AMENDED AND RESTATED
REAL ESTATE AND EQUIPMENT MASTER TRANSFER AGREEMENT
This Amended and Restated Real Estate and Equipment Master Transfer
Agreement ("AGREEMENT"), dated December 6, 1996 for reference purposes and
effective as of January 1, 1996 (the "EFFECTIVE DATE"), is made among FHP, Inc.,
a California corporation, FHP of Utah, Inc., a Utah corporation, FHP of New
Mexico, a New Mexico corporation (collectively, "FHP", or each an "FHP
COMPANY"), and Xxxxxxx Medical Management Corporation, a Delaware corporation
("TMMC"), who hereby amend and restate the Real Estate and Equipment Master
Transfer Agreement among the same parties dated as of January 1, 1996, with
reference to the following facts:
A. Each FHP Company is the owner or lessee of one or more medical
and/or administrative facilities described below and the furniture, fixtures and
equipment ("FF&E") located therein. The FF&E shall consist of the following
categories of personal property only: (i) furniture, (ii) data processing
equipment, (iii) medical equipment, (iv) minor equipment, (v) PBX equipment,
(vi) art and (vii) soft costs.
B. Each medical and administrative facility that is owned by an FHP
Company and intended to be the subject of this Agreement is described on
attached Exhibit A (collectively, together with the FF&E therein, the "OWNED
FACILITIES", and individually, together with the FF&E therein, an "OWNED
FACILITY").
C. Each medical and administrative facility that is leased by an FHP
Company and intended to be the subject of this Agreement is described on
attached Exhibit B (collectively, together with the FF&E therein, the "LEASED
FACILITIES", and, individually, together with the FF&E therein, a "LEASED
FACILITY").
D. Each medical and administrative facility leased by FHP, Inc.
pursuant to the Lease Agreement, dated August 2, 1990 between HMO Funding, Inc.
and FHP, Inc., as amended (collectively, the "HMO FUNDING LEASE"), is listed on
attached Exhibit C (collectively, together with the FF&E therein, the "HMO
FUNDING FACILITIES", and, individually, together with the FF&E therein, an "HMO
FUNDING FACILITY").
E. Subject to the terms and conditions of this Agreement, FHP
intends to transfer the Owned Facilities, the Leased Facilities, and the HMO
Funding Facilities to TMMC, and TMMC intends to accept such transfers and assume
the obligations arising therefrom.
Therefore, in consideration of the above facts and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Parties agree as follows:
1. LEASE OF THE OWNED FACILITIES. TMMC shall lease each Owned Facility
from the FHP Company listed on attached Exhibit A as owning each such Owned
Facility, and each such FHP Company shall lease each Owned Facility to TMMC
pursuant to a separate lease agreements, which shall be in substantially the
form and contain substantially the terms and conditions of the Amended and
Restated Lease Agreement attached as Exhibit D.
2. ASSIGNMENT AND ASSUMPTION OF LEASED FACILITIES AND LEASE OF FF&E.
Each FHP Company listed in attached Exhibit B as a lessee and/or sublessee of a
Leased Facility hereby assigns its leasehold and subleasehold interests in each
such lease and sublease to TMMC and concurrently therewith leases all FF&E in
each such Leased Facility to TMMC, and TMMC hereby accepts each such assignment
of leases and subleases and lease of FF&E on the terms and conditions of the
Master Assignment of Leases attached as Exhibit E. The foregoing assignment and
acceptance of such assignment shall survive the expiration of this Agreement.
TMMC shall provide such reasonable cooperation and assistance as may be required
by FHP or any successor in connection with its efforts to secure the agreement
of any or all lessors or sublessors of the Leased Facilities that FHP and any
such successor shall be forever released and discharged from any and all
liabilities under each lease or sublease of a Leased Facility assigned by FHP to
TMMC pursuant to this Section 2.
3. SUBLEASE OF HMO FUNDING FACILITIES. TMMC shall sublease or sub-ground
lease, as the case may be, each HMO Funding Facility, from FHP, Inc., and FHP,
Inc. shall sublease or sub-ground lease each HMO Funding Facility to TMMC
pursuant to separate sublease agreements,
-1-
which shall be in substantially the form and contain substantially the terms and
conditions of the Amended and Restated Sublease Agreement attached as
Exhibit F.
4. TERM. This Agreement shall commence on January 1, 1996 and expire on
December 31, 2000.
5. MISCELLANEOUS.
5.1 NOTICES AND ADDRESSES. The addresses for the parties for
delivery of any notices shall be as follows:
If to any FHP Company:
FHP International Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Attention: Secretary
If to TMMC:
Xxxxxxx Medical Management Corporation
0000 Xxxxxx Xxx
Xxxxx Xxxx, XX 00000
Attention: President
All notices and documents shall be delivered either by (i) messenger
or courier service, (ii) by nationally recognized overnight courier service
(such as Federal Express), or (iii) by registered or certified U.S. Mail,
postage prepaid, return receipt requested. Delivery shall be effective only
upon actual receipt.
5.2 FURTHER ASSURANCES. Each party hereto shall execute, acknowledge
and deliver to each other all documents, and shall take all actions, reasonably
required by such other party from time to time to confirm or effect the matters
set forth herein, or otherwise to carry out the purposes of this Agreement.
5.3 ATTORNEYS' FEES. In the event that any litigation is commenced
concerning or arising out of this Agreement, the party or parties prevailing in
such litigation shall be entitled to recover, in addition to such other relief
as may be granted, its/their reasonable costs and expenses, including without
limitation reasonable attorneys' fees and court costs, whether or not taxable,
as awarded by a court of competent jurisdiction.
5.4 MODIFICATIONS. This Agreement may not be modified orally or in
any other manner except by an agreement in writing signed by the parties hereto
or their respective successors-in-interest.
5.5 ASSIGNMENT. This Agreement is personal to the parties hereto,
and the rights and obligations hereunder are accordingly not assignable either
in whole or in part.
5.6 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of California.
5.7 EXHIBITS. All exhibits attached to this Agreement are
incorporated herein by reference, it being agreed by FHP and TMMC that, except
as hereinafter otherwise provided, mutually agreed upon revised versions of any
or all of Exhibits A, B and C may be substituted for such exhibits from time to
time to reflect the addition or deletion of Owned Facilities, Leased Facilities,
HMO Funding Facilities or any of the FF&E associated with such facilities to or
from said exhibits; provided that such revised exhibits shall only be effective
after they have been mutually agreed upon and duly executed on behalf of each
FHP Company and TMMC. Notwithstanding the foregoing, it is understood and
agreed that neither mutual agreement or execution on behalf of TMMC shall be
necessary to effectuate the deletion from Exhibit A of any facility which has
been sold or otherwise transferred to a new owner or the deletion from Exhibit C
of any facility which has been acquired from HMO Funding, Inc. by FHP or any
successor.
5.8 SUPERSEDING EFFECT. To the extent any of the Owned Facilities
and/or the Leased Facilities were previously transferred to TMMC, this Agreement
shall supersede such
-2-
transfers, and any agreements or other documentation evidencing such prior
transfers are hereby amended and restated in their entirety by this Agreement.
