FACILITY LEASE AGREEMENT
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THIS FACILITY LEASE AGREEMENT (this "Lease"), made and entered into
this 26th day of June , 1995, by and between CHARTER CANYON BEHAVIORAL
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HEALTH SYSTEM, INC., a Utah corporation (hereinafter called "Landlord"), and
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC., a Utah corporation (hereinafter called
"Tenant"),
W I T N E S S E T H:
LANDLORD AND TENANT hereby agree as follows:
SECTION 1. DEMISED PREMISES, TERM AND USE.
1.1 Landlord, for and in consideration of the covenants hereinafter
contained and made on the part of the Tenant, does hereby grant, demise and
lease unto the Tenant, and Tenant does hereby accept and lease from Landlord,
all of the followinq (collectively, the "Facility").
1.1.1 That certain tract or parcel of land located at 000 Xxxx
0000 Xxxxx, Xxxxxxx, Xxxx as more particularly described in Exhibit A
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attached hereto and incorporated herein by reference in its entirety (the
"Land");
1.1.2 All buildings (which includes the hospital building and
adjacent medical office building), structures and other improvements of
every kind including, but not limited to, alleyways, sidewalks, utility
pipes, conduits and lines (on-site and off-site), parking areas and
roadways appurtenant to such buildings, structures and improvements
presently situated on the Land (collectively, the "Building");
1.1.3 All easements, rights and appurtenances relating to the
Land and the Building;
1.1.4 All machinery and systems, including all components
thereof, now permanently affixed to or incorporated into the Building; and
1.1.5 The furniture, fixtures and equipment identified on the
Fixed Asset Reserve Report of the Facility (the "Fixed Asset Reserve
Report") as shown on a computer run thereof and initialed for
identification on behalf of Landlord and Tenant and which is incorporated
herein as Exhibit B by this reference (hereinafter referred to as the
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"Equipment"). No later than thirty (30) days after the date of this Lease,
Landlord and Tenant shall jointly conduct a physical inventory of the
Equipment, making any corrections to the Fixed Asset Reserve Report as
necessary, and each shall agree in writing upon a final inventory listing
of Equipment. Tenant's signature on the final inventory listing of
Equipment shall serve as its acknowledgement of receipt of the Equipment.
1.1.6 As of the "Rent Commencement Date" (as defined below),
Landlord agrees to transfer and Tenant agrees to accept custody and control
of all patient medical records and all records relating to the medical and
professional staff of the Facility. Tenant agrees to maintain and safeguard
such records in accordance with all provisions of applicable law and to
grant Landlord, and its representatives, free access to such
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records upon request from time to time upon reasonable prior notice.
1.2 The term of this Lease (the "Term") shall be for an initial
period of four (4) years commencing on the date hereof (the "Rent Commencement
Date") and ending at midnight on April 24th , 1999, unless sooner terminated or
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renewed as provided herein. Tenant shall have the privilege to renew and thereby
extend the Term for an additional period of three (3) years commencing upon the
expiration of the original term of this Lease and expiring at midnight on April
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24th , 2002 (the "Renewal Term"), unless sooner terminated as provided herein.
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The aforesaid privilege for Tenant to renew the Term shall be applicable only
if: (i) Tenant provides Landlord written notice of Tenant's exercise of the
Renewal Term at least one hundred eighty (180) days prior to the expiration of
the Term, and (ii) no "Event of Default" (as defined below) exists as of the
date of exercise of the Renewal Term or as of the date of the Renewal Term is to
become effective. Unless the context requires otherwise, any reference herein to
the "Term" shall include any exercised Renewal Term."
