EXHIBIT 10.16
AMENDMENT TO LEASE
THIS AMENDMENT (the "Amendment"), dated as of the 1/st/ day of July,
2002, between Universal Health Realty Income Trust ("Lessor"), a Maryland real
estate investment trust having an address at 000 Xxxxx Xxxxx Xxxx, Xxxx xx
Xxxxxxx, Xxxxxxxxxxxx 00000, and Universal Health Services of Rancho Springs,
Inc. ("Lessee"), a California corporation having an address at 000 Xxxxx Xxxxx
Xxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000, which is a subsidiary of Universal
Health Services, Inc., a Delaware corporation.
W I T N E S S E T H
WHEREAS, by Lease, dated as of December 24, 1986, as the same
heretofore has been amended (said Lease, as amended, is hereinafter referred to
as the "Lease"), certain premises (the "Leased Property"), as therein described,
are now leased and demised by Lessor to Lessee, as successor by merger to Inland
Valley Medical Center, Inc. (f/k/a Universal Health Services of Mission Valley,
Inc.); and
WHEREAS, Lessee also has an interest in that certain facility in
Murrieta, California, commonly referred to as the Rancho Springs Medical Center
(the "Medical Center"); and
WHEREAS, for operational, administrative, reimbursement and other
purposes, Lessee desires to combine the operations of the Leased Property and
the Medical Center for bookkeeping purposes, and as a result of such
combination, the accounts will not distinguish between gross revenues generated
by the Leased Property and gross revenues generated by the Medical Center; and
WHEREAS, Lessee has requested that Lessor modify certain provisions of
the Lease and Lessor has agreed to do so subject to and in accordance with the
terms and provisions of this Amendment; and
WHEREAS, the parties hereto mutually desire to amend the Lease as
herein set forth, and are executing and delivering this Amendment for such
purpose;
NOW, THEREFORE, the parties hereto, in consideration of the terms and
conditions herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby amend the Lease
as follows.
1. Amendment. Notwithstanding anything to the contrary contained in
the Lease, effective on and after July 1, 2002,
(a) the defined term "Excess Gross Revenues" in Article II of
the Master Lease shall be restated in its entirety to read as follows:
"Excess Gross Revenues: The amount by which (i) (y) with
respect to any measuring period to the extent occurring prior
to July 1, 2002, One Hundred (100%) percent of Gross Revenues
for such measuring period and (z) with respect to any
measuring period to the extent occurring on or after July 1,
2002, Fifty-two and 3/10 (52.3%) percent of Gross Revenues for
such measuring period exceeds (ii) the Gross Revenues for the
equivalent period of the Base Year."
(b) for the purpose of determining Gross Revenues with respect
to any measuring period to the extent occurring on or after July 1,
2002 and not encompassing all or any portion of the Base Year, the
defined term "Gross Revenues" in Article II of the Master Lease is
amended by adding the words "and the Medical Center" immediately after
"Leased Property" in all instances where the term "Leased Property"
occurs in the first sentence of the first paragraph thereof.
(c) for the purpose of determining Gross Revenues with respect
to any measuring period to the extent occurring on or after July 1,
2002 and not encompassing all or any portion of the Base Year, the
defined term "Gross Revenues" in Article II of the Master Lease is
amended by adding the words "or the Medical Center" immediately after
"Leased Property" in all instances where the term "Leased Property"
occurs in the first sentence of the second paragraph thereof.
2. Negotiation. If Lessee shall, in its sole discretion, elect to
construct an additional hospital within a twenty-five mile radius of the Leased
Property or the Medical Center, Lessor and Lessee shall, for a period of thirty
(30) days after notice of such election is given to Lessor, negotiate in good
faith for the modification of the Lease if and to the extent necessary to
reflect any reasonably anticipated impact on the calculation of Additional Rent
described in clause (b) of Section 3.1 of the Master Lease and the Fair Market
Value of the Leased Property for all purposes under the Lease resulting from the
complete transfer of a particular type of medical services by Lessee out of the
Leased Property and/or the Medical Center to such new hospital (such as the
transfer of all OB/GYN services to a new hospital). Lessee shall not be
prohibited from making such transfer during the period of negotiation, but any
adjustment pursuant to this paragraph shall be retroactive to the date of
transfer.
3. Brokerage. Lessee represents that it has not dealt with a broker or
finder in connection with this Amendment. Lessee shall indemnify, defend (with
legal counsel reasonably acceptable to Lessor) and save harmless Lessor from and
against all liability, claims, suits, demands, judgments, costs, interest and
expenses (including, without limitation, reasonable counsel fees and
disbursements incurred in the defense thereof) to which Lessor may be subject or
suffer by reason of any claim made for any commission, reimbursement or other
compensation arising from or as a result of the execution and delivery of this
Amendment.
4. Full Force and Effect. The Lease, as hereby amended, shall remain in
full force and effect according to its terms and conditions.
5. Defined Terms. All terms used but not defined in this Amendment
shall, for the purposes hereof, have the respective meanings ascribed to such
terms in the Lease.
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6. Successors and Assigns. The covenants, agreements, terms and
conditions contained in this Amendment shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns.
7. Amendments in Writing. This Amendment may not be changed orally, but
only by a writing signed by the party against whom enforcement thereof is
sought.
8. Effectiveness. This Amendment shall not be binding in any respect
upon Lessor until a counterpart hereof is executed by Lessor and delivered to
Lessee.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the day and year first above written.
UNIVERSAL HEALTH REALTY INCOME
TRUST
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President
UNIVERSAL HEALTH SERVICES OF
RANCHO SPRINGS, INC.
By: /s/ Xxxxx Filton
-------------------------------
Name: Xxxxx Filton
Title: Vice President
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