5.9 COUNTERPARTS. This Agreement may be executed in counterparts
with the same force and effect as if the parties had executed one instrument,
and each such counterpart shall constitute an original hereof.
FHP, Inc., a California corporation
By: /s/ Xxxxxxx X. Xxx
---------------------------------------------
Xxxxxxx X. Xxx, Senior Vice President and
Chief Financial Officer
FHP of Utah, Inc., a Utah corporation
By: /s/ Xxxxxxx X. Xxx
---------------------------------------------
Xxxxxxx X. Xxx, Senior Vice President and
Chief Financial Officer
FHP of New Mexico, Inc., a New Mexico corporation
By: /s/ Xxxxxxx X. Xxx
---------------------------------------------
Xxxxxxx X. Xxx, Senior Vice President and
Chief Financial Officer
Xxxxxxx Medical Management Corporation, a Delaware
corporation
By: /s/ Xxxx Xxxxxxxxx
---------------------------------------------
Xxxx Xxxxxxxxx, President
-3-
MASTER TRANSFER AGREEMENT
LIST OF EXHIBITS
Exhibit A List of Owned Facilities
Exhibit B List of Leased Facilities
Exhibit C List of HMO Funding Facilities
Exhibit D Amended and Restated Lease Agreement
Exhibit E Amended and Restated Master Lease Assignment
Exhibit F Amended and Restated Master Sublease Agreement
-4-
AMENDED AND RESTATED LEASE AGREEMENT
1. BASIC PROVISIONS ("BASIC PROVISIONS")
1.1 PARTIES: This Amended and Restated Lease Agreement ("LEASE"), dated
December __, 1996 for reference purposes and made effective as of January 1,
1996 (the "Effective Date), is made by and between FHP __________________, a
_______________ corporation, ("LESSOR") and Xxxxxxx Medical Management
Corporation, a Delaware corporation ("LESSEE") (collectively the "PARTIES", or
individually a "PARTY") to amend and restate that certain Master Lease Agreement
dated as of the Effective Date between the Parties as to the Premises provided
for in Paragraph 1.2 below.
1.2 PREMISES: That certain building which is located at
_______________________, ___________, __________, together with the FF&E
situated therein and the land on which it is located (the "PREMISES"), said
Premises having the projected net book value as of the Effective Date shown on
Exhibit I hereto.
1.3 FF&E: The furniture, fixtures and equipment located on the Premises
and consisting of the following categories of personal property only: (a)
furniture, (b) data processing equipment, (c) medical equipment, (d) minor
equipment, (e) PBX equipment, (f) art and (g) soft costs (the "FF&E"), said FF&E
being more fully described by reference to its net book value on Exhibit II
hereto and to the itemized schedule of FF&E attached as Exhibit III hereto.
1.4 TERM: Five (5) years ("TERM") commencing on January 1, 1996
("COMMENCEMENT DATE") and ending on December 31, 2000 ("EXPIRATION DATE").
1.5 BASE RENT: A monthly amount equal to the sum of (A) 0.6667% (eight
percent (8%) per annum) of the book value as of the Effective Date, set forth in
Exhibit A hereto for the Premises as of the Commencement Date plus (B) an amount
equal to the monthly depreciation expense for the Premises (using Lessor's
depreciation schedules attached as Exhibit IV hereto in effect as of the
Commencement Date) calculated as of the end of each calendar month of the Term
(collectively, "BASE RENT"), payable in twelve (12) monthly installments, each
of which shall be paid on the fifteenth (15th) day of each month immediately
following the month for which the calculation was made, with final payment due
on the fifteenth (15th) day of the month following the Expiration Date.
1.6 PERMITTED USE: Any lawful purposes.
2. PREMISES.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises for the Term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. The parties recognize
that this Lease is what is generally considered to be a "triple net" lease
whereby all risks and liabilities of ownership are assumed by the Lessee.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee on an "as is"
basis without any representations or warranties, express or implied, to the full
extent permitted under Applicable Law (as defined in Paragraph 4.3, below). All
repairs and modifications to the Premises (whether structural or non-structural,
capital or non-capital), including, without limitation, those required to
conform the Premises or any parts thereof to the requirements of any Applicable
Law now in effect or enacted in the future, shall be performed at the sole cost
and expense of Lessee. Notwithstanding any factors judicially developed as a
means of allocating the obligation to make alterations to leased premises to
comply with present or future Applicable Law, it is the intention of the Parties
that such obligations are those of Lessee and are accordingly reflected in rent
payments and other consideration under this Lease.
3. RENT.
Lessee shall cause payment of Base Rent and other rent or charges to be
received by Lessor (collectively "RENT") in lawful money of the United States,
without offset, deduction or prior demand, on or before the day on which it is
due under the terms of this Lease.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-1-
4. USE.
4.1 USE. Lessee shall use the Premises in accordance with all Applicable
Law. Lessee shall not use or permit the use of the Premises in a manner that
creates waste or a nuisance, or that disturbs owners and/or occupants of, or
causes damage to, neighboring premises or properties.
4.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE"
as used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for liability of Lessor to any governmental agency
or third party under any applicable statute or common law theory. Hazardous
Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof. Lessee
shall not engage in any activity in, on or about the Premises which constitutes
a Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law. "REPORTABLE USE" shall
mean (i) the installation or use of any above or below ground storage tank,
(ii) the generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority. Reportable Use shall also include Lessee's being
responsible for the presence in, on or about the Premises of a Hazardous
Substance with respect to which any Applicable Law requires that a notice be
given to persons entering or occupying any of the Premises or neighboring
properties. Notwithstanding the foregoing, Lessee may, without Lessor's prior
consent, but in compliance with all Applicable Law, use any ordinary and
customary materials reasonably required to be used by Lessee in the normal
course of Lessee's business permitted on the Premises, so long as such use is
not a Reportable Use and does not expose the Premises or neighboring properties
to any meaningful risk of contamination or damage or expose Lessor to any
liability therefor.
(b) INDEMNIFICATION. Lessee shall indemnify, protect, defend and
hold Lessor, and its agents, employees, and ground lessors, if any, and the
Premises, harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, costs, claims, liens, expenses, penalties, permits and
attorney's and consultant's fees arising out of or involving any Hazardous
Substance or storage tank brought onto the Premises by or for Lessee or under
Lessee's control.
4.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently and
in a timely manner, comply with all "APPLICABLE LAW," which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
all governmental authorities of competent jurisdiction and any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor's
engineers and/or consultants, relating in any manner to the Premises (including
but not limited to matters pertaining to (i) industrial hygiene,
(ii) environmental conditions on, in, under or about the Premises, including
soil and ground water conditions, (iii) the use, generation, manufacture,
production, installation, maintenance, removal, transportation, storage, spill
or release of any Hazardous Substance or storage tank), now in effect or which
may hereafter come into effect, and (iv) compliance with the terms and
conditions of the Americans with Disabilities Act. Whether or not reflecting a
change in policy from any previously existing policy Lessee shall, within five
(5) days after receipt of Lessor's written request, provide Lessor with copies
of all documents and information, including, but not limited to, permits,
registrations, manifests, applications, reports and certificates, evidencing
Lessee's compliance with any Applicable Law specified by Lessor, and shall
immediately upon receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving failure by Lessee or the Premises
to comply with any Applicable Law.