1.3 Tenant shall have the right and privilege to use and occupy the
Facility solely for the operation of a licensed acute psychiatric hospital
(including the treatment of mental health and addictive disease), or if the Utah
licensing category changes, the licensing category which most nearly encompasses
the same, which license shall be for a minimum of eighty (80) beds (the
"Permitted Use"), and for no other use without Landlord's prior written consent
(which consent shall not be unreasonably withheld); provided, however, that such
Permitted Use may include the relicensing of no more than eighty (80) beds for
use in connection with a residential treatment program, nursing home program or
other mental health endeavor. Tenant agrees at all times to maintain licensure
by the State of Utah, and accreditation by the Joint Commission on Accreditation
of Healthcare Organizations ("JCAHO"), or if that organization changes or ceases
to exist, its successor. Failure to maintain such licensure and accreditation of
the Facility shall be a material breach of this Lease, giving rise to the remedy
of termination, at Landlord's option, or any other remedy of Landlord pursuant
to Section 16 of this Lease. Tenant shall promptly deliver to Landlord copies of
the Facility's license, when received, and any change thereto during the Term,
copies of all JCAHO and Medicare surveys of the Facility, and any citations
issued with respect to the Facility. There shall be no change in license
category (except due to a change in the law specifying the categories of
licensure or except as otherwise contemplated hereunder) or status without the
prior written consent of Landlord. During the Term, neither Tenant, nor any
affiliate controlling or controlled by Tenant, nor any other entity with
substantially the same ownership as Tenant, shall own, operate or manage, in
whole or in part, any alcohol, chemical dependency or psychiatric hospital,
department, unit, service or rehabilitation center in Utah County. During the
Term, neither Landlord, nor any affiliate controlling or controlled by Landlord,
nor any other entity with substantially the same ownership as Landlord, shall
own, operate or manage, in whole or in part, any alcohol, chemical dependency or
psychiatric hospital, department, unit, service or rehabilitation center in Salt
Lake County.
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SECTION 2. RENT COMMENCEMENT DATE; RENTAL PAYMENTS.
2.1 The "Base Rental" (as defined below), "Percentage Rental" (as
defined below) and all additional charges shall begin to accrue on the Rent
Commencement Date.
2.2 Tenant does hereby covenant and agree to pay to Landlord, for the
use and occupancy of the Facility, at the times and in the manner hereinafter
provided, the following base rental (the "Base Rental"), which shall be paid in
U.S. dollars, in advance in equal monthly installments as set forth below,
without offset or deduction and without notice or invoice from Landlord, on the
first day of each and every month during the Term, commencing upon the Rent
Commencement Date and ending upon the termination date of this Lease.
MONTHS MONTHLY RENTAL
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1 to 3 $10,000.00
4 to 48 $38,000.00
49 to 84 (If applicable, to be determined
pursuant to Section 2.3 below.)
In the event Base Rental shall commence on a day other than the first day of a
month, then the Base Rental for the period from the Rent Commencement Date until
the first day of the month next following shall be prorated accordingly.
2.3 For each 12-month period during the Renewal Term, if any, Base
Rental shall be an amount equal to Base Rental for the previous 12-month period
adjusted to reflect the cost of living increase, if any, as determined by
multiplying the current Base Rental by a fraction, the denominator of which is
the "Consumer Price Index for All Urban Consumers (CPI-U), U.S. City Average,
(1982-84 = 100), Unadjusted, All Items Index" as published by the Bureau of
Labor Statistics of the U.S. Department of Labor (the "Index") for the month
immediately prior to the date which is twelve (12) months prior to any such
Renewal Term and the numerator of which is the Index for the month immediately
prior to the commencement date of such Renewal Term. If the publication of the
Index is discontinued, then Landlord and Tenant shall, in good faith, agree on a
suitable substitute. In no event shall the Base Rental for any 12-month period
of the Renewal Term be less than the Base Rental for the immediately prior 12-
month period or exceed the Base Rental for the immediately prior 12-month period
by more than 5%.
2.4 In addition to the Base Rental and all other amounts payable to
Landlord hereunder, Tenant does hereby covenant and agree to pay to Landlord
quarterly, without notice or invoice from Landlord, an amount equal to two
percent (2%) of the "Net Revenue" (as defined below) (the "Percentage Rental").
Each installment of Percentage Rental shall be payable to Landlord within forty-
five (45) days of the end of each calendar quarter during the Term (prorated for
partial quarters) and shall be accompanied by a certified statement of an
executive officer of Tenant detailing the calculation of Percentage Rental
accompanying such statement. For purposes of this Lease, "Net Revenue" shall
mean the gross revenue of Tenant in any way derived from the provision of goods
or services by Tenant at the Facility reduced by contractual allowances and
other discounts and deductions (including, without limitation, administrative
adjustments and charity care) and reserves in respect of doubtful accounts, it
being understood and agreed that "Net Revenue" shall include, in the case of a
sublease
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to a subsidiary of Tenant, all "Net Revenue" realized by such sublessee and
shall exclude the rent paid by such sublessee to Tenant, to the extent such rent
is based on "Net Revenue" of such sublessee.
