" and "under common control with"), as used with
respect to any person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
person, through the ownership of voting securities, partnership interests or
other equity interests, or through any other means.
"AHP" shall mean American Health Properties, Inc., a Delaware
corporation.
"APPLICABLE CPI PERCENT" shall mean the percent equal to (x)
the quotient of (i) the CPI most recently published as of the date that payment
of Percentage Rent for the last Calendar Quarter of such Calculation Period is
due, divided by (ii) the CPI as of the comparable prior year date; minus (y)
one, but in no event less than 2.0%.
"APPRECIATION AMOUNT" shall mean the amount, if any, by which
the Fair Market Value of the Property exceeds Landlord's Total Investment.
"AWARD" shall have the meaning ascribed to such term in
Section 16.1(c).
"BASE GROSS REVENUES" shall mean, for the Fixed Term, the
Gross Revenues for the 12-month period commencing with the first full day of the
first full calendar month of the Fixed Term and, for any Extended Term, the
Gross Revenues for the Base Year.
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"BASE RENT" shall mean, for the Fixed Term, $7,050,750 per
annum (prorated as of the date hereof) and, for each Extended Term, the amount
determined pursuant to Section 3.2.
"BASE RENTAL RATE" shall mean for any Calculation Period the
quotient of (a) the Base Rent payable with respect to such Calculation Period
divided by (b) the Landlord's Total Investment for such Calculation Period.
"BASE YEAR" shall mean with respect to each Extended Term the
12-month period ending with the last day of the last full calendar month
immediately preceding the commencement of such Extended Term.
"BUSINESS DAY" shall mean any day on which banking
institutions in Salt Lake City, Utah, New York, New York, Los Angeles,
California and Denver, Colorado are open for the conduct of normal banking
business.
"CALCULATION PERIOD" shall mean a period of 12 consecutive
months commencing with the first day of the first full calendar month of the
Fixed Term or any anniversary of such date.
"CALENDAR QUARTER" shall mean the three-month periods in each
calendar year ending on March 31st, June 30th. September 30th and December 31st,
respectively.
"CALIFORNIA AFFILIATE" shall mean Xxxxxxxxxx Convalescent
Hospitals, Inc., a California corporation which is a subsidiary of Xxxxxxxxxx
Healthcare Corporation, Inc., a California corporation.
"CALIFORNIA FACILITIES" shall mean the Lafayette Convalescent
Hospital, the Oak Park Convalescent Hospital, the Rheem Valley Convalescent
Hospital and the University Convalescent Hospital, collectively.
"CALIFORNIA FACILITIES SECURITY AGREEMENT" shall mean a
Security Agreement from the California Affiliate, pertaining to the California
Facilities, substantially in the form of Exhibit B hereto.
"CAPITAL ADDITIONS" shall mean (a) one or more new buildings
located on the Land or to be used, directly or indirectly, as part of the
Facility, (b) one or more additional structures annexed to any portion of any of
the Improvements, (c) the material expansion of existing Improvements, (d) the
construction of a new wing or new story on existing Improvements, or (e) any
expansion, construction, renovation or conversion of existing Improvements or
the installation of new Fixtures therein to (i) increase the bed or service
capacity of the Facility or (ii) change the purpose for which the Facility is
utilized. Notwithstanding anything to the contrary contained in Article XI, in
the event it is necessary to xxxxx or otherwise take corrective action with
respect to the existence of a Hazardous Substance (as hereinafter defined)
located in, on or under the Property or in the Improvements, such abatement or
corrective action shall not be deemed to be a Capital Addition and shall be the
sole responsibility of Tenant at its sole cost and expense.
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"CAPITAL ADDITIONS COST" shall mean the cost of any Capital
Additions. Such cost shall include (a) the costs of constructing the Capital
Additions, including site preparation and improvement, materials, labor,
supervision, developer and administrative fees, the costs of design, engineering
and architectural services, the costs of fixtures, the costs of construction
financing (including, if funded, by Landlord, capitalized interest at a rate
equal to the Prime Rate plus 250 basis points) and other similar costs approved
in writing by Landlord, (b) if agreed to by Landlord in writing in advance, the
purchase price and other acquisition costs, or applicable ground lease rental
payable for any period such ground lease is in effect to and including the date
upon which such Capital Addition is completed and occupied or in operation, as
the case may be, of any land which is acquired or leased for the purpose of
placing thereon all or any portion of the Capital Additions or for providing
means of access thereto, or parking facilities therefor (including the costs of
surveying the same and recording, title insurance and escrow fees and charges),
(c) insurance premiums, real estate taxes, water and sewage charges and other
carrying charges for such Capital Additions during their construction, (d) fees
and expenses of legal counsel, (e) any documentary transfer or similar taxes,
(f) any applicable regulatory or administrative fees and charges, and any costs,
charges, fees or expenses paid or incurred in connection with obtaining any
applicable permits, licenses, franchises, authorizations, certificates of need,
certificates of occupancy and similar authorizations and entitlements and (g)
all other reasonable costs and expenses of Landlord or Tenant, as applicable,
and any lending institution which has committed to finance the Capital
Additions, including, but not limited to, (i) the fees and expenses of their
respective legal counsel, (ii) any printing. duplicating and messenger expenses,
(iii) any filing, registration and recording taxes and fees, (iv) any
documentary transfer or similar taxes, (v) any title insurance charges and
appraisal fees, (vi) any rating agency fees and (vii) any commitment or similar
fees charged by any lending institution financing or offering to finance any
portion of such Capital Additions.
"CAPITAL ADDITIONS DEPRECIATION" shall mean the depreciation
schedule applicable to Capital Additions as mutually agreed by Landlord and
Tenant.
"CASH FLOW" shall mean, for any period of determination, an
amount equal to the sum of the amounts for such period of (i) net income before
income taxes and interest expense, (ii) depreciation, amortization and other
similar non-cash charges, (iii) Base Rent and (iv) Percentage Rent.
"CLAIMS" shall have the meaning specified in Section 22.1.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COMMENCEMENT DATE" shall have the meaning ascribed to such
term in Section 3.1.
"CONDEMNATION" shall have the meaning ascribed to such term in
Section 16.1(a).
"CONDEMNOR" shall have the meaning ascribed to such term in
Section 16.1(d).
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"CONSOLIDATED FINANCIALS" shall mean, for any fiscal year (or
other accounting period) for Tenant and Affiliates thereof statements of
earnings, retained earnings and cash flows for such period and for the period
from the beginning of the respective fiscal year to the end of such period and
the related balance sheet as at the end of such period, together with the notes
thereto, all in reasonable detail and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding fiscal year
(or period), all of which shall be prepared in accordance with generally
accepted accounting principles.
"CPI" shall mean the Consumer Price Index for the region in
which the Facility is located (All Urban Consumers, 1982-84=100).
"DATE OF TAKING" shall have the meaning ascribed to such term
in Section 16.1(b).
"ELMWOOD LEASE" shall mean the Lease dated as of March 1,
1993, by and between AHP of New Orleans, Inc., a Louisiana corporation, as
Landlord, and Xxxxxxxxxx Elmwood Medical Center, Inc., a Louisiana corporation,
as Tenant.
"ENCUMBRANCE" shall have the meaning ascribed to such term in
Article XXVII.
"EVENT OF DEFAULT" shall have the meaning ascribed to such
term in Section 17.1.
"EXCESS REVENUE" shall mean, with respect to each Calculation
Period, the difference between the Gross Revenues for such Calculation Period
and the Base Gross Revenues.
"EXISTING LEASES" shall mean those certain leases described in
Exhibit C.
"EXTENDED TERM" shall have the meaning ascribed to such term
in Section 3.2.
"FACILITY" shall mean the 139 bed general acute care hospital
presently operated on the Land, or with Landlord's consent, such other general
health care facility, general health and rehabilitation hospital, nursing home,
retirement center, congregate living facility, health care related apartments or
hotel, medical office building or other medical facility with treatment,
diagnostic or surgical facilities for inpatient or outpatient care (which may
include, without limitation, acute care inpatient facilities, skilled nursing
facilities, intermediate care facilities, home health care agencies, ambulatory
care clinics or similar facilities) offering other related health care products
and services being operated or proposed to be operated on the Land from time to
time in accordance with the provisions of this Lease.
"FACILITY MORTGAGE" shall have the meaning ascribed to such
term in Section 14.1.
"FACILITY MORTGAGEE" shall have the meaning ascribed to such
term in Section 14.1.
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"FAIR MARKET RENTAL" shall mean, with respect to the Property
(including any Capital Additions or portions thereof paid for by Landlord) the
rental paid on a net basis as provided in Section 4.8 hereof which a willing
tenant not compelled to rent would pay to a willing landlord not compelled to
lease for the highest and best medical use and occupancy of such property
permitted pursuant to this Lease for the term in question, assuming that Tenant
is not in default under this Lease, but without taking into account Percentage
Rent. For purposes of this Lease, Fair Market Rental shall be determined in
accordance with the appraisal procedures set forth in Article XXV or as
otherwise mutually agreed upon by Landlord and Tenant.
"FAIR MARKET VALUE" shall mean, with respect to the Property,
including all Capital Additions, the price that a willing buyer not compelled to
buy would pay to a willing seller not compelled to sell for such property
(except as otherwise provided below), assuming that (a) this Lease is not in
effect with respect to the Property, (b) such seller must pay any closing costs
and title insurance premiums with respect to such sale, and (c) the Property is
fully licensed by all governmental agencies having jurisdiction thereof, and is
and will continue to be operated for the Primary Intended Use and is otherwise a
going concern. Notwithstanding the foregoing, the computation of Fair Market
Value shall assume that this Lease is in effect with respect to the Property in
the event that Tenant elects to acquire the Property pursuant to Section
15.2(b). For purposes of this Lease, Fair Market Value shall be determined in
accordance with the appraisal procedures set forth in Article XXV or as
otherwise mutually agreed upon by Landlord and Tenant.
"FISCAL YEAR" shall mean the 12-month period commencing
January 1 and terminating December 31.
"FIXED TERM" shall have the meaning ascribed to such term in
Section 3.1.
"FIXTURES" shall have the meaning ascribed to such term in
clause (c) of Article II.
"GAAP" shall mean generally accepted accounting principles.
"GROSS REVENUES" shall mean all revenues received or
receivable from, in connection with, incidental to or by reason of the operation
of the Facility or any other use of the Property by Tenant or any Affiliate
thereof, including, without limitation, all revenues received or receivable from
the Existing Leases, from the Facility and all patient revenues received or
receivable from, in connection with or incidental to the use of or otherwise by
reason of all rooms, beds and other facilities provided, meals served, services
performed, space or facilities subleased or goods sold on the Property and
including, without limitation (except as provided below), arrangements with
third parties relating to the possession or use of any portion of the Property;
provided, however, that Gross Revenues shall not include:
(i) any revenues from professional fees or
charges by physicians or providers of ancillary services when
and to the extent such charges are paid over
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to such physicians or providers of ancillary services, or are
accompanied by separate charges for the use of the Facility or
any portion thereof;
(ii) non-operating revenues such as interest
income or income from the sale of assets not sold in the
ordinary course of business;
(iii) contractual allowances or reserves (relating
to any period during the Term) for xxxxxxxx not paid by or
received from the applicable governmental agencies or third
party providers;
(iv) allowances according to generally accepted
accounting principles for uncollectable accounts, including
credit card accounts, uncompensated care, charity care or
other administrative discounts and collection expenses;
(v) all patient billing credits and adjustments
that are appropriate according to generally accepted
accounting principles relating to health care accounting;
(vi) all federal, state or local sales or excise
taxes and any tax based upon or measured by Gross Revenues
which is added to or made a part of the amount billed to the
patient or other recipient of such services or goods, whether
included in the xxxx or stated separately;
(vii) all provider discounts for hospital or other
medical facility utilization contacts and credit card
discounts;
(viii) all costs of any federal, state or local
governmental program imposed specially to provide or finance
indigent patient care;
(ix) all rental income, concession fees and other
payments received by Tenant from any Affiliate of Tenant;
provided, however, that any receipts of such Affiliate that
would be deemed Gross Revenues if received by Tenant shall be
considered to be part of Gross Revenues to the extent of
Tenant's or any of its Affiliate's percentage interest in such
receipts;
(x) amounts received by Tenant pursuant to a
sublease of any portion of the Property if the rental paid by
the sublessee under the sublease is based, in whole or in
part, on either (a) the income or profits derived by the
business activities of the sublessee, or (b) any other formula
such that any portion of the sublease rental would fail to
qualify as `rents from real property' under Section 856(d) of
the Code, or any similar or successor provisions thereto,
provided, however, that any receipts of such sublessee that
would be deemed Gross Revenues if received by Tenant shall be
considered to be part of Gross Revenues; and
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(xi) revenues attributable to services actually
provided at locations other than the Property, such as home
health care and other services.
"XXXXXXXX LEASE" shall mean the Lease dated as of June 30,
1993, by and between AHP of Kansas, Inc., a Kansas corporation, as Landlord, and
Xxxxxxxxxx Xxxxxxxx Hospital, Inc., a Kansas corporation, as Tenant.
"HAZARDOUS SUBSTANCES" shall mean those substances, materials,
and wastes listed in the United States Department of Transportation Table (49
CFR 172 101) or by the Environmental Protection Agency as hazardous substances
(40 CFR Part 302) and amendments thereto, or such substances, materials and
wastes which are or become regulated under any applicable local, state or
federal law including, without limitation, any material, waste or substance
which is (i) hydrocarbons, petroleum and petroleum products, (ii) asbestos,
(iii) polychlorinated biphenyls, (iv) formaldehyde, (v) radioactive substances,
(vi) flammables and explosives, (vii) described as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq.
(33 U.S.C. Section 1321 or listed pursuant to Section 307 of the Clean Water Act
(33 U.S.C. Section 1317), (viii) defined as a "hazardous waste" pursuant to
Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq. (42 U.S.C. Section 6903), (ix) defined as a "hazardous substance"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C.
Section 9601), as the same may be amended from time to time, or (x) any other
substance, waste or material which could presently or at any time in the future
cause a detriment to or impair the value or beneficial use of the Land or other
Property (which, for purposes of this definition shall include all air, soils,
ground water, surface water and soil vapor) or constitute or cause a health,
safety or environmental hazard on, under or about the Land or other Property or
to any person who may enter on, under, or about the Land or other Property or
require remediation at the behest of any governmental agency.
"IMPACTED FACILITY" shall have the meaning specified in
Section 15.2.
"IMPOSITIONS" shall mean all taxes (including without
limitation all real property taxes imposed upon the Land, Improvements or other
portions of the Property, including, but not limited to all tangible and
intangible personal property, ad valorem, sales, use, single business, gross
receipts, transaction privilege, documentary stamp (if any are associated with
this Lease or the transactions contemplated hereby), rent or similar taxes
relating to or imposed upon Landlord, any portion of the Property, Tenant or its
business conducted upon the Land), assessments (including without limitation all
supplemental real property tax assessments or assessments for public
improvements or benefit, whether or not commenced or completed prior to the data
hereof and whether or not to be completed within the Term), ground rents, water,
sewer or other rents and charges, excises, tax levies, fees (including without
limitation license, permit, franchise, inspection, authorization and similar
fees) and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, of every character
or nature whatsoever with respect to or connected with the Property or the
business conducted thereon by Tenant (including all interest, penalties and
fines thereon due to any failure or delay in payment thereof) which at any time
prior to, during or with respect to the Term hereof may be assessed or imposed
on or with respect to, or may be a lien upon (a)
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Landlord's interest in the Property, (b) the Property or any part thereof or any
Rent therefrom or any estate, right, title or interest therein, (c) Landlord's
capital invested in the State as represented by the Property, or (d) any
occupancy, operation, use or possession of, or sales from, or activity conducted
on or in connection with the Property or the leasing or use of the Property or
any part thereof by Tenant.
"IMPROVEMENTS" shall have the meaning ascribed to such term in
clause (b) of Article II.
"INITIAL INVESTMENT COST" shall mean $57,073,000.
"INSURANCE REQUIREMENTS" shall mean all terms and conditions
of any insurance policy required by this Lease and all requirements of the
issuer of any such insurance policy.
"LAFAYETTE CONVALESCENT HOSPITAL" shall mean the facility
located at 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 of which Xxxxxxxxxx
Real Estate Corporation owns the real property and the California Affiliate
operates the facility and owns the personal property.
"LAND" shall mean all of that certain real property situated
in the City of Xxxx Xxxxxx Xxxx Xxxxxx xx Xxxx Xxxx, Xxxxx of Utah and more
particularly described in Exhibit A attached hereto and incorporated herein by
reference, and any other parcel of land acquired or leased and made subject to
this Lease in connection with a Capital Addition.
"LANDLORD LENDER" shall have the meaning ascribed to that term
in Section 14.1.
"LANDLORD'S TOTAL INVESTMENT" shall mean an amount equal to
the sum of (y) the Initial Investment Cost and (z) all Capital Additions Costs
pertaining to the Property paid for by Landlord pursuant to Section 11.2 of the
Lease.
"LANDLORD'S TRANSACTION EXPENSES" shall mean all out-of-pocket
expenses reasonably incurred by Landlord in connection with (i) the preparation
of this Lease, the Purchase Agreement and any Substitute Lease and the
instruments contemplated hereunder and thereunder, and any other instruments
required to be executed and delivered by Tenant to Landlord in connection,
herewith or therewith (whether or not the transactions hereby or thereby
contemplated shall be consummated) and (ii) the transactions contemplated to be
performed hereunder and thereunder, including but not limited to the reasonable
fees and disbursements of Landlord's legal counsel, title insurance premiums,
recording taxes and fees, survey fees, valuation or appraisal fees, engineering
fees and architects' fees.
"LEASE" shall mean this document, as the same may be amended
from time to time in accordance herewith.
"LEGAL REQUIREMENTS" shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, common law, decrees and injunctions affecting the
Property or the maintenance, construction, use, alteration, occupancy or
operation thereof, whether now or hereafter enacted and in force (including any
of
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the foregoing which may require repairs, modifications or alterations in or
to the Property), all permits, licenses, certificates, franchises,
authorizations, land use entitlements, zoning and regulations relating thereto,
and all covenants, conditions. agreements, restrictions and encumbrances
contained in any instruments, either of record or known to Tenant (other than
encumbrances created by Landlord without the consent of Tenant), at any time in
force affecting the Property.
"MINIMUM REPURCHASE PRICE" shall mean the Landlord's Total
Investment less the net amount (after deduction of all reasonable legal fees and
other costs and expenses, including without limitation expert witness fees,
incurred by Landlord in connection with obtaining any such proceeds or awards)
of any proceeds of insurance paid to and retained by Landlord in accordance with
Article XV of this Lease and of any Awards received by Landlord and not applied
to restoration of the Property in accordance with Article XVI of this Lease.
"NOTICE" shall mean a notice given pursuant to Section 30.8
hereof.
"OAK PARK CONVALESCENT HOSPITAL" shall mean the facility
located at 0000 Xxx Xxxx Xxxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000, of which
Xxxxxxxxxx Real Estate Corporation owns the real property and the California
Affiliate operates the facility and owns the personal property.
"OFFICER'S CERTIFICATE" shall mean a certificate of Tenant
signed by the chief financial officer or another officer authorized so to sign
by resolutions adopted by the board of directors or the articles of
incorporation or by-laws of the general partner of the Tenant or by any other
person whose power and authority to act has been authorized by delegation in
writing by the chief financial officer of the general partner of the Tenant.
"OVERDUE RATE" shall mean, as of a specified date, a rate of
interest equal to the Prime Rate plus five percent per annum, but in no event
greater than the maximum rate of interest then permitted under applicable law.
"PAYMENT DATE" shall mean any due date for the payment of any
installment of Base Rent.
"PERCENTAGE RENT" shall mean the percentage rent payable by
Tenant to Landlord pursuant to Section 4.4.
"PERCENTAGE RENT COMMENCEMENT DATA" shall mean with respect to
the Fixed Term, the first day of the first full calendar month of the Fixed
Term, and with respect to each Extended Term, the one year anniversary of the
first day of such Extended Term.
"PERMITTED ENCUMBRANCES" shall mean the matters, if any, set
forth in Exhibit D attached hereto and incorporated herein by reference.
A "PERSON" shall mean any natural person, corporation, limited
liability company, business trust, association, company, partnership or
government (or any agency or political
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subdivision thereof) or, for purposes of the definition of "Change of Control"
herein, any group acting in concert (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934).
"PHC" shall mean Xxxxxxxxxx Healthcare Corporation, a
California corporation.
"PIONEER ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean the
Pioneer Assignment and Assumption Agreement of even date herewith, by and
between Landlord and Tenant.
"PRIMARY INTENDED USE" shall mean a general acute care
hospital licensed by the State, and such additional uses which are licensed or
applied for on the date hereof or are permitted by Landlord from time to time
hereunder.
"PRIME RATE" shall mean the fluctuating rate of interest most
recently announced by Xxxxx Fargo at its principal office in San Francisco,
California as its "Prime Rate." The "Prime Rate" is one of Xxxxx Fargo's base
rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto. The "Prime Rate" is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Xxxxx Fargo may designate and may not be the
lowest of Xxxxx Fargo's base rates. Any change in any of the interest rates
chargeable hereunder resulting from a change in the Prime Rate shall become
effective as of the Business Day on which each change in the "Prime Rate" is
announced.
"PROPERTY" shall have the meaning ascribed to such term in
Article II.
"PURCHASE AGREEMENT" shall have the meaning given to that term
in the Recitals to this Lease.
"REMEDIAL WORK" shall have the meaning specified in Section
8.4.
"RENT" shall mean the Base Rent, Percentage Rent and
Additional Charges.
"RHEEM VALLEY CONVALESCENT HOSPITAL" shall mean the facility
located at 000 Xxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxx 00000 of which Xxxx X. and
Xxxxxxxx Xxxxxxxx own the real property and the California Affiliate operates
the facility and owns the personal property.
"SECURITY AGREEMENT" shall mean the Security Agreement of even
date between Tenant, as Debtor, and Landlord, as Secured Party.
"SECURITY LETTER OF CREDIT" shall have the meaning ascribed
thereto in Section 29.3.
"STATE" shall mean the State of Utah.
"TAKING" shall mean a taking or voluntary conveyance during
the Term hereof of all or any part of the Property, or any interest therein,
right with respect thereto or use thereof, as
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a result of, incidental to, or in settlement of any condemnation or other
eminent domain proceedings affecting such Property, regardless of whether such
Proceedings shall have actually been commenced.
"TANGIBLE NET WORTH" shall mean, as of the date of
determination, the sum of the following for Tenant and its consolidated
subsidiaries, if any, on a consolidated basis, determined in accordance with
generally accepted accounting principles (a) the amount of capital or stated
capital (after deducting the cost of any shares held in the applicable entity's
treasury); (b) plus the amount of capital surplus and retained earnings; or (c)
in the case of a capital or retained earnings deficit, minus the amount of such
deficit, (d) less the amount, if any, carried on the books of the entity and any
consolidated subsidiaries of the entity for goodwill, patents, trademarks,
copyrights, licenses, and other assets which are properly classified as
intangible assets under generally accepted accounting principles.
"TEN-YEAR TREASURY RATE" shall mean, as of the date of
determination, the monthly average yield to maturity of actively traded
marketable United States Treasury securities bearing a fixed rate of interest,
adjusted for a constant maturity of ten years, as calculated by the Federal
Reserve Board for the four preceding calendar weeks and published in said
board's Statistical Release H. 15.
"TENANT'S CAPITAL INVESTMENT" shall mean, for any period of
determination, the lesser of (x) the aggregate amount of the increase, during
the applicable period, of the original cost of (a) property, plant and
equipment, (b) capitalized development expenses and (c) investments which, at
the time made, are reasonably likely to contribute to the business of the
Facility, and (y) the aggregate amount of the increase, during the applicable
period, of capital stock, paid-in surplus, retained earnings and advances from
PHC (to the extent subordinated, to Landlord's satisfaction, to the prior
payment in full of Tenant's obligation to Landlord under this Lease).
"TENANT'S PERSONAL PROPERTY" shall mean all machinery,
equipment, furniture, furnishings, movable walls or partitions, computers or
other personal property, and consumable inventory and supplies, including,
without limiting the generality of the foregoing, mail boxes, desks, lamps,
chairs, beds, bedstands, non-affixed cabinetry, tables, and similar movable
equipment, owned by Tenant and used on the Land, but in no event any items
included within the definition of Fixtures.
"TERM" shall mean the Fixed Term and any Extended Terms, as
the context may require, unless earlier terminated pursuant to the Provisions of
this Lease.
"TERMINATION DATE" shall mean January 31, 2004.
"TOTAL RENT" shall mean the sum of Base Rent, Percentage Rent
and Additional Charges.
"UNAVOIDABLE DELAYS" shall mean delays due to strikes,
lockouts, inability to procure materials, power failures, acts of God,
governmental restrictions, enemy action, civil
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commotion, unavoidable casualty and other causes beyond the control of the party
responsible for performing an obligation hereunder, provided that lack of funds
shall not be deemed a cause beyond the control of either party hereto.
"UNIVERSITY CONVALESCENT HOSPITAL" shall mean the facility
located at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, of which
Xxxxxxxxxx Real Estate Corporation owns the real property and the California
Affiliate operates the facility and owns the personal property.
"XXXXX FARGO" shall mean Xxxxx Fargo Bank, N.A., a national
banking association.
ARTICLE II
LEASE OF PROPERTY
Landlord hereby leases, demises and lets to Tenant, and Tenant
hereby hires, takes and leases from Landlord, upon the terms and subject to the
conditions hereinafter set forth, TO HAVE AND TO HOLD, all of Landlord's right,
title and interest in and to all of the following (the "Property"):
(a) the Land;
(b) all buildings, structures and other improvements of
every kind, including but not limited to the Facility, all buildings and
structures hereafter constructed upon the Land and all alleyways and connecting
tunnels, sidewalks, utility pipes, conduits and lines (on-site and off-site),
parking areas, roadways and other related on-site and off-site improvements
appurtenant to such buildings and structures presently or hereafter situated
upon the Land, and any and all Capital Additions paid for by Landlord pursuant
to Section 11.2 of this Lease (the "Improvements");
(c) all "fixtures" as that term is defined in the State
now and hereafter located in, on or used and incorporated into the Land or
Improvements; all equipment (including non-movable medical equipment),
machinery, fixtures and other items of property, including all components
thereof, now and hereafter located in, on or used and incorporated into the
Property, in all cases so as to constitute component parts thereof, including,
without limitation, any and all furnaces, boilers, heaters, electrical
equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal, air-cooling and
air conditioning systems, equipment and apparatus, sprinkler systems and fire
and theft protection equipment, built-in oxygen and vacuum systems, wiring,
tubing, central clock systems, doctor register systems. elevators, dumb waiters,
intercom systems, nurse call systems, affixed cabinetry and counters, pneumatic
tube systems, vacuum cleaning systems, conveyor systems, paging systems, mill
work, x-ray protection, pass-through boxes, exhaust systems, laboratory plumbing
and piping, medical gas systems, nurse station counters, emergency generators
and similar items incorporated into and made a component part of the Property,
all of which to the greatest extent permitted by law are hereby deemed by the
parties hereto to constitute component parts of real
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estate, together with all replacements, modifications, alterations and additions
thereto, but specifically excluding Tenant's Personal Property (the "FIXTURES");
and
(d) all easements, licenses, rights-of-way and
appurtenances relating to the Land and the Improvements.
ARTICLE III
TERM OF LEASE
3.1 TERM OF LEASE. The initial term of this Lease shall
commence on the date hereof (the `Commencement Date'), and, unless extended or
terminated earlier in accordance with the provisions of this Lease, shall remain
in effect until January 31, 2004 (the "Fixed Term"). If for any reason Landlord
cannot deliver possession of the Property (or any portion thereof) to Tenant on
the Commencement Date, Landlord shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease or the obligations of
Tenant hereunder or extend the Term hereof, but in such case, Tenant shall not
be obligated to pay Rent until possession of the Property is tendered to Tenant.
3.2 OPTION TO EXTEND TERM OF LEASE.
Landlord hereby grants to Tenant an option to extend
the term of this Lease for three consecutive ten-year renewal terms (the
"Extended Terms"). Each Extended Term shall be on the same terms and conditions
as those set forth herein for the Fixed Term (including, but not limited to,
Tenant's obligation to pay Percentage Rent), except that Base Rent shall be paid
at a rate equal to the then current Fair Market Rental which, unless otherwise
mutually agreed to by Landlord and Tenant, shall be determined by appraisal
pursuant to the provisions of Article XXV. In no event, however, shall the Base
Rent for any Extended Term be less than 102%, nor more than 107%, of the total
amount of Base Rent and Percentage Rent reserved under this Lease for the Base
Year for such Extended Term. Tenant shall pay to Landlord, on the first day of
each Extended Term, an Additional Charge equal to 0.5% of the Landlord's Total
Investment. Each such option may only be exercised by Tenant if, at the time
such option is exercised, (a) this Lease has not expired or been sooner
terminated and (b) an Event of Default is not continuing, and shall be exercised
by Tenant by delivery of Notice to that effect to Landlord not less than 180 nor
more than 360 days prior to the expiration of the then current Term. Tenant's
exercise of any option to extend the term of this Lease for an Extended Term
pursuant to this Section 3.2 shall constitute Tenant's irrevocable and binding
commitment to lease the Property on the terms stated in this Lease for the whole
of such Extended Term. If Tenant is unable to exercise any option due to the
provisions of this Lease, the time during which such option may be exercised
shall not be extended or enlarged. Time is strictly of the essence with respect
to the requirement that Tenant give timely Notice of its exercise of any options
hereunder, and Tenant's failure timely to exercise any option strictly in
accordance with its terms shall constitute a material, irredeemable and
incurable failure to satisfy a condition precedent to the vesting of any rights
in Tenant pursuant to the option, and Tenant hereby expressly waives any right
to claim relief from forfeiture or any other form of equitable relief from the
consequences of any untimely exercise of any such option strictly in accordance
with its terms.
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The implied covenant of good faith and fair dealing, if any, under this Lease
shall not be construed to impose upon Landlord any obligation to notify Tenant
in advance of the impending deadline for the exercise of any option hereunder,
nor shall it obligate Landlord to excuse the tardy exercise of any option,
however slight. The failure of Tenant to exercise any of the options for the
Extended Terms within the respective times specified in this Section shall
thereby terminate any remaining such options.