4.4 INSPECTION; COMPLIANCE. Lessor shall have the right to enter the
Premises at any time, in the case of an emergency, and otherwise at reasonable
times, for the purpose of inspecting the condition of the Premises and for
verifying compliance by Lessee with this Lease and all Applicable Law and to
employ experts and/or consultants in connection therewith and/or to advise
Lessor with respect to Lessee's activities, including but not limited to the
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the party requesting
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-2-
same, unless a Default or Breach (as defined in Paragraph 11.1) of this Lease,
violation of Applicable Law, or a contamination, caused or materially
contributed to by Lessee is found to exist or be imminent, or unless the
inspection is requested or ordered by a governmental authority as the result of
any such existing or imminent violation or contamination. In any such case,
Lessee shall upon request reimburse the Lessor for the costs and expenses of
such inspections.
5. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
5.1 LESSEE'S OBLIGATIONS. Lessee shall, at Lessee's sole cost and expense
and at all times, keep the Premises and all parts thereof (including the FF&E)
in good order, condition and repair, structural and non-structural (whether or
not such portion of the Premises requiring repair, or the means of repairing the
same, are reasonably or readily accessible to Lessee, and whether or not the
need for such repairs occurs as a result of Lessee's use, any prior use, the
elements or the age of such portion of the Premises, and whether or not any
required repairs considered are capital or non-capital), including, without
limiting the generality of the foregoing, landscaping and all equipment or
facilities serving the Premises, such as plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities, and life-safety systems. Without
limiting the generality of the foregoing provision, Lessee shall maintain the
Premises in a manner and in a condition which is at least consistent with
comparable buildings in the immediate area in which the Premises is located.
5.2 LESSOR'S OBLIGATIONS. It is intended by the Parties that Lessor have
no obligation, in any manner whatsoever, to repair or maintain the Premises, the
improvements located thereon, or the FF&E therein, whether structural or non-
structural, all of which obligations are intended to be those of the Lessee
under Paragraph 5.1 hereof. It is the intention of the Parties that the terms
of this Lease govern the respective obligations of the Parties as to maintenance
and repair of the Premises and the FF&E. Lessee and Lessor expressly waive the
benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease with respect to, or which affords
Lessee the right to make repairs at the expense of Lessor or to terminate this
Lease by reason of, any needed repairs.
5.3 EQUIPMENT AND TRADE FIXTURES; ALTERATIONS.
(a) FF&E. This Lease of the Premises shall include all FF&E. Lessee
shall use the FF&E for the purposes for which it is intended, and shall at
Lessee's sole cost and expense maintain and repair the FF&E subject to ordinary
wear and tear and general obsolescence. Lessor shall have no obligation to
maintain or repair any of the FF&E or to replace any FF&E considered inefficient
or obsolete.
(b) ALTERATIONS. Lessee may make any interior alterations or
modifications to the Premises (collectively, "ALTERATIONS") that are not
Structural Alterations (as defined below) without Lessor's prior consent,
provided (i) on the expiration or earlier termination of this Lease, Lessee
shall, at Lessor's election and at Lessee's sole cost, restore all or any
portion of the Premises to the condition existing prior to the installation or
construction of the Alteration(s), (ii) no such Alteration shall affect the
exterior or the structural integrity of the Premises (which shall include the
foundation, bearing walls and structural roof), any telephone closets,
stairwells, elevators, plumbing systems, sprinkler systems (connected to the
building core), life safety systems, HVAC systems (including primary and
secondary loops connected to the building core), and other mechanical or
electrical systems (collectively, "STRUCTURAL ALTERATIONS"), (iii) for any
Alterations where the estimated cost exceeds $50,000, Lessee shall provide
Lessor with at least ten (10) business days prior written notice of the
commencement of construction to permit Lessor the opportunity to post a notice
of non-responsibility pursuant to Applicable Law, and (iv) Lessee shall (A)
obtain, at Lessee's sole cost, all required governmental permits and licenses
required for any proposed Alteration, (B) if required by Lessor, provide Lessor
with copies of all such permits and licenses, and (C) comply with all conditions
imposed on Lessee by such permits and/or licenses. Any Alterations by Lessee
during the Term shall be done in a good and workmanlike manner, with good and
sufficient materials, and in compliance with all Applicable Law. Lessee shall
promptly upon completion thereof furnish Lessor with as-built plans and
specifications, if any, therefor. Any request for a consent to any Structural
Alteration may be withheld in Lessor's sole and absolute discretion.
(c) INDEMNIFICATION. Lessee shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for Lessee
at or for use on the Premises, which claims are or may be secured by any
mechanics' or material man's lien against the Premises or any interest therein.
If any such lien attaches or Lessee receives notice of any such lien, Lessee
shall cause the lien to be released and removed of record within ten (10) days
after Lessor's demand. Despite any other provision of this Lease, if the lien
is not released and removed within
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-3-
ten (10) days after Lessor delivers notice of the lien to Lessee, Lessor may
immediately take all action necessary to release and remove the lien, without
any duty to investigate the validity of such lien, unless lessee has commenced
legal action to contest, dispute, or defend the claims of the lienholder and the
validity of such lien and continues to prosecute such action to a successful
judgment releasing the lienholder's lien against Lessee or Lessor's interest in
the Premises. All expenses (including reasonable attorney's fees) incurred by
Lessor in connection with release of the lien shall be considered rent under
this Lease and be immediately due and payable by Lessee. If Lessee shall, in
good faith, contest the validity of any such lien, claim or demand, then Lessee
shall, at its sole expense defend and protect itself, Lessor and the Premises
against the same and shall pay and satisfy any such adverse judgment that may be
rendered thereon before the enforcement thereof against the Lessor or the
Premises.
5.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require their removal or
become the owner thereof as provided herein, all Alterations made to the
Premises by Lessee shall be the property of and owned by Lessee, but considered
a part of the Premises. Lessor may, at any time and at its option, elect in
writing to Lessee to be the owner of all or any specified part of the
Alterations. Unless otherwise instructed per subparagraphs 5.3(b) and 5.4(b)
hereof, all Alterations shall, at the expiration or earlier termination of this
Lease, become the property of Lessor and remain upon and be surrendered by
Lessee with the Premises.
(b) REMOVAL. Lessor may require that any or all Alterations be
removed by the expiration or earlier termination of this Lease. Lessor may
require the removal or restoration at any time of all or any part of any
Alterations made without the required consent of Lessor.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by
the end of the last day of the Term or any earlier termination date, with all of
the improvements, parts and surfaces thereof clean and free of debris and in
good operating order, condition and state of repair, ordinary wear and tear
excepted. "ORDINARY WEAR AND TEAR" shall not include any damage or
deterioration that would have been prevented by good maintenance practice or by
Lessee performing all of its obligations under this Lease.