2.5 During the Term, Tenant shall maintain accurate and complete
business records (the "Records"). The Records shall be kept in a reasonable and
customary form. Landlord may cause an audit to be made of the Records in order
to verify the amount of all Percentage Rental installments, and prompt
adjustment shall be made by the proper party to compensate for any errors or
omissions disclosed by such audit. At Landlord's option, any such audit may be
conducted by an employee or other agent of Landlord or a certified public
accountant of Landlord's choice. Any such audit shall be conducted during
regular business hours at Tenant's offices and in such manner as not to
interfere with Tenant's normal business activities. Landlord shall bear the cost
of any such audit. In no event shall audits be made pursuant to this Section
2.5 more frequently than annually. All information transmitted to or audited by
Landlord under Sections 2.4 and 2.5 shall be kept strictly confidential.
2.6 All payments provided for in this Lease (those hereinafter
stipulated as well as Base Rental and Percentage Rental) shall be paid or mailed
to:
Charter Canyon Behavioral Health System, Inc.
c/o Charter Medical Corporation
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
or to such other payee or address as Landlord may designate in writing to
Tenant. Any Base Rental, Percentage Rental or other amounts payable to Landlord
hereunder, if not paid within ten (10) days after the date the same is due and
payable, shall bear a late charge equal to the greater of (i) one Hundred and
No/100 Dollars ($100.00) or (ii) a daily service charge at the rate of 10% per
annum for each day the same is past due (the "Past Due Interest Rate"); however,
in no event shall Landlord collect any such charges at a rate in excess of the
legal limits for such charges under applicable laws.
2.7 Tenant understands and agrees that the obligation of the Tenant
to pay Base Rental, Percentage Rental and all other amounts payable to Landlord
hereunder is absolute and unconditional without relief from valuation and
appraisement laws and, except as otherwise contemplated hereunder, shall not be
subject to abatement, diminution, postponement or deduction, or to any defense
other than payment or to any right of set-off, counterclaim or recoupment
arising out of any breach under this Lease, or out of any obligation or
liability at any time owing to Tenant by any of the foregoing. It is the
intention of Landlord and Tenant that this Lease be a "triple net lease," with
Tenant paying during the Term all costs and expenses relating to the Facility,
including but not limited to taxes, maintenance, insurance, utilities, and
operational expenses.
SECTION 3. TAXES.
3.1 Tenant shall pay all real estate taxes and assessments imposed
upon the Facility during the Term or imposed upon the rentals payable under this
Lease as and when due and payable to the applicable governing authority.
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Tenant shall provide written evidence of the payment of the aforesaid taxes and
assessments at least ten (lO) business days prior to the due date (which shall
be the date upon which payment can be made without penalty, interest or
premium). Landlord shall pay all real estate taxes and assessments (including
back taxes, if any) imposed upon the Facility for any periods prior to and
following the Term. Appropriate adjustments shall be made on the commencement
and termination of this Lease consistent with the foregoing. Tenant shall be
liable for all taxes levied against personal property and trade fixtures placed
or used by Tenant in the Facility including, without limitation, the Equipment.
3.2 Tenant shall not be required to pay and there shall be excluded
from any tax xxxx received by Tenant all income, excess profits, estate, single
business, inheritance, succession, transfer, franchise, capital or other tax
assessments upon Landlord. Tenant may contest any tax or assessment at its own
expense. Landlord agrees to cooperate with Tenant and will execute any document
which may be reasonably necessary and proper for any such proceedings.
SECTION 4. CONDITION OF PREMISES.
4.1 Subject to the representations and warranties made by Landlord in
this Lease and subject to any defects which Charter Medical Corporation
("Charter Medical") has agreed to cure pursuant to that certain Letter Agreement
dated April 26, 1995 between Charter Medical and Ramsay Health Care, Inc., the
Facility is leased to Tenant from Landlord in an "AS-IS" condition with respect
to compliance with statutes, ordinances, rules, regulations, and zoning
variances applicable to the manner of operation of Tenant's business at the
Facility. Landlord represents and warrants to Tenant, as of the date hereof,
that (i) the Facility meets all physical and safety standards for the operation
of an "acute psychiatric hospital" under the laws of the State of Utah and (ii)
the Facility and all electrical, plumbing, mechanical, utility, roof, foundation
and other systems thereat are in good and proper working order and repair and
all utility systems are in place and available for Tenant's use. Tenant hereby
undertakes, at its sole cost and expense, the responsibility to obtain all
appropriate governmental approvals and licenses in order for Tenant to operate
the Facility for the Permitted Use during the Term. In no event shall Landlord
be liable for any limitation on use of the Facility which may be imposed by
statute, ordinance or regulation.