ARTICLE IV
RENT
4.1 PAYMENT OF LANDLORD'S TRANSACTION EXPENSES. Tenant
shall pay to Landlord all Landlord's Transaction Expenses within 30 days of
Landlord's transmittal to Tenant of written invoices for all Landlord's
Transaction Expenses, in a form reasonably acceptable to Tenant.
4.2 PAYMENT OF BASE RENT, PERCENTAGE RENT AND ADDITIONAL
CHARGES. During the Term, Tenant shall pay to Landlord at the times specified
herein, in lawful money of the United States of America, without right of offset
or deduction, by wire transfer of immediately available funds to such account or
accounts as Landlord may designate from time-to-time in a Notice, the Rent.
4.3 BASE RENT. Commencing on the first Business Day of
the first full calendar month occurring coincident with or after the
Commencement Date and, thereafter, on the first day of each calendar month
occurring during the Term hereof, Tenant shall pay to Landlord Base Rent in an
amount determined by dividing (x) the then annual Base Rent by (y) 12, provided
that the first payment of Base Rent shall include an additional amount for any
partial calendar month occurring between the Commencement Date and the date of
the first payment of Base Rent. Any payment of Base Rent for a period of less
than one calendar month shall be prorated based upon a 30-day month and the
actual number of days elapsed.
4.4 PERCENTAGE RENT.
(a) "Percentage Rent" shall accrue, in the
manner and at the times set forth in this Section 4.4, in an amount equal to six
percent of the Excess Revenues for any Calculation Period commencing during the
Fixed Term and in an amount equal to five percent of the Excess Revenues for any
Calculation Period commencing during any of the Extended Terms; provided,
however, that no Percentage Rent Shall accrue during the first Calculation
Period commencing during any Extended Term. On August 14, 1996, and thereafter
on the 45th day after the last day of every Calendar Quarter commencing during
the Term of this Lease, Tenant shall pay Percentage Rent on a quarterly basis.
The quarterly payment shall be determined by (i) annualizing the Gross Revenues
for the portion of the Calculation Period ended (prorated for any partial
period) as of the end of the last Calendar Quarter, (ii) subtracting from such
annualized Gross Revenues the Base Gross Revenues to arrive at the Excess
Revenues for such completed portion of the Calculation Period, (iii) multiplying
such Excess Revenues by six percent or five percent, as the case may be, to
arrive at annualized Percentage Rent, (iv) multiplying such
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annualized Percentage Rent by a fraction the numerator of which is the number of
days elapsed in the Calculation Period through the end of the last Calendar
Quarter and the denominator of which is 360 and (v) subtracting from the product
thus obtained any Percentage Rent payments previously made with respect to such
Calculation Period.
(b) Notwithstanding subsection (a) of this
Section 4.4 to the contrary, in no event shall the increase in Percentage Rent
due and payable under this Lease with respect to any Calculation Period during
the Fixed Term be less than an amount equal to two percent of aggregate Base
Rent and Percentage Rent reserved hereunder for the immediately preceding
Calculation Period, nor shall it be greater than the amount determined by
multiplying (i) the Applicable CPI Percent by (ii) the aggregate Base Rent and
Percentage Rent reserved hereunder for the immediately preceding Calculation
Period. In no event, however, shall the Percentage Rent due and payable under
this Lease with respect to any Calculation Period during the Fixed Term be
greater than the amount which when added to the Base Rent reserved for such
Calculation Period equals $8,914,180. For purposes of this Section 4.2(b), and
only for the first Calculation Period during the Fixed Term, Base Rent and
Percentage Rent shall mean the aggregate amount of Base Rent and the aggregate
amount of Percentage Rent that was or should have been paid and/or accrued
during the last 12 consecutive month period of the Xxxxxxxx Lease and the
Elmwood Lease.
(c) Notwithstanding subsection (a) of this
Section 4.4 to the contrary, in no event shall the increase in Percentage Rent
due and payable under this Lease with respect to any Calculation Period during
any Extended Term be less than an amount equal to two percent of aggregate Base
Rent and Percentage Rent reserved hereunder for the immediately preceding
Calculation Period, nor shall it be greater than the amount determined by
multiplying (i) the Applicable CPI Percent by (ii) the aggregate Base Rent and
Percentage Rent reserved hereunder for the immediately preceding Calculation
Period.
(d) Notwithstanding subsection (a) and (c) of
this Section 4.4 to the contrary, if the aggregate amount of Base Rent and
Percentage Rent for any Calculation Period commencing during an Extended Term
reaches a level (the "Pause Point") at which Landlord realizes a percentage
return on the Landlord's Total Investment for such Calculation Period equal to
the sum of (x) the Base Rental Rate for such Calculation Period and (y) 325
basis points, Percentage Rent shall cease to accrue for the remainder of such
Calculation Period.
4.5 CONFIRMATION OF PERCENTAGE RENT. Tenant shall utilize
or cause to be utilized, an accounting system for the Property in accordance
with GAAP, which will accurately record and reflect all Gross Revenues for each
Calculation Period and each Calendar Quarter ending during such Calculation
Period. Tenant shall retain, for at least six years following the end of each
Calculation Period (and in all events until the reconciliation described in
Section 4.6 far such Calculation Period has been made), reasonably adequate
records conforming to the aforementioned accounting system showing all Gross
Revenues for such Calculation Period. Landlord, at its own expense, except as
provided hereinbelow, shall have the right, from time to time, to audit or cause
to be audited by its independent accountants or other independent authorized
representatives the information set forth in the Officer's Certificate regarding
Percentage Rent referred to in Section 4.6. In connection with such audits,
Landlord (or such
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accountants or authorized representatives, as the case may be) may examine,
audit and copy Tenant's records with respect thereto (including supporting data
and sales and excise tax returns), subject to any prohibitions or limitations on
disclosure of any such data under applicable law or regulations, including,
without limitation, any duly enacted "Patients' Xxxx of Rights" or similar
legislation and such reasonable limitations as may be necessary to preserve the
confidentiality of the hospital-patient relationship and the physician-patient
privilege. If any such audit discloses a deficiency in the payment of Percentage
Rent, Tenant shall forthwith pay to Landlord the amount of the deficiency,
together with interest at the Overdue Rate, for the period from the date when
such payment should have been made to the date when such payment is made. If any
such audit discloses that Gross Revenues actually received by Tenant for the
Calculation Period to which such audit relates exceed those reported by Tenant
by more than five percent, Tenant shall pay all of Landlord's costs, charges,
fees and expenses related to such audit. Any proprietary information obtained by
Landlord pursuant to the provisions of this Section 4.5 shall be treated as
confidential, except that, subject to appropriate confidentiality safeguards,
such information may be used in any litigation between Landlord and Tenant and
may be disclosed by Landlord to Owner, Landlord's lenders or prospective
lenders. The obligations of Tenant contained in this Section shall survive the
expiration or earlier termination of this Lease.
4.6 CERTIFICATES REGARDING PERCENTAGE RENT. Each payment
of Percentage Rent shall be delivered to Landlord, together with an Officer's
Certificate setting forth the calculation for the most recently completed
Calendar Quarter and the Calculation Period to date (except in the event no
payment is due, in which case such Officer's Certificate shall be delivered to
Landlord at such time as such payment would otherwise be due). In addition,
within 90 days after each Calculation Period, Tenant shall deliver to Landlord
an Officer's Certificate reasonably acceptable to Landlord setting forth the
Gross Revenues, together with Tenant's computation of Percentage Rent paid (or
payable) for such Calculation Period. If the Percentage Rent due for any
Calculation Period, as shown in any such certificate, exceeds the sum of the
quarterly payments of Percentage Rent previously made by Tenant with respect to
such Calculation Period, Tenant promptly shall remit to Landlord the amount of
such deficit. If the Percentage Rent for such Calculation Period, as shown in
such certificate, is less than the sum of the quarterly payments of Percentage
Rent previously made by Tenant with respect to such Calculation Period, Landlord
shall credit such sum to the payment of Percentage Rent next due. The obligation
of Tenant to pay to Landlord Percentage Rent shall survive the expiration or
earlier termination of the Term, and a final reconciliation (taking into
account, among other relevant adjustments, any contractual allowances which are
accrued after such expiration or termination date but which relate to Gross
Revenues accrued prior to such expiration or termination date and Tenant's good
faith best estimate of the amount of any unresolved contractual allowances)
shall be made not later than seven years after expiration or termination. Tenant
shall advise Landlord within 60 days after such expiration or termination date
of Tenant's best estimate at that time of the approximate amount of such
adjustments, which estimate shall not be binding on Tenant.
4.7 ADDITIONAL CHARGES. Subject to Article XIII hereof,
Tenant shall pay and discharge as and when due and payable all Impositions and
other amounts, liabilities and obligations which Tenant assumes or agrees to pay
under this Lease. If Tenant fails or refuses to
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pay any of the items referred to in the immediately preceding sentence, Tenant
shall promptly pay and discharge every fine, penalty, interest and cost which
may arise or accrue for the non-payment or late payment of such items. The
aforementioned amounts, liabilities, obligations, Impositions, fines, penalties,
interest and costs are referred to herein as "Additional Charges." The
Additional Charges shall constitute Rent hereunder. If any Rent (but as to
Additional Charges, only those which are payable directly to Landlord) shall not
be paid on its due date, Tenant shall pay to Landlord on demand, as an
Additional Charge, a late charge to the extent permitted by law, computed at the
Overdue Rare on the amount of such overdue Rent from the due date of such Rent
to the date such Rent is paid. Any payment by Tenant of Additional Charges to
Landlord pursuant to any requirement of this Lease shall relieve Tenant of its
obligation to pay such Additional Charges to the entity to which they would
otherwise be paid.
4.8 TRIPLE NET LEASE.
(a) TRIPLE NET LEASE. This Lease is what is
commonly called a "net net net lease," it being understood that Landlord shall
receive all Rent as provided in this Article free and clear of any and all
Impositions, encumbrances, charges, obligations or expenses of any nature
whatsoever in connection with the ownership and operation of the Property. In
addition to the Rent reserved by this Article, except as expressly provided
herein to the contrary, Tenant shall pay to the parties respectively entitled
thereto all Impositions, insurance premiums, operating charges, maintenance
charges, construction costs and any other charges, costs and expenses which
arise or may be contemplated under any provisions of this Lease during the Term
hereof. All of such charges, costs and expenses shall constitute Rent, and upon
the failure of Tenant to pay any such costs, charges or expenses, Landlord shall
have the same rights and remedies as otherwise provided in this Lease for the
failure of Tenant to pay Rent. It is the intention of the parties hereto that
this Lease shall not be terminable for any reason by the Tenant and that Tenant
shall in no event be entitled to any abatement of or reduction in Rent payable
under this Lease except as herein expressly provided. Any present or future law
to the contrary shall not alter this agreement of the parties.
(b) BANKRUPTCY. Provided that there has been no
rejection hereof by Landlord or any trustee or receiver of Landlord, Tenant
covenants and agrees that it shall remain obligated under this Lease in
accordance with its terms, and that Tenant shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding the bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding-up or other proceeding affecting Landlord or any assignee of Landlord in
any such proceeding and notwithstanding any action with respect to this Lease
which may be taken by any trustee or receiver of Landlord or any such assignee
in any such proceeding or by any court in any such proceeding.
(i) In the event that Tenant shall file
a petition, or an order for relief is entered against Tenant, under Chapter 7,
9, 11 or 13 of the Bankruptcy Code, 11 U.S.C.S. 101 et seq. (the `Bankruptcy
Code") and the trustee of Tenant shall elect to assume this Lease for the
purpose of assigning the same, such assumption or assignment may only be made if
all the conditions of subsections (ii) and (iii) of this Section 4.8(b) are
satisfied. If Tenant's trustee or debtor-in-possession, as the case may be,
shall fail to elect to assume this Lease within
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60 days (or additional time fixed by the court) after such trustee shall have
been appointed, or the date of filing of the petition, at Landlord's election
(and in its sole and absolute discretion) this Lease shall be deemed to have
been rejected and, in such event, Landlord shall thereupon immediately be
entitled to possession of the Property without further obligation to the trustee
or Tenant, and this Lease shall be cancelled, but Landlord's right to be
compensated for damages in the bankruptcy proceedings shall survive such
cancellation.
(ii) No election to assume this Lease shall be effective unless in
writing and addressed to Landlord and unless, in Landlord's business judgment,
all the following conditions, which Landlord and Tenant acknowledge to be
commercially reasonable, have been satisfied:
(A) The trustee (or Tenant, as
debtor-in-possession) has cured or has provided Landlord adequate assurance
that:
(I) within ten days from the date of
such assumption, the trustee (or debtor-in-possession) will cure all monetary
defaults under this Lease; and
(II) within 30 days from the date of
such assumption, the trustee (or debtor-in-possession) will cure all
non-monetary defaults under this Lease or commence to cure within 30 days and
thereafter diligently pursue to completion.
(B) The trustee (or debtor-in-possession) has
compensated, or has provided to Landlord adequate assurance that within ten days
from the date of assumption Landlord will be compensated, for any pecuniary loss
incurred by Landlord arising from the default of the Tenant or the trustee (or
the debtor-in-possession) as recited in Landlord's written statement of
pecuniary loss sent to the trustee (or debtor-in-possession);
(C) The trustee (or debtor-in-possession) has
provided Landlord with adequate assurance of the future performance of each of
Tenant's obligations under this Lease, provided that:
(I) the trustee (or
debtor-in-possession) shall also deposit with Landlord, as security for the
timely payment of Rent, an amount equal to (w) three months' Base Rent and (x)
the last quarterly payment of Percentage Rent and (y) the other monetary charges
accruing under this Lease; and
(II) the obligations imposed upon the
trustee (or debtor-in-possession) shall continue with respect to Tenant after
completion of bankruptcy proceedings.
(D) Landlord has determined that the assumption
of the Lease will not:
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(I) breach any provision in any
agreement by which Landlord is bound relating to the Property; or
(II) disrupt, in Landlord's reasonable
judgment, the reputation and profitability of the Property.
(E) For purposes of this subsection, "adequate
assurance" shall mean:
(I) Landlord shall determine that the
trustee (or debtor-in-possession) has and will continue to have sufficient
unencumbered assets after the payment of all secured obligations and
administrative expenses to assure Landlord that the trustee (or
debtor-in-possession) will have sufficient funds to fulfill the obligations of
Tenant under this Lease; and
(II) an order shall have been entered
segregating sufficient cash payable to Landlord, or there shall have been
granted a valid and perfected first lien and security interest in property of
the Tenant or trustee (or debtor-in-possession), acceptable as to value and kind
to Landlord, to secure to Landlord the obligation of the Trustee (or
debtor-in-possession) to cure the monetary or non-monetary defaults under this
Lease within the time periods set forth above.
(iii) If the trustee (or debtor-in-possession) has assumed
the Lease pursuant to all the provisions of subsections (i) and (ii) of this
Section 4.8(b), for the purpose of assigning (or electing to assign) Tenant's
interest under this Lease or the estate created thereby to any other person,
such interest or estate may be so assigned only if Landlord shall acknowledge in
writing that the intended assignee has provided adequate assurance of future
performance of all the terms, covenants and conditions of this Lease to be
performed by Tenant. For purposes of this subsection (iii), "adequate assurance
of future performance" means that Landlord shall have ascertained that each of
the following conditions has been satisfied:
(A) the assignee has submitted a current
financial statement audited by a certified public accountant which shows
tangible net worth and working capital in amounts determined to be sufficient by
Landlord to assure the future performance by such assignee of Tenant's
obligations under this Lease;
(B) if requested by Landlord, the assignee shall
have obtained guarantees in form and substance satisfactory to Landlord from one
or more persons who satisfy Landlord's standards of creditworthiness;
(C) Landlord has obtained all consents to
waivers from any third parties required under any lease, mortgage, financing
arrangement or other agreement by which Landlord is bound to enable Landlord to
permit such assignment;
(D) the assignee has deposited an adequate
security deposit with Landlord; and
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(E) the assignee has demonstrated that its
intended use of the Property is consistent with the terms of this Lease and will
not diminish the reputation of the Facility, or violate any "exclusive" which
has been granted by Tenant to any permitted subtenant in the Property.
(iv) When, pursuant to the Bankruptcy Code, the trustee
(or debtor-in-possession) shall be obligated to pay reasonable use and occupancy
charges for the use of the Property or any portion thereof, such charges shall
not be less than the Rent.
(v) Neither Tenant's interest in the Lease, nor any
lesser interest of Tenant herein, nor any estate of Tenant hereby created, shall
pass to any trustee, receiver, assignee for the benefit of creditors or any
other person by operation of law or otherwise unless Landlord shall consent to
such transfer in writing. No acceptance by Landlord of rent or any other
payments from any such trustee, receiver, assignee or person shall be deemed to
have waived, nor shall it waive the need to obtain Landlord's consent to, or
Landlord's right to terminate this Lease for, any transfer of Tenant's interest
under this Lease without such consent.
(vi) Any person to whom this Lease is assigned pursuant to
the provisions of the Bankruptcy Code shall be deemed without further act or
deed to have assumed all the obligations arising under this Lease on or after
the date of such assignment. Any such assignee shall, upon demand, execute and
deliver to Landlord an instrument confirming such assumption.
ARTICLE V
IMPOSITIONS
5.1 PAYMENT OF IMPOSITIONS. Tenant shall pay, or cause to be paid,
all Impositions prior to delinquency and before any fine, penalty, interest or
cost may be added for non-payment (subject to Tenant's rights of contest
pursuant to the provisions of Article XIII). Such payments shall be made
directly to the authorities levying such Impositions, if possible. Tenant shall,
promptly upon request by Landlord, furnish to Landlord original or certified
copies of receipts or other reasonably satisfactory evidence of such payments.
Tenant's obligation to pay Impositions shall be deemed absolutely fixed upon the
date such Impositions become a lien upon the Property or any part thereof.
Notwithstanding the foregoing, if any such Imposition may, at the option of the
payor, lawfully be paid in installments (whether or not interest shall accrue on
the unpaid balance of such Imposition), Tenant may pay the same (and shall pay
any accrued interest on the unpaid balance of such Imposition) in installments,
and in such event shall pay such installments (subject to Tenant's right of
contest pursuant to the provisions of Article XIII) as the same become due and
before any fine, penalty, premium, further interest or cost is added thereto.
Landlord shall, at its expense and to the extent required or permitted by
applicable laws and regulations, prepare and file all returns with respect to
Landlord's net income, gross receipts, sales, use, single business, transaction
privilege, rent, ad valorem and franchise taxes (without waiving Landlord's
right to reimbursement therefore from Tenant to the extent that the same
constitutes Impositions), and with respect to taxes on Landlord's capital
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stock. Tenant shall, at its expense, and to the extent required or permitted by
applicable laws and regulations, prepare and file all other tax returns and
reports with respect to any Imposition as may be required of Tenant by
governmental agencies or authorities. If any refund shall be due from any taxing
authority with respect to any Imposition paid by Tenant, the same shall be paid
over to and retained by Tenant unless an Event of Default shall have occurred
hereunder and be continuing, in which case such refund shall be paid over to and
retained by Landlord. Any such funds retained by Landlord due to an Event of
Default shall be applied as provided in Article XVII. Landlord and Tenant shall,
each upon a request by the other, provide such information as is maintained by
the party to whom the request is made with respect to the Property as may be
reasonably necessary to prepare any required returns or reports. If any
governmental agency or authority classifies any property covered by this Lease
personal property, Tenant shall file all personal property tax returns in such
jurisdictions where it may legally so file. Landlord, to the extent it possesses
the same, and Tenant, to the extent it possesses the same, will provide to the
other party, promptly upon request, cost and depreciation records reasonably
necessary for filing returns for any property so classified as personal
property. If Landlord is legally required to file any personal property tax
returns, Landlord shall provide Tenant with copies of any assessment notices
with respect thereto in sufficient time for Tenant to file a protest with
respect thereto if it so elects pursuant to Article XIII. If no Event of Default
is then continuing, Tenant may at its option and sole cost and expense, upon
Notice to Landlord, protest, appeal or institute such other proceedings as
Tenant reasonably may deem appropriate to effect a reduction of real estate or
personal property assessments so long as such action is conducted in good faith
and with due diligence. In such event, Landlord, at Tenant's sole cost and
expense, shall fully cooperate with Tenant in such protest, appeal, or other
action. Tenant hereby agrees to indemnify, defend, save and hold Landlord
harmless from and against any and all losses, demands, claims, obligations and
liabilities against or incurred by Landlord in connection with such cooperation
by Landlord. Xxxxxxxx by either party to the other for reimbursement of personal
property taxes shall be accompanied by copies of a xxxx therefor and evidence of
payments thereof which identify the personal property with respect to which such
payments have been made.
5.2 NOTICE OF IMPOSITION. Landlord shall give prompt Notice to
Tenant of all Impositions payable by Tenant hereunder of which Landlord at any
time has knowledge. Notwithstanding the foregoing, however, Landlord's failure
to give any such Notice shall in no way diminish Tenant's obligations hereunder
to pay such Impositions, but Landlord shall be responsible for any fine, penalty
or interest resulting from its failure to give such notice and any default by
Tenant hereunder shall be obviated for a reasonable time (which shall not exceed
fifteen (15) Business Days) after Tenant receives Notice of any Imposition which
it is obligated to pay.
5.3 ADJUSTMENT OF IMPOSITIONS. Impositions imposed with respect to
the tax period during which the Term expires or terminates shall be adjusted and
prorated between Landlord and Tenant, whether or not such Imposition is imposed
before or after such expiration or termination, so that Tenant is only obligated
to pay that portion of such Imposition(s) pertaining to the tax period within
the Term. The obligation of Tenant to pay its prorated share of Impositions
shall survive expiration or earlier termination of this Lease.
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5.4 UTILITY CHARGES. Tenant shall pay or cause to be paid all
charges for all utilities, including but not limited to electricity, power, gas,
oil and water, used in the Property during the Term.
5.5 INSURANCE PREMIUMS. Tenant shall pay or cause to be paid all
premiums for insurance coverage required to be maintained pursuant to Article
XIV.
ARTICLE VI
TERMINATION OR ABATEMENT OF LEASE
Without limiting the provisions of Section 4.8, Tenant, to the full
extent permitted by law, shall remain bound by this Lease in accordance with its
terms. Tenant shall not take any action without the prior written consent of
Landlord to modify, surrender or terminate this Lease. The obligations of
Landlord and Tenant hereunder shall be separate and independent covenants and
agreements, and Rent and all other sums shall continue to be payable by Tenant
hereunder in any event unless the obligation of Tenant to pay the same
terminates pursuant to the express provisions of this Lease or by termination of
this Lease (other than by reason of an Event of Default). Without limiting the
generality of the immediately preceding sentence, Tenant shall not seek or be
entitled to any abatement, deduction, deferment or reduction of Rent, or set-off
against Rent, nor shall the respective obligations of Landlord and Tenant be
otherwise affected (except as set forth in this Lease) by reason of: (a) any
damage to, or destruction of, all or any portion of the Property from whatever
cause or any Taking of all or any portion of the Property; (b) the lawful or
unlawful prohibition of, or restriction upon, Tenant's use of all or any portion
of the Property, or the interference with such use or with Tenant's quiet
enjoyment of the Property by any person or entity other than Landlord, or by
reason of eviction by paramount title; (c) any claim which Tenant has or may
have against Landlord by reason of any default or breach of any warranty by
Landlord under this Lease or under any other agreement between Landlord and
Tenant or to which Landlord and Tenant are parties; (d) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding up or other proceeding affecting Landlord or any assignee or transferee
of Landlord; or (e) any other cause, whether similar or dissimilar to any of the
foregoing (other than a discharge of Tenant from any such obligations as a
matter of law). Except as specifically set forth in this Lease to the contrary,
Tenant hereby specifically waives all rights, arising from any occurrence
whatsoever, which (i) may now or hereafter be conferred upon it by law to
modify, surrender or terminate this Lease or quit or surrender all or any
portion of the Property or (ii) entitle Tenant to any abatement, reduction,
suspension or deferment of Rent or other sums payable by Tenant hereunder.
ARTICLE VII
OWNERSHIP OF PROPERTY
7.1 OWNERSHIP OF THE PROPERTY. As between Landlord and Tenant the
Property is, and throughout the Term shall continue to be, the property of
Landlord. Tenant has only the right to the exclusive possession and use of the
Property, upon the terms and subject to the conditions set forth in this Lease.
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7.2 TENANT'S PERSONAL PROPERTY; SECURITY INTEREST. Tenant may, at
its expense, install, affix, assemble or place on the Property any items of
Tenant's Personal Property and may, subject to the conditions set forth below,
remove Tenant's Personal Property upon the expiration or earlier termination of
this Lease or in the ordinary course of business so long as any damage caused by
such removal shall be promptly repaired by Tenant. Notwithstanding the
foregoing, in order to secure the payment and the performance of all of Tenant's
obligations under this Lease, Tenant hereby grants to Landlord a security
interest in (and hereby pledges and collaterally assigns to Landlord) all of
Tenant's rights, title and interest in and to Tenant's Personal Property, all
whether now existing or hereafter acquired and hereby further agrees to execute
and deliver to Landlord, forthwith after demand by Landlord from time to time,
any security agreement in a form reasonably acceptable to Landlord and Tenant
and such additional writings and instruments, including without limitation
financing statements, as may be reasonably required by Landlord for the purpose
of effectuating the intent of this sentence and Tenant agrees that Landlord
shall have with respect to all Personal Property all rights and remedies of a
secured party under the Uniform Commercial Code as adopted in the State,
including, but not limited to, the right after the occurrence of an Event of
Default (and the expiration of any applicable cure periods, if any) to use or
sell Tenant's Personal Property, and Landlord shall not be required to remove
any of Tenant's Personal Property from the Property and in no event shall
Landlord be liable to Tenant for use of Tenant's Personal Property. Pending
disposition of Tenant's Personal Property by Landlord, Landlord shall be
entitled to use Tenant's Personal Property in connection with the operation (if
any) of the Facility. Tenant shall not permit the Property or Personal Property
to become subject to any liens or encumbrances of any kind without first
obtaining the prior written consent of Landlord, except for liens or
encumbrances permitted by Section 29.1(a). This Lease and the security interest
granted Landlord hereby shall be subordinate to any purchase money security
interest or capital lease permitted under Section 29.1(a). Landlord further
agrees that Tenant may lease Tenant's Personal Property, and Landlord shall
execute and deliver such agreements as may be reasonably required by any
permitted equipment lessor or the holder of a permitted purchase money security
interest to confirm that Landlord's lien on Tenant's Personal Property in
question is subordinate to the rights of such equipment lessor or lender and in
each case Tenant shall use commercially reasonable efforts to obtain from the
holder of the purchase money debt or lessor of Tenant's Personal Property, as
the case may be, its agreement to (i) notify Landlord or its successors and
assigns of any default by Tenant, (ii) allow Landlord or its successors and
assigns an opportunity to cure any default, (iii) recognize Landlord or its
successors and assigns as succeeding to Tenant's rights under the agreement in
question and to the undisturbed use of the equipment, provided that Landlord
fully complies with the terms of such agreement, provided, that the failure by
Tenant, using reasonable efforts, to obtain the aforementioned agreements shall
not impair or deny Tenant's right to enter into leases involving Tenant's
Personal Property. Tenant shall provide and maintain on the Property during the
entire Term such Tenant's Personal Property as shall be necessary to operate,
the Facility in compliance with all licensure and certification requirements, in
substantial compliance with all Legal Requirements and Insurance Requirements
and otherwise in accordance with customary practice in the health care industry
with respect to the Primary Intended Use or other uses then conducted on the
Property by Tenant and permitted hereunder. All Tenant's Personal Property not
removed by Tenant within thirty days following the expiration or earlier
termination of this Lease shall be considered abandoned by Tenant and may be
appropriated, sold, destroyed or otherwise disposed of by Landlord
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without first giving Notice thereof to Tenant and without any payment or
obligation to account to Tenant. Tenant shall, at its sole cost and expense,
restore the Property to the condition required by Section 10.1(d), including
repair of all damage to the Property caused by the removal of Tenant's Personal
Property, whether effected by Tenant or Landlord, except that caused by the
gross negligence or willful misconduct of Landlord.
ARTICLE VIII
CONDITION AND USE OF PROPERTY
8.1 CONDITION OF THE PROPERTY. LANDLORD MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, AND SHALL BE SUBJECT TO NO LIABILITY WITH
RESPECT TO, NOR SHALL THE VALIDITY OF THIS LEASE BE AFFECTED BY ANY CLAIM,
DEMAND OR CAUSE OF ACTION REGARDING THE PROPERTY OR ANY PART THEREOF, EITHER AS
TO ITS DESIGN, CONDITION OR FITNESS FOR ANY PARTICULAR USE OR PURPOSE OR
OTHERWISE, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT
OR PATENT. TENANT ACKNOWLEDGES AND AGREES THAT THE PROPERTY HAS BEEN INSPECTED
BY TENANT, HAS BEEN APPROVED FOR OCCUPANCY BY ALL GOVERNMENT AGENCIES HAVING
JURISDICTION THEREOVER AND IS SATISFACTORY TO IT IN ALL RESPECTS, INCLUDING FOR
ITS PRIMARY INTENDED USE, AND THAT TENANT IS LEASING THE PROPERTY "AS IS" IN ITS
PRESENT CONDITION, AND SUBJECT TO (A) THE EXISTING STATE OF TITLE, INCLUDING ALL
COVENANTS, CONDITIONS. RESTRICTIONS, EASEMENTS, LICENSES, LEGAL REQUIREMENTS,
MORTGAGES, DEEDS OF TRUST, ASSIGNMENTS OF LEASES, FIXTURE FILINGS AND OTHER
FINANCING INSTRUMENTS AND ANY AND ALL OTHER MATTERS OF RECORD AND OTHERWISE
EXCEPT TO THE EXTENT ANY OF THE FOREGOING WERE CAUSED OR CREATED BY LANDLORD,
AND (B) MATTERS WHICH WOULD BE DISCLOSED BY AN INSPECTION OF THE PROPERTY OR BY
AN ACCURATE SURVEY OF THE LAND. TENANT WAIVES ANY AND ALL CLAIMS, DEMANDS AND
CAUSE OR CAUSES OF ACTION HERETOFORE OR HEREAFTER ARISING AGAINST LANDLORD WITH
RESPECT TO THE CONDITION OF THE PROPERTY.
8.2 USE OF THE PROPERTY.
(a) Throughout the entire Term, Tenant shall obtain and
shall maintain in effect all permits, licenses, authorizations and approvals
needed to use and operate the Property and the Facility for Tenant's Primary
Intended Use in accordance with all Legal Requirements.