6. INSURANCE; INDEMNITY.
6.1 PAYMENT FOR INSURANCE. Lessee shall carry and pay for all insurance
required under this Paragraph 6.
6.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force during
the Term a Commercial General Liability policy of insurance protecting Lessee
and Lessor (as an additional insured) against claims for bodily injury, personal
injury and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis for the
Premises providing single limit coverage in an amount not less than $5,000,000
per occurrence. The limits of said insurance required by this Lease or as
carried by Lessee shall not, however, limit the liability of Lessee nor relieve
Lessee of any obligation hereunder. All insurance to be carried by Lessee shall
be primary and not contributory with any similar insurance that may be carried
by Lessor, whose insurance shall be considered excess insurance only.
(b) CARRIED BY LESSOR. Lessor shall have no obligation to carry any
insurance under this Lease.
6.3 PROPERTY INSURANCE. Lessee shall obtain and keep in force during the
term of this Lease a policy or policies, naming Lessor as additional insured,
with loss payable to Lessee insuring the Premises for loss or damage caused by
the usual all-risk perils. The amount of such insurance shall be equal to the
full replacement cost of each of the Premises, as the same shall exist from time
to time. In the event of a damage or destruction of the Premises, Lessor may
elect that such insurance proceeds be paid to and disbursed through a third-
party escrow or construction disbursement account selected by Lessor.
6.4 INSURANCE POLICIES. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term a "General Policyholders Rating"
of at least A- 14 as set forth in the most current issue of "Best's Insurance
Guide." Lessee shall not do or permit to be done anything which shall
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-4-
invalidate the insurance policies referred to in this Paragraph 6. Lessee shall
cause to be delivered to Lessor certified copies of policies of such insurance
or certificates evidencing the existence and amounts of such insurance with the
insureds and loss payable clauses as required by this Lease. No such policy
shall be cancelable or subject to modification except after thirty (30) days
prior written notice to Lessor. Lessee shall prior to the expiration of such
policies, furnish Lessor with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Lessor may order such insurance and charge the
cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon
demand. If Lessee shall fail to procure and maintain the insurance required to
be carried by Lessee under this Paragraph 6, Lessor may, but shall not be
required to, procure and maintain the same, but at Lessee's expense.
6.5 WAIVER OF SUBROGATION. Without affecting any other rights or remedies
and without imposing on Lessor an obligation to procure property insurance,
Lessee and Lessor ("WAIVING PARTY") each hereby release and relieve the other,
and waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss of or damage to the Waiving Party's property arising
out of or incident to the perils required to be insured against under this
Paragraph 6. The effect of such releases and waivers of the right to recover
damages shall not be limited by the amount of insurance carried or required, or
by any deductibles applicable thereto.
6.6 INDEMNITY. Lessee shall indemnify, protect, defend and hold harmless
the Premises, Lessor and its agents, employees, and contractors, from and
against any and all claims, loss of rents and/or damages, costs, liens,
judgments, penalties, permits, attorney's and consultant's fees, expenses and/or
liabilities (collectively, "CLAIMS") arising out of, involving, or dealing with,
the occupancy of the Premises by Lessee, the conduct of Lessee's business, any
act, omission or neglect of Lessee, its agents, contractors, employees or
invitees, and out of any Default or Breach by Lessee in the performance in a
timely manner of any obligation on Lessee's part to be performed under this
Lease, and any active or passive negligence of Lessor whether any such Claims
are caused in whole or in part by such active and/or passive negligence of
Lessor. In case any action or proceeding is brought against Lessor by reason of
any of the foregoing matters, Lessee upon notice from Lessor shall defend the
same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid
any such Claim in order to be so indemnified.
6.7 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause (including, without limitation, the active or passive negligence of
Lessor), whether the said injury or damage results from conditions arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Notwithstanding Lessor's active or passive negligence or breach of this Lease,
Lessor shall under no circumstances be liable for injury to Lessee's business or
for any loss of income or profit therefrom.
7. DAMAGE OR DESTRUCTION.
7.1 LESSEE'S OBLIGATIONS. If all or any part of the Premises are
destroyed, whether or not by a loss that is caused by a risk required to be
insured under this Lease, this Lease shall continue in full force and effect
without interruption, reduction, or abatement of rent or other expenses
hereunder. Upon occurrence of such damage or destruction, Lessee shall, at
Lessee's sole cost and expense, forthwith repair or restore the Premises to the
condition existing before the occurrence of such damage and destruction, and
replace all FF&E destroyed or damaged thereby. In the event this Lease expires
prior to the completion of such repair, Lessee shall, at Lessor's election,
either (i) continue with full repair and restoration of the Premises, or (ii)
deliver to Lessor an amount determined by Lessor's construction consultant to be
necessary to complete such repair or restoration. Lessor shall have no
obligation to Lessee whatsoever in the event of any damage or destruction to the
Premises or any parts thereof.
7.2 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-5-
8. REAL PROPERTY TAXES.
8.1 PAYMENT OBLIGATION. Lessee shall pay the Real Property Taxes, as
defined in Paragraph 8.2, applicable to the Premises during the Term. All such
payments shall be made at least ten (10) days prior to the delinquency date of
the applicable installment. Lessee shall promptly furnish Lessor with
satisfactory evidence that such Real Property Taxes have been paid. If Lessee
shall fail to pay any Real Property Taxes required by this Lease to be paid by
Lessee, Lessor shall have the right to pay the same, and Lessee shall reimburse
Lessor therefor upon demand.
8.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term "REAL
PROPERTY TAXES" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax imposed upon the Premises by
any authority having the direct or indirect power to tax, including any city,
state or federal government, or any school, agricultural, sanitary, fire,
street, drainage or other improvement district thereof, levied against any legal
or equitable interest of Lessor in the Premises or in the real property of which
the Premises are a part, Lessor's right to rent or other income therefrom,
and/or Lessor's business of leasing the Premises. The term "REAL PROPERTY
TAXES" shall also include any tax, fee, levy, assessment or charge, or any
increase therein, imposed by reason of events occurring, or changes in
applicable law taking effect, during the Term, including but not limited to a
change in the ownership of the Premises or in the improvements thereon, the
execution of this Lease, or any modification, amendment or transfer thereof, and
whether or not contemplated by the Parties.
8.3 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon the Alterations and all FF&E located
within the Premises.
9. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon.