4.2 If at any time during the Term the manner of operation of
Tenant's business at the Facility does not meet with codes as required by
regulations of governing authorities, then Tenant will bring the Facility up to
the proper standards at Tenant's expense. Tenant shall be responsible for paying
any and all fines or penalties assessed by any governmental authority if the
manner of operation of Tenant's business at the Facility fails to meet codes and
regulations of governmental authorities during the Term.
4.3 Landlord agrees to provide operations and maintenance manuals in
its possession for all improvements and mechanical systems located on the
Facility. Landlord shall deliver the aforesaid operations and maintenance
manuals on the Rent Commencement Date.
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SECTION 5. REPAIRS AND MAINTENANCE.
5.1 Tenant acknowledges that, except as provided in Section 4.1 and
Section 6 and Section l0, Landlord has made, makes and shall make no
representations or warranties with respect to the Facility, express or implied.
Without limiting the generality of the foregoing, Tenant acknowledges and agrees
that Landlord has made, makes and shall make (i) no representation or warranty
except as provided in Section 4.1 and Section 6 and Section 10 of tenantability
or habitability with respect to the Facility, (ii) no representation or warranty
of fitness with respect to any Equipment or fixtures contained therein, and
(iii) no representation or warranty, except as provided in Section 4.1 and
Section 6 and Section l0, with respect to the physical condition of the Facility
or the operating order or condition of any Equipment.
5.2 Subject to the representations and warranties made by Landlord in
this Lease, Tenant shall be responsible to keep and maintain, repair and replace
the non-structural and other systems and elements of the Facility, in a state of
good order, condition and repair to the full extent not expressly delineated
below as being Landlord's responsibility. Landlord shall be responsible to keep
and maintain, repair and replace the roof, foundations, floor slabs, structural
walls and other structural elements of the Facility in a state of good order,
condition and repair. Any sums or costs expended or incurred by Tenant for
obligations which are Landlord's responsibility under the immediately preceding
sentence and are not otherwise paid to Tenant may be offset by Tenant against
rentals and other charges otherwise due under this Lease. Tenant will suffer no
active or permissive waste thereof or injury to the Facility and shall assume
financial responsibility for any such waste or injury caused by Tenant.
SECTION 6. ENVIRONMENTAL MATTERS.
6.1 Tenant represents and warrants that no handling, transportation,
storage, treatment or usage of hazardous or toxic substances will occur on or at
the Facility in violation of any "Environmental Laws" (as defined below) as a
result of Tenant's occupancy and use of the Facility. Tenant shall comply with
all Environmental Laws in the use and occupancy of the Facility under this
Lease. Tenant agrees to indemnify, defend and hold Landlord and its officers,
partners, employees and agents harmless from any claims, judgments, damages,
fines, penalties, costs, liabilities (including sums paid in settlement of
claims) or loss, including reasonable attorneys' fees, consultants' fees and
experts' fees, which arise during or after the Term in connection with the
violation by Tenant of any Environmental Laws on or at the Facility.
6.2 Landlord represents and warrants as of the date hereof that no
handling, transportation, storage, treatment or usage of hazardous or toxic
substances has occurred in, on, about or under the Facility and that the
Facility is currently in full compliance with all Environmental Laws. Landlord
agrees to indemnify, defend and hold Tenant and its officers, partners,
employees and agents harmless from and against any and all claims, judgments,
damages, fines, penalties, costs, liabilities (including sums paid in settlement
of claims), loss or expenses, including reasonable attorneys' fees, consultants'
fees and experts' fees, in connection with the presence or alleged presence of
hazardous or toxic substances in, on,
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about or under the Facility or any violation of any Environmental Laws for all
periods prior to the date hereof.
6.3 For purposes of this Lease, "Environmental Laws" means all
federal, state, local and foreign laws or regulations, codes, plans, orders,
decrees, judgments, injunctions, notices or demand letters issued, promulgated,
approved or entered thereunder relating to pollution or protection of the
environment, including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substance or wastes.