(b) Throughout the entire Term, Tenant shall use or cause
to be used the Property in accordance with its Primary Intended Use and for such
other uses as may be necessary in connection with or incidental to such use.
Tenant shall not use the Property or any portion thereof for any other purpose
whatsoever without the prior written consent of Landlord. The parties agree that
Landlord's consent will not be deemed to be unreasonably withheld if, in the
reasonable opinion of Landlord, the Tenant's proposed use of the Property will
significantly
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alter the character or purpose or detract from the value or operating efficiency
of the Property, or significantly impair the revenue-producing capability of the
Property. No use shall be made or permitted to be made of the Property and no
acts shall be done which violate any Legal Requirements or Insurance
Requirements or which will cause the cancellation of any insurance policy
covering the Property or any part thereof, nor shall Tenant sell or otherwise
provide to patients therein, or permit to be kept, used or sold in, about or
under the Property any Hazardous Substance (except in strict compliance with all
Legal Requirements, but only as may be necessary to the operation of the
Facility, with respect to such substances other than asbestos and hydrocarbons)
or any other article which may be prohibited by the Legal Requirements or
Insurance Requirements. Tenant shall, at its sole cost, comply with all of the
requirements pertaining to the Property of any insurance board, association,
organization or company necessary for the maintenance of the insurance required
pursuant to this Lease.
(c) Tenant shall not commit or suffer to be
committed any waste nor shall Tenant cause or permit any nuisance on the
Property.
(d) Tenant shall neither suffer nor permit all
or any portion of Tenant's Personal Property or the Property, including any
Capital Addition whether or not financed or paid for by Landlord, to be used in
such a manner as (i) may impair the owner's title thereto or to any portion
thereof or (ii) may make possible a claim or claims of adverse usage, adverse
possession or implied dedication of all or any portion of the Property to the
public, except as is necessary in the ordinary and prudent operation of the
Property.
8.3 LANDLORD TO GRANT EASEMENTS. Subject to the provisions of this
Section 8.3, Landlord shall, from time to time so long as no Event of Default
has occurred and is continuing, at the request of Tenant and at Tenant's sole
cost and expense (but subject to the approval of Landlord, which approval shall
not be unreasonably withheld or delayed), (a) grant easements and other rights
in the nature of easements burdening the Property for the benefit of real
property adjacent to the Land or for the exclusive use and enjoyment of persons
or entities specified by Tenant in such request but only as may be necessary for
the operations of the Facility; (b) dedicate or transfer unimproved portions of
the Property for road, highway or other public purposes but only as may be
necessary for the operation of the Facility; (c) execute petitions to have the
Property annexed to any municipal corporation or utility district; and (d)
execute amendments to any covenants, conditions, restrictions and equitable
servitudes affecting the Property, but only if each such grant, dedication,
transfer, petition or amendment is not detrimental to the proper conduct of the
business of Tenant on the Property and does not materially reduce the value of
the Property in Landlord's reasonable discretion.
8.4 HAZARDOUS SUBSTANCES.
(a) All operations or activities upon, or any use or
occupancy of the Property, or any portion thereof, by Tenant, or any agent,
contractor, employee or subtenant of Tenant shall at all times during the Term
be in all respects in strict compliance with any and all Legal Requirements and
Insurance Requirements relating to Hazardous Substances, including, but not
limited to, the discharge and removal of Hazardous Substances. Tenant shall not
sell or otherwise provide to patients therein or permit to be kept, used or sold
in, about, on or under the
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Property any Hazardous Substance or any other article which may be prohibited by
the Legal Requirements or Insurance Requirements, except that Tenant may store,
handle, process, maintain or dispose of any Hazardous Substances necessary to
the Primary Intended Use in strict compliance with the Legal Requirements and
the Insurance Requirements. Tenant shall pay all costs required properly to use,
handle and dispose of all Hazardous Substance and shall keep the Property free
and clear of any lien relating to Hazardous Substances which may be imposed
pursuant to the Legal Requirements and Insurance Requirements. Neither Tenant,
nor any agent, contractor, employee or subtenant of Tenant shall allow the
manufacture, storage, voluntary transmission or presence of any Hazardous
Substances over or upon the Property (except in strict compliance with the Legal
Requirements and Insurance Requirements). Landlord, at its sole cost and
expense, shall have the right at any time with notice to Tenant (but not more
often than once in any calendar year) to conduct an environmental audit of the
Property and Tenant shall cooperate in the conduct of such environmental audit.
Furthermore, neither Tenant, nor any agent, contractor, employee or any
subtenant of Tenant shall install or permit to be installed in or on the
Property friable asbestos or any substance containing asbestos or similarly
deemed hazardous by governmental authorities or the Legal Requirements
respecting such materials, and with respect to any such materials currently
present in the Property, shall promptly either (x) remove any material which
such Legal Requirements deem hazardous and require be removed, at its sole cost
and expense, or (y) otherwise comply with the Legal Requirements. Tenant shall
promptly notify Landlord in writing of any order, receipt of any notice of
violation or noncompliance with any applicable law, rule, regulation, standard
or order, any threatened or pending action by any regulatory agency or other
governmental authority or any claims made by any third parry relating to
Hazardous Substances on, emanations on or from, releases on or from, or threats
of releases on or from any of the Property and shall promptly furnish Landlord
with copies of any correspondence, notices or legal pleadings in connection
therewith. Landlord shall have the right, but shall not be obligated, to notify
any governmental authority of any state of facts which may come to its attention
with respect to Hazardous Substances on, released from or emanating on or from
any part of the Property.
(b) Without limiting Section 22.1, Tenant shall,
with the right to participate in the applicable proceedings, indemnify, protect,
defend (with counsel reasonably approved by Landlord) and hold Landlord, and the
directors, officers, shareholders, employees and agents of Landlord, harmless
from any claims (including, but not limited to, third party claims for personal
injury or real or personal property damage), or natural resources damage,
actions, administrative proceedings (including informal proceedings), judgments,
damages, punitive damages, penalties, fines, costs, liabilities (including sums
paid in settlements of claims), interest or losses, including reasonable
attorneys' and paralegals' fees and expenses (including any such fees and
expenses incurred in enforcing the covenants and obligations of Tenant under
this Lease or collecting any sums due hereunder), consultant fees, and expert
fees, together with all other costs and expenses of any kind or nature ("Costs")
that arise directly or indirectly from or in connection with the presence,
suspected presence, release or threatened release of any Hazardous Substance in
or into or at, on, about, under or within the Property, to the extent that such
Costs are not attributable to the gross negligence or willful misconduct of
Landlord. The indemnification provided in this Section 8.4(b) shall specifically
apply to and include claims or actions brought by or on behalf of employees or
contractors of Tenant or employees or contractors of Tenant, and Tenant hereby
expressly waives any immunity to which
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Tenant may otherwise be entitled under any industrial or workers' compensation
laws. In the event Landlord shall suffer or incur any such Costs, Tenant shall
pay to Landlord the total of all such. Costs suffered or incurred by Landlord
upon demand therefor by Landlord; provided, that the Landlord shall not settle
any claims for such Costs or confess judgment thereto without the approval of
Tenant, which approval shall not unreasonably be withheld, and, provided,
further, that in the event Tenant fails to approve any such settlement or
confession of judgment, Tenant shall provide the Landlord with sufficient
security for such Costs, as determined by the Landlord in its sole discretion.
Without limiting the generality of the foregoing, the indemnification provided
by this Section 8.4(b) shall specifically cover Costs, including capital,
operating and maintenance costs, incurred in connection with any investigation
or monitoring of site conditions, any cleanup, containment, remedial, removal or
restoration work required or performed by any federal, state or local
governmental agency or political subdivision or performed by any
non-governmental entity or person because of the presence, suspected presence,
release or suspected release of any Hazardous Substance in or into the air,
soil, groundwater, surface water or soil vapor at, on, about, under or within
the Property (or any portion thereof), and any claims of third parties for loss
or damage due to such Hazardous Substance, to the extent that such Costs are not
attributable to the gross negligence or willful misconduct of Landlord. In
addition, such indemnification shall include, but not be limited to, all loss or
damage sustained by Landlord or any third party to whom Landlord may be liable
due to any Hazardous Substance (i) that is present or suspected to be present
on, about, under or within the Property or (ii) that migrates, flows,
percolates, diffuses or in any way moves onto, into or under the air, soil,
groundwater, surface water or soil vapor at, on, about, under or within the
Property, irrespective of whether such Hazardous Substance shall be present or
suspected to be present on, about, under or within the Property as a result of
any release, discharge, disposal, dumping, spilling or leaking (accidental or
otherwise) onto the Property or caused by any person or entity; provided,
however, that the indemnification obligation arising out of clauses (i) and (ii)
above shall apply solely to the extent that such loss or damage results from
events occurring during the Term of this Lease and are not attributable to the
gross negligence or willful misconduct of Landlord.
(c) In the event any investigation or monitoring
of site conditions or any clean-up, containment, restoration, removal or other
such work ("REMEDIAL WORK") is required under any applicable Legal Requirements,
including, but not limited to, any judicial order or order of any governmental
entity, or in order to comply with any agreements affecting the Property because
of, or in connection with, any occurrence or event described in Section 8.4(b),
Tenant shall perform or cause to be performed the Remedial Work in compliance
with such law, regulation, order or agreement and subject to the final review
and approval of Landlord, which approval shall not be unreasonably withheld or
delayed; provided, however, that Tenant may withhold such performance pursuant
to a good faith dispute regarding the application, interpretation or validity of
the law, regulation, order, or agreement, subject to the requirements of Section
8.4(d); provided, further, however, that Landlord shall reasonably cooperate
with Tenant to the extent necessary to deliver such authorizations as may be
required in order for Tenant to perform its obligations under this Section
8.4(c). All Remedial Work shall be performed by one or more contractors,
selected by Tenant and approved in advance in writing by
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Landlord, which approval shall not be unreasonably withheld or delayed, and
under the supervision of a consulting engineer, selected by Tenant and approved
in advance in writing by Landlord, which approval shall not be unreasonably
withheld or delayed. All costs and expenses of Remedial Work shall be paid by
Tenant, including, but not limited to, the charges of such contractors and
consulting engineer, and Landlord's reasonable attorneys' and paralegals' fees
and other costs incurred in connection with the monitoring or review of such
Remedial Work. In performing its obligations hereunder, Tenant shall be
subrogated to any rights Landlord may have under any indemnifications or
warranties from any present, future or former owners, tenants or occupants or
users of the Property, to the extent available. In the event Tenant shall fail
timely to commence, diligently to prosecute to completion or to complete to
Landlord's reasonable satisfaction any necessary Remedial Work, Landlord may,
but shall not be required to, cause such Remedial Work to be performed, and all
costs and expenses thereof paid or incurred by Landlord in connection therewith
shall be Costs within the meaning of Section 8.4(b). Landlord's disapproval of
or dissatisfaction with any Remedial Work shall be deemed to be reasonable so
long as Landlord's requirements for any Remedial Work are consistent with the
then current requirements and standards imposed by prudent institutional
investors in connection with their management of real property. All such Costs
shall be due and payable upon demand therefor by Landlord. If Tenant fails to
perform its obligations hereunder, Landlord shall be subrogated to any rights
Tenant may have under any indemnifications from any present, future or former
owners, tenants or other occupants or users of the Property relating to the
matters covered by this Section 8.4.
(d) Notwithstanding any provision of this
Section 8.4 to the contrary, but without limiting the provisions of Article
XIII, Tenant shall be permitted to contest or cause to be contested, subject to
compliance with the requirements of this Section 8.4(d) and Article XIII, by
appropriate action any Remedial Work requirement, and Landlord shall not perform
such requirement on its behalf, so long as Tenant has given Landlord written
notice that Tenant is contesting or shall contest or cause to be contested the
same, and Tenant actually contests or causes to be contested the application,
interpretation or validity of the law, regulation, order or agreement pertaining
to the Remedial Work by appropriate proceedings conducted in good faith with due
diligence, provided that such contest shall not subject Landlord to civil
liability whatsoever. Tenant shall give such security or assurances as may be
reasonably required by Landlord to insure compliance with the Legal Requirements
pertaining to the Remedial Work (and payment of all costs, expenses, interest
and penalties in connection therewith) and to prevent any sale, forfeiture or
loss by reason of such nonpayment or noncompliance.
(e) All of the obligations of Tenant under this
Section 8.4 shall survive expiration or earlier termination of this Lease. The
provisions of this Section may be enforced by Landlord without regard to any
other rights and remedies Landlord may have against Tenant under this Lease and
without regard to any limitations on Landlord's recourse as may be otherwise
provided in this Lease. Tenant agrees that, notwithstanding any provision in
this Lease to the contrary, a separate action or actions to enforce Tenant's
obligations under this Section 8.4 may be brought and prosecuted against Tenant.
Any costs and other payments required to be paid by Tenant to Landlord under
this Section 8.4 which are not paid within fifteen days of demand therefor shall
thereupon be considered delinquent. Tenant shall pay to Landlord immediately
upon demand therefor interest on such overdue amounts, from the date when due
until paid, at the Overdue Rate.
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8.5 EXISTING LEASES. On or before the Commencement date,
Landlord and Tenant shall execute the Pioneer Assignment and Assumption
Agreement of even date herewith whereby Landlord shall assign and transfer to
Tenant all of Landlord's right, title and interest in, to and under the Existing
Leases, and, subject to the provisions of the Absolute Assignment of Subleases
and Rents of even date herewith between Tenant, as assignor, and Landlord, as
assignee, all rents, income, issues and profits owing thereunder. Tenant assumes
and covenants to keep, perform and fulfill all of the terms, covenants,
conditions and obligations of Landlord under the Existing Leases.
ARTICLE IX
LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE
REQUIREMENTS AND INSTRUMENTS. Subject to the rights of Tenant as provided in
Article XIII relating to permitted contests, Tenant, at its sole cost and
expense, shall promptly (a) comply with all applicable Legal Requirements and
Insurance Requirements with respect to the use, operation, maintenance, repair
and restoration of the Property, whether or not compliance therewith shall
require structural change in any of the Improvements or interfere with the use
and enjoyment of the Property, and (b) procure, maintain and comply with all
appropriate licenses, certificates of need, provider agreements and other
permits, licenses, franchises and authorizations required for any use of the
Property and Tenant's Personal Property then being made, and for the proper
erection, installation, operation and maintenance of the Property or any part
thereof, including without limitation any Capital Additions.
9.2 COVENANTS REGARDING LEGAL REQUIREMENTS. Tenant
covenants and agrees that it shall not use the Property or Tenant's Personal
Property for any purpose which violates the Legal Requirements. Tenant has
obtained or duly applied for and shall maintain all appropriate licenses,
certificates, permits, provider agreements, franchises, authorizations and
approvals necessary to operate the Property in its customary manner for the
Primary Intended Use, and any other use conducted on the Property by Tenant and
permitted by Landlord hereunder. Tenant may, however, contest the legality or
applicability of any such Legal Requirement as provided in Article XIII hereof.
9.3 REPRESENTATIONS AND WARRANTIES. As a material
inducement to Landlord to enter into this Lease with Tenant, Tenant hereby makes
the following representations and warranties to Landlord that:
(a) Tenant is a corporation duly organized and
validly existing under die laws of the State of Utah, and has all requisite and
necessary power and authority to execute and deliver this Lease to Landlord, and
any other documents referenced or required herein to be executed and delivered
by Tenant to Landlord hereunder;
(b) that this Lease, and any other documents
referenced or required herein to be executed and delivered by Tenant to Landlord
hereunder do not and shall not violate
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any instrument, judgment, decree or order to which Tenant is a party or by which
Tenant is bound; and
(c) that to the best of Tenant's knowledge, and
after reasonable and due inquiry and diligence, none of the representations and
warranties of Seller contained in the Purchase Agreement are untrue or
misleading in any material respect.
ARTICLE X
CONDITION OF THE PROPERTY
10.1 MAINTENANCE AND REPAIR.
(a) Tenant, at its sole cost and expense, shall
keep the Property and all private roadways, sidewalks and curbs appurtenant
thereto and which are under Tenant's control in good order, condition and repair
and, except as otherwise expressly provided to the contrary in Article XIV, XV,
or XVI with reasonable promptness, shall make all necessary and appropriate
repairs and replacements thereto of every kind and nature, whether interior or
exterior, structural or nonstructural, ordinary or extraordinary, patent or
latent, foreseen or unforeseen, or arising by reason of a condition existing
prior to the commencement of the Term of this Lease and regardless of the cause
necessitating repair. Tenant shall also be obligated at its expense to make all
repairs, modifications and renovations necessary to comply with all licensing,
safety and health and building code, regulations applicable to the Property so
that it can be legally operated for its Primary Intended Use. All repairs by
Tenant shall, to the extent reasonably achievable, be at least equal in quality
to the original work. Tenant shall not take or omit to take any action, the
taking or omission of which might materially impair the value or the usefulness
of all or any portion of the Property for the Primary Intended Use. Tenant shall
give Landlord ten days prior Notice of any repair, replacement, modification or
renovation pursuant to this Section the cost of which exceeds $100,000 and,
prior to commencing any such repair, replacement, modification or renovation,
shall provide to Landlord either (i) a lien payment and completion bond in form
and substance and issued by a surety reasonably acceptable to Landlord or (ii) a
payment and completion guaranty in form and substance and executed by a
guarantor reasonably acceptable to Landlord, as Tenant may elect.
(b) Landlord shall not under any circumstances
be required to make any repairs, replacements, alterations, restorations or
renewals of any nature or description to the Property, whether interior or
exterior, structural or non-structural, ordinary or extraordinary, patent or
latent, foreseen or unforeseen, or to make any expenditure whatsoever with
respect thereto, in connection with this Lease, nor shall Landlord under any
circumstances be required to maintain the Property in any other way, except as
specifically provided herein. Tenant hereby waives, to the fullest extent
permitted by law, the right to make repairs at the expense of Landlord pursuant
to any law or equitable principle in effect at the time of the execution of this
Lease or hereafter enacted. Landlord shall have the right to give, record and
post, as appropriate, notices of non-responsibility under any mechanic's lien
laws now or hereafter existing, and any other notices of a similar nature that
Landlord may reasonably elect to give, record or post from time to tune during
the Term. If reasonably possible, any such notices shall be posted so as not to
interfere with Tenant's business.
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(c) Nothing contained in this Lease, and no
action or inaction by Landlord, shall be deemed or construed in any manner as
(i) constituting the consent or request of Landlord, expressed or implied, to
any contractor, subcontractor, laborer, materialman or vendor to or for the
performance of any labor or services or the furnishing of any materials or other
property for the construction, alteration, addition, repair or demolition of or
to all or any portion of the Property or (ii) giving Tenant any right, power or
permission to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such a manner as would
permit the making of any claim against Landlord with respect thereto, or to make
any agreement that may create, or in any way may be the basis for the assertion
of any right, title, interest, lien, claim or other encumbrance upon the estate
of Landlord in all or any portion of the Property.
(d) Unless Landlord conveys title to any of the
Property to Tenant pursuant to the provisions of this Lease, Tenant shall, upon
the expiration or earlier termination of this Lease, vacate and surrender the
Property to Landlord in the condition in which the Property was originally
received from Landlord, except as repaired, rebuilt, restored, altered or added
to as permitted or required by the provisions of this Lease, and except for
ordinary wear and tear (but subject to the obligation of Tenant under this
Section to maintain the Property in good order, condition and repair during the
entire Term of this Lease) and except for damage or destruction by casualty or
condemnation which Tenant is not required to repair by the provisions of this
Lease.
10.2 ENCROACHMENTS AND RESTRICTIONS. Tenant has reviewed
and approved the Title Commitment and the Survey. If any of the Improvements
shall at any time during the Term violate any agreement or condition contained
in any lawful covenant, condition, restriction, equitable servitude or other
agreement affecting all or any portion of the Property, or shall impair the
rights of others under any easement or right-of-way burdening the Property,
provided that such agreement, covenant, condition, restriction or easement has
not been created by Landlord, then promptly upon the request of Landlord, or at
the behest of any person affected by violation or impairment and in such case,
in the event of an adverse final determination, Tenant shall either (a) obtain
valid and effective waivers or settlements of all claims, liabilities and
damages resulting from each such encroachment, violation or impairment, whether
the same shall affect Landlord or Tenant, provided that Landlord shall consent
to all such settlements or waivers or (b) make such changes in the Improvements
and take such other actions as Tenant in the reasonable and good faith exercise
of its judgment deems practicable to remove such encroachment and to end such
violation or impairment, including, if necessary, the alteration of any of the
Improvements provided that Landlord shall consent to all such alterations and
the changes are not the result of any condition created solely by Landlord. With
respect to any encroachments identified on the ALTA surveys of the Property
delivered by Tenant to Landlord pursuant to the Purchase Agreement, Landlord
agrees that it shall not require Tenant to obtain a waiver of or otherwise
correct any such encroachment unless and until an affected third party notifies
Landlord of its objection to any such encroachment. In any event Tenant shall,
subject to Landlord's consent, take all such actions as may be necessary in
order to be able to continue the operation of the Improvements for the Primary
Intended Use substantially in the manner and to the extent the Improvements were
operated prior to the assertion of such violation or impairment.
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Tenant shall not be responsible for any claims covered by Landlord's title
insurance policy, and Landlord agrees that any proceeds recovered under such
title insurance policy shall be made available to Tenant to remedy the claimed
violation or restriction.
ARTICLE XI
CAPITAL ADDITIONS
11.1 CONSTRUCTION OF CAPITAL ADDITIONS.
(a) If no Event of Default shall have occurred
and be continuing, Tenant may, subject to the terms and conditions contained in
this Article, construct or install Capital Additions on the Property. All
Capital Additions costing in excess of $100,000 shall require the prior written
approval of Landlord, which approval shall not be unreasonably withheld or
delayed as expressly provided herein. It shall not be unreasonable for the
Landlord to withhold its consent if any appraisal obtained by Landlord shows
that the fair market value of the Capital Addition as proposed to be built is
less than the cost of the Capital Additions. Tenant shall not be permitted to
create any Encumbrance on the Property in connection with any such Capital
Addition, without Landlord's prior written consent (which consent shall not be
unreasonably withheld or delayed).
(b) Prior to commencing construction of any
Capital Addition, Tenant shall submit to Landlord in writing a proposal setting
forth in reasonable detail any proposed Capital Addition and shall provide to
Landlord such plans and specifications, permits, licenses, contracts and other
information concerning the proposed Capital Addition as Landlord may reasonably
request. Without limiting the generality of the foregoing, such proposal shall
indicate the approximate projected cost of constructing such Capital Addition,
the use or uses to which it will be put and a good faith estimate of the change,
if any, in the Gross Revenues that Tenant anticipates will be caused by such
Capital Addition. Tenant shall not commence to build any Capital addition unless
Tenant shall first have provided Landlord with either (i) a lien payment and
completion bond in form and substance and issued by a surety reasonably
acceptable to Landlord in an amount equal to 150% of the reasonably anticipated
cost of such Capital Additions or (ii) a payment and completion guaranty in form
and substance and executed by a guarantor reasonably acceptable to Landlord.
(c) No Capital Addition shall be made which
would tie in or connect any Improvements with any other improvements on property
adjacent to the Property (and not part of the Property), including without
limitation, tie-ins of buildings or other structures or utilities unless Tenant
shall have obtained the prior written consent of Landlord, which consent
Landlord may grant, withhold or delay in its sole discretion. All proposed
Capital Additions shall be architecturally integrated and consistent with the
Property.
11.2 CAPITAL ADDITIONS FINANCED OR PAID FOR BY LANDLORD.
(a) Tenant may request that Landlord provide or
arrange financing for any Capital Addition expected to cost in excess of
$100,000 by providing to Landlord such information about such Capital Addition
as Landlord may reasonably request. Landlord may, but
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shall be under no obligation to, meet the request, and within 30 days of receipt
of such information, Landlord shall notify Tenant as to whether it will finance
the proposed Capital Addition and, if so, the terms and conditions upon which it
would do so, including the terms of any amendment to this Lease (including,
without limitation, the increase in Base Rent to compensate Landlord for the
additional funds advanced by it). Notwithstanding the foregoing, Landlord shall
not finance the cost of any proposed Capital Addition if such cost is, less than
$100,000. In no event shall the portion of the material, labor charges and
fixtures of the Capital Additions Cost be less than seventy-five percent (75%)
of the total amount of such cost. Tenant shall, within thirty (30) days of
Tenant's receipt of Landlord's Notice that Landlord will finance the proposed
Capital Addition, give Landlord a notice accepting or rejecting Landlord's
proposed financing.
(b) If Landlord finances the Capital Additions
Cost of the proposed Capital Addition, Tenant shall provide Landlord with the
following (unless waived by Landlord in writing):
(i) prior to any disbursement of funds,
such information, certificates, licenses, permits, authorizations, evidence of
zoning and other documents reasonably requested by Landlord, or by any third
party lender with whom Landlord has agreed or may agree to provide financing, as
necessary to confirm that Tenant will be able to use the Capital Addition upon
completion thereof in accordance with the Primary Intended Use for such Capital
Addition, including all required federal, state or local government licenses,
permits, authorizations and approvals;
(ii) prior to any disbursement of funds,
an Officer's Certificate and, if requested, a certificate from Tenant's
architect, setting forth in reasonable detail the projected (or actual, if
available) Capital Additions Cost;
(iii) prior to or coincident with the
first disbursement of funds, an amendment to this Lease (together with a
memorandum thereof in recordable form), duly executed and acknowledged, in form
and substance reasonably satisfactory to Landlord and Tenant, providing for an
increase in the Base Rent on the terms and conditions determined in accordance
with Section 11.2(a), along with the legal description of any land obtained in
connection with such Capital Addition and such other provisions as may be
necessary or appropriate;
(iv) prior to or coincident with the
first disbursement of funds, a construction and development agreement setting
forth the terms for Landlord's financing and Tenant's construction of such
Capital Additions;
(v) prior to or coincident with payment
for any land obtained in connection with such Capital Addition, a deed conveying
to Landlord title to such land, or, if applicable, a ground lease on terms
acceptable to Landlord, which title or leasehold shall be free and clear of any
liens, encumbrances or other exceptions to or matters affecting title except
those approved by Landlord, and, upon completion of the Capital Addition, a
final as-built survey thereof reasonably satisfactory to Landlord;
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(vi) during construction and following
completion of the Capital Addition, endorsements to any outstanding policy of
title insurance covering the Property, or commitments therefor reasonably
satisfactory in form and content to Landlord (x) updating the same without any
additional exception except such as may be reasonably permitted by Landlord and
(y) adding to its coverage any land acquired or leased in connection with such
Capital Addition and increasing the coverage thereof by an amount equal to the
Fair Market Value of the Capital Addition (except to the extent covered by the
owner's policy of title insurance referred to in subparagraph (vii) below);
(vii) following the advance of funds, if
appropriate, (x) an extended coverage owner's policy of title insurance insuring
fee simple title to any land conveyed to Landlord pursuant to subparagraph (v),
free and clear of all liens and encumbrances except those approved by Landlord,
and (y) a lender's policy of title insurance reasonably satisfactory in form and
substance to Landlord and to any Lender with whom Landlord has agreed or may
agree to provide financing; and
(viii) during or following the advancement
of funds, prints of architectural and engineering drawings relating to the
Capital Addition and such other certificates (including, but not limited to,
endorsements increasing the insurance coverage, if any, at the time required by
Section 14.1), documents, opinions of counsel, appraisals, surveys, certified
copies of duly adopted resolutions of the board of directors of Tenant
authorizing the execution and delivery of the lease amendment, construction and
development agreement and any other instruments as may be reasonably required by
Landlord and any lender from whom Landlord has agreed or may agree to obtain
financing.
(c) Any new mortgage or supplement to any
existing mortgage entered into by Landlord with any lending institution covering
the Property or any land referred to in subparagraph (iv) above shall be subject
to the rights of Tenant under this Lease, as this Lease may be amended from time
to time.
(d) If Landlord finances the cost of any such
Capital Addition, Tenant will reimburse Landlord for all reasonable fees, costs
and expenses (including fees and costs of in-house and outside attorneys)
incurred by Landlord in connection therewith.
11.3 CAPITAL ADDITIONS PAID FOR BY TENANT. If Landlord
does not finance the cost of a Capital Addition under the terms of Section 11.2
and Tenant elects nevertheless to construct or cause to be constructed such
Capital Addition, (i) Tenant shall not commence any construction with respect to
such Capital Addition without first obtaining the lien payment and completion
bond or payment and completion guaranty required by Section 11.1, (ii) Tenant
shall pay the cost of such Capital Addition, and there shall be no adjustment in
the Rent, the Pause Point or Landlord's Total Investment by reason of any such
Capital Addition, and (iii) Tenant shall elect Tenant's Capital Addition
Depreciation and shall notify Landlord of such determination.
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11.4 DISPOSITION OF CAPITAL ADDITIONS UPON EXPIRATION OR
TERMINATION OF LEASE. Upon the expiration or earlier termination of this Lease,
all Capital Additions shall pass to and become the property of Landlord, free
and clear of all encumbrances. With respect to Capital Additions paid for by
Tenant, Landlord shall pay to Tenant, within 90 days following the expiration or
earlier termination of this Lease, an amount equal to the Capital Additions Cost
of such Capital Additions (provided that at least 80% of the total amount of
such Capital Additions Cost represents charges for material, labor and fixtures)
less Tenant's Capital Addition Depreciation.
11.5 NON-CAPITAL ADDITIONS. Tenant shall have the right to
make additions, modifications or improvements to the Property which are not
Capital Additions from time to time as it, in its reasonable discretion, may
deem to be desirable for the Property's uses and purposes permitted hereunder,
provided that such action does not (i) significantly and adversely alter the
character or purpose or detract in any manner from the value or operating
efficiency of the Property, (ii) significantly impair the revenue-producing
capability of the Property, or (iii) materially and adversely affect the ability
of Tenant to comply with the provisions of this Lease, and provided that, if the
cost of such non-capital additions, modifications or improvements exceed
$200,000, Tenant gives Landlord ten days' prior Notice of such addition,
modification or improvement. The cost of such non-capital additions,
modifications or improvements to the Property shall be paid by Tenant, and all
such non-capital additions, modifications and improvements shall, without
payment by Landlord at any time, be included under the terms of this Lease, and
upon expiration or earlier termination of this Lease shall pass to and become
the property of Landlord.