10. ASSIGNMENT AND SUBLETTING.
10.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage or otherwise transfer or encumber or
sublet (collectively, "ASSIGN" or "ASSIGNMENT") all or any part of Lessee's
interest in this Lease or in any of the Premises without Lessor's prior written
consent, which consent shall not be unreasonably withheld subject to the terms
and conditions set forth below, which the Parties agree are reasonable:
a. Any assignment shall not: (i) be effective without the express
written assumption by such assignee or sublessee (either, a "TRANSFEREE") of the
obligations of Lessee under this Lease, or (ii) release Lessee of any of its
direct and primary obligations hereunder to Lessor.
x. Xxxxxx may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.
c. The consent of Lessor to any assignment shall not constitute a
consent to any subsequent assignment by Lessee or to any subsequent or
successive assignment by the assignee or sublessee. However, Lessor may consent
to subsequent assignments or any amendments or modifications thereto without
notifying Lessee or anyone else liable on the Lease or sublease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease or sublease.
d. In the event of any Default or Breach of Lessee's obligations
under this Lease, Lessor may proceed directly against Lessee, any one else
responsible for the performance of the Lessee's obligations under this Lease,
including any sublessee, without first exhausting Lessor's remedies against any
other person or entity responsible therefor to Lessor, or any security held by
Lessor or Lessee.
e. Each request for consent to an assignment shall be in writing,
accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any. Lessee agrees to provide Lessor
with such other or additional information and/or documentation as may be
reasonably requested by Lessor.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-6-
f. Upon receiving Lessee's notice requesting consent to an
assignment, together with all information required pursuant to Paragraph
10.1(e), above, then, without limiting the foregoing, Lessor may refuse to
consent on any commercially reasonable grounds, and refusal to so consent shall
be deemed reasonable if the proposed assignment or subletting does not meet the
following conditions:
i. The assignment or subletting shall be on the same terms and
conditions set forth in Lessee's notice given to Lessor;
ii. No assignment or subletting shall be valid, and no Transferee
shall take possession of any of the Premises until an original of the duly
executed counterpart of the assignment documentation has been delivered to
Lessor;
iii. No Transferee shall have been negotiating with Lessor in the
last six (6) months for space in a building owned by Lessor;
iv. The proposed use of the Premises by the Transferee shall be
permitted by the use provisions of this Lease and in accordance with all
Applicable Laws;
v. The Transferee has the financial capability to fulfill the
obligations imposed by the assignment or subletting;
vi. The Transferee has a reputation in the community for financial
reliability and the bank or other financial references support in full the
financial statements delivered to Lessor on behalf of the Transferee;
vii. The Transferee demonstrates, in Lessor's business judgment, that
it is able to perform the obligations on Transferee's part to be performed under
this Lease;
viii. The Transferee shall not have been involved in any civil,
criminal or administrative litigation or proceedings which is unsatisfactory in
the reasonable opinion of Lessor; and
ix. The Transferee intends to use the Premises for the provision of
medical services or as medical office space.
10.2 ASSIGNMENT TO AN AFFILIATE. Notwithstanding the foregoing provisions
of Paragraph 10.1, above, Lessee may assign this Lease to an Affiliate of Lessee
without the prior consent of Lessor, provided Lessor receives notice of such
intent to assign at least ten (10) days prior the effective date of the
assignment. An "AFFILIATE" for purposes of this Paragraph 10.1(b) shall mean
any entity which directly controls, is under common control with, or is directly
or indirectly controlled by Lessee or FHP International Corporation, a Delaware
corporation. Notwithstanding such permitted assignment, Lessee shall remain
directly and primarily liable to Lessor for all obligations and liabilities of
"Lessee" under this Lease.
10.3 XXXXXXX MEDICAL GROUP. Notwithstanding the foregoing provisions of
Paragraphs 10.1 and 10.2, above, Lessee may allow employees, agents,
contractors, representatives, invitees, guests, visitors and customers of
Xxxxxxx Medical Group, including any physicians or physician groups having a
management agreement or management agreements with Lessee, to use all or any
portion of the Premises at any time and from time to time (collectively, the
"TMG USE"). TMG Use shall not include a subletting or an assignment of Lessee's
interest under this Lease. However, TMG Use shall not require notice to Lessor
or Lessor's consent. Lessee shall remain directly responsible to Lessor for any
such TMG Use as if the TMG Use were directly by Lessee.
11. DEFAULT; BREACH; REMEDIES.
11.1 DEFAULT; BREACH. A "DEFAULT" is defined as a failure by the Lessee
to observe, comply with or perform any of the terms, covenants, conditions or
rules applicable to Lessee under this Lease. A "BREACH" is defined as the
occurrence of any one or more of the following Defaults, and, where a grace
period for cure after notice is specified herein, the failure by Lessee to cure
such Default prior to the expiration of the applicable grace period, and shall
entitle Lessor to pursue the remedies set forth in Paragraph 11.2:
(a) NONPAYMENT OF RENT. Failure to pay any installment of Base
Rent or other rent due and payable hereunder, upon the date when
payment is due, such
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-7-
failure continuing for a period of ten (10) business days after written
notice of such failure, it being understood and agreed that Lessor shall
not be required to comply with the foregoing grace period and notice
provisions more often than twice in any twelve (12) month period; or
(b) OTHER OBLIGATIONS. Failure to perform any obligation,
agreement or covenant under this Lease, other than Lessee's obligation
to pay Base Rent, such failure continuing for thirty (30) calendar
days after written notice of such failure or such longer period as is
reasonably necessary to remedy such failure, provided that Lessee
shall continuously and diligently pursue such remedy until such
failure is cured.
11.2 REMEDIES. In the event of a Default of this Lease by Lessee, within
thirty (30) days after written notice to Lessee (or in case of an emergency,
without notice), Lessor may at its option (but without obligation to do so),
perform such duty or obligation on Lessee's behalf, including but not limited to
the obtaining of reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. The costs and expenses of any such performance
by Lessor shall be due and payable by Lessee to Lessor upon invoice therefor.
In the event of a Breach of this Lease by Lessee, with or without further notice
or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of all or any of the
Premises by any lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately surrender possession of the Premises to
Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the
worth at the time of the award of the unpaid rent which had been earned at the
time of termination; (ii) the worth at the time of 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 the Lessee proves could have
been reasonably avoided, (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom. The worth at the time of award of the amount
referred to in provision (iii) of the prior sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent. Efforts by Lessor to mitigate
damages caused by Lessee's Default or Breach of this Lease shall not waive
Lessor's right to recover damages under this Paragraph.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, and, for such purposes,
Lessee acknowledges that the restrictions on assignment set forth in Paragraph
10, above, are reasonable limitations.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located.
The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.
Provided, however, in the event of a Breach occurring with respect to
Premises located in the State of Utah, Lessee shall have the following remedies
rather than the remedies set forth in the preceding provisions of this Paragraph
11.2:
(X) Terminate Lessee's rights under this Lease by written notice, or
reenter and take possession of the Premises by lawful means with or without
terminating this Lease; and
(Y) Lessee shall pay to Lessor the cost of recovering possession of
the Premises, all costs of reletting, including reasonable renovation,
remodeling and alteration of the Premises, the amount of any commissions paid by
Lessor in connection with such reletting, and all other costs and damages
arising out of Lessee's default, including attorneys' fees and costs.