SECTION 7. IMPROVEMENTS. Tenant may make interior non-structural alterations
within the Building provided that all such alterations are performed in a first-
class manner, in a good and workmanlike condition, utilizing first-quality new
materials and complying with all governmental regulations. Tenant shall not,
without Landlord's prior written consent, which consent by Landlord may not be
unreasonably withheld, make any structural alterations, additions or
improvements in, on or about the Facility.
SECTION 8. FIXTURES AND PERSONAL PROPERTY. Any trade fixtures, business
equipment, inventory, trademarked items, signs and other removable personal
property installed in or on the Facility by Tenant, at its expense, shall remain
the property of Tenant. Landlord agrees that Tenant shall have the right, at
any time or from time to time, to remove any and all of such items provided that
Tenant is not in default under the terms of this Lease and provided that the
Facility is promptly restored to a state of good order, condition and repair
upon the removal of such personal property. Tenant shall pay before delinquency
all taxes, assessments, license fees and public charges levied, assessed or
imposed upon its business operations in the Facility as well as upon its trade
fixtures, merchandise and other personal property in or upon the Facility.
SECTION 9. LIENS. Tenant shall not permit to be created nor to remain
undischarged any lien, encumbrance or charge arising out of any work or work
claim of any contractor, mechanic or laborer or arising out of any material
supplied by materialman which might be, or become, a lien or encumbrance or
charge upon the Facility and Tenant shall not suffer any other matter or thing
whereby the estate, right and interest of Landlord in the Facility might be
impaired.
SECTION l0. LAWS AND ORDINANCES.
l0.1 Tenant agrees to comply with all laws, ordinances, orders and
regulations relating to the manner of operation of Tenant's business at the
Facility (including, without limitation, laws, ordinances, orders and
regulations of any authority governing the licensure of the Facility). The
Landlord shall, at the Landlord's sole expense, comply with all requirements of
law and with all ordinances, regulations or orders of any federal, state,
municipal or other public authority affecting the Facility and with all
requirements of any insurance company insuring the Landlord against casualties.
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l0.2 Tenant agrees not to (i) permit any illegal practice to be
carried on or committed on or at the Facility, (ii) use the Facility for any
purpose whatsoever which might create a nuisance, or (iii) use the Facility in
any manner which would vitiate the insurance on the Facility.
SECTION 11. SERVICES.
11.1 Tenant shall be solely responsible for and promptly pay all
charges for the use and consumption of water, sewer, gas, phone and electricity
and all other utility services used at the Facility.
11.2 Landlord shall not be liable to Tenant in damages or otherwise
if said utilities or services are interrupted or terminated because of necessary
repairs, installations or improvements, or any cause beyond the Landlord's
control.
SECTION 12. DAMAGE OR CASUALTY.
In the event that fifty percent (5O%) or more of the improvements on
the Facility are destroyed or rendered untenantable by fire or other casualty
during the Term (based upon the cost to replace the improvements damaged or
destroyed as compared with the market value of the improvements immediately
prior to such fire or other casualty as shown by certificate of an independent
architect, engineer or appraiser selected by Tenant and approved by Landlord),
then Tenant shall have the right to terminate this Lease effective as of the
date of the casualty by giving, within thirty (3O) days of such casualty,
written notice of termination to Landlord. If said notice of termination is
given within such thirty (3O) day period, the Lease shall terminate and Base
Rental and all other charges shall xxxxx as aforesaid from the date of such
casualty, and Landlord shall promptly repay to Tenant any rent paid in advance
which has not been earned as of the date of such casualty. If this Lease is not
so terminated, and whether the extent of casualty is more or less than 5O%, the
Landlord shall promptly and completely restore the facility. All rentals and
other charges shall be appropriately abated during the restoration period.
SECTIoN 13. INDEMNITY AND INSURANCE.
13.1 Tenant hereby agrees to indemnify and hold Landlord free and
harmless against and from any and all claims and liability arising from Tenant's
use of the Facility and the conduct of its business thereon, and from any
activity, work or other thing done, permitted or suffered by Tenant on or about
the Facility, and shall further indemnify and hold Landlord harmless against and
from any and all claims arising from any act or negligence of Tenant or any
officer, agent, employee, guest or invitee of Tenant, and from and against all
costs, attorneys' fees, expenses and liabilities incurred in or from any such
claim or any action or proceeding brought thereon; and if any case, action or
proceeding be brought against Landlord by reason of any such claim, Tenant, upon
notice from Landlord, shall defend the same at Tenant's expense by counsel
selected by Tenant subject to the reasonable approval of Landlord. Landlord
shall indemnify and hold Tenant harmless from and against any and all claims
arising from any wrongful actions or negligence of Landlord or any officer,
agent, employee, guest or invitee of Landlord, or from any misrepresentation
made by Landlord under this Lease or any other breach or violation of this Lease
and from and against
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all costs, attorneys' fees, expenses and liabilities incurred in or from any
such claim or any action or proceeding brought thereon; and if any case, action
or proceeding be brought against Tenant by reason of any such claim, Landlord,
upon notice from Tenant, shall defend the same at Landlord's expense by counsel
selected by Landlord subject to the reasonable approval of Tenant.