11.6 SALVAGE. All materials which are scrapped or removed
in connection with the construction of either Capital Additions permitted by
Section 11.1, non-capital additions permitted by Section 11.5, or repairs
required by Article X shall be or become the property of the party which paid
for, or provided the financing for such work.
ARTICLE XII
LIENS
Subject to the provisions of Article XIII relating to
permitted contests, Tenant shall not directly or indirectly create or allow to
remain and shall promptly discharge at its expense any lien, encumbrance,
security interest, attachment, title retention agreement or claim upon the
Property or any attachment, levy, claim or encumbrance in respect of Rent, not
including, however, (a) this Lease, (b) Permitted Encumbrances, (c)
restrictions, liens and other encumbrances which are created by, in favor of, or
consented to in writing by Landlord or expressly permitted under Section 29.1(a)
hereof, (d) liens for taxes or assessments or other governmental charges and
levies if not yet delinquent, or if in good faith being contested or litigated,
provided that Tenant maintains a reserve against such taxes, assessments,
charges or levies in an amount deemed adequate by Landlord and furnishes
security reasonably satisfactory to Landlord for the payment of such taxes,
assessments, charges and levies, (e) the Existing Leases and other subleases in
existence on the date hereof and subleases permitted by Article XXIII, (f) liens
for Impositions or for sums resulting from noncompliance with Legal Requirements
so long as the same are not yet payable or are payable without the addition of
any
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fine or penalty and are in the process of being contested as permitted by
Article XIII, (g) liens of mechanics, laborers, materialmen, suppliers or
vendors for sums either disputed or not yet due, provided that (i) the payment
of such sums shall not be postponed for more than five days after the completion
of the action giving rise to such lien and such reserve or other appropriate
provisions as shall be required by law or generally accepted accounting
principles shall have been made therefor or (ii) any such liens are in the
process of being contested as permitted by Article XIII, (h) any liens which are
the responsibility of Landlord pursuant to the provisions of Article XXVII, are
directly created or permitted by Landlord, or are filed against the Property as
a result of Landlord's acts or omissions and not related to or a consequence of
Tenant's acts or omissions (i) purchase money security interests on equipment
constituting Tenant's Personal Property and leases of such equipment, (j)
judgment and other similar liens, provided that the execution or other
enforcement of such liens is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate proceedings in
accordance with the requirements of this Lease, (k) liens constituting renewals,
extensions or replacements of liens described in the foregoing clauses, but
only, in the case of each such renewal, extension or replacement lien, to the
extent of the original principal amount of the obligation so secured, and to the
extent that such renewal, extension or replacement lien is limited to all or
part of the property that secured the lien extended, renewed or replaced.
ARTICLE XIII
CONTESTS
Tenant, on its own or on Landlord's behalf (or in Landlord's name), but
at Tenant's sole cost and expense, upon Notice to Landlord, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
without prejudice to Landlord's rights hereunder the amount, validity or
application, in whole or in part, of any Imposition, Legal Requirement,
Insurance Requirement, lien, attachment, levy, encumbrance, charge or claim not
otherwise permitted by Article XII, provided that (a) in the case of an unpaid
Imposition, lien, attachment, levy, encumbrance, charge or claim, the
commencement and continuation of such proceedings shall suspend the collection
thereof from Landlord and from the Property, (b) neither the Property nor any
Rent therefrom nor any part thereof or interest therein would be subject to any
risk of being sold, forfeited, attached, foreclosed, or lost, (c) in the case of
a Legal Requirement, Landlord would not be in any danger of incurring any lien,
charge, fine, penalty, or other civil or criminal liability for failure to
comply therewith pending the outcome of such proceedings, (d) in the event that
any such contest shall involve a sum of money or potential loss in excess of
$100,000 then, in any such event, Tenant shall deliver to Landlord an Officer's
Certificate to the effect set forth in clauses (a), (b) and (c), to the extent
applicable, (e) in the case of a Legal Requirement or an Imposition, lien,
encumbrance or charge, Tenant shall give such reasonable security as may be
demanded by Landlord to insure ultimate payment of the same and to prevent any
sale or forfeiture of the affected portion of the Property or the Rent by reason
of such non-payment or non-compliance, which security may be a guaranty in form
and substance acceptable to Landlord and executed by a guarantor acceptable to
Landlord; provided, however, the provisions of this Article shall not be
construed to permit Tenant to contest the payment of Rent (except as to contests
concerning the method of computation or the basis of levy of any Imposition) or
any other sums payable by Tenant to Landlord hereunder, (f) in the case of an
Insurance Requirement, the coverage required by Article XIV shall be maintained,
and (g) if
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such contest be finally resolved against Landlord or Tenant, Tenant shall, as
Additional Charges due hereunder, promptly pay the amount required to be paid,
together with all interest and penalties accrued thereon, or comply with the
applicable Legal Requirement or Insurance Requirement. Landlord, at Tenant's
expense, shall execute and deliver to Tenant such authorizations and other
documents as may reasonably be required in any such contest and, if reasonably
requested by Tenant or if Landlord so desires, Landlord shall join as a party
therein. Tenant shall indemnify and save Landlord harmless against any
liability, cost or expense of any kind that may be imposed upon Landlord in
connection with any such contest and any loss resulting therefrom.
ARTICLE XIV
INSURANCE
14.1 GENERAL INSURANCE REQUIREMENTS. Tenant shall at all
times maintain policies of insurance insuring the Property, and all property
located in or on the Property including, without limitation, all Capital
Additions, Tenant's Personal Property and all other property located in or on
the Property, all satellite clinics operated by Tenant whether on or off the
Property; and the business operated by Tenant, against the kind of risk and in
the amounts of coverage described below. All such insurance shall be written by
companies of recognized responsibility authorized to conduct an insurance
business in the State. All such insurance (other than insurance with respect to
Tenant's Personal Property) shall name Tenant as the insured and Landlord as an
additional insured. Proceeds of insurance policies payable to compensate any
loss shall be payable to Landlord or Tenant as provided in Article XV. All such
insurance shall name as an additional insured or loss payee, as appropriate, the
holder (a "FACILITY MORTGAGEE") of any mortgage, deed of trust or other security
agreement securing any Encumbrance placed on the Property in accordance with the
provisions of Article XXVII ("FACILITY MORTGAGES") by way of a standard form of
mortgagee's loss payable endorsement. Any loss adjustment or other settlement in
excess of $250,000 shall require the written consent of Landlord and each
Facility Mortgagee and any other lender of Landlord or its Affiliates ("LANDLORD
LENDER") having any contractual insurance requirements which would impact on the
insurance requirements of this Lease to the extent so required and Landlord has
given Tenant written notice thereof. Originals or certified copies of all
insurance policies obtained pursuant to this Article shall be deposited with
Landlord and, if requested, with any Facility Mortgagee(s) or Landlord
Lender(s). The policies on the Property, including the Improvements, Fixtures
and Tenant's Personal Property, shall insure against the following risks:
(a) loss or damage by fire, vandalism and
malicious mischief, extended coverage perils ("all risk"), and all physical loss
perils insurance including but not limited to sprinkler leakage, in an amount
not less than 100% of the then full replacement cost thereof (as defined below
in Section 14.2) or such lesser amount as is approved by Landlord in writing;
(b) loss or damage by explosion of steam
boilers, pressure vessels or similar apparatus, now or hereafter installed in
the Facility in such amounts with respect to any one accident as may be
reasonably requested by Landlord from time to time of not less than $57,073,000;
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(c) business interruption or loss of rental
under a rental value insurance policy covering risk of loss during the lesser of
the first 12 months of reconstruction or the actual reconstruction period
necessitated by the occurrence of any of the hazards described in Sections
14.1(a) or 14. 1(b), in an amount sufficient to prevent Landlord from becoming a
coinsurer;
(d) claims for personal injury or property
damage under a policy of comprehensive general public liability insurance or
commercial general liability insurance. Such insurance shall include Broad Form
Contractual Liability insurance coverage insuring all of Tenant's indemnity
obligations pursuant to Section 8.3(b) (if obtainable at a reasonable cost) and
pursuant to Section 22.1 of this Lease. Such coverage shall have a minimum
combined single limit of liability of at least $5 million and a general
aggregate limit of at least $5 million, with $5 million umbrella coverage. Any
such policy shall be written to apply to all bodily injury, property damage,
personal injury and other covered losses, however occasioned, subject to
standard policy exclusions, occurring during the policy term, and shall be
endorsed to provide that such coverage shall be primary and that any insurance
maintained by Landlord shall be excess insurance only. Such coverage shall also
contain endorsements: (i) deleting any employee exclusion on personal injury
coverage; (ii) including employees as additional insureds; (iii) deleting any
liquor liability exclusion; and (iv) providing for coverage of employers
automobile non-ownership liability. All such insurance shall provide for
severability of interests; shall provide that an act or omission of one of the
named insureds shall not reduce or avoid coverage to the other named insureds;
and shall afford coverage for all claims based on acts, omissions, injury and
damage, which claims occurred or arose (or the onset of which occurred or arose)
in whole or in part during the policy period. Tenant shall also maintain
employers liability insurance with a limit of no less than $1 million per
employee and $1 million per occurrence and workers' compensation insurance as
required by law;
(e) claims arising out of medical malpractice in
an amount not less than $2 million for each person and $2 million for each
occurrence;
(f) flood (when the Property is located in whole
or in part within an area designated by an appropriate agency or authority of
the United States as a flood plain) and such other hazards and in such amounts
as may be customary for comparable properties in the area and as may be
available from insurance companies, insurance pools, or other appropriate
companies authorized to do business in the State;
(g) during any period during which any Capital
Addition is under construction, course of construction insurance and all risks
insurance in such amounts as Landlord shall reasonably require;
(h) such other hazards and in such amounts as
may be customary for comparable properties in Salt Lake City, Utah and as may be
available from insurance companies, insurance pools, or other appropriate
companies authorized to do business in the State at rates which are economically
practicable in relation to the risks covered; and
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(i) any other insurance in such form and in such
amounts as Landlord may reasonably request.
14.2 REPLACEMENT COST. The term "full replacement cost" as
used herein shall mean the actual replacement cost of the Property requiring
replacement from time to time, less exclusions provided in a normal fire
insurance policy (which, on the Commencement Date is agreed to be not more than
$60,000,000). If either party believes that full replacement cost (the then
replacement cost less such exclusions) has increased or decreased at any time
during the Lease Term, it may have such full replacement cost redetermined by
the insurer then providing the largest amount of fire insurance coverage carried
on the Property.
14.3 ADDITIONAL INSURANCE. In addition to the insurance
described in Section 14.1, throughout the Term Tenant shall maintain such
additional insurance as may be required from time to time by Landlord provided
that the types and amounts of any such additional insurance required by Landlord
is then customarily maintained by the operators of similar health care
facilities in Salt Lake County, Utah. Tenant shall further maintain adequate
workers' compensation insurance coverage for all persons employed by Tenant on
the Property. Such workers' compensation insurance shall be in accordance with
the requirements of applicable local, state and federal law.
14.4 WAIVER OF SUBROGATION. All insurance policies carried
by Landlord or Tenant covering the Property, the Fixtures, the Facility or
Tenant's Personal Property shall expressly waive any right of subrogation on the
part of the insurer against the other party. Landlord and Tenant agree that the
respective policies of insurance carried by them will include such waiver
clauses or endorsements so long as the same are obtainable without extra cost.
If such clauses and endorsements are only available upon the payment of an extra
charge, the other party, at its election, may pay the same, but shall not be
obligated to do so; provided that the Tenant shall at all times be obligated to
carry the policies of insurance required under this Article regardless of
whether the waiver of subrogation required under this Section 14.4 is available.
14.5 FORM OF INSURANCE. All of the policies of insurance
referred to in this Article shall be written in a form, and issued by insurance
companies, reasonably satisfactory to Landlord. Landlord agrees that it will not
unreasonably withhold or delay its approval as to the form of the policies or
the insurance companies selected by Tenant. Tenant shall pay all of the premiums
therefor, and shall deliver an original or certified copy of any policy, or
renewal thereof, to Landlord, any Facility Mortgagee and any Landlord Lender at
least 10 days prior to the expiration of the existing policy to which such
renewal policy relates. If Tenant either fails to effect such insurance as
herein required or to pay the premium therefor, or to deliver such policies or
certified copies thereof to Landlord at the times required, Landlord shall be
entitled, but shall have no obligation, to effect such insurance and pay the
premiums therefor, which premiums shall be repayable to Landlord upon demand
therefor in a Notice, and failure by Tenant to repay the same shall constitute
an Event of Default within the meaning of Section 17.1(d). Each insurer
mentioned in this Article shall agree, by endorsement on the policy or policies
issued by it, or by independent instrument furnished to Landlord, that it will
give to Landlord (and to any Facility Mortgagee and Landlord Lender of which
Tenant has notice, if
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required) 30 days prior written notice before such policy or policies expire,
are altered or are cancelled.
14.6 CHANGE IN LIMITS. If either party shall at any time
deem the limits of the personal injury or property damage public liability
insurance or malpractice insurance then carried by Tenant to be insufficient or
excessive, the parties shall endeavor in good faith to agree promptly upon the
proper and reasonable limits for such insurance to be carried, and such
insurance shall thereafter be carried with the limits thus agreed upon until
further change pursuant to the provisions of this Section.
14.7 BLANKET POLICY. Notwithstanding anything to the
contrary contained in this Article, Tenant's obligations to carry the insurance
provided for herein may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant so long as (a)
the coverage afforded to Landlord is not reduced or diminished or otherwise
altered from that which would exist under a separate policy meeting all other
requirements of this Lease by reason of the use of such blanket policy of
insurance and (b) the requirements of this Article are otherwise satisfied.
14.8 NO SEPARATE INSURANCE. Tenant shall not obtain
separate insurance concurrent in form or contributing in the event of loss with
that required in this Article XIV to be furnished by, or which may reasonably be
required to be furnished by Tenant, nor shall Tenant increase the amount of any
then existing insurance by securing an additional policy or additional policies,
unless all parties having an insurable interest in the subject matter of the
insurance, including in all cases Landlord and all Facility Mortgagees, are
named therein as additional insureds, and the loss is payable under said
insurance in the same manner as losses are payable under this Lease. Tenant
shall immediately notify Landlord of the obtaining of any such separate
insurance or of the increasing of any of the amounts of the then existing
insurance.
ARTICLE XV
INSURANCE PROCEEDS
15.1 HANDLING OF INSURANCE PROCEEDS. Subject to Section
15.4 hereof, all proceeds from any policy of insurance required by Article XIV
of this Lease shall be paid to Landlord and held in trust by Landlord (subject
to the provisions of Section 15.7) and shall be made available for
reconstruction, repair or replacement, as the case may be, of any damage to or
destruction of all or any portion of the Property to which such proceeds relate,
and shall be paid out by Landlord from time to time subject to the provisions
hereof for the cost of such reconstruction, repair or replacement. Any unused
portion shall be retained by Landlord free and clear upon completion of such
repair and restoration but shall be applied by Landlord against Tenant's
obligations for Rent next coming due under this Lease. If neither Landlord nor
Tenant is required or elects to repair and restore, and the Lease is terminated
without purchase by Tenant as described in Section 15.2(a), then all such
insurance proceeds shall be retained by Landlord. All salvage resulting from any
risk covered by insurance shall belong to Landlord, except that any salvage
relating to Tenant's Personal Property shall be the property of Tenant.
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15.2 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION
COVERED BY INSURANCE.
(a) Except as provided in Section 15.7, if
during the Term a portion of the Property is totally destroyed or materially
damaged by a risk covered by the insurance described in Article XIV so that the
Facility is rendered unsuitable for its Primary Intended Use (taking into
account all relevant factors, including but no limited to the number of useable
beds, the amount of square footage reasonably available for use by Tenant and
the type and amount of Gross Revenues lost) (the "IMPACTED FACILITY"), Tenant
shall at its option either (i) restore the Impacted Facility to substantially
the same condition as existed immediately before the damage or destruction and
this Lease shall continue in full force and effect or (ii) offer to purchase the
Property from Landlord for a purchase price equal to the greater of the Minimum
Repurchase Price or the Fair Market Value of the Property immediately prior to
such damage or destruction. If Tenant restores the Impacted Facility, the
insurance proceeds shall be paid out by Landlord to Tenant or its designee from
time to time as reasonably requested by Tenant to pay for the reasonable costs
of such restoration and any excess proceeds remaining after such restoration
shall be retained by Tenant.
(b) Except as provided in Section 15.7, if
during the Term, the Improvements or Fixtures are partially destroyed due to a
risk covered by the insurance described in Article XIV but the Impacted Facility
is not thereby rendered unsuitable for the Primary Intended Use, in Tenant's
reasonable opinion (taking into account all relevant factors, including but not
limited to the number of useable beds, the amount of square footage reasonably
available for use by Tenant and the type and amount of Gross Revenues lost),
Tenant shall restore the Impacted Facility to substantially the same condition
as existed immediately before the damage or destruction. Such damage or
destruction shall not terminate this Lease; provided, however, that if Tenant
cannot, with reasonable diligence and within a reasonable time, obtain all
government approvals, including building permits, licenses, conditional use
permits and any certificates of need, necessary to perform all required repair
and restoration work and to operate the Impacted Facility in substantially the
same manner and for the Primary Intended Use, Tenant shall either (i) offer to
purchase the Property for a purchase price equal to the greater of the Minimum
Repurchase Price or the Fair Market Value immediately prior to such damage or
destruction or (ii) continue to operate under the Lease which shall remain in
full force and effect and Landlord shall be entitled to retain the insurance
proceeds, less the amount needed to restore the Property so that the portion of
the Facility unaffected by the casualty can be used as a complete architectural
unit. If Tenant shall make such offer and Landlord does not accept the same
within 120 days of Landlord's receipt of such offer, Tenant may either (x)
withdraw such offer, in which case this Lease shall remain in full force and
effect and Tenant shall proceed to restore the Impacted Facility as soon as
reasonably practicable to substantially the same condition as existed
immediately before such damage or destruction, or (y) terminate this Lease after
recovery by Landlord of all insurance proceeds and the payment by Tenant of any
Shortfall in cash. If Tenant so restores the Impacted Facility, insurance
proceeds shall be paid out by Landlord from time to time to pay for the
reasonable costs of such restoration, and any excess proceeds remaining after
such restoration shall be retained by Landlord.
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(c) If Tenant elects to repair or restore any
damage or destruction to the Property and the cost of any such repair or
restoration exceeds the amount of proceeds received by Landlord from the
insurance required under Article XIV, Tenant shall contribute any and all excess
amounts necessary to repair or restore the Facility. Tenant shall provide
Landlord with a payment or completion guaranty in form and substance reasonably
acceptable to Landlord. If no acceptable guarantor is available, Tenant shall
pay Landlord the amount of such difference, which amount shall be held in trust,
together with any other insurance proceeds, for application to the cost of
repair and restoration as such repair and restoration progresses.
(d) If Landlord accepts Tenant's offer to
purchase the Property as set forth in this Section 15 this Lease shall terminate
as to the Property upon payment of the purchase price therefor and Landlord
shall thereupon remit to Tenant all insurance proceeds pertaining to the
Property less Landlord's reasonable expenses, including attorneys' fees, and
assign Landlord's rights in any uncollected insurance proceeds to Tenant.
15.3 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION
NOT COVERED BY INSURANCE. Except as provided in Section 15.7 below, if during
the Term the Facility is totally destroyed or materially damaged (i) from a risk
not covered by insurance described in Article XIV but that would have been
covered if Tenant carried the insurance customarily maintained by, and generally
available to, the operators of reputable facilities which are used for the
Primary Intended Use in the region in which the Facility is located, (ii) from a
risk for which insurance coverage is voided due to any act or omission by
Tenant, or (iii) as result of an earthquake, whether or not such damage or
destruction renders the Impacted Facility unsuitable for their Primary Intended
Use (taking into account all relevant factors, including but not limited to the
number of useable bends, the amount of square footage reasonably available for
use by Tenant and the type and amount of Gross Revenues lost), Tenant shall
restore the Impacted Facility to substantially the same condition as existed
immediately before such damage or destruction and not terminate this Lease.
Except as provided in Section 15.7 below, if during the Term either Facility is
totally destroyed or materially damaged from a risk not covered by insurance
described in Article XIV and not described in clause (i), (ii) or (iii) of the
immediately preceding sentence, whether or not such Facility is thereby rendered
unusable for its Primary Intended Use (taking into account all relevant factors,
including, but not limited to, the number of useable beds, the amount of square
footage reasonably available for use by Tenant and the type and amount of Gross
Revenues lost), Tenant shall, at its option, either (i) restore the Facility to
substantially the same condition as existed immediately prior to such damage or
destruction and this Lease shall continue in full force and effect or (ii) offer
to purchase the Property from Landlord for a purchase price equal to the greater
of the Minimum Repurchase Price or the Fair Market Value of the Property
immediately prior to such damage or destruction. If this Lease continues in full
force and effect, Tenant shall continue to pay Rent, in the manner and at the
times herein specified, including the full amounts of Base Rent, Percentage Rent
and Additional Charges, provided that during the period of restoration when the
Facility is not suitable for its Primary Intended Use, Tenant shall pay
Percentage Rent at a rate equal to the Percentage Rent for the immediately
preceding Fiscal Year during which Percentage Rent accrued.
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15.4 PAYMENT OF PROCEEDS ON TENANT'S PROPERTY AND CAPITAL
ADDITIONS PAID BY TENANT. Notwithstanding any provision herein, all insurance
proceeds payable by reason of any loss of or damage to any of Tenant's Personal
Property or Capital Additions paid for by Tenant shall be paid to Tenant and
Tenant shall hold such insurance in trust to pay the cost of repairing or
replacing damaged Tenant's Personal Property or Capital Additions paid for by
Tenant; provided, however, that if the damaged Tenant's Personal Property or
Capital Additions paid for by Tenant were no longer necessary to Tenant's
operations prior to their destruction, Tenant shall not be obligated to repair
or replace them.
15.5 RESTORATION OF TENANT'S PROPERTY. Upon any
restoration of the Impacted Facility as provided in Section 15.2 or 15.3, Tenant
shall either (i) at Tenant's sole cost and expense, restore all alterations and
improvements made by Tenant, Tenant's Personal Property and all Capital
Additions paid for by Tenant, or (ii) at Tenant's sole cost and expense, replace
such alterations and improvements, Tenant's Personal Property or Capital
Additions with improvements or items of the same or better quality and utility
in the operation of the Property; provided, however, that if the damaged
Tenant's Personal Property or Capital Additions paid for by Tenant were no
longer necessary to Tenant's operations prior to their destruction, Tenant shall
not be obligated to replace them.
15.6 ABATEMENT OF RENT. Unless and until Tenant shall pay
the purchase price for the Property to Landlord in accordance with this Article
XV (and this Lease is thereby terminated or otherwise terminated as provided in
this Article XV), in the event of any damage or destruction of the Property,
this Lease shall remain in full force and effect and Tenant's obligation to make
rental payments and to pay all other charges required by this Lease shall not be
abated by reason of any damage or destructions to the Property or the subsequent
loss of Landlord's entitlement to the Property.
15.7 DAMAGE NEAR END OF TERM. Notwithstanding any
provisions of this Article XV to the contrary, if damage to or destruction of
the Facility occurs during the last 12 months of the then applicable term
(whether Fixed or Extended), if Tenant has not elected to extend such term, and
if such damage or destruction cannot be fully repaired and restored within six
months immediately following the date of loss, then Tenant shall have the right
to terminate this Lease by giving written Notice thereof to Landlord within 30
days after the date of such damage or destruction, in which event, Landlord
shall collect any insurance proceeds to which it is entitled, and Tenant shall
assign Tenant's rights in any additional insurance proceeds. In the event that
the Facility is totally destroyed or damaged (i) from a risk not covered by
insurance described in Article XIV but that would have been covered if Tenant
carried the insurance customarily maintained by, and generally available to, the
operators of reputable facilities which are used for the Primary Intended Use in
the region in which the Facility is located, (ii) from a risk for which
insurance coverage is voided due to any act or omission by Tenant, or (iii) as a
result of an earthquake, whether or not such damage or destruction renders the
Facility unsuitable for its Primary Intended Use (taking into account all
relevant factors, including but not limited to the number of useable beds, the
amount of square footage reasonably available for use by Tenant and the type and
amount of Gross Revenues lost), then Tenant shall pay to
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Landlord a sum equal to the amount reasonably necessary to repair such damage or
destruction if Tenant elects to terminate the Lease.
15.8 TERMINATION OF OPTION TO PURCHASE. Any termination of
this Lease pursuant to this Article shall cause any option to purchase granted
to Tenant under this Lease and the right to extend the Term by any Extended Term
to be terminated and to be without further force or effect.
15.9 WAIVER. Tenant hereby waives any statutory rights of
termination which may arise by reason of any damage or destruction of the
Facility which Landlord is obligated to restore or may restore under any of the
provisions of this Lease.
ARTICLE XVI
CONDEMNATION
16.1 DEFINITIONS.
For purposes of this Article XVI the following terms have the
meanings specified in this Section 16.1.
(a) "CONDEMNATION" means (a) the exercise of any
governmental power, whether by legal proceedings or otherwise, by a Condemnor,
or (b) a voluntary sale or transfer by Landlord with Tenant's consent (provided
no Event of Default has occurred and is continuing at such time) to any
Condemnor, either under threat of condemnation or while legal proceedings for
condemnation are pending.
(b) "DATE OF TAKING" means the earlier of: (i)
the first date the Condemnor has the right to immediate possession of the
property being condemned, or (ii) the date on which Tenant's quiet possession is
materially disturbed by a Condemnation proceeding such that it is impractical to
continue operations of the Facility.
(c) "AWARD" means all compensation, sums and any
other value awarded, paid or received on a total or partial condemnation.
(d) "CONDEMNOR" means any public or quasi-public
authority, or private corporation or individual, having the power of
condemnation.
16.2 PARTIES' RIGHTS AND OBLIGATIONS. If during the Term
there is any Taking of all or any part of the Property or of any interest in
this Lease by Condemnation, the rights and obligations of the parties with
respect to such Condemnation shall be determined by this Article.
16.3 TOTAL TAKING. If title to the whole of Tenant's
interest in the Property shall be taken or condemned by any Condemnor, this
Lease shall cease and terminate as of the Date of Taking. If title to less than
the whole of the Property shall be so taken or condemned, which nevertheless
renders the Property unsuitable for its Primary Intended Use, in Tenant's
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reasonable opinion (taking into account all relevant factors, including but not
limited to the number of useable beds, the amount of square footage reasonably
available for use by Tenant, and the type and amount of Gross Revenues lost),
Tenant and Landlord each shall have the option by Notice to the other, at any
time prior to the taking of possession by, or the date of vesting of title in,
such Condemnor, whichever first occurs, to terminate this Lease as of such
earlier to occur date. Upon such earlier to occur date, if such Notice has been
given, this Lease shall cease and terminate. In either of such events, all Rent
paid or payable by Tenant hereunder shall be apportioned as of the date the
Lease shall have been so terminated as aforesaid.
16.4 ALLOCATION OF PORTION OF AWARD. Subject to the rights
of any Facility Mortgagee, the total Condemnation Award made with respect to all
or any portion of the Property shall be distributed to Landlord and Tenant
ratably in accordance with the value of their respective interests in and to
such Property as hereafter set forth in this Section 16.4. All of the Award
shall be the sole and exclusive property of Landlord and shall be payable to
Landlord, subject to the rights of any Facility Mortgagee; provided that any
portion of such Condemnation Award which is expressly allocated by the Condemnor
to the taking of Tenant's leasehold interest in the Property, Tenant's Share of
Appreciation Amount (if any), the taking of any Capital Additions (or any
portion thereof) paid for by Tenant, any loss of business by Tenant during the
remaining Term of this Lease, the taking of Tenant's Personal Property, or any
removal and relocation expenses of Tenant in any such proceedings shall be the
sole property of and payable to Tenant. In any Condemnation proceedings Landlord
and Tenant each shall seek their own Award in conformity herewith, at their own
expense.
16.5 PARTIAL TAKING. If title to less than the whole of
the Property shall be taken or condemned, and the Property is still suitable for
its then Primary Intended Use, in Tenant's reasonable opinion, or if Tenant or
Landlord shall be entitled (but shall not elect) to terminate this Lease as
provided in Section 16.3 hereof, Tenant at its own cost and expense shall with
all reasonable diligence restore the untaken portion of any Improvements so that
such improvements shall constitute a complete architectural unit of the same
general character and condition (as nearly as may be possible under the
circumstances) as the Improvements existing immediately prior to such
Condemnation or Taking. Landlord and Tenant shall each contribute to the cost of
restoration that part of their Award specifically allocated to such restoration,
if any (or if no such specific allocation is made, a just, fair and reasonable
portion of its Award as reasonably determined by Landlord and Tenant or by
arbitration in accordance with Section 28.14 if Landlord and Tenant are unable
to agree within 30 days of the Award), together with any and all severance and
other damages awarded for any taken Improvements; provided, however, the amount
of such contribution shall not exceed such cost. If such amounts are not
sufficient to cover the cost of restoration Landlord and Tenant shall contribute
any additional amounts needed for restoration in proportion to the amounts
already contributed by them, provided that in no event shall Landlord contribute
any amount to such restoration in excess of its Award. Thereafter, any excess
restoration cost shall be borne solely by Tenant. Landlord agrees that Tenant
shall be entitled to an equitable abatement of Base Rent in the event of a
partial taking of the Property, but such abatement shall be strictly limited to
any amount of excess Award paid to Landlord after the restoration cost has been
paid.
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16.6 TEMPORARY TAKING. If the whole or any part of the
Property or of Tenant's interest under this Lease shall be taken or condemned by
any Condemnor for its temporary use or occupancy for a period of not more than
one hundred-eighty (180) days, this Lease shall not terminate, and Tenant shall
continue to pay, in the manner and at the times herein specified, the full
amounts of Base Rent, Percentage Rent, if any, and Additional Charges, provided
that during any such Temporary Taking Tenant shall pay Percentage Rent at a rate
equal to the average Percentage Rent during the three immediately preceding
Fiscal Years (or if three Fiscal Years shall not have elapsed, the average
during the last preceding Fiscal Years occurring during the Term). Except to the
extent Tenant may be prevented from so doing pursuant to the terms of the order
of the Condemnor, Tenant shall continue to perform and observe all of the other
terms, covenants, conditions and obligations hereof on the part of the Tenant to
be performed and observed as though such Taking or Condemnation had not
occurred. Upon any such Taking or Condemnation described in this Section, the
entire amount of any such Award made for such Taking or Condemnation allocable
to the Term of this Lease, whether paid by way of damages, Rent or otherwise,
shall be paid to Tenant. Tenant covenants that upon the termination of any such
Taking or Condemnation set forth in this Section, Tenant will, at its sole cost
and expense (subject to any contribution by Landlord as set forth in Section
16.5), restore the Property as nearly as may be reasonably possible to the
condition in which the same was immediately prior to such Taking or
Condemnation, unless such period of temporary use or occupancy shall expire less
than six months prior to termination of this Lease or extend beyond the
expiration of the Term, in which case Tenant shall not be required to make such
restoration.