Notwithstanding any termination or reentry, the liability of Lessee for the rent
payable under this Lease shall not be extinguished for the balance of the Term,
and Lessee agrees to compensate Lessor on demand for any deficiency arising from
reletting the Premises.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-8-
11.3 BREACH BY LESSOR. In the event of any actual or alleged breach by
Lessor of any obligation to be performed by Lessor under this Lease, Lessee
shall have the sole remedy of damages or injunctive relief; under no
circumstances shall Lessee have the right to terminate this Lease.
12. CONDEMNATION. If any of the Premises or any portion thereof are taken
under the power of eminent domain or sold under the threat of the exercise of
said power (all of which are herein called "CONDEMNATION"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs. If more than ten percent (10%) of
the floor area of any of the Premises, or more than twenty-five percent (25%) of
the land area not occupied by any building, is taken by condemnation, Lessee
may, at Lessee's option, to be exercised in writing within ten (10) days after
Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within ten (10) days after the condemning authority shall have
taken possession) terminate this Lease as of the date the condemning authority
takes such possession. If Lessee does not terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and effect as to the
portion of the Premises remaining, except that the Base Rent shall be reduced in
the same proportion as the rentable floor area of the Premises taken bears to
the total rentable floor area of the building located on the Premises. No
reduction of Base Rent shall occur if the only portion of the Premises taken is
land on which there is no building. Any award for the taking of all or any part
of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any compensation, separately awarded
to Lessee for Lessee's relocation expenses and/or loss of Lessee's Trade
Fixtures. In the event that this Lease is not terminated by reason of such
condemnation, Lessor may, to the extent of its net severance damages received,
over and above the legal and other expenses incurred by Lessor in the
condemnation matter, repair any damage to the Premises caused by such
condemnation, except to the extent that Lessee has been reimbursed therefor by
the condemning authority. Lessee shall be responsible for the payment of any
amount in excess of such net severance damages required to complete such repair.
In the alternative, Lessor shall have the right to assign all such severance
damages to Lessee, in which case Lessee shall forthwith undertake the full
repair or restoration of the Premises at Lessee's sole cost and expense.
13. TENANCY STATEMENT.
13.1 Each Party (as "RESPONDING PARTY") shall within ten (10) days after
written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party an estoppel certificate stating
whether the Responding Party is aware of any default of the Requesting Party,
the remaining Lease term, any unexercised options, the Base Rent payable, the
extent of any Base Rent paid in advance, and such other information as may be
reasonably requested by the Requesting Party.
13.2 If Lessor desires to finance, refinance, or sell any of the Premises,
any part thereof, or the building of which such Premises are a part, Lessee
shall deliver to any potential lender or purchaser designated by Lessor such
financial statements of Lessee as may be reasonably required by such lender or
purchaser, including but not limited to Lessee's most recent financial
statements.
14. LESSOR'S LIABILITY. In the event of a transfer of Lessor's title or
interest in any of the Premises or in this Lease, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor.
15. SEVERABILITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
16. TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
17. RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
18. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-9-
19. NOTICES. All notices required or permitted by this Lease shall be in
writing and shall be delivered to Lessor or Lessee at the following addresses,
or at such other address(es) as either party may, from time to time, by like
notice designate:
If to Lessor: FHP, Inc.
0000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Attention: Secretary
If to Lessee: Xxxxxxx Medical Management Corporation
0000 Xxxxxx Xxx
Xxxxx Xxxx, XX 00000
Attention: President
All notices and documents shall be delivered either by (i) messenger or courier
services, (ii) by nationally recognized overnight courier service (such as
Federal Express), or (iii) by registered or certified U.S. Mail, postage
prepaid, return receipt requested. Delivery shall be effective only upon actual
receipt.
20. WAIVER. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to, or approval of, any subsequent or similar
act by Lessee, or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease requiring such consent.
21. RECORDING. Neither this Lease nor a memorandum thereof shall be recorded.
22. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of any of
the Premises or any part thereof beyond the expiration or earlier termination of
this Lease.
23. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
24. COVENANTS AND CONDITIONS. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
25. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and, except as
otherwise expressly provided herein, be governed by the laws of the State in
which the Premises are located. Any litigation, arbitration or other method of
dispute resolution between the Parties concerning this Lease shall be initiated
and determined in the County of Orange, California.
26. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
26.1 SUBORDINATION. This Lease shall be subject and subordinate to any
ground lease, mortgage, deed of trust, or other hypothecation or security device
(collectively, "SECURITY DEVICE"), now or hereafter placed by Lessor upon any of
the Premises, to any and all advances made on the security thereof, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Lessee agrees that the entity holding any such Security Device (a "LENDER")
shall have no duty, liability or obligation to perform any of the obligations of
Lessor under this Lease, but that in the event of Lessor's default with respect
to any such obligation, Lessee will give any such Lender whose name and address
have been furnished Lessee in writing for such purpose notice of Lessor's
default and allow such Lender thirty (30) days following receipt of such notice
for the cure of said default before invoking any remedies Lessee may have by
reason thereof. If any Lender shall elect to have this Lease superior to the
lien of its Security Device and shall give written notice thereof to Lessee,
this Lease shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.
26.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
26.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one month's rent.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-10-
26.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "NON-DISTURBANCE AGREEMENT") from the
Lender that Lessee's possession and this Lease will not be disturbed so long as
Lessee is not in Breach hereof and attorns to the record owner of the Premises.
26.4 SELF-EXECUTING. The agreements contained in this Paragraph 26 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of any of the Premises, Lessee and Lessor shall execute
such further writings as may be reasonably required to separately document any
such subordination or non-subordination, attornment and/or non-disturbance
agreement as is provided for herein.
27. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part, as Lessor may reasonably deem necessary. .
28. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.
29. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
The Parties hereto have executed this Lease as of the date first above written.
Lessor: Lessee:
_________________________________ Xxxxxxx Medical Management Corporation
By: _____________________________ By: _____________________________
Xxxxxxxx W. Price III Xxxx X. Xxxxxxxxx
Its: ____________________________ Its: President & CEO
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-11-
EXHIBIT I
The projected net book value as of January 1, 1996 and the net book value
as of September 30, 1996 of the Premises located at _____________________,
______________, _______________ are $________________ and $________________,
respectively.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-12-
EXHIBIT II
The net book value as of September 30, 1996 of the FF&E situated within the
Premises located at _____________________, ______________, _______________ is
$_______________________.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-13-
EXHIBIT III
Schedule of FF&E
To be supplied.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-14-
EXHIBIT IV
Depreciation Schedule
To be supplied.
EXHIBIT D TO MASTER TRANSFER AGREEMENT
-15-
MASTER ASSIGNMENT OF LEASES
All initially capitalized terms not otherwise defined in this
Master Assignment of Leases ("ASSIGNMENT") shall have the same meaning as
ascribed to them in the Real Estate and Equipment Master Transfer Agreement
of even date to which this Master Assignment of Leases is attached and into
which it is incorporated by reference (the "MASTER TRANSFER AGREEMENT").