13.2 During the Term, Landlord, at its sole cost and expense, shall
keep the Facility and all of Tenant's improvements and alterations therein,
insured, for the mutual benefit of Landlord and Tenant, against loss or damage
by earthquake, flood, fire and such other risks as are now or hereafter included
in an extended coverage endorsement in common use for commercial property in the
geographic location of the Facility, including vandalism and malicious mischief,
and such other insurance as may from time to time be reasonably required in an
amount equal to the full replacement value of the Facility. If any dispute
between the parties regarding whether the amount of insurance carried complies
with this Section 13.2 cannot be resolved by agreement, Landlord, not more often
than once every year, may request the carrier of the insurance then in force to
determine the full replacement value of the Facility and the resulting
determination shall be conclusive between the parties for the purpose of this
Section 13.2. Landlord and Tenant agree that Bankers Trust Company, as
mortgagee, shall be named as a loss payee on all insurance required under this
Section 13.2.
13.3 During the Term, Tenant, at its sole cost and expense, shall
keep or cause to be kept in force, for the mutual benefit of Landlord, Bankers
Trust Company, as mortgagee, and Tenant, comprehensive general liability
insurance against claims and liability for personal injury, death, or property
damage arising from the use, occupancy, disuse, or condition of the Facility, or
adjoining areas or walkways, providing protection initially of at least Ten
Million Dollars ($10,OOO,OOO) for personal injury to or death of one or more
persons, or property damage arising out of a single accident or occurrence. The
amount of the required public liability insurance shall be increased to a
reasonable and customary sum under the circumstances as agreed by Landlord and
Tenant upon the request of Landlord, not more than once each year.
13.4 During the Term, Tenant, at its sole cost and expense, shall
maintain in force professional liability insurance, providing protection of at
least Ten Million Dollars $1O,OOO,OOO) per occurrence, insuring against claims
and liabilities arising out of or in connection with services rendered at the
Facility.
13.5 During the Term, Tenant, at its sole cost and expense, shall
keep in force in form and coverage reasonably satisfactory to Landlord:
13.5.1 Workers' compensation insurance in an amount necessary to
meet all legally required limits.
13.5.2 Business interruption insurance insuring that Base
Rental, real estate taxes, [Percentage Rental (based upon an average of the
Percentage Rental paid over the last four (4) calendar quarters) and all
other amounts payable to Landlord hereunder] will be paid to Landlord for
such length of time as would be required with the exercise of due diligence
and dispatch to rebuild, repair or replace the Facility, with any outside
time limit on payment
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not to be less than twelve (12) months, if the Facility is destroyed or
rendered inaccessible for the use required herein.
13.5.3 Boiler and machinery insurance if at any time or from
time to time such equipment is located at the Facility.
13.5.4 If Tenant commits, permits, or causes the conduct of any
activity or the bringing or operation of any equipment on or about the
Facility creating unusual hazards, Tenant shall procure and maintain in
force during such activity or operation insurance sufficient to cover the
risks represented thereby. Landlord's demand for usual hazard insurance
hereunder shall not constitute a waiver of Landlord's right to demand the
removal, cessation, or abatement of such activity or operation.
13.5.5 Other insurance, in amounts from time to time reasonably
required by Landlord, against other insurable risks, if at the time they
are commonly insured against for facilities similar to the Facility and
commercially available to Tenant. Tenant may procure and maintain any
insurance not required by this Lease, but all such insurance shall be
subject to all other provisions of this Lease pertaining to insurance and
shall be for the mutual benefit of Landlord and Tenant.