ARTICLE XVII
DEFAULTS AND REMEDIES
17.1 EVENTS OF DEFAULT. Any one or more of the following
events shall be deemed an "EVENT OF DEFAULT" hereunder:
(a) Tenant shall fail to pay Rent payable by
Tenant under this Lease when the same becomes due and payable;
(b) Any representation or warranty made by the
Tenant in connection with this Lease or the Security Agreement or the Absolute
Assignment of Subleases and Rents, or in any report, certificate, financial
statement or other instrument furnished in connection herewith or therewith,
from time to time, whether under Article XXIV of this Lease or otherwise, shall
prove to be false or misleading in any material respect, provided, that Tenant
shall have a period of 15 days after Notice thereof from Landlord to take
whatever action that may be necessary such that the subject representation or
warranty would no longer be false or misleading;
(c) Tenant shall fail to observe or perform any
other term, covenant or condition of this Lease and such failure is not cured by
Tenant within a period of 15 days after Notice thereof from Landlord, unless
such failure cannot with due diligence be cured within a period of 15 days, in
which case such failure shall not be deemed to continue if Tenant proceeds
promptly and with due diligence to cure the failure and diligently completes the
curing thereof;
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(d) Tenant shall: (i) admit in writing its
inability to pay its debts generally as they mature, (ii) make a general
assignment for the benefit of its creditors; (iii) have appointed a trustee,
receiver or liquidator pursuant to an order of a court of competent jurisdiction
of itself or of the whole or any part of its property which is not discharged in
sixty (60) days, (iv) terminate or suspend its business, (v) have any of its
assets executed upon, attached or judicially seized and such execution,
attachment or seizure is not vacated or set aside within sixty (60) days;
(e) Tenant shall: (i) file a voluntary case
under any applicable bankruptcy, insolvency, debtor relief or other similar law
or statute of the United States of America or any State thereof now or
hereinafter in effect ("BANKRUPTCY LAWS"), or (ii) consent to or acquiesce in
the appointment of a receiver, liquidator, assignee, trustee, custodian or
sequestrator (or similar official of itself or of the whole or any part of its
property) which is not discharged in sixty (60) days;
(f) Tenant shall, on a petition filed under any
applicable Bankruptcy Laws against any of them, be adjudicated a bankrupt or
have an order for relief thereunder entered against it or fail to oppose any
such proceeding or if a court of competent jurisdiction shall enter an order or
decree appointing, without its consent, a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of itself or of the
whole or any part of its property and such judgment, order or decree shall not
be vacated or set aside or stayed within sixty (60) days from the date of the
entry thereof;
(g) Tenant shall be liquidated or dissolved, or
shall voluntarily begin proceedings toward such liquidation or dissolution, or
shall, in any manner, permit the sale or divestiture of substantially all of its
assets;
(h) an Event of Default under the terms of the
Security Agreement, the California Facilities Security Agreements or the
Absolute Assignment of Subleases and Rents shall occur and be continuing (after
the expiration of any cure periods, if any, set forth therein);
(i) Tenant shall fail to make when due any
scheduled payment with respect to indebtedness unless such failure is being
diligently contested in good faith and such failure shall continue for five days
following its receipt of written advice with respect thereto, if the effect of
such failure could reasonably be anticipated to have a material adverse effect
on the business, operations, properties, assets or condition (financial or
otherwise) of Tenant;
(j) any Notification Event described in Section
29.2(f) shall occur, which is reasonably likely to result in liability to the
Tenant having a material adverse effect on the business, operations, properties
or condition (financial or otherwise) of Tenant and Tenant shall fail to cure
(to Landlord's reasonable satisfaction) the events or state of affairs
constituting such Notification Event within thirty days after notice thereof was
due from Tenant pursuant to Section 29.2(f);
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(k) the estate or interest of Tenant in the
Property or any part thereof shall be levied upon or attached in any proceeding
and the same shall not be vacated or discharged within the later of 60 days
after commencement thereof or 30 days after Notice thereof from Landlord (unless
Tenant shall be contesting such lien or attachment in good faith in compliance
with this Lease;
(l) except as a result of damage, destruction or
a partial, temporary or complete Condemnation, Tenant voluntarily ceases
operations on the Property; or
(m) PHC should undergo a change of ownership
control, including, without limitation, any transfer of fifty percent or more of
all of the issued and outstanding stock of PHC, or PHC should cease to own,
beneficially or as of record, directly or indirectly through one or more
subsidiaries, all of the capital stock of Tenant.
No Event of Default (other than a failure to make a payment of
money) shall be deemed to exist under clause (c) above during any time the
curing thereof is prevents by an Unavoidable Delay, provided that upon the
cessation of such Unavoidable Delay, Tenant immediately shall remedy such
default.
Tenant shall immediately notify Landlord of the occurrence of
any event set forth in subsections 17.1(b) through (m) of which Tenant has
actual knowledge and the failure to do so shall constitute an immediate Event of
Default.
17.2 CERTAIN REMEDIES. Upon any Event of Default, Landlord shall
have all legal, equitable and contractual rights, powers and remedies provided
either in this Lease, at common law or in equity, or by statute or otherwise.
Without limiting the foregoing, if an Event of Default occurs, is not
cured within the period, if any, for such cure provided in Section 17.1, and is
continuing, Tenant shall, to the extent permitted by law and if required by
Landlord to do so, immediately surrender to Landlord the Property and quit the
same. To the extent permitted by applicable law, Landlord may enter upon and
repossess the Property by reasonable force, summary proceedings, ejectment or
otherwise, and may remove Tenant and all other persons and any and all personal
property from the Property subject to rights of any residents or patients and to
any requirement of law. Tenant hereby assents to and waives all legal notice to
vacate the Property. Landlord may so terminate Tenant's right of possession and
may repossess the Premises without liability for trespass or conversion, without
demand or notice of any kind to Tenant and without terminating this Lease, in
which event Landlord may, but shall be under no obligation to, relet the same
for the account of Tenant for such rent and upon such terms as shall be
satisfactory to Landlord. Neither the repossession of the Property, the failure
of Landlord to relet Property, nor the reletting of all or any portion of the
Property, shall relieve Tenant of its liability and obligation hereunder, all of
which shall survive any such repossession or reletting.
FURTHER, TENANT RECOGNIZES THAT ITS FAILURE TO INVEST AN AGGREGATE OF
AT LEAST $3,400,000 AS TENANT'S CAPITAL INVESTMENT DURING THE PERIOD COMMENCING
ON THE COMMENCEMENT DATE AND
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ENDING ON FEBRUARY 28, 1999, WOULD DEPRIVE LANDLORD OF IMPORTANT CONSIDERATION
FOR THIS LEASE. ACCORDINGLY, IF ANY EVENT OF DEFAULT SHALL OCCUR ON OR BEFORE
FEBRUARY 28, 1999, AND LANDLORD SHALL THEREAFTER TERMINATE THIS LEASE ON ACCOUNT
THEREOF OR DURING THE CONTINUANCE THEREOF, TENANT AGREES THAT, WITHOUT PREJUDICE
TO ANY OTHER REMEDY LANDLORD MAY HAVE HEREUNDER OR UNDER APPLICABLE LAW, TENANT
SHALL PAY TO LANDLORD AS LIQUIDATED DAMAGES (AND NOT AS A PENALTY) AN AMOUNT
EQUAL TO THE EXCESS OF (X) $3,400,000 OVER (Y) THE SUM OF THE AGGREGATE AMOUNT
OF TENANT'S CAPITAL INVESTMENT DURING THE PERIOD COMMENCING ON THE COMMENCEMENT
DATE AND ENDING ON FEBRUARY 28, 1999. TENANT AND LANDLORD ACKNOWLEDGE AND AGREE
THAT, SINCE IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE
DAMAGES THAT LANDLORD MAY SUFFER AS A RESULT OF TENANT'S FAILURE TO INVEST SUCH
$3,400,000 AS TENANT'S CAPITAL INVESTMENT WITHIN SUCH PERIOD OF TIME, SUCH
EXCESS AMOUNT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT LANDLORD WOULD
SUSTAIN IN THE EVENT OF SUCH FAILURE.
17.3 TERMINATION AND DAMAGES. (a) Upon the occurrence of any Event of
Default, Landlord shall have the right, to the extent permitted by applicable
law, (i) to terminate this Lease and Tenant's right to possession of the
Property by any lawful means, upon ten days' Notice of such termination (which
Notice shall run concurrent with any Notice required to be given by Section 17.1
and during which time Tenant shall have the opportunity to cure any such Event
of Default), in which case, if Tenant shall fail to cure all Events of Default
within the foregoing ten-day period, this Lease shall terminate and all of
Tenant's rights hereunder shall cease and Tenant shall immediately surrender
possession of the Property to Landlord and, in such event, Landlord shall be
entitled to recover form Tenant all damages incurred by reason of Tenant's
default, and (ii) to enforce all of Landlord's rights and remedies under this
Lease, including the right to recover the Rent and other sums owed as such
become due hereunder together with interest on such overdue Rent and any other
overdue amount owed by Tenant, from the date when due until paid, at the lesser
of the Overdue Rate or the maximum rate permitted by applicable law. Tenant
further covenants, as an additional and cumulative obligation after any
termination by reason of any Event of Default, to pay punctually to Landlord (or
such other person entitled thereto) all Rent and punctually to perform all of
the obligations which Tenant covenants in this Lease to pay and perform in the
same manner and to the same extent and at the same time as if this Lease had not
been terminated; provided, however, that in calculating the amounts so to be
paid by Tenant, Tenant shall be credited with any amount actually paid to
Landlord as damages pursuant to clause (i) above and also with any rent actually
obtained by Landlord by reletting the Property, after deducting all expenses of
such reletting and of collecting such rent, with the exception that Tenant shall
in no event be entitled to receive any such credit in excess of the amount
otherwise payable to Landlord pursuant to this Section. Furthermore, Landlord
shall also have all rights and remedies provided in Section 17.2. If any
litigation is commenced with respect to any alleged default under this Lease,
the prevailing party in such litigation shall receive, in addition to its
damages incurred, its reasonable attorneys' fees, and all costs and expenses
incurred in connection therewith. Neither the termination of this Lease pursuant
to this Section 17.3, the repossession of the Property, the failure of Landlord,
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notwithstanding reasonable good faith efforts to relet the Property, nor the
reletting of all or any portion of the Property, shall relieve Tenant of its
liability and obligations hereunder, all of which shall survive any such
termination, repossession or reletting. Upon any such termination, Tenant shall
forthwith pay to Landlord all Rent due and payable with respect to the Property
to and including the date of such termination. Thereafter Tenant shall promptly
pay to Landlord the full amount of Landlord's damages suffered by reason of
Tenant's breach of this Lease, which damages shall include but are not limited
to the sum of:
(i) the worth at the time of the award of the unpaid Rent
earned at the time of such termination, repossession or reletting;
(ii) the worth at the time of the award, of the amount by
which the unpaid Rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided;
(iii) the worth at the time of the award of the amount by
which the unpaid Rent for the balance of the Term after the time of the award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided; and
(iv) any other amount necessary to compensate Landlord for
the costs incurred in regaining possession and reletting the Property,
including, but not limited to, brokerage fees and commissions, construction
costs, rent concessions, and all legal costs and expenses.
(b) the "worth at the time of the award" of the amounts
referred to in clauses (i) and (ii) of subsection (a) of this Section 17.3 shall
be computed by allowing interest at the Overdue Rate. The "worth at the time of
the award" of the amount referred to in clause (iii) of subsection (a) of this
Section 17.3 shall be determined by a Court having jurisdiction thereof using
the lowest rate of capitalization (highest present worth) reasonably applicable
at the time of such determination and allowed by applicable law.
(c) Percentage Rent, for the purposes of this Section
17.3, shall be a sum equal to the Percentage Rent for the Fiscal Year in which
the termination, re-entry or repossession takes place and during which
Percentage Rent accrued.
17.4 APPLICATION OF FUNDS. Any payments which are made to and
received by Landlord under any of the provisions of this Lease during the
continuance of any Event of Default shall be applied to Tenant's obligations in
the order which Landlord may determine or as may be prescribed by applicable
laws.
17.5 FAILURE TO CONDUCT BUSINESS. For the purpose of determining
rental loss damages or Percentage Rent, if Tenant fails to conduct business upon
the Property, and thereby causes the exact damages or the amount of Percentage
Rent to be unascertainable, Percentage Rent for such period shall be deemed to
be the Percentage Rent during the immediately preceding Fiscal Year during which
Percentage Rent accrued.
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17.6 LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. If an Event of
Default occurs under this Lease and is not cured within the time provided under
this Lease with respect to such Event of Default, Landlord, without waiving or
releasing any obligation of Tenant, and without waiving any such Event of
Default, may (but shall be under no obligation to) at any time thereafter cure
such default for the account and at the expense of Tenant, and may, to the
extent permitted by law, enter upon the Property for such purpose and take all
such action thereon as, in Landlord's sole judgment, may be necessary or
appropriate with respect thereto. No such entry by Landlord on the Property
shall be deemed an eviction of Tenant. All sums so paid by Landlord and all
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses, in each case as permitted by law) so incurred,
together with a late charge thereon (to the extent permitted by law) computed at
the Overdue Rate from the date on which such sums or expenses are paid or
incurred by Landlord until the date reimbursed, shall be reimbursed by Tenant to
Landlord on demand. The obligations of Tenant and rights of Landlord contained
in this Article shall survive the expiration or earlier termination of this
Lease.
17.7 WAIVER. If this Lease is terminated pursuant to the provisions
of this Article, Tenant waives, to the extent permitted by applicable law, (a)
any right of redemption, re-entry or repossession, (b) any right to trial by
jury in the event of summary proceedings to enforce the remedies set forth in
this Article, and (c) the benefit of any laws now or hereafter enforced
exempting property from liability for rent or for debt.
ARTICLE XVII
CURE BY TENANT OF LANDLORD DEFAULTS
Landlord shall be in default of its obligations under this Lease if
Landlord shall fail to observe or perform any term, covenant or condition of
this Lease on its part to be performed, and such failure shall continue for a
period of 30 days after Notice thereof from Tenant (or such shorter time as may
be necessary in order to protect the health or welfare of any patient or other
resident of the Property), unless such failure cannot be cured with due
diligence within a period of 30 days (or the above described shorter time, as
applicable), in which case such failure shall not be deemed to continue is
Landlord, within said 30 day period (or the above described shorter time, as
applicable), proceeds promptly and with due diligence to cure the failure and
diligently completes the curing thereof. The time within which Landlord shall be
obligated to cure any such failure shall also be subject to extension of time
due to the occurrence of any Unavoidable Delay. If Landlord fails to commence or
complete such cure as provided herein, Tenant may cure such default, and for so
long as Tenant continues to pay Rent, Tenant shall have the right by separate
and independent action to pursue any claim it may have against Landlord for
monetary damages for Landlord's failure to cure such default, including, without
limitation, all costs and expenses of Tenant (including attorneys' fees and
expenses). In the event Tenant acquires the Property pursuant to the option
granted hereunder, Tenant, at its option, shall be entitled to offset against
the purchase price the amount of any damages owing from Landlord to Tenant.
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ARTICLE XIX
PURCHASE OF PROPERTY BY TENANT
19.1 PURCHASE OF PROPERTY. If Tenant purchases the Property from
Landlord pursuant to any of the terms of this Lease, Landlord shall, except as
otherwise expressly provided, upon receipt from Tenant of the applicable
purchase price, together with full payment of any unpaid Rent due and payable
with respect to any period ending on or before the date of such purchase,
deliver to Tenant an ALTA Owner Policy of Title Insurance or such equivalent
policy of title insurance as may be available in the State and which is
reasonably acceptable to Tenant, together with such endorsements, reinsurance
agreements and direct access agreement as Tenant may reasonably request,
together with an appropriate special warranty deed or other conveyance conveying
marketable fee simple title in and to the Property to Tenant in the condition
set forth in Article XXVI, except that the Property shall be free and clear of
all mortgages and encumbrances other than (a) those Tenant has agreed hereunder
to pay or discharge, (b) those mortgages which Tenant has agreed in writing to
accept and to take title subject to on the date the Property was originally
conveyed to Landlord and which are not in default, (c) encumbrances required to
be imposed on the Property under Section 8.3, and (d) any other encumbrances
permitted to be imposed on the Property under the provisions of Article XXVII
which are assumable at no cost or expense to Tenant or to which Tenant may take
subject without cost or expense to Tenant. The difference between the applicable
purchase price and the total amount of the encumbrances assumed or taken subject
to, if a positive number, shall be paid in cash to Landlord or as Landlord may
direct, in federal or other immediately available funds, unless otherwise
mutually agreed by Landlord and Tenant; provided, that Landlord shall be
obligated to pay to Tenant in cash any negative difference between the
applicable purchase price and the total amount of the encumbrances so assumed or
taken subject to by Tenant. All reasonable expenses of conveying the Property to
Tenant, including, without limitation, the cost of the aforementioned title
insurance and attorneys' fees incurred by Landlord in connection with such
conveyance and release, and documentary transfer and similar taxes, recording
fees and expenses of Tenant's counsel, shall be paid by Tenant.
19.2 FAILURE TO CLOSE PURCHASE. The closing of any such sale shall be
contingent upon and subject to Tenant obtaining all required governmental
consents and approvals for such transfer. If such sale shall fail to be
consummated by reason of the inability of Tenant to obtain all such approvals
and consents and if the Term would otherwise expire, then this Lease shall
remain in effect on a month-to-month basis (on the terms of the Lease in effect
upon the expiration of such Term and notwithstanding any provision of Article
XX) until the earlier of: (i) the consummation of the purchase of (ii) the 90th
day following the end of the Term. In the event Tenant is unable to consummate
the purchase during the Term or such 90 day extension of the Term for any reason
which is beyond the control of the Tenant, Tenant's option under Section 3.2
herein to elect Extended Terms shall be reinstated during the last 90 days of
the Term or, such 90 day extension, as applicable, to prevent Tenant's
forfeiture of its leasehold under this Lease due to the failure to close the
Purchase of the Property, provided Tenant exercises such option by delivering a
Notice to Landlord prior to the expiration of the Term, or such 90 day
extension, as applicable, and such Extended Term shall commence or shall be
deemed to have commenced immediately following the last day of the Term.
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ARTICLE XX
HOLDING OVER
If Tenant for any reason remains in possession of the Property after
the expiration or earlier termination of the Term, such possession shall be a
month-to-month tenancy during which time Tenant shall pay to Landlord as rental
each month the aggregate of (i) one and one half (1 1/2) times one-twelfth of
the aggregate total Base Rent and Percentage Rent payable with respect to the
last 12-month period of the Term just expired or terminated, (ii) all Additional
Charges accruing during the month with respect to which such payment related,
and (iii) all other sums, if any, payable by Tenant pursuant to the provisions
of this Lease with respect to the Property. During such period of month-to-month
tenancy, Tenant shall be obligated to perform and observe all of the terms,
covenants and conditions of this Lease, but shall have no rights hereunder other
than the right, to the extent given by law to month-to-month tenancies, to
continue its occupancy and use of the Property. Nothing contained herein shall
constitute the consent, express or implied, of Landlord to the holding over of
Tenant after the expiration or earlier termination of the Term.
ARTICLE XXI
RISK OF LOSS
During the Term of this Lease, Tenant shall bear the risk of loss or of
decrease in the enjoyment and beneficial use of the Property resulting from the
damage or destruction thereof by fire, the elements, casualties, thefts, riots,
wars or any other cause, or resulting from foreclosures, attachments, levies or
executions (other than those caused by Landlord and those claiming from, through
or under Landlord) and, in the absence of the gross negligence, willful
misconduct or breach of this Lease by Landlord, Landlord shall in no event be
responsible therefor nor shall any of the events mentioned in this Section
entitle Tenant to any abatement of Rent except as specifically provided in this
Lease.
ARTICLE XXII
LIABILITY OF PARTIES
22.1 INDEMNIFICATION BY TENANT. Notwithstanding the existence of
any insurance provided for in Article XIV, and notwithstanding the policy limits
of any such insurance, Tenant shall, subject to applicable law, indemnify,
defend, save and hold Landlord harmless from and against any and all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses ("Claims") (including, without limitation, reasonable attorney's
fees and expenses), to the extent permitted by law, imposed upon, incurred by or
asserted against Landlord arising out of, connected with or incidental to:
(a) any Hazardous Substance located at, in, on, under or
about the Property due to the act or omission of Tenant, including any
improvements, repairs, handling, removal or other actions taken by Tenant in
order to comply with all rules and regulations promulgated by
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any applicable federal, state, or local government rule and regulation with
respect to any such Hazardous Substance or related problems that Landlord or
Tenant becomes aware of;
(b) any accident, injury or death of persons, or loss of
or damage to property, occurring on or about the Property or adjoining
sidewalks, alleys or roadways, including without limitation any claims of
malpractice;
(c) any past, present or future use, misuse, non-use,
condition, management, maintenance or repair by Tenant of the Property or
Tenant's Personal Property and any litigation, proceedings of claim by
governmental entities or other third parties to which Landlord is made a party
or other participant related to the Property or Tenant's Personal Property or
such use, misuse, non-use, condition, management, maintenance or repair thereof,
including but not limited to any failure to perform obligations (other than
condemnation proceedings) to which Landlord is made a party;
(d) any Impositions which are the obligations of Tenant
to pay pursuant to the applicable provisions of this Lease;
(e) any failure on the part of Tenant to perform or
comply with any of the terms of this Lease; and
(f) the non-performance of any of the terms and
provisions of any and all existing and future subleases of the Property to be
performed by Tenant thereunder.
Any amounts payable by Tenant under this Section shall be paid
within ten days after Tenant's liability therefore is determined by litigation
or otherwise. If such amounts are not timely paid, they shall bear a late charge
(to the extent permitted by law) at the Overdue Rate from the date of such
determination to the date paid. Tenant, at its expense, shall contest, resist
and defend any such claim, action or proceeding asserted or instituted against
Landlord, or may compromise or otherwise dispose of the same as Tenant sees fit.
Nothing herein shall be construed as requiring Tenant to indemnify, defend or
hold Landlord harmless against Landlord's own sole, gross negligence or willful
misconduct.
22.2 INDEMNIFICATION BY LANDLORD. Landlord shall indemnify, defend,
save and hold Tenant harmless from and against any and all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) imposed
upon, incurred by or asserted against Tenant arising out of, connected with or
incidental to the sole or gross negligence or willful misconduct of Landlord;
provided, however, that Tenant's right to indemnification as provided herein,
shall be subject to the limitation set forth in Article XXVIII.
22.3 CONTINUING LIABILITY. Tenant's and Landlord's liability under
this Article shall survive any termination of this Lease and shall continue for
the term provided herein or as permitted by the laws of the State, whichever is
longer.
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ARTICLE XXIII
ASSIGNMENT AND SUBLETTING
23.1 ASSIGNMENT AND SUBLETTING. Subject to the provisions of
Section 23.3 below and any other express conditions or limitations set forth in
this Lease, Tenant may, without the consent of Landlord, and in addition to the
Existing Leases, (a) sublet up to an aggregate of 25% of the rentable square
footage of the Facility, to concessionaires or other third party users or
operators thereof, provided that (i) any subletting to any party shall not
individually as to any one such subletting, or in the aggregate, materially
diminish the actual or potential Percentage Rent payable under this Lease and
(ii) Tenant, at the request of Landlord, executes a Collateral Assignment of
Subleases and Rents in favor of Landlord in a form reasonably acceptable to
Landlord as security for the obligations of Tenant hereunder, or (b) transfer or
assign its rights hereunder (iii) to a joint venture, partnership or other
entity in which Tenant holds a controlling interest and, in the case of a
partnership, Tenant is the general partner or (iv) in connection with a public
offering of equity interests in an Affiliate of Tenant, to such Affiliate,
provided that Landlord reasonably determines that such Affiliate has a Tangible
Net Worth at least equal to that of Tenant. Except as otherwise permitted in the
immediately preceding sentence, an assignment or subletting of all or any
portion of the Property shall not be permitted unless the consent of Landlord is
first obtained. Among the factors which Landlord may consider in determining
whether or not to grant its consent to any subletting or assignment are the
following: (s) whether the assignee assumes all obligations of Tenant under the
Lease in a writing in form and content reasonably acceptable to Landlord, (t)
whether such assignee meets the financial covenants applicable to Tenant
hereunder and demonstrates such fact to Landlord's reasonable satisfaction, (u)
if no Event of Default is in effect and continuing hereunder, (v) whether the
assignee or sublessee has a financial condition comparable to the greater of (i)
Tenant's financial condition as of the Commencement Date or (ii) Tenant's
financial condition as of the date of the proposed assignment or subletting and
(w) in the case of a subletting the sublessee shall comply with the provisions
of Section 23.2, (x) in the case of an assignment, (i) the assignee assumes in
writing and agrees to keep and perform all of the terms of this Lease on the
part of Tenant to be kept and performed, (ii) the assignee complies with the
covenants set forth in Section 28 hereof, (iii) the assignment causes no
violation of any other covenants under this Lease by Tenant or the assignee, and
(iv) the assignee becomes jointly and severally liable with Tenant for the
performance thereof, (y) an original counterpart of each such sublease and
assignment and assumption, duly executed by Tenant and such sublessee or
assignee, as the case may be, in form and substance satisfactory to Landlord, is
delivered promptly to Landlord, and (z) in case of either an assignment or
subletting, Tenant remains primarily liable, as principal rather than as surety,
for the prompt payment of Rent and for the performance and observance of all
covenants and agreements to be performed by Tenant hereunder.
23.2 ATTORNMENT. Tenant shall insert in each sublease permitted
under Section 23.1 provisions reasonably satisfactory to Landlord which provide
for the benefit of Landlord that (a) such sublease is subject and subordinate to
all of the terms and provisions of this Lease and to the rights of Landlord
hereunder, (b) in the event this Lease shall terminate before the expiration of
such sublease, the sublessee thereunder will, at Landlord's option, either
attorn to Landlord and waive any right the sublessee may have to terminate the
sublease or surrender possession under such sublease, and (c) in the event the
sublessee receives Notice from Landlord or
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Landlord's assignees, if any, stating that Tenant is in default under this
Lease, the sublessee shall thereafter be obligated to pay all rentals accruing
under said sublease directly to the party giving such Notice, or as such party
may otherwise direct. All rentals received from the sublessee by Landlord or
Landlord's assignees, if any, as the case may be, shall be credited against the
amounts owed to Landlord under this Lease.
23.3 SUBLEASE LIMITATION. Anything contained in this Lease to the
contrary notwithstanding, Tenant shall not sublet the Property on any basis such
that the rental to be paid by the sublessee thereunder would be based, in whole
or in part, on either (a) the income or profits derived by the business
activities of the sublessee, or (b) any other formula such that any portion of
the sublease rental would fail to qualify as "rents from real property" within
the meaning of Section 856(d) of the Code, or any similar or successor provision
thereto.
ARTICLE XXIV
INFORMATION FROM TENANT
24.1 OFFICER'S CERTIFICATES. At any time and from time to time,
upon not less than 20 days Notice by Landlord, Tenant shall furnish to Landlord
an Officer's Certificate certifying that this Lease is unmodified and in full
force and effect (or that this Lease is in full force and effect as modified and
setting forth the modifications), the date to which the Rent has been paid,
whether there exists any Event of Default or any situation which, with the
giving of notice, passage of time, or both, would constitute an Event of Default
hereunder based upon Tenant's current knowledge, whether Tenant contends that
Landlord is in default hereunder, and if Tenant so contends the basis for such
contention, the date upon which the Term terminates, and such other information
as Landlord reasonably may request. The failure by Tenant to deliver such
estoppel certificate to Landlord within 20 days of Landlord's request therefor
shall be conclusively deemed to be Tenant's certification (i) that this Lease is
in full force and effect, without modification except as represented by
Landlord; (ii) that there are no uncured defaults in Landlord's performance
hereunder, and (iii) that not more than one month's rent has been paid in
advance. Any such certificate furnished pursuant to this Section 24.1 may be
relied upon by Landlord, any prospective purchaser of the Property, and any
Facility Mortgagee or Landlord Lender.
24.2 FINANCIAL INFORMATION. Tenant shall furnish, the following
statements to Landlord:
(a) within 120 days after the end of each Fiscal Year (i)
a balance sheet and statements of revenues and expenses and changes in retained
earnings and cash flows for Tenant, all certified by independent public
accountants of recognized standing reasonably acceptable to Landlord, such
statements to be prepared in accordance with generally accepted accounting
principles consistently applied, to be for such Fiscal Year and the immediately
preceding Fiscal Year and to be in comparative columnar form and (ii) a schedule
of capital expenditures or reserves therefor for such Fiscal Year.
(b) within 45 days after the end of each of the first
three fiscal quarters of each Fiscal Year, financial statements similar to those
referred to in clause (a) above, but only
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certified by the principal financial or other appropriate officer of Tenant as
having been prepared in accordance with generally accepted accounting principles
consistently applied (but which may exclude footnote disclosures), such
financial statements to be for the period from the beginning of such Fiscal Year
(and immediately preceding Fiscal Year) to the end of such quarter (and
comparable quarter);
(c) concurrent with the statements furnished pursuant to
clauses (a) and (b) above, an Officer's Certificate stating that, after making
due inquiry, no Event of Default has occurred and is continuing under this
Lease, or if such Event of Default has occurred, to such officer's knowledge,
specifying all such Events of Default, the nature of such Events of Default, and
the steps being taken to remedy the same;
(d) within 45 days after the end of each fiscal quarter,
quarterly and year-to-date operating statistics;
(e) as requested in a Notice by Landlord, within 30 days
after the end of each month during the Term or Extended Term, any and all
operational, statistical and/or financial statements, as prepared and
distributed by Tenant in the ordinary course of business;
(f) on the first, second and third anniversary of the
Commencement Date hereof, an Officer's Certificate setting forth the Tenant's
Capital Investment to date;
(g) with respect to the California Facilities, annual and
quarterly financial information in reasonable form, and, as requested by
Landlord in a Notice, such other financial information and operating statistics
in the form prepared for the California Facilities in the ordinary course of
business; and
(h) with reasonable promptness, such other information
respecting the financial condition and affairs of Tenant as Landlord may
reasonably request from time to time.