This Assignment, dated for reference purposes and effective on Effective
Date, is made Orange County, California between each FHP Company listed on
attached Exhibit B to the Master Transfer Agreement (each, an "ASSIGNOR" or
collectively, "ASSIGNORS"), and XXXXXXX MEDICAL MANAGEMENT CORPORATION, a
Delaware corporation ("ASSIGNEE"), with reference to the following facts:
A. Each Assignor is the lessee or sublessee of one or more Leased
Facilities under those certain leases and subleases described more particularly
on Exhibit B attached to the Master Transfer Agreement (collectively, the
"LEASES").
B. Pursuant to the Master Transfer Agreement, Assignors desire to
(i) assign all of their respective right, title and interest as lessees and
sublessee in the Leases to Assignee and, (ii) concurrently therewith, lease the
FF&E in each such Leased Facility to Assignee.
Therefore, based on the above facts and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. Each Assignor hereby respectively assigns to Assignee all of such
Assignor's right, title and interest as lessee and/or sublessee in those Leases
in which such Assignor has an interest as lessee or sublessee (including,
without limitation, any and all options, right of first refusal, rights of first
notice and any other preferential rights in favor of the lessee in the Leases to
the full extent such rights assignable), and Assignee (i) accepts these
assignments and assumes and agrees to perform, as direct obligations to each and
every owner of the Leased Facilities, all the obligations of Assignors as
lessees and/or sublessees under the Leases, which obligations arise after the
Effective Date and (ii) to the extent leasehold improvements were installed at
the expense of the FHP Company leasing such Leased Facility, agrees to pay to
Assignor as additional monthly rent an amount equal to the sum of (A) 0.6667%
(eight percent (8%) per annum) of the book value of the leasehold improvements
in each Leased Facility as of the Effective Date plus (B) the monthly
depreciation expense of such leasehold improvements in each Leased Facility
calculated at the end of each calendar month using the FHP depreciation
schedules in place as of the Effective Date.
2. In addition, subject to the purchase obligations of Assignee as
more particularly set forth in Section 4.2 of the Master Transfer Agreement and
in consideration of the assignment and assumption of Leases in Section 1, above,
each Assignor hereby leases to Assignee all FF&E in each Leased Facility, and
Assignee hereby (i) leases all such FF&E from each such Assignor and (ii) agrees
to pay to assignor as additional monthly rent an amount equal to the sum of (A)
0.6667% (eight percent (8%) per annum) of the book value of the FF&E in each
Leased Facility as of the Effective Date plus (B) the monthly depreciation
expense of the FF&E in each Leased Facility calculated at the end of each
calendar month using the FHP depreciation schedules in place as of the Effective
Date. Assignee shall use the FF&E for the purposes for which it is intended and
shall, at Assignee's sole cost and expense, maintain the FF&E in good condition
and repair, subject to ordinary wear and tear and general obsolescence. No
Assignor shall have any obligation to maintain, repair or replace any of the
FF&E.
3. Assignee shall and does indemnify and hold harmless Assignors and
each of them against all liability, damages, judgments, claims, actions or
demands (collectively, "CLAIMS") against them or any of them arising out of or
in any way connected with (i) the lessee's and/or sublessee's obligations under
the Leases, which obligations arise after the Effective Date and (ii) the FF&E,
whether based on occurrences before or after the Effective Date and whether made
before or after the Effective Date.
4. Assignors shall and do indemnify and hold harmless Assignee
against all Claims against Assignee arising out of or in any way connected with
the lessee's and/or sublessee's obligations under the Leases, which obligations
arise before the Effective Date.
5. Assignee shall have no right to further assign or sublet any of
the Leased Facilities or the leaseholds or subleaseholds thereunder except to an
Affiliate or Assignee. For purposes of this paragraph 5, an "AFFILIATE" shall
mean any entity that directly or indirectly controls, is controlled by or is
under common control with Assignee or FHP International Corporation, a Delaware
corporation. Notwithstanding the foregoing provisions of this Section 5,
assignee may
EXHIBIT E TO MASTER TRANSFER AGREEMENT
allow employees, agents, contractors, representatives, invitees, guests,
visitors and customers of Xxxxxxx Medical Group, including any physicians or
physician groups having a management agreement or management agreements with
Assignee, to use all or any portion of the Leased Facilities at any time and
from time to time (collectively, the "TMG USE"). TMG Use shall not include a
subletting or an assignment of Assignee's interest under the Leases.
However, TMG Use shall not require notice to Assignor or Assignor's consent.
Assignee shall remain directly responsible to Assignor for any such TMG Use
as if the TMG Use were directly by Assignee.
6. This Assignment is subject to all subleases of the Leases and the
Leased Facilities, and the transfer of the leaseholds under this Assignment
includes the benefits and obligations arising under such subleases.
The parties hereto have executed this Assignment by their execution of
the Master Transfer Agreement to which this Assignment is attached.
EXHIBIT E TO MASTER TRANSFER AGREEMENT
EXHIBIT F
AMENDED AND RESTATED SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease"), dated December __, 1996 for
reference purposes and effective as of January 1, 1996 (the "Effective Date").
is made in Orange County, California between ____________ ("SUBLESSOR") and
Xxxxxxx Medical Management Corporation, a Delaware corporation ("SUBLESSEE"),
who hereby amend and restate that certain Master Sublease Agreement dated as of
the Effective Date between the same parties, with reference to the following
facts:
A. Sublessor is the lessee or sub-ground lessee of a facility owned
by HMO Funding, Inc., which is located at ___________, ____________, ______
(hereinafter the "HMO FUNDING FACILITY"), pursuant to a lease between Sublessor
and HMO Funding, Inc. (the "MASTER LEASE").
B. Sublessor desires to (i) sublease the HMO Funding Facility to
Sublessee and, (ii) concurrently therewith, sublease the FF&E (as hereinafter
defined) in such facility to Sublessee.
Therefore, based on the above facts and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. FF&E. As used in this Sublease, the term "FF&E" shall mean the
furniture, fixtures and equipment located in the HMO Funding Facility and
consisting of the following categories of personal property only: (a)
furniture, (b) data processing equipment, (c) medical equipment, (d) minor
equipment, (e) PBX equipment, (f) art and (g) soft costs, said FF&E being more
fully described by reference to its net book value on Exhibit I hereto and to
the itemized schedule of FF&E attached as Exhibit II hereto.
2. SUBLEASE. As of the Effective Date, Sublessor hereby subleases
to Sublessee the HMO Funding Facility and, concurrently therewith, subleases the
FF&E to Sublessee on the terms and conditions hereinafter set forth. Sublessee
shall use such FF&E for the purposes for which it is intended and shall, at
Sublessee's sole cost and expense, maintain the FF&E in good condition and
repair, subject to ordinary wear and tear and general obsolescence. Sublessee
shall perform all obligations of Sublessor under the Master Lease with respect
to such FF&E. As between Sublessor and Sublessee, Sublessor shall have no
obligation to maintain, repair or replace any of the FF&E.