24.3 LICENSING INFORMATION. Tenant shall promptly furnish to
Landlord complete copies of all surveys, examinations, inspections, compliance
certificates and similar reports of any kind issued to Tenant by any
governmental agencies or authorities having jurisdiction over the licensing of
the operation of the Property which are material to the Property or the
Facility, their ownership or operation.
ARTICLE XXV
APPRAISALS OF THE PROPERTY AND OPTIONS
25.1 APPRAISERS. If at any time it becomes necessary to determine
the Fair Market Value or Fair Market Rental of the Property for any purpose
under this Lease, and the parties are unable to agree thereupon, the party
required or permitted to give Notice of such required determination shall
include in the Notice the name of a person selected to act as appraiser on its
behalf. Within ten days after such Notice, Landlord or Tenant, as the case may
be, shall by Notice to Tenant or Landlord, as the case may be, either agree to
the appointment of the appraiser identified in such initial Notice, in which
case such appraiser shall be the sole appraiser
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for purposes of determining the Fair Market Value or Fair Market Rental, as the
case may be, or shall appoint a second person as an appraiser on its behalf. Any
appraiser appointed pursuant to this Section must (i) be a member of the
American Institute of Real Estate Appraisers (or any successor organization
thereto), (ii) have at least five years' experience in the valuation of private
hospitals and (iii) be neither an employee nor former employee of Landlord or
Tenant or their Affiliates. The appraiser(s) thus appointed shall, within 45
days after the date of the Notice appointing the first appraiser, proceed to
appraise the Property to determine the Fair Market Value or Fair Market Rental
thereof (as the case may be) as of the relevant date (giving effect to the
impact, if any, of inflation from the date of their decision to the relevant
date). In the case of two appraisers, except as provided in Section 25.2, the
two appraisals shall be averaged to determine the Fair Market Value, Fair Market
Value Purchase Price or Fair Market Rental, as the case may be. In any event,
the appraised value determined in accordance with this Section shall be final
and binding on Landlord and Tenant.
25.2 METHOD OF APPRAISAL. Any appraisal required or permitted by
the terms of this Lease shall be conducted in a manner consistent with sound
appraisal practice, taking into account the market, cost and business enterprise
(income) approaches. Notwithstanding the provisions of Section 25.1, if the
difference between the appraisal amounts determined by the appraisers appointed
pursuant to Section 25.1 exceeds ten percent of the lesser of such appraisal
amounts, then the two appraisers shall have 20 days to appoint a third
appraiser. If no such appraiser is appointed within such 20 days or within 90
days of the original request for a determination of Fair Market Value or Fair
Market Rental (as the case may be), whichever is earlier, either Landlord or
Tenant may refer the matter to arbitration as set forth in Section 30.14. Any
appraiser appointed by the original appraisers or through arbitration shall be
instructed to determine the Fair Market Value or Fair Market Rental (as the case
may be) within 45 days after the appointment of such appraiser. The
determination of the three appraisers which differs most in the terms of dollar
amount from the determinations of the other two appraisers shall be excluded,
and 50% of the sum of the remaining two determinations shall be the appraised
value, which appraised value shall be final and binding upon Landlord and Tenant
as the Fair Market Value or Fair Market Rental of the Property, as the case may
be. If the lowest and highest appraised values are equidistant in amount from
the middle appraised value, then such middle appraised value shall be the Fair
Market Value or Fair Market Rental (as the case may be). The provisions of this
Article shall be specifically enforceable to the extent such remedy is available
under applicable law, and any determination hereunder shall be final and binding
upon the parties except as otherwise provided by applicable law. Landlord and
Tenant each shall pay the fees and expenses of the appraiser appointed by it,
and each shall pay one-half of the fees and expenses of the third appraiser and
one-half of all other costs and expenses incurred in connection with each
appraisal.
ARTICLE XXVI
OPTIONS TO PURCHASE
26.1 LANDLORD'S OPTION TO PURCHASE TENANT'S PERSONAL PROPERTY;
TRANSFER OF LICENSES. Provided Tenant has not exercised its option pursuant to
Section 26.2 hereof, effective upon not less than ninety (90) days prior notice
given at any time within one hundred eighty (180) days prior to the expiration
of the Term of this Lease, or upon such shorter Notice
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as shall be reasonable if this Lease is terminated prior to its expiration date,
Landlord shall have the option to purchase all (but not less than all) of
Tenant's Personal Property, if any, at the expiration or termination of this
Lease, for an amount equal to the then fair market value thereof (as determined
by the appraisal process set forth in Section 25), taking into account and with
appropriate price adjustments for, all equipment leases, conditional sale
contracts, UCC-1 financing statements and other encumbrances to which such
Tenant's Personal Property is subject. Upon the expiration or termination of the
Lease and such purchase by Landlord, Tenant shall use good faith efforts, at
Landlord's sole cost and expense, to transfer and assign to Landlord or its
designee, or assist Landlord or its designee in obtaining, any contracts,
licenses, and certificates required for the then operation of the Facility.
26.2 TENANT'S OPTION TO PURCHASE THE PROPERTY. Provided no Event of
Default specified in Sections 17.1 (a), (e), (f) or (g) hereof has occurred and
is continuing, Tenant shall have the option, exercisable on not less than one
hundred eighty (180) days nor more than three hundred sixty (360) days' prior
Notice, to purchase the Property at the expiration of the Fixed Term, or at the
expiration of any Extended Term, at the greater of (y) the Fair Market Value, or
(z) an amount equal to the sum of (i) $63,250,000 plus (ii) all Capital
Additions Costs pertaining to the Property paid for by Landlord. Tenant shall
also have the right, during any Extended Term, to exercise such option in the
event that, during any Extended Term, Landlord defaults with respect to its
agreements, covenants, obligations, representations or warranties under this
Lease and such default is not cured within any applicable cure period. Upon
exercise by Tenant of its option to purchase the Property, Landlord shall, at
the election of Tenant, either convey the Property as a sale of assets or as a
sale of the stock of a corporation whose sole assets consist of the Property.
If Tenant shall timely and properly exercise the foregoing
option, the sale of the Property shall be consummated through an escrow to be
opened with a mutually acceptable title or escrow company and shall close within
ten Business Days following the expiration of the Fixed Term or Extended Term
(unless earlier exercised due to a Landlord default) in connection with which
Tenant exercised such purchase option. The purchase price of the Property (net
of the principal balance of any Facility Mortgages placed on the Property by
Landlord and expressly assumed by Tenant and the amount of any damages owing by
Landlord to Tenant) shall be deposited into escrow by wire transfer of
immediately available funds at least two business days prior to close of escrow
and shall be paid to Landlord at close of escrow by wire transfer of immediately
available funds to such account as Landlord shall designate. Tenant acknowledges
and agrees that it shall purchase the Property from Landlord "AS IS" and subject
to all faults, defects in title and other matters whatsoever, including, but not
limited to, all matters of record, other than (a) Facility Mortgages not
expressly assumed by Tenant and (b) any other liens, encumbrances, attachments,
levies or claims encumbering the Property to the extent Landlord is responsible
for creation of same, all of which shall be removed of record prior to purchase.
Landlord shall make no warranty or representation except (i) with respect to its
corporate authority and (ii) that it has removed all liens and encumbrances
referenced in clauses (a) and (b) in the preceding sentence. All title insurance
premiums and other closing costs associated with the purchase of the Property by
Tenant pursuant to this Section shall be paid by Tenant.
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26.3 SPECIFIC PERFORMANCE OF OPTIONS. The parties acknowledge that:
(i) The irrevocable right and options herein
granted by one party to the other is a moving consideration and a principal
cause of this transaction without which neither party would have entered it.
(ii) The parties hereto agree that damages for
breach of the option provisions hereof are insusceptible of reasonable measure,
and accordingly they agree that specific performance and injunctive relief are
appropriate remedies for nonperformance.
If either party shall fail or refuse to consummate the sale
and transfer of Tenant's Personal Property or the Property, as the case may be,
pursuant to the options granted by Section 26.1 or 26.2 or extend the Term
hereof under Section 19.2, then the aggrieved party may forthwith apply to a
court of competent jurisdiction for a decree of specific performance ordering
the transfer of Tenant's Personal Property or the Property, as the case may be,
upon payment of the applicable purchase price therefor, or the extension of the
Term hereof upon payment of the applicable monthly rent. If Landlord rejects
Tenant's tender of the applicable purchase price or the applicable monthly rent,
as the case maybe, then Tenant's tender of such funds into the court registry
shall be deemed equivalent to payment.
ARTICLE XXVII
FACILITY MORTGAGES
Without the consent of Tenant, Landlord may, subject to the
terms and conditions set forth below in this Section, from time to time,
directly or indirectly, create or otherwise cause to exist any lien,
encumbrance, security interest or title retention agreement ("ENCUMBRANCE") upon
the Property, or any portion thereof or interest therein, whether to secure any
borrowing or other means of financing or refinancing provided that the principal
amount of such borrowing, financing or refinancing does not exceed 80% of the
then Fair Market Value of the Property. Any such Encumbrance (i) shall contain
the right to prepay (whether or not subject to a prepayment penalty, which
penalty shall be paid by Landlord); (ii) shall provide that it is subject to the
rights of Tenant under this Lease, including the rights of Tenant to acquire the
Property pursuant to the applicable provisions of this Lease; (iii) shall be
paid in full and released and reconveyed in the event Tenant purchases the
Property pursuant to this Lease, unless Tenant elects to assume such
Encumbrance; and (iv) shall not provide for negative amortization or
capitalization of interest; provided, however, that Tenant agrees that it shall
subordinate this Lease to any mortgage, security interest or deed of trust that
may hereafter from time to time be recorded on Landlord's interest in the
Property, and to any and all advances made or to be made thereunder, and to
renewals, replacements and extensions thereof. Tenant's failure to delivery any
reasonable written subordination document requested by Landlord in accordance
with the preceding sentence within ten Business Days after Notice thereof shall
constitute an Event of Default hereunder. Any such subordination, however, shall
be subject to the condition precedent that the mortgagee under such mortgage or
the beneficiary under such deed of trust enter into a written non-disturbance
and attornment agreement with Tenant, in form and content satisfactory to
Tenant, whereunder it is agreed that in the event of a sale or foreclosure under
such mortgage or deed of trust, the purchaser of the Property (including the
mortgagee or beneficiary under such
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mortgage or deed of trust), shall acquire or hold the Property subject to this
Lease so long as no Event of Default has occurred and is continuing hereunder,
and so long as Tenant recognizes such purchaser as the landlord under this Lease
and agrees, if requested to do so, to attorn to such purchaser and, if
instructed to do so by such purchaser, to make rental payments directly to it.
ARTICLE XXVIII
LIMITATION OF LIABILITY
Tenant specifically agrees that neither AHP nor Landlord nor
any officer, shareholder, employee or agent of AHP or Landlord (each of which
shall, for purposes of this Article XXVII, be considered an Affiliate of
Landlord) shall be held to any personal liability, jointly or severally, for any
obligation of, or claims against Landlord, Tenant agreeing to look solely to
Landlord's equity interest in the Property or to Landlord's interests or
interests of subsidiaries of Landlord in other properties leased to Tenant or
Affiliates of Tenant for recovery of any judgment from Landlord, except that
Landlord's obligations under Section 19.1 and Article XXVII, clause (iii) shall
be a general and unlimited liability of Landlord. The provisions contained in
the foregoing sentence are not intended to, and shall not, limit any right that
Tenant might otherwise have to obtain injunctive relief against Landlord or
Landlord's successors in interest, or any action not involving the personal
liability of Landlord (original or successor). In no event shall Landlord
(original or successor) or any Affiliate of Landlord be required to respond in
monetary damages from Landlord's assets other than Landlord's equity interest in
the Property. Furthermore, except as otherwise expressly provided herein, in no
event shall Landlord or any Affiliate of Landlord (original or successor) ever
be liable to Tenant for any indirect or consequential damages suffered by Tenant
from whatever cause. Landlord specifically acknowledges and agrees that neither
PHC, nor any officer, shareholder, employee, agent or Affiliate thereof nor
their successors or assigns has guaranteed the payment or performance of any of
Tenant's obligations hereunder.
ARTICLE XXIX
ADDITIONAL COVENANTS OF TENANT
29.1 ADDITIONAL NEGATIVE COVENANTS. Tenant covenants and
agrees with Landlord that, during the Term hereof, Tenant shall not, either
directly or indirectly:
(a) FIXED CHARGE COVERAGE RATIO. Commencing on the first
day of the month which is at least six full months after the effective date
hereof, permit the ratio of: (i) (a) Tenant's Cash Flow to (b) the sum of Total
Rent payable hereunder and principal and interest payments payable by Tenant for
any calendar quarter to be less than 2.0 to 1.0; provided, however, that the
failure of Tenant to comply with the foregoing ratio shall not constitute an
Event of Default if a Security Letter of Credit in the amount of twelve monthly
installments of Base Rent is in effect or is obtained within ten Business Days
after such failure.
(b) SALE OF ASSETS. Other than in the ordinary course of
business, sell, lease, transfer or otherwise dispose of all or any substantial
part of its properties, equipment or assets, except for (x) equipment or
properties which are no longer useful in its business or have been
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replaced and (y) during any 12-month period, equipment or property with an
aggregate market value not exceeding $250,000.
(c) CONSOLIDATION OR MERGER. Consolidate with or merge
into any other entity or permit any other corporation to merge into it unless
(i) it is the survivor or (ii) after giving pro forma effect to the merger,
based on its financial statements and the financial statements of the other
entity or entities participating in the merger, for, in each case, its most
recently completed fiscal year or quarter, there is no violation of any of the
covenants of this Lease to be observed or performed by Tenant.
(d) DIVIDENDS. Declare or pay any dividend or make any
distribution or make any redemption with respect to any capital stock of Tenant
unless and until Tenant's obligation to maintain the Security Letter of Credit
as provided in Section 29.3(c) hereof has been extinguished.
(e) TRANSACTIONS WITH AFFILIATES. Commencing as of the
date hereof, unless and until Tenant's obligation to maintain the Security
Letter of Credit as provided in Section 29.3 hereof has been extinguished, sell,
lease, transfer or otherwise dispose of any of its properties or assets
(relating to the Property), or enter into any contract, agreement,
understanding, loan, advance or guaranty with, or for the benefit of, any
Affiliate of Tenant, except (i) in the ordinary course of business and on terms
that are no less favorable than those that could have been obtained in a
comparable transaction with an unrelated person and (ii) involving an aggregate
amount not exceeding $250,000 for all Affiliates of Tenant in any twelve month
period.
(f) ADDITIONAL FINANCIAL COVENANT. Permit the ratio of
its current assets, excluding any encumbered (other than in favor of Landlord)
and legally restricted current assets, to current liabilities (both determined
in accordance with GAAP) to be less than one-to-one; provided, however, that the
failure of Tenant to comply with the foregoing ratio shall not constitute an
Event of Default if a Security Letter of Credit in the amount of twelve monthly
installments of Base Rent is in effect or is obtained within ten Business Days
after such failure.
(g) LIMITATION ON BUSINESS. Change or alter the
operations of the Facility as presently conducted if the effect thereof could
reasonably be anticipated to have a material adverse effect on the business,
properties, condition (financial or otherwise) or operations of the Facility.
(h) NON-COMPLYING USES. With such exceptions as are not
material in the aggregate, use the Property or permit the Property to be used in
violation of any Legal Requirements or Insurance Requirements or in a manner
which will cause the cancellation of any insurance policy covering the Property
or any part thereof or any provider agreement.
29.2 ADDITIONAL AFFIRMATIVE COVENANTS. Tenant covenants
and agrees with Landlord that, during the Term hereof, Tenant shall:
(a) MAINTENANCE OF PROPERTIES AND INTANGIBLE ASSETS.
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(i) Maintain its corporate existence in good
standing.
(ii) Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its existence and, with
such exceptions, if any, as are not material in the aggregate, to obtain and,
having obtained, preserve, renew and keep in full force and effect all customary
accreditation, rights, licenses and permits and, with such exceptions, if any,
as are not material in the aggregate, comply with all laws and regulations
applicable to it and conduct and operate the Facility in substantially the
manner, with such changes as may from time to time be considered by management
as necessary or appropriate, in which it is presently conducted and operated,
and at all times, with such exceptions as are not material in the aggregate, to
obtain, maintain, preserve and protect all necessary franchises, provide
agreements, contract rights, trademarks and trade names used or useful in its
operations and preserve all its assets which are used or useful in the conduct
of its operations, and keep the same in working order and condition, and, which
such exceptions as are not material in the aggregate, from time to time to make,
or cause to be made, all necessary repairs, renewals, replacements, betterments
and improvements thereto, so that the operation of the Facility may be properly
and advantageously conducted at all times. Without limiting the generality of
the foregoing, Tenant shall use or cause the Property to be used for the Primary
Intended Use and only for such other uses as may be necessary in connection with
or incidental to said use or as may be agreed to by Landlord in its sole and
absolutely determination. With such exceptions as are not material in the
aggregate, no use shall be made or permitted to be made of the Property and no
acts shall be done which violate any Legal Requirements or Insurance
Requirements or which will cause the cancellation of any insurance policy
covering the Property or any part thereof or any provider agreements. Tenant
shall comply in all material respects with all Legal Requirements and all
Insurance Requirements.
(iii) Tenant, immediately upon obtaining knowledge
of facts which are reasonably likely to result in an action by any Federal,
state or local agency (or the staff thereof) to revoke, withdraw or suspend any
permit, license, conditional use permit, variance certificate, certificate of
need, letter of nonreviewability, provider agreement or other governmental
approval, or an action of any other type, which would have a material adverse
effect on the Tenant or the operations of the Facility, shall notify the
Landlord thereof immediately.
(b) OBLIGATIONS AND TAXES. With such exceptions as are
not material individually or in the aggregate, none of which exceptions results
in the creation of a lien prohibited by this Lease on any property of Tenant,
pay all indebtedness and obligations in accordance with customary trade
practices and pay and discharge promptly all taxes, assessments and governmental
charges or levies imposed on it or upon its income and profit, or upon any of
its property, real, personal or mixed, or upon any part thereof, before the same
shall become in default, as well as pay before they shall become in default all
lawful claims for labor, material and supplies or otherwise which, if unpaid,
might become a lien or charge upon such Property or any part thereof.
(c) LITIGATION NOTICE. Give Landlord prompt notice of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency
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which, if adversely determined, would materially adversely affect the business,
operations, properties, assets or condition (financial or otherwise) of Tenant.
(d) NOTICE OF CERTAIN EVENTS. Give Landlord prompt Notice
of any Event of Default which it has actual knowledge or any event of which it
has actual knowledge which, with the passage of time or the giving of notice, or
both, would constitute an Event of Default.
(e) TENANT'S CAPITAL INVESTMENT. Tenant shall, during the
period commencing on the Commencement Date and ending on February 28, 1999, make
Tenant's Capital Investment in an aggregate amount equal to at least $3,400,000.
(f) PENSION PLANS. Tenant shall notify Landlord within
ten business days of the occurrence of any of the following events
("NOTIFICATION EVENTS") with respect to Tenant's Plans (as defined in ERISA) and
within ten days of obtaining knowledge of any Notification Event with respect to
Plans of its Affiliates: (i) the termination of a Plan, unless such Plan can be
terminated without material adverse effect on the business, properties or
condition (financial or otherwise) of Tenant; (ii) the failure to make
contributions to any of Tenant's Plans (including any Multiemployer Plans) in a
timely manner and in sufficient amount to comply with the requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); (iii) the
failure to comply with all material requirements of ERISA and the Code which
relate to such Plans and Multiemployer Plans (as defined by ERISA), where such
failure to comply would have a material adverse effect on the business,
properties or condition (financial or otherwise) of Tenant; (iv) receipt by
Tenant of any notice of the institution of any proceeding or other action which
may directly result in the termination of any Plans or Multiemployer Plans; (v)
a Termination Event or Reportable Event (as defined by ERISA) with respect to a
Plan; and (vi) any event or condition which would cause the lien provided for
under Section 4068 of ERISA to attach to the assets of Tenant. Tenant shall not
fail to make any payments to any Multiemployer Plan that Tenant may be required
to make under any agreement relating to any Multiemployer Plan, ERISA or any
other law pertaining thereto, except for any payments being contested in good
faith in accordance with Article XIII with respect to which Tenant has
established adequate reserves or which, if not made, would not have a material
adverse effect on the business, properties or condition (financial or otherwise)
of Tenant.
19.3 SECURITY FOR THE LEASE.
(a) SECURITY AGREEMENT. On or before the Commencement
Date, Tenant shall execute and deliver to Landlord the Security Agreement.
(b) ADDITIONAL COLLATERAL SECURITY FROM CALIFORNIA
AFFILIATE. Concurrently with its execution hereof, Tenant will cause the
California Affiliate to execute and deliver to Landlord (i) a Security Agreement
substantially in the form of the California Facilities Security Agreement,
pertaining to the assisted living facilities owned and operated by such
California Affiliate, (ii) such financing statements and other instruments as
Landlord may reasonably request in order to perfect the security interests or
encumbrances established by such Security Agreement, and (iii) an opinion of
counsel to such California Affiliate, in form reasonably acceptable to Landlord,
to the effect that the California Facilities Security Agreement is binding
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on and enforceable against the California Affiliate signatory thereto. Such
Security Agreement will be effective upon delivery thereof to Landlord, and will
be binding upon and enforceable against the California Affiliate. However,
Landlord agrees not to file any of the financing statements associated with such
Security Agreement unless (i) an Event of Default occurs hereunder, (ii) a
default occurs under the California Security Agreement, or (iii) the California
Affiliate challenges or disavows the Security Agreement to which it is a party.
Tenant shall have the right to have the security interests and encumbrances
created by the California Facilities Security Agreement released by Landlord if
Tenant provides equivalent collateral security in substitution therefor, which
shall be determined by Landlord in its discretion, reasonably exercised.
(c) SECURITY LETTER OF CREDIT. As security for the timely
and faithful performance by Tenant of each and every one of Tenant's obligations
under this Lease, Tenant shall, on the Commencement Date and thereafter as
provided herein, deliver and maintain an irrevocable standby letter of credit
which (A) is issued or confirmed by a bank having capital or surplus of at least
$1 billion and whose senior unsecured debt securities are rated "A2" or better
by Xxxxx'x or "A" or better by S&P, provided none of such securities is subject
to a "credit watch with negative implications," (B) is payable, in whole or in
part, "at sight" upon Landlord's presentation to the issuing or confirming bank
of a draft or other document in the amount therein stated to be due and (C) is
otherwise in form and substance reasonably satisfactory to Landlord (such
security letter of credit, as the same may be augmented, increased, renewed or
replaced as hereinafter provided, is referred to herein as the "Security Letter
of Credit"), and which contains the undertaking of such bank in the amount of
the sum of twelve monthly installments of Base Rent. If Landlord shall draw any
amount, representing an amount equal to the obligation or obligations of Tenant
hereunder, against the Security Letter of Credit, which it shall be entitled to
do if an Event of Default has occurred and is continuing (and any applicable
cure period, if any, has expired), and apply the proceeds of such drawing
against any obligation or obligations of Tenant hereunder in such amount or
amounts as Landlord, in its sole discretion, shall decide, Tenant shall cause
either (i) an additional Security Letter of Credit to be issued or (ii) the
bank's undertaking under the original Security Letter of Credit to be increased,
in either case, in an amount equal to the amount of such drawing within five
Business Days following Tenant's receipt of notice of such drawing. Tenant shall
(x) renew the Security Letter of Credit at least annually and shall deliver to
Landlord such renewal Security Letter of Credit at least 30 days prior to the
expiration of the previous Security Letter of Credit and (y) replace the
Security Letter of Credit with a new Security Letter of Credit in favor of any
permitted assignee of Landlord's interest under this Lease (provided Tenant
shall have received 30 days' prior notice of such assignment) and shall deliver
to Landlord's assignee such replacement Security Letter of Credit in time for
the scheduled closing of Landlord's assignment of its interest under this Lease.
After the Security Letter of Credit is established, Tenant may reduce the amount
of the Security Letter of Credit to six monthly installments of Base Rent if,
for the period of four consecutive calendar quarters most recently completed as
of the date of determination, Tenant is in compliance with Sections 29.1(b) and
29.1(g) hereof, as reflected in financial statements prepared in accordance with
generally accepted accounting principals as set forth in an Officer's
Certificate delivered not later than sixty (60) days after the end of such most
recent quarter. Such Officer's Certificate shall be accompanied by an
appropriate cash flow statement and a compilation report thereon, without
material qualification, of Tenant's independent public accountants. If and after
Tenant's
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obligation to maintain the Security Letter of Credit has been so reduced, Tenant
will be obligated to increase such letter to twelve monthly installments of Base
Rent within ten (10) business days after each time it delivers financial
information to Landlord pursuant to Section 24.2 hereof which indicates that
Tenant has failed to comply with any requirement of Sections 29.1(b) or 29.1(g)
for the most recent period of two consecutive calendar quarters and such
obligation will remain in effect until Tenant has subsequently satisfied the
requirements of Sections 29.1(b) and 29.1(g) for another period of four
consecutive calendar quarters.
Tenant's failure to timely deliver or maintain any
Security Letter of Credit in accordance with this Section 29.3(b) shall
constitute an immediate Event of Default (which shall not require the giving of
Notice) and, in such event, Landlord shall have the right to draw the entire
balance of the Security Letter of Credit, as the case may be, and apply the
proceeds against any obligation or obligations of Tenant hereunder in such
amount or amounts as Landlord, in its sole discretion, shall decide and exercise
any other remedies permitted Landlord hereunder, at law or in equity. Landlord
shall not be deemed to hold any funds drawn under the Security Letter of Credit
in trust but shall not commingle such funds with other assets of Landlord.
Tenant shall not be entitled to any interest with respect to any such funds held
by Landlord.
ARTICLE XXX
MISCELLANEOUS
30.1 LANDLORD'S RIGHT TO INSPECT. Landlord and its authorized
representatives may, at any time and from time to time, upon reasonable notice
to Tenant, inspect the Property during usual business hours subject to any
security, health, safety or patient business confidentiality requirements of
Tenant or any governmental agency, or created by any Insurance Requirement or
Legal Requirement relating to the Property.
30.2 NO WAIVER. No failure by Landlord or Tenant to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
provided hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such breach, shall constitute a waiver of any such breach
or of any such term. To the extent permitted by applicable law, no waiver of any
breach shall affect or alter this Lease, which shall continue in full force and
effect with respect to any other then existing or subsequent breach.
30.3 REMEDIES CUMULATIVE. To the extent permitted by law, each
legal, equitable or contractual right, power and remedy of Landlord or Tenant
now or hereafter provided either in this Lease or by statute or otherwise shall
be cumulative and concurrent and shall be in addition to every other right,
power and remedy the exercise or beginning of the exercise by Landlord or Tenant
of any one or more of such rights, powers and remedies shall not preclude the
simultaneous or subsequent exercise by Landlord or Tenant of any or all of such
other rights, powers and remedies.
30.4 ACCEPTANCE OF SURRENDER. No surrender to Landlord of this
Lease or of all or any portion of or interest in the Property shall be valid or
effective unless agreed to and accepted in writing by Landlord, and no act by
Landlord or any representative or agent of Landlord, other
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than such a written acceptance by Landlord, shall constitute an acceptance of
any such surrender by Tenant.
30.5 NO MERGER OF TITLE. There shall be no merger of this Lease or
of the leasehold estate created hereby if the same person, firm, corporation or
other entity acquires, owns or holds, directly or indirectly, this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, and the fee estate in the Property.
30.6 CONVEYANCE BY LANDLORD. Simultaneously with any transfer of
interest in the Property (except pursuant to Article XXVII), Landlord shall
cause to be transferred to the same transferee a similar interest in all
properties owned by Landlord or its Affiliates and leased to Tenant or its
Affiliates. If Landlord or any successor owner of the Property conveys the
Property in accordance with the terms hereof (other than as security for a
debt), and the grantee or transferee of the Property expressly assumes all
obligations of Landlord hereunder arising or accruing from and after the date of
such conveyance or transfer, Landlord or such successor owner, as the case may
be, thereupon shall be released from all liabilities and obligations of Landlord
under this Lease.
30.7 QUIET ENJOYMENT. So long as Tenant pays all Rent as the same
becomes due and fully complies with all of the terms of this Lease and fully
performs its obligations hereunder, Landlord warrants, represents and covenants
that Tenant shall peaceably and quietly have, hold and enjoy the Property for
the Term hereof, free of any claim or other action by Landlord or anyone
claiming by, through or under Landlord, but subject to all liens and
encumbrances of record as of the date hereof or hereafter consented to by
Tenant. Except as otherwise provided in this Lease, no failure by Landlord to
comply with the foregoing covenant shall give Tenant any right to cancel or
terminate this Lease or xxxxx, reduce or make a deduction from or offset against
the Rent or any other sum payable under this Lease, or to fail or refuse to
perform any other obligation of Tenant hereunder. Notwithstanding the foregoing,
Tenant shall have the right, by separate and independent action, to pursue any
claim it may have against Landlord as a result of a breach by Landlord of the
covenant of quiet enjoyment contained in this Section and, in the event Tenant
acquires the Property pursuant to the option granted hereunder, offset, at
Tenant's option, against the purchase price the amount of any damages owing from
Landlord to Tenant.
30.8 NOTICES. All notices, demands, requests, consents, approvals
and other communications ("Notice" or "Notices") hereunder shall be in writing
and delivered by personal delivery, courier or messenger service, express or
overnight mail, or by registered or certified mail, return receipt requested and
postage prepaid, or by facsimile, addressed to the respective parties as
follows:
If to Tenant: Xxxxxxxxxx Pioneer Valley Hospital, Inc.
c/o Xxxxxxxxxx Healthcare Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
FAX: (000) 000-0000
Phone: (000) 000-0000
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with a copy to: Millbank, Tweed, Xxxxxx & XxXxxx
601 X. Xxxxxxxx Street, 30th Floor
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
FAX: (000) 000-0000
Phone: (000) 000-0000
If to Landlord: AHP of Utah, Inc.
c/o American Health Properties, Inc.
0000 Xxxxx Xxxxxxx'x Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
FAX: (000) 000-0000
Phone: (000) 000-0000
or to such other address as either party may hereafter designate. Personally
delivered Notices sent by courier or messenger service or by express or
overnight mail or by facsimile shall be effective upon receipt, and Notices
given by mail shall be complete at the time of deposit in the U.S. mail system,
but any prescribed period of Notice and any right or duty to do any act or make
any response within any prescribed period or on a date certain after the service
of such Notice given by mail shall be extended five (5) days.
30.9 SURVIVAL OF TERMS; APPLICABLE LAW. Anything contained in this
Lease to the contrary notwithstanding, all claims against, and liabilities of,
Tenant or Landlord arising prior to any date of termination of this Lease shall
survive such termination for two years, except for third party claims based on
alleged tortious actions and omissions of Tenant during the term of this Lease,
which third party claims shall survive the term of this Lease. If any term or
provision of this Lease or any application thereof shall be invalid or
unenforceable for any reason whatsoever, the remainder of this Lease and any
other application of such term or provisions shall not be affected thereby. If
any late charge or any interest rate provided for in any provision of this Lease
based upon a rate in excess of the maximum rate permitted by applicable law,
such charges shall be fixed at the maximum permissible rate. Neither this Lease
nor any provision hereof may be changed, waived, discharged, modified or
terminated except by an instrument in writing and in recordable form, signed by
Landlord and Tenant. Subject to any limitations on assignment contained in this
Lease, all the terms and provisions of this Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. The headings in this Lease are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof. THIS LEASE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH, BUT
NOT INCLUDING ITS CONFLICTS OF LAWS RULES.
30.10 EXCULPATION OF LANDLORD'S AND TENANT'S OFFICERS AND AGENTS.
This Lease is made on behalf of Landlord and Tenant by an officer thereof, not
individually, but solely in such
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officer's capacity in such office as authorized by the directors of Landlord or
Tenant. The obligations of this Lease are not binding upon, nor shall resort be
had to, the private property of any of the directors, shareholders, members,
officers, employees or agents of Landlord or Tenant personally, but bind only
Landlord's and Tenant's property. The provision contained in the foregoing
sentence is not intended to, and shall not, limit any right that landlord or
Tenant might otherwise have to obtain injunctive relief against the other party
or its successors in interest, or any action not involving the personal
liability of the directors, shareholders, members, officers, employees or agents
of Landlord or Tenant. Except as otherwise expressly provided herein, in no
event shall either party ever be liable to the other party for any indirect or
consequential damages suffered by a party from whatever cause.
30.11 TRANSFERS FOLLOWING TERMINATION. Upon the expiration
or earlier termination of the Term, Tenant shall use good faith efforts to
transfer to Landlord or Landlord's nominee, or to cooperate with Landlord or
Landlord's nominee in connection with the processing by Landlord or Landlord's
nominee of any applications for, all licenses, operating permits and other
governmental authorizations and all contracts (including contracts with
governmental or quasi-governmental entities) which may be necessary for the
operation of the Facility; provided, however, that the costs and expenses of any
such transfer or the processing of any such application shall be paid by
Landlord or Landlord's nominee.
30.12 TENANT'S WAIVERS. Tenant waives all presentments,
demands for performance, notices of nonperformance, protests, notices of
protests, notices of dishonor, and notices of acceptance and waives all notices
of the existence, creation, or incurring of new or additional obligations,
except as expressly granted herein.
30.13 MEMORANDUM OF LEASE. Landlord and Tenant shall,
concurrently herewith, enter into a short form memorandum of this Lease and all
options contained herein, in form suitable for recording under the laws of the
State in which the Property is located. Tenants shall pay all costs and expenses
of recording such memorandum of this Lease.
30.14 ARBITRATION. Any controversy arising out of,
connected with or incidental to this Lease (except disputes concerning
determinations of Fair Market Value which shall be resolved exclusively as
provided in Article XXI) shall be decided by binding arbitration in Denver,
Colorado under the expedited procedures of the American Arbitration Association,
provided that claim is made within the applicable period of limitation.
Depositions to obtain discovery may be taken upon good cause, upon leave to do
so granted by the arbitrator.
30.15 MODIFICATIONS. No provision of this Lease may be
amended, supplemented or otherwise modified except by an agreement in writing
signed by the parties hereto or their respective successors in interest.
30.16 ATTORNEYS' FEES. If either party commences an action
against the other to interpret or enforce any of the terms of this Lease or
because of the breach by the other party of any of the terms hereof, the losing
or defaulting party shall pay to the prevailing party reasonable attorneys'
fees, costs and expenses incurred in connection with the prosecution or defense
of such action.
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30.17 TIME IS OF THE ESSENCE. Time is hereby expressly made
of the essence with respect to each and every term and provision of this Lease,
including, but in no way limiting the generality of the foregoing, each and
every time constraint and deadline imposed by the terms of this Lease and the
obligation of the Tenant to exercise the options set forth in this Lease,
including, without limitation, the rights and options set forth in Articles III,
XIX and XXV within the respective time periods set forth herein. The parties
intend that they be strictly bound by the provisions concerning the timing of
performance of their respective obligations contained in this Lease. Further, if
any attempt is made by either party to perform an obligation required by it to
be performed or comply with a provision of this Lease required by it to be
complied with, in any matter, other than in strict compliance with the time
constraints applicable thereto, even if such purported attempt is but one day
late, then such purported attempt at performance or compliance shall be deemed
(i) violative of this "Time is of the Essence" clause, (ii) in contravention of
the intent of the parties hereto, and (iii) null and void and of no force and
effect.
30.18 COUNTERPARTS. This Lease may be executed in any
number of counterparts, each of which shall be deemed an original but when taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, Tenant and Landlord have executed this
Lease as of the date first above written.
XXXXXXXXXX PIONEER VALLEY HOSPITAL,
INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx,
Vice President
AHP of UTAH, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxx
President
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EXHIBIT A
Pioneer Fee Property
PARCEL 1:
BEGINNING at a point South 89 (degrees) 56'54" West 1054.1 feet and North 0
(degrees) 04'58" West 173.0 feet from the Southeast corner of Section 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base and Meridian, (said point also
being on the Westerly line of 0000 Xxxx Xxxxxx), which point is also the
Northeast corner of the HCA Properties, Inc. property contained in that certain
Warranty Deed recorded September 11, 1981 as Entry No. 3603565, in Book 5291, at
Page 153 of the Official Records; and running thence West along said HCA
Properties, Inc., North boundary line, 100.00 feet to the Northwest corner of
the HCA Properties, Inc. property; thence along the West boundary of the said
HCA Properties, Inc. property South 0 (degrees) 04'58" East 140.0 feet to the
North line of 0000 Xxxxx Xxxxxx; thence along said North line of said 0000 Xxxxx
Xxxxxx 89 (degrees) 56'54" West 171.0 feet to a point on the West line of the
Southeast quarter of the Southeast quarter of said Section 30; thence along said
West line North 1295 feet to the 1/16 Section line; thence East 425.88 feet,
more or less, to a point on the West line of vacated 0000 Xxxx Xxxxxx; thence
along said West line South 0 (degrees) 05' East 150.24 feet, more or less, to a
point of tangency with a 144.69 foot radius curve to the right; thence
Southwesterly 124.27 feet along said curve to a point of tangency; thence South
49 (degrees) 07'42" West 38.22 feet to a point of tangency with a 205.32 foot
radius curve to the left; thence Southwesterly 175.79 feet along said curve to a
point of tangency; thence South 723.44 feet to the point of BEGINNING.
TOGETHER WITH the West one-half of the vacated street (0000 Xxxx Xxxxxx)
abutting a portion of the said property on the East.
EXCEPTING THEREFROM the following described property conveyed to National Health
Investors, Inc. in that certain Special Warranty Deed recorded March 2, 1993 as
Entry No. 5445234, in Book 6613, at Page 1040 of the Official Records, to-wit:
BEGINNING at a point on the West line of the Southeast quarter of the Southeast
quarter of Section 30, said point being South 89 (degrees) 56'54" West along the
Section line 1323.97 feet and North 0 (degrees) 08'49" West 1093.53 feet from
the Southeast corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake
Base and Meridian; and running thence North 0 (degrees) 08'49" West along said
West line 234.16 feet to the Northwest corner of the Southeast quarter of the
Southeast quarter of said Section 30; thence North 89 (degrees) 57'12" East
along the North line of said Southeast quarter of the Southeast quarter 279.72
feet; thence South 0 (degrees) 08'49" East 113.80 feet; thence South 45
(degrees) 08'49" East 43.64 feet; thence South 00 (degrees) 08'49" East 6.02
feet; thence North 89 (degrees) 51'11" East 6.02 feet; thence South 45 (degrees)
08'49" East 109.16 feet to a point on a curve to the right, the radius point of
which bears North 53 (degrees) 23'53" West 144.59 feet; thence Southwesterly
along the arc of said curve 31.63 feet to a point of tangency; thence South 49
(degrees) 07'42" West 38.22 feet to a point of a 205.32 foot radius curve to the
left; thence Southwesterly along the arc of said curve 37.77 feet; thence North
45 (degrees) 08'49" West 186.99 feet; thence South 89 (degrees) 51'11" West 5.23
feet; thence South 0 (degrees) 08'49" East 52.88 feet; thence South 89 (degrees)
51'11" West 179.63 feet to the point of BEGINNING.
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PARCEL 2:
BEGINNING at a point on the North right of way line of 0000 Xxxxx Xxxxxx and the
West right of way line of 0000 Xxxx Xxxxxx, said point being South
89(degrees)56'54" West 1057.25 feet, more or less, and North 0(degrees)03'06"
West 33 feet from the Southeast corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1
West, Salt Lake Base and Meridian; and running thence North 0(degrees)03'06"
West along said West right of way line 140.0 feet, more or less, to the
Southerly boundary line of the Valley West Hospital, Inc. property as described
in that certain Warranty Deed recorded January 26, 1979 as Entry No. 3229774, in
Book 4806, at Page 585, Salt Lake County Recorder's Office; thence South
89(degrees)56'54" West along said South boundary line 100.0 feet, more or less,
to an Easterly boundary line of Valley West Hospital's property as described in
the Warranty Deed described hereinabove; thence South 0(degrees)03'06" East
along said East boundary line 140.0 feet, more or less, to the North right of
way line of 0000 Xxxxx Xxxxxx; thence North 89(degrees)56'54" East along said
North right of way line 100.00 feet, more or less, to the point of BEGINNING.
PARCEL 3:
BEGINNING at a point 885.275 feet West and 33 feet North from the Southeast
corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base and
Meridian; and running thence West along the North line of 0000 Xxxxx Xxxxxx
108.525 feet, more or less, to the East line of 0000 Xxxx Xxxxxx; thence North
0(degrees)04'58" West along East line 167 feet; thence North 89(degrees)56'54"
East 108.525 feet, more or less; thence South 167 feet to the point of
BEGINNING.
PARCEL 4:
BEGINNING at a point South 89(degrees)56'54" West 994.1 feet and North
0(degrees)04'58" West 283.0 feet from the Southeast corners of Section 30,
Township 1 South, Range 1 West, Salt Lake Base and Meridian, (which point of
beginning is on the Easterly line of 0000 Xxxx Xxxxxx); and running thence North
0(degrees)04'58" West 365 feet; thence East 300 feet; thence North
0(degrees)04'58" West 320.0 feet; thence West 275.99 feet to a point on a 145.32
foot radius curve to the right; thence Northeasterly 39.70 feet along said curve
to a point of tangency; thence North 49(degrees)07'42" East 38.22 feet to a
point on a 204.69 foot radius curve to the left; thence Northeasterly 175.81
feet along said curve to a point of tangency; thence North 0(degrees)05' West
150.28 feet, more or less, to the 1/16 Section line; thence East 343.88 feet,
more or less; thence South 710.0 feet; thence West 32.88 feet; thence South
265.255 feet; thence South 89(degrees)56'54" West 285.00 feet; thence South
0(degrees)04'58" East 70.00 feet; thence South 89(degrees)56'54" West 180.53
feet to the point of BEGINNING.
EXCEPTING THEREFROM that portion located within the bounds of 0000 Xxxxx Xxxxxx
(also known as Pioneer Parkway).
TOGETHER WITH the East one-half of the vacated street (0000 Xxxx Xxxxxx)
abutting a portion of said property on the West.
PARCEL 5:
BEGINNING at a point North along the Section line 796.505 feet and West 107.35
feet from the Southeast corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West,
Salt Lake Base and Meridian; and running thence West 324.65 feet; thence North
178.25 feet; thence East 324.65 feet; thence South 178.25 feet to the point of
BEGINNING.
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PARCEL 6:
BEGINNING at point in the center of 0000 Xxxx Xxxxxx 618.255 feet North of the
Southeast corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base
and Meridian; and running thence North 178.25 feet; thence West 495 feet;
thence South 178.25 feet; thence East 495 feet to the point of BEGINNING.
EXCEPTING THEREFROM those portions located within the bounds of 0000 Xxxx Xxxxxx
and 0000 Xxxxx Xxxxxx (also known as Pioneer Parkway).
PARCEL 7:
BEGINNING at a point on the East line of 0000 Xxxx Xxxxxx, said point being
North 0 (degrees) 02'10" West along the section line 788.49 feet and East 33.0
feet from the Southwest corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West,
Salt Lake Base and Meridian; and running thence North 0 (degrees) 02'10" West
along said East line 200.00 feet; thence East 420.00 feet; thence South 0
(degrees) 02'10" East 200.00 feet; thence West 420.00 feet to the point of
BEGINNING.
PARCEL 8:
BEGINNING North 0 (degrees) 02'10" West 788.1 feet and North 89 (degrees) 57'50"
East 40 feet from the Southwest corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1
West, Salt Lake Base and Meridian; and running thence North 0 (degrees) 02'10"
West 1.78 feet; thence East 413 feet; thence South to the North line of
Rockwood Way; thence Westerly along said North line to the point of BEGINNING.
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DESCRIPTIONS OF RAISED PLANTED PORTIONS OF THE DESIGNATED THREE MEDIAN ISLANDS
"A", "B" AND "C" LOCATED TOTALLY WITHIN DEDICATED 0000 XXXXX XXXXXX XXXXXXXX AND
REMAINING IN PRIVATE OWNERSHIP ARE AS FOLLOWS:
PLANTED MEDIAN 'A'
Beginning at a point North 651.27 feet and West 860.12 feet from the Southeast
corner of Xxxxxxx 00, X 0 X, X 0 X, XXX & X; thence Southwesterly 29.59 feet
along a curve to the left having a radius of 109.63 feet and a central angle of
15(degrees)27'58"; thence Southwesterly 10.76 feet along a curve to the right
having a radius of 111.30 feet and a central angle of 5(degrees)32'17"; thence
South 2.00 feet; thence East 44.21 feet; thence Northeasterly 29.59 feet along a
curve to the left having a radius of 109.63 feet and a central angle of
15(degrees)27'58"; thence Northeasterly 10.76 feet along a curve to the right
having a radius of 111.30 feet and a central angle of 5(degrees)32'17"; thence
North 2.00 feet; thence West 44.21 feet to the point of beginning, containing
0.012 acres +/-.
PLANTED MEDIAN 'B'
Beginning at a point North 651.27 feet and West 653.76 feet from the Southeast
corner of Xxxxxxx 00, X 0 X, X 0 X, XXX & X; thence Southwesterly 29.59 feet
along a curve to the left having a radius of 109.63 feet and a central angle of
15(degrees)27'58"; thence Southwesterly 10.76 feet along a curve to the right
having a radius of 111.30 feet and a central angle of 5(degrees)32'17"; thence
South 2.00 feet; thence East 58.15 feet; thence Northeasterly 29.59 feet along a
curve to the left having a radius of 109.63 feet and a central angle of
15(degrees)27'58"; thence Northeasterly 10.76 feet along a curve to the right
having a radius of 111.30 feet and a central angle of 5(degrees)32'17"; thence
North 2.00 feet; thence West 58.15 feet to the point of beginning, containing
0.014 acres +/-.
PLANTED MEDIAN 'C'
Beginning at a point North 651.27 feet and West 461.45 feet from the Southeast
corner of Xxxxxxx 00, X 0 X, X 0 X, XXX & X; thence Southwesterly 13.09 feet
along a curve to the left having a radius of 4.17 feet and a central angle of
180(degrees)00'00"; thence East 95.74 feet; thence Northeasterly 80.72 feet
along a curve to the left having a radius of 154.17 feet and a central angle of
30(degrees)00'00"; thence N 60(degrees)00'00" E 94.24 feet; thence Northeasterly
17.78 feet along a curve to the left having a radius of 99.17 feet and a central
angle of 10(degrees)16'24"; thence N 49(degrees)43'36" E 22.89 feet; thence
Northeasterly 4.20 feet along a curve to the right having a radius of 100.83
feet and a central angle of 2(degrees)23'03"; thence N 30(degrees)00'00" W 2.00
feet; thence S 60(degrees)00'00" W 138.59 feet; thence Southwesterly 76.36 feet
along a curve to the right having a radius of 145.83 feet and a central angle of
30(degrees)00'00"; thence West 95.74 feet to the point of beginning, containing
0.058 acres +/-.
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EXHIBIT B
CALIFORNIA FACILITIES SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement') dated as of May 15,
1996, is by and between XXXXXXXXXX CONVALESCENT HOSPITALS. INC., a California
corporation (the "Debtor") and AHP of Utah, Inc., a Utah corporation (the
"Secured Party").
RECITALS
A. Xxxxxxxxxx Healthcare Corporation, a California
corporation ("Xxxxxxxxxx") of which the Debtor is a wholly-owned subsidiary and
Xxxxxxxxxx Pioneer Valley Hospital, Inc., a Utah corporation ("Xxxxxxxxxx
Utah"), another wholly-owned subsidiary of Xxxxxxxxxx, have entered into a
Purchase and Sale Agreement dated as of May 15, 1996 with the Secured Party and
various affiliates of the Secured Party (with such Purchase and Sale Agreement,
as it may be modified or amended, referred to as the "Purchase and Sale
Agreement").
B. Pursuant to the Purchase and Sale Agreement the
Secured Party will acquire an acute care hospital in West Valley City, Utah, and
pursuant to the Pioneer Hospital Lease dated as of May 15, 1996 (as it may be
modified or amended, the "Pioneer Hospital Lease"), Secured Party will lease
such facility to Xxxxxxxxxx Utah.
C. The Secured Party has conditioned its obligations
under the Pioneer Hospital Lease upon the execution and delivery of this
Agreement by the Debtor.
NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the
following terms have the following meanings:
"Account" means any "account", as such term is defined in
Section 9.106 of the UCC, now owned or hereafter acquired by the Debtor, and, in
any event, shall include, without limitation or in addition, each of the
following, whether now owned or hereafter acquired by the Debtor: (a) all rights
of the Debtor to payment for goods sold or leased, services rendered or the use
of space in premises owned or leased by Debtor, whether or not earned by
performance and weather or not payable by the account debtor or reimbursable
through a Governmental Health Care Program or through private health insurance,
(b) all accounts receivable of the Debtor, (c) all security pledged, assigned,
or granted to or held by the Debtor to secure any of the foregoing, (d) all
guaranties of, insurance claims, entitlements or indemnifications with respect
to, any of
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the foregoing, and (e) all rights of the Debtor as an unpaid seller
of goods or services, including, but not limited to, all rights of stoppage in
transit, replevin, reclamation, and resale.
"Chattel Paper" means any "chattel paper", as such term is
defined in Section 9. 105(a)(2) of the UCC, now owned or hereafter acquired by
the Debtor.
"Collateral" has the meaning specified in Section 2.1 of this
Agreement.
"Default" means any default by the Debtor in the performance
of its obligations under this Agreement or the occurrence of any Event of
Default, as defined in the Pioneer Hospital Lease.
"Deposit Accounts" shall have the meaning specified in Section
2.1(c) hereof.
"Facilities" means the skilled nursing facilities operated by
the Debtor which are identified in Schedule 1 hereto.
"Instrument" means any "instrument", as such term is defined
in Section 9.105(a)(9) of the UCC, now owned or hereafter acquired by the
Debtor, and, in any event, shall include all promissory notes, drafts, bills of
exchange, and trade acceptances of the Debtor, whether now owned or hereafter
acquired.
"Obligations" means all payment and performance obligations of
Xxxxxxxxxx Utah under the Pioneer Hospital Lease and all obligations of the
Debtor under this Agreement.
"Proceeds" means any "proceeds", as such term is defined in
Section 9.306 of the UCC and, in any event, shall include, but not be limited
to, (a) any and all proceeds of any insurance, indemnity, warranty, or guaranty
payable to the Debtor from time to time with respect to any of the Collateral,
(b) any and all payments (in any form whatsoever) made or due and payable to the
Debtor from time to time in connection with any requisition, confiscation,
condemnation, seizure, or forfeiture of all or any part of the Collateral by any
governmental authority (or any Person acting under color of), and (c) any and
all other amounts from time to time paid or payable under or in connection with
any of the Collateral.
"UCC" means the Uniform Commercial Code as in effect in the
State of California; provided, that if by mandatory provisions of law, the
perfection or effect of perfection or nonperfection of the security interest
created hereunder in any Collateral is governed by the Uniform Commercial Code
as in effect on or after the date hereof in any other jurisdiction, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provision hereof relating to such perfection or the effect of perfection
or nonperfection.
Section 1.2 Other Definitional Provisions. References to
"Sections", "subsections", "Exhibits", and "Schedules" shall be to Sections,
subsections, Exhibits, and Schedules, respectively, of this Agreement unless
otherwise specifically provided. All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms
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defined. All references to statutes and regulations shall include any amendments
of the same and any successor statutes and regulations.
ARTICLE 2
Security Interest
Section 2.1 Security Interest. As collateral security for the
prompt payment and performance in full when due of the Obligations (whether at
stared maturity, by acceleration, or otherwise), the Debtor hereby grants to the
Secured Party a lien on and security interest in, and hereby assigns to Debtor,
all of the Debtor's right, title, and interest in and to the following insofar
and insofar only as they be related, to one or more of the Facilities, whether
now owned or hereafter arising or acquired and wherever located (collectively,
the "Collateral"):
(a) all Accounts;
(b) all Instruments;
(c) all deposit accounts (including disbursement,
lockbox, and concentration accounts) of Debtor maintained with Secured Party or
any bank or other financial institutions ("Deposit Accounts"), all cash
deposited therein from time to time and other monies and property of Debtor in
the possession or under the control of Secured Party; and
(d) all Proceeds and products of any or all of the
foregoing.
Section 2.2 Debtor Remains Liable. Notwithstanding anything to
the contrary contained herein, (a) the Debtor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Secured Party of any of its rights hereunder shall not release the Debtor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) the Secured Party shall not have any obligation or
liability under any of the contracts and agreements included in the Collateral
by reason of this Agreement, nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Debtor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
ARTICLE 3
Representations and Warranties
To induce the Secured Party to enter into this Agreement and
the Pioneer Hospital Lease, the Debtor represents and warrants to the Secured
Party that:
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Section 3.1 Title. The Debtor is, and with respect to
Collateral acquired after the date hereof the Debtor will be, the legal and
beneficial owner of the Collateral free and clear of any lien or other
encumbrance.
Section 3.2 Accounts. Each Account included in the Collateral
(a) is genuine and in all respects what it purports to be, (b) represents the
legal, valid, and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by such account debtor, (c) the amount of each
Account represented as owing is the correct amount actually and unconditionally
owing in all material respects except for normal trade discounts granted in the
ordinary course of business, and (d) no Account is subject to any material
offset, counterclaim, or other defense.
Section 3.3 Financing Statements. No financing statement,
security agreement, or other lien instrument covering all or any part of the
Collateral is on file in any public office, except as may have been filed in
favor of the Secured Party pursuant to this Agreement. The Debtor does not do
business and has not done business within the past five (5) years with respect
to the Facilities under a trade name or any name other than its legal name set
forth at the beginning of this Agreement and under the names Lafayette
Convalescent Hospital, Oak Park Convalescent Hospital, Rheem Valley Convalescent
Hospital and University Convalescent Hospital.
Section 3.4 Principal Place of Business. The principal place
of business and chief executive office of the Debtor, and the office where the
Debtor keeps its books and records, is located at 000 X. Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000.
Section 3.5 Perfection. Upon the filing of a Uniform
Commercial Code financing statement with the California Secretary of State, and
upon the Secured Party's obtaining possession of all Instruments and Chattel
Paper of the Debtor, and upon written notice hereof by the Secured Party to the
banks at which the deposit accounts are maintained, the security interest in
favor of the Secured Party created herein will constitute a valid and perfected
lien upon and security interest in the Collateral, subject to no equal or prior
liens.
Section 3.6 Deposit Accounts. Schedule 2 hereto sets forth as
of the date hereof all lockbox agreements and Deposit Accounts of Debtor.
ARTICLE 4
Covenants
The Debtor covenants and agrees with the Secured Party that so
long as any Obligations remain outstanding:
Section 4.1 Encumbrances. The Debtor shall not create, permit,
or suffer to exist, and shall defend the Collateral against, any lien or other
encumbrance on the Collateral, and shall defend the Debtor's rights in the
Collateral and the Secured Party's security interest in the
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Collateral against the claims and demands of all persons. The Debtor shall do
nothing to impair the rights of the Secured Party in the Collateral.
Section 4.2 Modification of Accounts. The Debtor shall, in
accordance with prudent business practices, endeavor to collect or cause to be
collected from each account debtor under its Accounts related to the Facilities,
as and when due, any and all amounts owing under such Accounts. Without the
prior written consent of the Secured Party or unless in the ordinary course of
business, the Debtor shall not (a) grant any extension of time for any payment
with respect to any of such Accounts, (b) compromise, compound, or settle any of
such Accounts for less than the full amount thereof, (c) release, in whole or in
part, any person liable for payment of any of such Accounts, (d) allow any
credit or discount for payment with respect to any such Account, or (e) release
any lien or guaranty securing any such Account.
Section 4.3 Disposition of Collateral. The Debtor shall not
sell, lease, assign (by operation of law or otherwise), or otherwise dispose of,
or grant any option with respect to, the Collateral or any part thereof without
the prior written consent of the Secured Party, except for dispositions in the
ordinary course of business.
Section 4.4 Corporate Changes. The Debtor shall not change its
name, names under which it does business, identity, or structure in any manner
that might make any financing statement filed in connection with this Agreement
seriously misleading unless the Debtor shall have given the Secured Party thirty
(30) days prior written notice thereof and shall have taken all action deemed
necessary or desirable by the Secured Party to make each financing statement not
seriously misleading. The Debtor shall not change its principal place of
business, chief executive office, or the place where it keeps its books and
records unless it shall have given the Secured Party thirty (30) days prior
written notice thereof and shall have taken all action deemed necessary or
desirable by the Secured Party to cause its security interest in the Collateral
to be perfected with the priority required by this Agreement.
Section 4.5 Bailees. If any of the Collateral is at any time
in the possession or control of any bank or other financial institution,
warehouseman, bailee, any of the Debtor's agents or processors or any other
third person, the Debtor shall notify such warehouseman, bailee, agent,
processor or third Person of the security interest created hereunder, shall
instruct such Person to hold such Collateral for the Secured Party's account
subject to the Security Party's instructions and shall take all actions deemed
necessary or desirable by Secured Party to protect and perfect its security
interest in the Collateral hereunder or under the Pioneer Hospital Lease.
Section 4.6 Collections on Accounts; Delivery of Collateral.
In connection with the collections on Accounts, the Debtor, at the Secured
Party's direction, shall take such actions as the Secured Party may deem
necessary or advisable to enforce collections on the Accounts. Except as
otherwise provided in this Agreement, the Debtor shall have the right to receive
Chattel Paper included in the Collateral and to receive and further negotiate in
the ordinary course of business all Instruments, but the Debtor shall promptly
deliver all other Collateral (the possession of which is necessary to perfect
the security interest therein) and all Proceeds to the Secured Party. If a
default shall have occurred and be continuing, the Debtor shall, upon the
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request of the Secured Party, deliver all Instruments, and Chattel Paper,
included in the Collateral to the Secured Party.
Section 4.7 Lockbox of Proceeds. If a Default occurs, upon
request of the Secured Party, the Debtor shall promptly instruct all patients,
residents and other persons obligated with respect to all Accounts and other
Collateral to make all payments with respect thereto to a post office box or
boxes in accordance with the terms of lockbox agreements acceptable to the
Secured Party to which Debtor will become a party. Debtor shall irrevocably
instruct each depository bank which has entered into a lockbox agreement with it
to remit all proceeds of such payments directly to Secured Party on a daily
basis by automated clearing house debit directly for credit to a concentration
account in the name of the Secured Party or by wire transfer to Secured Party
for deposit to such concentration account. Any income received by the Secured
Party with respect to the balance from time to time standing to the credit of
such concentration account shall remain, or be deposited, in the concentration
account. In addition to the foregoing, the Debtor agrees that if any Proceeds
(including, without limitation, the payments made in respect of Accounts) shall
be received by it, the Debtor shall as promptly as possible deposit such
Proceeds into the concentration account held at Secured Party. Until so
deposited, all such Proceeds shall be held in trust by the Debtor for the
benefit of the Secured Party and shall be segregated from any other funds or
property of the Debtor. Once established, Debtor shall not amend or modify any
lockbox agreement without the consent of Secured Party.
Section 4.8 Deposit Accounts. Debtor shall not open any new
deposit account or otherwise utilize any deposit or brokerage account other than
the Deposit Accounts disclosed on Schedule 2 unless Debtor shall have given the
Secured Party thirty (30) days prior written notice thereof and shall have taken
all action deemed necessary or desirable by the Secured Party to cause a first
priority security interest to be perfected therein.