3. SUBLEASE TERM. The term of this Sublease shall be one (1) day
less than the "Initial Term" or the "Extended Term", as the case may be, of the
Master Lease.
4. USE. The HMO Funding Facility shall be used and occupied by
Sublessee for the uses permitted under the Master Lease and for no other
purpose.
5. SUBRENTAL. Sublessee shall pay to Sublessor a monthly subrental
equal to the sum of the following: (A) all monthly rental, operating expenses,
fees, and other expenses due under the Master Lease for the HMO Funding
Facility, (B) 0.6667% (eight percent (8%) per annum) of the projected book value
of the FF&E and leasehold improvements in the HMO Funding Facility as of the
Effective Date as set forth in Exhibit III hereto, plus (C) themonthly
depreciation expense of the FF&E and leasehold improvements in the HMO Funding
Facility, (collectively "Subrental"), payable in twelve (12) monthly
installments, each of which shall be paid on the fifteenth (15th) day of each
month, immediately following the month for which the calculation was made, with
final payment due on the fifteenth (15th) of the month following expiration of
the Sublease term. For purposes of preceding clause (C), net book value and
depreciation shall be calculated at the end of each calendar month using
Sublessor's depreciation schedules (attached as Exhibit IV hereto) in place as
of the Effective Date.
EXHIBIT F TO MASTER TRANSFER AGREEMENT
6. INCORPORATION OF TERMS OF THE MASTER LEASE.
6.1 This Sublease is subject and subordinate to the Master Lease.
Subject to the modifications set forth in this Sublease, the terms of the Master
Lease are incorporated herein by reference, and shall, as between Sublessor and
Sublessee (as if they were Lessor and Lessee, respectively, under the Master
Lease) constitute the terms of this Sublease except to the extent that they are
inapplicable to, inconsistent with, or modified by, the terms of this Sublease.
In the event of any inconsistencies between the terms and provisions of the
Master Lease and the terms and provisions of this Sublease, the terms and
provisions of this Sublease shall govern. Sublessee acknowledges that it has
reviewed the Master Lease and is familiar with the terms and conditions thereof.
6.2 For the purposes of incorporation herein, the terms of the Master
Lease are subject to the following additional modifications:
(a) In all provisions of the Master Lease (under the terms
thereof and without regard to modifications thereof for purposes of
incorporation into this Sublease) requiring the approval or consent of
HMO Funding, Inc., Sublessee shall be required to obtain the approval
or consent of both Sublessor and HMO Funding, Inc.
(b) In all provisions of the Master Lease requiring Sublessor
to submit, exhibit to, supply or provide HMO Funding, Inc. with
evidence, certificates, or any other matter or thing, Sublessee shall
be required to submit, exhibit to, supply or provide, as the case may
be, the same to both HMO Funding, Inc. and Sublessor. In any such
instance, Sublessor shall first determine, in its sole discretion, if
such evidence, certificate or other matter or thing shall be required
and, to the extent provided, satisfactory.
(c) Sublessor shall have no obligation to restore or rebuild
any portion of the HMO Funding Facility after any destruction or
taking by eminent domain, and all such obligations are hereby assumed
by Sublessee during the Sublease term.
7. SUBLESSEE'S OBLIGATIONS. Sublessee covenants and agrees that all
obligations of Sublessor under the Master Lease shall be done or performed by
Sublessee with respect to the HMO Funding Facility, and Sublessee's obligations
shall run to Sublessor and HMO Funding, Inc. as Sublessor may determine in its
sole discretion to be appropriate or be required by the respective interests of
Sublessor and HMO Funding, Inc. Sublessee agrees to indemnify Sublessor, and
hold it harmless, from and against any and all claims, damages, losses, expenses
and liabilities (including reasonable attorneys' fees) incurred as a result of
the non-performance, non-observance or non-payment of any of Sublessor's
obligations under the Master Lease which, as a result of this Sublease, became
an obligation of Sublessee. If Sublessee makes any payment to Sublessor
pursuant to this indemnity, Sublessee shall be subrogated to the rights of
Sublessor concerning said payment. Sublessee shall not do, nor permit to be
done, any act or thing which is, or with notice or the passage of time would be,
a default under this Sublease or the Master Lease. Any default by HMO Funding,
Inc. under the Master Lease shall not constitute as between Sublessor and
Sublessee a default by Sublessor or an eviction, actual or constructive, of
Sublessee and no such default shall excuse Sublessee from the performance or
observance of any of its obligations to be performed or observed under this
Sublease, or entitle Sublessee to receive any reduction in or abatement of the
rent provided for in this Sublease.
8. DEFAULT BY SUBLESSEE. In the event Sublessee shall be in default
of any covenant of, or shall fail to honor any obligation under, this Sublease,
Sublessor shall have available to it against Sublessee all of the remedies
available (a) to HMO Funding, Inc. under the Master Lease in the event of a
similar default on the part of Sublessor thereunder or (b) at law.
EXHIBIT F TO MASTER TRANSFER AGREEMENT
9. QUIET ENJOYMENT. So long as Sublessee pays all of the rent and
other amounts due hereunder and performs all of Sublessee's other obligations
hereunder, Sublessor shall do nothing to affect Sublessee's right to peaceably
and quietly have, hold and enjoy the HMO Funding Facility.
10. CONDITION OF PREMISES. Sublessee acknowledges that it is
subleasing the HMO Funding Facility "as-is" and that Sublessor is not making any
representation or warranty concerning the condition of the HMO Funding Facility
and that Sublessor is not obligated to perform any work to prepare the HMO
Funding Facility for Sublessee's occupancy.
11. ASSIGNMENT AND SUBLETTING. Sublessee shall have no right to
assign or further sublet the HMO Funding Facility or any portion thereof or any
right or privilege appurtenant thereto except to an Affiliate of Sublessee. For
purposes of this paragraph 11, an "AFFILIATE" shall mean any entity that
directly or indirectly controls, is controlled by or is under common control
with Sublessee or FHP International Corporation, a Delaware corporation.
Notwithstanding the foregoing provisions of this paragraph 11, Sublessee may
allow employees, agents, contractors, representatives, invitees, guests,
visitors and customers of Xxxxxxx Medical Group, including any physicians or
physician groups having a management agreement or management agreements with
Sublessee, to use all or any portion of the HMO Funding Facility at any time and
from time to time (collectively, the "TMG USE"). TMG Use shall not include
subletting or an assignment of Sublessee's interest under this Sublease.
However, TMG Use shall not require notice to Sublessor or Sublessor's consent.
Sublessee shall remain directly responsible to Sublessor for any such TMG Use as
if the TMG Use were directly by Sublessee.
The parties hereto have executed this Sublease as of the date first
above written.
Lessor: Lessee:
______________________________ Xxxxxxx Medical Management Corporation
By:___________________________ By:_______________________________
Xxxxxxx X. Xxxxx III Xxxx X. Xxxxxxxxx
its:__________________________ Its: President & CEO
EXHIBIT F TO MASTER TRANSFER AGREEMENT