ARTICLE 5
Rights of the Secured Party
Section 5.1 POWER OF ATTORNEY. THE DEBTOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS THE SECURED PARTY AND ANY OFFICER OR AGENT THEREOF,
WITH FULL POWER OF SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH
FULL IRREVOCABLE POWER AND AUTHORITY IN THE NAME OF THE DEBTOR OR IN ITS OWN
NAME, TO TAKE AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT, ANY
AND ALL ACTION AND TO EXECUTE ANY AND ALL DOCUMENTS AND INSTRUMENTS WHICH THE
SECURED PARTY AT ANY TIME AND FROM TIME TO TIME DEEMS NECESSARY OR DESIRABLE TO
ACCOMPLISH THE PURPOSES OF THIS AGREEMENT AND, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, THE DEBTOR HEREBY GIVES THE SECURED PARTY THE POWER AND RIGHT
ON BEHALF OF THE DEBTOR AND IN ITS OWN NAME TO DO ANY OF THE FOLLOWING AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT, WITHOUT NOTICE TO OR THE
CONSENT OF THE DEBTOR:
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(i) to demand, xxx for, collect, or receive in
the name of the Debtor or in its own name, any money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral and, in connection therewith, endorse checks, notes, drafts,
acceptances, money orders, documents of title, or any other instruments
for the payment of money under the Collateral or any policy of
insurance;
(ii) to pay or discharge taxes, liens, or other
encumbrances levied or placed on or threatened against the Collateral;
(iii) to send requests for verification to account
debtors and other obligors;
(iv) (A) to direct account debtors and any other
parties liable for any payment under any of the Collateral to make
payment of any and all monies due and to become due thereunder directly
to the Secured Party or as the Secured Party shall direct; (B) to
receive payment of and receipt for any and all monies, claims, and
other amounts due and to become due at any time in respect of or
arising out of any Collateral; (C) to sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, proxies, stock powers,
verifications, and notices in connection with accounts and other
documents relating to the Collateral; (D) to commence and prosecute any
suit, action, or proceeding at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral, (E) to
defend any suit, action, or proceeding brought against the Debtor with
respect to any Collateral; (F) to settle, compromise, or adjust any
suit, action, or proceeding described above and, in connection
therewith to give such discharges or releases as the Secured Party may
deem appropriate; (G) to exchange any of the Collateral for other
property upon any merger, consolidation, reorganization,
recapitalization, or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Collateral with any committee,
depositary, transfer agent, registrar, or other designated agency upon
such terms as the Secured Party may determine; (H) to add or release
any guarantor, indorser, surety, or other party to any of the
Collateral; (I) to renew, extend, or otherwise change the terms and
conditions of any of the Collateral; (J) to make, settle, compromise,
or adjust any claims under or pertaining to any of the Collateral
(including claims under any policy of insurance); and (K) to sell,
transfer, pledge, convey, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Secured Party were the absolute owner thereof for all
purposes, and to do, at the Secured Party's option and the Debtor's
expense, at any time, or from time to time, all acts and things which
the Secured Party deems necessary to protect, preserve, maintain, or
realize upon the Collateral and the Secured Party's security interest
therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND
SHALL BE IRREVOCABLE. The Secured Party shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges, and options
expressly or implicitly granted to the Secured Party in this Agreement, and
shall not be liable for any
85
failure to do so or any delay in doing so. Neither the Secured Party nor any
Person designated by the Secured Party shall be liable for any act or omission
or for any error of judgment or any mistake of fact or law, except to the extent
such liability results from the Secured Party's gross negligence, bad faith or
willful misconduct. This power of attorney is conferred on the Secured Party
solely to protect, preserve, maintain, and realize upon its security interest in
the Collateral. The Secured Party shall not be responsible for any decline in
the value of the Collateral (except to the extent such decline is due to the
Secured Party's failure to exercise reasonable care in the custody of any
Collateral in its possession) and shall not be required to take any steps to
preserve rights against prior parties or to protect, preserve, or maintain any
lien given to secure the Collateral.
Section 5.2 Assignment by the Secured Party. The Secured Party
may at any time assign or otherwise transfer all or any portion of its rights
and obligations under the Pioneer Hospital Lease to any other Person, and such
Person shall thereupon become vested with all the benefits thereof granted to
the Secured Party herein or otherwise.
ARTICLE 6
Default
Section 6.1 Rights and Remedies. If a Default shall have
occurred and be continuing, the Secured Party shall have the following rights
and remedies:
(i) In addition to all other rights and remedies
granted to the Secured Party in this Agreement or in the Pioneer
Hospital Lease or by applicable law, the Secured Party shall have all
of the rights and remedies of a secured party under the UCC (whether or
not the UCC applies to the affected Collateral). Without limiting the
generality of the foregoing, the Secured Party may (A) without demand
or notice to the Debtor, collect, receive, or take possession of the
Collateral or any part thereof and for that purpose the Secured Party
may enter upon any premises on which the Collateral is located and
remove the Collateral therefrom or render it inoperable, and/or (B)
sell, lease, or otherwise dispose of the Collateral, or any part
thereof, in one or more parcels at public or private sale or sales, at
the Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Secured Party may
deem commercially reasonable and/or (C) setoff against any and all
funds or other Collateral at any time and from time to time on deposit
or otherwise held in any account held at Secured Party. The Secured
Party shall have the right at any public sale or sales, and, to the
extent permitted by applicable law, at any private sale or sales, to
bid (which bid may be, in whole or in part, in the form of cancellation
of indebtedness) and become a purchaser of the Collateral or any part
thereof free of any right or equity of redemption on the part of the
Debtor, which right or equity of redemption is hereby expressly waived
and released by the Debtor. Upon the request of the Secured Party, the
Debtor shall assemble the Collateral and make it available to the
Secured Party at any place designated by the Secured Party that is
reasonably convenient to the Debtor and the Secured Party. The Debtor
agrees that the Secured Party shall not be obligated to give more than
ten (10)
86
days written notice of the time and place of any public sale or of the
time after which any private sale may take place and that such notice
shall constitute reasonable notice of such matters. The Secured Party
shall not be obligated to make any sale of Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of
Collateral may have been given. The Secured Party may, without notice
or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned. The Debtor shall
be liable for all reasonable expenses of retaking, holding, preparing
for sale, or the like, and all reasonable attorneys' fees, legal
expenses, and other costs and expenses incurred by the Secured Party in
connection with the enforcement of the Secured Party's rights under
this Agreement. The Debtor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are
insufficient to pay the obligations of Xxxxxxxxxx Utah under the
Pioneer Hospital Lease or if the Debtor thereunder in full. The Secured
Party may apply the Collateral against all such obligations in such
order and manner as the Secured Party may elect in its sole discretion.
The Debtor waives all rights of marshalling, valuation, and appraisal
in respect of the Collateral.
(ii) The Secured Party may cause any or all of the
Collateral held by it to be transferred into the name of the Secured
Party or the name or names of the Secured Party's nominee or nominees.
(iii) The Secured Party may exercise any and all
rights and remedies of the Debtor under or in respect of the
Collateral, including, without limitation, any and all rights of the
Debtor to demand or otherwise require payment of any amount under, or
performance of any provision of, any of the Collateral.
(iv) The Secured Party may collect or receive all
money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to
do so.
(v) On any sale of the Collateral, the Secured Party
is hereby authorized to comply with any limitation or restriction with
which compliance is necessary, in the view of the Secured Party's
counsel, in order to avoid any violation of applicable law or in order
to obtain any required approval of the purchaser or purchasers.
ARTICLE 7
Miscellaneous
Section 7.1 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Debtor and the Secured Party and
their respective successors and assigns, except that the Debtor may not assign
any of its rights or obligations under this Agreement without the prior written
consent of the Secured Party.
87
Section 7.2 Amendment; Entire Agreement. This Agreement
embodies the final, entire agreement between the parties hereto and supersedes
any and all prior commitments, agreements, representations, and understandings,
whether written or oral, relating to the subject maker hereof and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no unwritten oral
agreements between the parties hereto. The provisions of this Agreement may be
amended or waived only by an agreement in writing signed by the parties hereto.
Section 7.3 Notices. All notices, demands, requests, consents,
approvals and other communications ("Notice" or "Notices") hereunder shall be in
writing and delivered by personal delivery, courier or messenger service,
express or overnight mail, or by registered or certified mail, return receipt
requested and postage prepaid, or by facsimile, addressed to the respective
parties as follows:
If to Debtor: Xxxxxxxxxx Convalescent Hospitals, Inc.
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
FAX: (000) 000-0000
If to Secured Party: AHP of Utah, Inc.
0000 Xxxxx Xxxxxxx'x Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Arm: Chief Investment Officer
FAX: (000) 000-0000
or to such other address as either party may hereafter designate. Personally
delivered Notices sent by courier or messenger service or by express or
overnight mail or by facsimile shall be effective upon receipt, and Notices
given by mail shall be complete at the time of deposit in the U.S. mail system,
but any prescribed period of Notice and any right or duty to do any act or make
any response within any prescribed period or on a date certain after the service
of such Notice given by mail shall be extended five (5) days.
Section 7.4 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California and the
applicable laws of the United States of America.
Section 7.5 Headings. The headings, captions, and arrangements
used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 7.6 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by the Secured Party shall affect the
representations and warranties or the right of the Secured Party to rely upon
them.
88
Section 7.7 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same agreement.
Section 7.8 Waiver of Bond. In the event the Secured Party
seeks to take possession of any or all of the Collateral by judicial process,
the Debtor hereby irrevocably waives any bonds and any surety or security
relating thereto that may be required by applicable law as an incident to such
possession, and waives any demand for possession prior to the commencement of
any such suit or action.
Section 7.9 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTOR
CALIFORNIA CONVALESCENT
HOSPITALS, INC.
By:
---------------------------------------
Xxxxxx X. Xxxxxx
Vice President
SECURED PARTY
AHP OF UTAH, INC.
By:
---------------------------------------
Xxxxxxx X. XxXxx
Vice President
89
SCHEDULE 1
TO
CALIFORNIA CONVALESCENT HOSPITAL
SECURITY AGREEMENT
FACILITIES
The Facilities consist of the following skilled nursing facilities:
1. Lafayette Convalescent Hospital
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
2. Oak Park Convalescent Hospital
0000 Xxx Xxxx Xxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
3. Rheem Valley Convalescent Hospital
000 Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
4. University Convalescent Hospital
0000 Xxxxx Xxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
90
SCHEDULE 2
TO
CALIFORNIA CONVALESCENT HOSPITAL
SECURITY AGREEMENT
DEPOSIT ACCOUNTS AND LOCKBOX AGREEMENTS
91
EXHIBIT C
Existing Pioneer Leases
Tenant
Xxxxxxxx Xxxxx
Xxx Xxxxxxx Xxxx, M.D.
Xxxxxxx X. Xxxxxx, M.D.
Xxxxx X. Xxxxx, M.D.
Xxxxxxx Medical Clinic, Inc.
Heart Care Lease
Xxxxx XxXxxx, M.D.
Xxxxxx X. XxXxxxxx, M.D.
Mountain West Cardiology Associates
Nighttime Pediatric Clinics, Inc.
Xxxxxx X. Xxxxx, Xx., M.D.
Xxxxxx Shirts, M.D.
Xxx X. Xxxxxx, M.D.
Western Urological Clinic, P.C.
J.D. Xxxxxxx, M.D.
J. Xxxxxxx, M.D.
National Health Advisors
92
EXHIBIT D
To Pioneer Hospital Lease
Pioneer Permitted Encumbrances
8. (Affects a portion of Parcel 2)
Taxes for the year 1996 and thereafter, not yet due or payable. The
records of the Salt Lake County Treasurer show that taxes for the year
1995 have been paid in the amount of $2,558.08. (Xxxxxxx Xx.
00-00-000-000 xxx Xxx Xxxxxxxx Xx. 00)
(Affects a portion of Parcel 2)
Taxes for the year 1996 and thereafter, not yet due or payable. The
records of the Salt Lake County Treasurer show that taxes for the year
1995 have been paid in the amount of $246,882.15. (Xxxxxxx Xx.
00-00-000-000 xxx Xxx Xxxxxxxx Xx. 00)
(Affects Parcel 3)
Taxes for the year 1996 and thereafter, not yet due or payable. The
records of the Salt Lake County Treasurer show that taxes for the year
1995 have been paid in the amount of $1,613.38. (Xxxxxxx Xx.
00-00-000-000 xxx Xxx Xxxxxxxx Xx. 00)
(Affects Parcel 4)
Taxes for the year 1996 and thereafter, not yet due or payable. The
records of the Salt Lake County Treasurer show that taxes for the year
1995 have been paid in the amount of $1,980.93. (Xxxxxxx Xx.
00-00-000-000 xxx Xxx Xxxxxxxx Xx. 00)
(Affects Parcel 5)
Taxes for the year 1996 and thereafter, not yet due or payable. The
records of the Salt Lake County Treasurer show that taxes for the year
1995 have been paid in the amount of $25,046.46. (Xxxxxxx Xx.
00-00-000-000 xxx Xxx Xxxxxxxx Xx. 00)
Taxes for the year 1996 and thereafter, not yet due or payable. The
records of the Salt Lake County Treasurer show that taxes for the year
1995 have been paid in the amount of $21,502.35. (Xxxxxxx Xx.
00-00-000-000 xxx Xxx Xxxxxxxx Xx. 00)
(Affects Parcel 7)
Taxes for the year 1996 and thereafter, not yet due or payable. The
records of the Salt Lake County Treasurer show that taxes for the year
1995 have been paid in the amount of $4,007.61. (Xxxxxxx No.
00-00-000-000 and Tax District No. 24)
9. Said property lies within the boundaries of West Valley City, and is
subject to any and all charges and assessments thereof. (Phone No.
000-0000)
NOTE: Delinquent special Assessment charges may have been reported to
Salt Lake County by West Valley City. It is recommended that when
checking with the said City care should be taken to specifically ask if
any delinquent charges have been certified to the Salt Lake County
Treasurer.
93
10. Said property lies within the boundaries of Xxxxxxx-Xxxxxx Improvement
District, and is subject to any and all charges and assessments
thereof. (Phone No. 000-0000)
NOTE: Delinquent Special Assessment charges may have been reported to
Salt Lake County by Xxxxxxx-Xxxxxx Improvement District. It is
recommended that when checking with the said District care should be
taken to specifically ask if any delinquent charges have been certified
to the Salt Lake County Treasurer.
11. A right of way and easement for a water ditch and incidental purposes
as disclosed by means instruments of record, including that certain
Warranty Deed recorded August 25, 1943 as Entry No. 958185, in Book
354, at Page 218 of the Official Records, through and across said
property as follows:
Commencing 618.255 feet North of the Southeast corner of Section 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base and Meridian, and
running thence West 495 feet; thence North 356.50 feet; thence East 3
feet; thence South 353.50 feet; thence East 492 feet; thence South 3
feet to the beginning.
12. A right of way as disclosed by that certain Warranty Deed recorded
October 24, 1962 as Entry No. 177142, in Book 1978, at Page 261 of the
Official Records, through and across said property as follows:
Beginning at a point on the North line of a 4 rod street which is South
89(degree)56'54" West 993.80 feet and North 00(degree)04'58" West 33.00
feet from the southeast corner of Section 30, Township 1 South, Range 1
West, Salt Lake Base and Meridian, and running thence North
00(degree)04'58" West 1008.00 feet; thence South 89(degree)56'54" West
60.00 feet; thence South 00(degree)04'58" East 498.00 feet; thence
South 89(degree)56'54" West 169.90 feet to a point of tangency with a
20 foot radius curve to the right; thence along said curve for an arc
distance of 15.50 feet to a point of tangency with a 50 foot radius
reverse curve to the left; thence along said curve for an arc distance
of 234.60 feet to a point of tangency with a 20 foot radius reverse
curve to the right; thence along said curve for an arc distance of
15.50 feet; thence North 89(degree)56'54" East 169.92 feet; thence
South 00(degree)04'58" East 450.00 feet to the North line of said
street; thence North 89(degree)56'54" East 60.00 feet along said street
to the point of beginning.
13. A right of way and easement 60 feet in width to lay, maintain, operate,
repair, inspect, protect, remove and replace pipe lines, valves, valve
boxes and other gas transmission and distribution facilities, as
created in favor of MOUNTAIN FUEL SUPPLY COMPANY by instrument recorded
March 5, 1963 as Entry No. 1503412, in Book 2023, at Page 365 of the
Official Records, through and across said property as follows:
The land of the Grantor, located in the Southeast quarter of the
Southeast quarter of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt
Lake Base and Meridian; the center line of said right of way and
easement shall extend through and across the above described land and
premises as follows, to-wit: Beginning at a point 1020 feet West and
94
33 feet North from the Southeast corner of said Section 30; thence
North 0(degree)04'58" West 1008.00 feet.
14. A right of way and easement for the erection and continued maintenance,
repair, alteration, and replacement of electric transmission,
distribution, and telephone circuits, and 4 guy anchors and 5 poles,
with the necessary guys, stubs, cross-arms and other attachments
thereon, or affixed thereto, for the support of said circuits, as
created in favor of UTAH POWER & LIGHT COMPANY by instrument recorded
March 27, 1963 as Entry No. 1308451, in Book 2031, at Page 621 of the
Official Records, through and across said property as follows:
Beginning at the South boundary line of the Grantors' land at a point
33 feet North and 992 feet West, more or less, from the Southeast
corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base
and Meridian; thence North 21(degree)22' West 24 feet, more or less;
thence North 0(degree)05' West 644 feet; thence East 53 feet on said
land and being in the Southeast quarter of the Southeast quarter of
said Section 30.
15. A right of way and easement for the erection and continued maintenance,
repair, alteration, and replacement of electric transmission,
distribution, and telephone circuits, and one guy anchor and 2 poles,
with the necessary guys, stubs, crossarms and other attachments
thereon, or affixed thereto, for the support of said circuits, as
created in favor of UTAH POWER & LIGHT COMPANY by instrument recorded
January 20, 1964 as Entry No. 1973580, in Book 2145, at Page 234 of the
Official Records, through and across said property as follows:
Beginning on the East boundary fence of the Grantors' land at a point
1319 feet North and 495 feet West, more or less, from the Southeast
corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base
and Meridian; thence South 89(degree)57' West 471.5 feet; thence South
50(degree)42' West 34 feet to the West boundary fence of said land and
being in the Southeast quarter of the Southeast quarter of said Section
30.
16. A right of way and easement for the erection and continued maintenance,
repair, alteration, and replacement of electric transmission,
distribution, and telephone circuits, and one guy anchor and 2 poles,
with the necessary guys, stubs, crossarms and other attachments
thereon, or affixed thereto, for the support of said circuits, as
created in favor of UTAH POWER & LIGHT COMPANY by instrument recorded
January 20, 1964 as Entry No. 1973581, in Book 2145, at Page 235 of the
Official Records, through and across said property as follows:
Beginning on the East boundary fence of the Grantors' land at a point
1300 feet North and 900 feet West, more or less, from the Southeast
corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base
and Meridian; thence South 50(degree)42' West 10.4 feet; thence South
0(degree)05' East 245 feet, more or less, to the South boundary line of
said land and being in the Southeast quarter of the Southeast quarter
of said Section 30.
95
17. A right of way and easement for the erection and continued maintenance,
repair, alteration, and replacement of electric transmission,
distribution, and telephone circuits, and no guy anchors and 1 pole,
with the necessary guys, stubs, crossarms and other attachments
thereon, or affixed thereto, for the support of said circuits, as
created in favor of UTAH POWER & LIGHT COMPANY by instrument recorded
January 20, 1964 as Entry No. 1973582, in Book 2145, at Page 236 of the
Official Records, through and across said property as follows:
Beginning on the North boundary line of the Grantors' land at a point
1050 feet North and 1000 feet West, more or less, from the Southeast
corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base
and Meridian; thence South 0(degree)05' East 355 feet, more or less, to
an existing pole on said land and being in the Southeast quarter of the
Southeast quarter of said Section 30.
18. Intentionally omitted.
19. A right of way and easement as disclosed by means instruments of
record, including that certain Quit-Claim Deed recorded as Entry No.
2885193, in Book 4424, at Page 297 of the Official Records, through and
across said property as follows:
Beginning at a point on the North line of a 4 rod Street which is South
89(degree)56'54" West 993.80 feet and North 00(degree)04'58" West 33.00
feet from the Southeast corner of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1
West, Salt Lake Base and Meridian, and running thence North
00(degree)04'58" West 1008.00 feet; thence South 89(degree)56'54" West
60.00 feet; thence South 00(degree)04'58" East 1008.00 feet to the
North line of said street; thence North 89(degree)56'54" East 60.00
feet along said street to the point of beginning.
20. A right of way and easement 6 feet in width to construct, operate,
maintain and remove communication and other facilities, as created in
favor of THE MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY by
instrument recorded April 15, 1981 as Entry No. 3554551, in Book 5237,
at Page 70 of the Official Records, through and across said property as
follows:
An easement six (6) feet in width described by a center line with three
(3) feet on each side as follows: Commencing 885.275 feet West and
North 197 feet from Southeast corner of Section 00, Xxxxxxxx 0 Xxxxx,
Xxxxx 1 West, Salt Lake Base and Meridian; thence South
89(degree)56'54" West 108.525 feet to end.
21. (Affects Parcel 2)
Any existing easements for utilities which may have been constructed
through, over or under that portion of the herein described property
shown as being a portion of vacated 0000 Xxxxx Xxxxxx, as disclosed by
Ordinance recorded August 19, 1982 as Entry No. 3703755, in Book 5403,
at Page 2835 of the Official Records.
22. A right of way and easement 16 feet in width to lay, maintain, operate,
repair, inspect, protect, remove and replace pipe lines, valves, valve
boxes and other gas transmission
96
and distribution facilities, as created in favor of MOUNTAIN FUEL
SUPPLY COMPANY by instrument recorded December 22, 1982 as Entry No.
3742037, in Book 5427, at Page 336 of the Official Records, through and
across said property as follows:
Land of the Grantor located in the Southeast quarter of Section 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base and Meridian, the center
line of said right of way and easement shall extend through and across
the above described land and premises as follows, to-wit: Beginning at
a point North 31.90 feet and West 1317.15 feet from the Southeast
corner of said Section 30; thence North 382.00 feet; thence East 35.00
feet.
23. Notes and other matters set forth in that certain Dedication Plat for
0000 Xxxxx Xxxxxx recorded March 28, 1983 as Entry No. 3773932, in Book
83-3 of Plats, at Page 41 of the Official Records.
24. A right of way and easement 16 feet in width to lay, maintain, operate,
repair, inspect, protect, remove and replace pipe lines, valves, valve
boxes and other gas transmission and distribution facilities, as
created in favor of MOUNTAIN FUEL SUPPLY COMPANY by instrument recorded
May 6, 1983 as Entry No. 3789802, in Book 5457, at Page 99 of the
Official Records, through and across said property as follows:
Land of the Grantor located in the East half of the Southeast quarter
of Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base and
Meridian, the center line of said right of way and easement shall
extend through and across the above described land and premises as
follows, to-wit: Beginning at a point North 762.51 feet and West 43.74
feet from the Southeast corner of said Section 30; thence West 50.01
feet; thence on a curve to the left with a central angle of
30(degree)00'00" and a radius of 150.00 feet and a length of 78.54
feet; thence South 60(degree)00'00" West, 143.77 feet; thence on a
curve to the right with a central angle of 30(degree)00'00", a radius
of 127.00 feet a length of 66.50 feet; thence West 160.00 feet to
Grantor's West property line.
Also beginning at a point North 708.76 feet and West 234.20 feet from
the Southeast corner of said Section 30; thence North 245.00 feet;
thence West 225.00 feet; thence South 115.00 feet.
25. Any existing easements for utilities which may have been constructed
through, over or under that portion of the herein described property
shown as being a portion of vacated 0000 Xxxx Xxxxxx, as disclosed by
Ordinance recorded March 26, 1984 as Entry No. 3920620, in Book 5541,
at Page 1626 of the Official Records.
26. A right of way and easement for ingress and egress as disclosed by
means instruments, including that certain Quit-Claim Deed recorded
April 8, 1986 as Entry No. 4226798, in Book 5783, at Page 2326 of the
Official Records, through and across said property as follows:
Beginning at a point where the centerline of 0000 Xxxx Xxxxxx
intersects the North line of 0000 Xxxxx Xxxxxx extended West, said
point being South 89(degree)56'54" West 1023.80 feet
97
and North 0(degree)04'24" East 676.02 feet from the Southeast corner of
Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base and
Meridian; and running thence West 30.00 feet; thence North
0(degree)04'24" East 220.46 feet to a point of 205.321 foot radius
curve to the right; thence Northeasterly along the arc of said curve
74.06 feet; thence East 66.19 feet to a point on a curve to the left
the radius point of which is South 89(degree)58'45" East 145.321 feet;
thence Southwesterly along the arc of said curve 75.96 feet to a point
of tangency; thence South 0(degree)04'24" West 220.38 feet; thence West
30.00 feet to the point of beginning.
27. A right of way and easement to construct, operate, maintain and remove
communication and other facilities, as created in favor of THE MOUNTAIN
STATES TELEPHONE AND TELEGRAPH COMPANY by instrument recorded August
28, 1990 as Entry No. 4958403, in Book 6247, at Page 2629 of the
Official Records, through and across said property as follows:
Commencing at a point on the North line of 0000 Xxxxx Xxxxxx said point
being South 89(degree)56'54" West 1325.1 feet and North 0(degree)04'58"
West 33.00 feet from the Southeast corner of Section 00, Xxxxxxxx 0
Xxxxx, Xxxxx 1 West, Salt Lake Base and Meridian; thence North 62.00
feet; thence East 4.0 feet; thence South 37.0 feet; thence East 6.0
feet; thence South 25.0 feet more or less to the North line of 0000
Xxxxx Xxxxxx; thence along North line South 89(degree)56'54" West 10.0
feet to the point of beginning.
28. The Recitals, Covenants, Conditions, Restrictions, and Easements and/or
Rights of Way contained in that Special Warranty Deed recorded March 2,
1993 as Entry No. 5445234, in Book 6613, at Page 1040 of the Official
Records.
29. A right of way and easement to lay, maintain, operate, repair, inspect,
protect, remove and replace pipelines, valves, valve boxes and other
gas transmission and distribution facilities, as created in favor of
MOUNTAIN FUEL SUPPLY COMPANY by instrument recorded October 8, 1993 as
Entry No. 5626108, in Book 6773, at Page 1447 of the Official Records,
through and across said property as follows:
Beginning at a point South 89(degree)56'54" West 994.10 feet and North
0(degree)04'54" West 676.00 feet from the Southeast corner of Section
00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base and Meridian; thence
South 89(degree)56'54" West 30.00 feet; thence North 0(degree)04'58"
West 212.00 feet; thence Northeasterly on a 205.32 foot radius curve to
the right 175.79 feet; thence North 49(degree)07'42" East 38.22 feet;
thence Northerly on a 144.69 foot radius curve to the left 124.27 feet;
thence North 0(degree)05'00" West 141.99 feet; thence North
89(degree)57'12" East 30.00 feet; thence South 0(degree)05'00" East
142.00 feet; thence Southwesterly on a 174.69 foot radius curve to the
right 150.04 feet; thence South 49(degree)07'42" West 38.22 feet;
thence Southerly on a 175.32 foot radius curve to the left 150.11 feet;
thence South 0(degree)04'58" East 212.00 feet to the point of
beginning.
30. A right of way and easement to lay, maintain, operate, repair, inspect,
protect, remove and replace pipelines, valves, valve boxes and other
gas transmission and distribution facilities, as created in favor of
MOUNTAIN FUEL SUPPLY COMPANY by instrument
98
recorded November 1, 1993 as Entry No. 5644734, in Book 6791, at Page
1283 of the Official Records, through and across said property as
follows:
Beginning at a point 89(degree)56'54" West 994.10 feet and North
0(degree)04'58" West 676.00 feet from the Southeast corner of Section
00, Xxxxxxxx 0 Xxxxx, Xxxxx 1 West, Salt Lake Base and Meridian; thence
South 89(degree)56'54" West 30.00 feet; thence North 0(degree)04'58"
West 212.00 feet; thence Northeasterly on a 205.32 foot radius curve to
the right 175.79 feet; thence North 49(degree)07'42" East 38.22 feet;
thence Northerly on a 144.69 foot radius curve to the left 124.27 feet;
thence North 0(degree)05'00" West 141.99 feet; thence North
89(degree)57'12" West 30.00 feet; thence South 0(degree)05'00" East
142.00 feet; thence Southwesterly on a 174.69 foot radius curve to the
right 150.04 feet; thence South 49(degree)07'42" West 38.22 feet;
thence Southerly on a 175.32 foot radius curve to the left 150.11 feet;
thence South 0(degree)04'58" East 212.00 feet to the point of
beginning.
31. (Affects Parcel 6 and that portion of Parcel 2 assessed under Xxxxxxx
No. 00-00-000-000) There is no recorded means of ingress and egress to
a public road from said property, and it is assumed that there exists a
valid and subsisting easement for that purpose over adjoining
properties, but the Company does not make any representation as to the
existence and/or adequacy of access to and from said property.
EXCEPTIONS XX. 00 XXXXXXX XX. 00, INCLUSIVE, AFFECT PARCEL 8 AND PARCEL 9
32. Taxes for the year 1996 and thereafter, not yet due or payable. The
records of the Salt Lake City Treasurer show that taxes for the year
1995 have been paid in the amount of $4,916.89. (Xxxxxxx No.
00-00-000-000 and Tax District No. 24)
33. Said property lies within the boundaries of West Valley City, and is
subject to any and all charges and assessments thereof. (Phone No.
000-0000)
NOTE: Delinquent Special Assessment charges may have been reported to
Salt Lake County by West Valley City. It is recommended that when
checking with the said City care should be taken to specifically ask if
any delinquent charges have been certified to the Salt Lake County
Treasurer.
34. Said property lies within the boundaries of Xxxxxxx-Xxxxxx Improvement
District, and is subject to any and all charges and assessments
thereof. (Phone No. 000-0000)
NOTE: Delinquent Special Assessment charges may have been reported to
Salt Lake County by Xxxxxxx-Xxxxxx Improvement District. It is
recommended that when checking with the said District care should be
taken to specifically ask if any delinquent charges have been certified
to the Salt Lake County Treasurer.
35. A right of way and easement to construct, operate, maintain and remove
communication and other facilities, as created in favor of THE MOUNTAIN
STATES TELEPHONE AND TELEGRAPH COMPANY by instrument recorded May 15,
1972 as Entry No.
99
2456184, in Book 3072, at Page 399, and re-recorded July 10, 1973 as
Entry No. 2553313, in Book 3369, at Page 277 of the Official Records,
through and across said property (exact location not given).
EXCEPTION NO. 36 AND EXCEPTION NO. 37 AFFECT PARCELS 2 THROUGH 9, INCLUSIVE
36. Matters disclosed by that certain ALTA/ACSM Land Title Survey, dated
August 8, 1995, bearing certificate of date of November 6, 1995,
prepared by Xxxxxx & Malinquist, Inc., as Job No. 03094-953, certified
by Xxxx X. Xxxxxx, License No. 142765.
37. Water rights, claims, or title to water.