13.6 All insurance required by the provisions of this Lease
shall be carried only with responsible insurance companies, and shall:
13.6.1 Name Landlord as an additional insured or additional loss
payee, as applicable;
13.6.2 Contain a waiver of subrogation by the insurance company
against either Landlord or Tenant. The parties hereby mutually release each
other from all claims for which the claiming party is insured or is under
this Lease required to be insured;
13.6.3 Be primary as to Landlord and noncontributing with any
insurance that may be carried by Landlord;
13.6.4 Not provide for a deductible or more than Twenty-Five
Thousand Dollars ($25,000);
13.6.5 Be provided by insurance companies duly licensed in the
State of Utah and reasonably acceptable to Landlord;
13.6.6 Provide that they cannot be canceled or materially
changed except after thirty (3O) days' written notice by the insurer to
Landlord, Bankers Trust Company, as mortgagee, and Tenant; and
13.6.7 Be on an "occurrence" basis.
To the extent such insurance policies are assignable, at the
expiration of the Term or sooner termination of this Lease, at Landlord's
option, Landlord may reimburse Tenant pro rata for all prepaid premiums on
insurance required to be maintained by Tenant, and Tenant shall thereupon assign
all Tenant's right, title, and interest in that insurance to Landlord. Tenant
may provide any blanket insurance covering the Facility and any other
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location or locations any insurance required or permitted under this Lease,
provided such blanket insurance otherwise meets the requirements of this Lease.
13.7 Each party shall deliver, in the manner required for notices
herein, copies of policies and certificates of all insurance policies required
by this Lease, together with evidence satisfactory of payment required for
procurement and maintenance of the policy, within the following time limits:
13.7.1 For insurance required at the commencement of this Lease,
upon the Rent Commencement Date.
13.7.2 For insurance becoming required at a later date, at least
ten (l0) days before the requirement takes effect.
13.7.3 For any renewal or replacement of a policy already in
existence, each party will use its best efforts to provide evidence at
least ten (10) days before expiration or other termination of the existing
policy, but, in any event, no later than the date of expiration or
termination.
If either party fails or refuses to procure or to maintain insurance as
required by this Lease or fails or refuses to furnish required proof that the
insurance has been procured and is in force and paid for, the other party shall
have the right, but not the obligation, at the other party's election, to
procure and maintain such insurance. The premiums paid by Landlord shall be
treated as additional rent due from Tenant with interest at the Past Due
Interest Rate in accordance with Section 2.4, to be paid on the first day of the
month following the date on which the premiums were paid. Landlord shall give
Tenant prompt notice of the payment of such premiums, stating the amounts paid
and the name of the insurer or insurers, and interest shall run from the date of
payment by Landlord. The premiums paid by Tenant shall be treated as credits
against rentals owed.
13.8 All personal property brought into the Facility shall be at the
risk of Tenant only, and Landlord shall not be liable for theft thereof or any
damages thereto occasioned from any act of any other person, other than as
covered by Section 13.1.
SECTION 14. ASSIGNMENT, SUBLETTING AND OWNERSHIP.
14.1 Tenant shall not, without the prior written consent of Landlord,
which consent Landlord may not unreasonably withhold, it being deemed reasonable
for Landlord to withhold consent if such assignee is not financially able to
fulfill Tenant's duties and obligations hereunder, transfer or assign this Lease
or any interest hereunder, or sublet the Facility or any part thereof, or permit
the use of the Facility or any part thereof by any party other than Tenant.
Consent to one assignment or sublease shall not destroy or waive this provision,
and all later assignments and subleases shall likewise by made only upon the
prior written consent of Landlord. Any and all rents payable to Tenant by any
sublessee shall be included in the calculation of Net Revenue. Subtenants or
assignees shall become liable, without the necessity of any further
documentation whatsoever, directly to Landlord for all obligations of Tenant
hereunder. No such sublease or assignment shall relieve Tenant of liability
under this Lease, and after any such sublease or assignment, Tenant and
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the sublessee or assignee shall be jointly and severally liable for all of
Tenant's obligations hereunder. If Tenant is a partnership, limited liability
company or corporation, then the transfer of a majority interest in the Tenant
other than as set forth below shall be deemed a transfer for purposes of
assignment or subletting which requires the consent of Landlord hereunder. For
the purposes of this Section 14, any single sale, assignment, transfer, or other
disposition, or any series of sales, assignments, transfers, or other
dispositions, of any of the issued and outstanding capital stock of Tenant which
shall result in changing the "ownership" or "control" of Tenant shall be
construed as a transfer of this Lease. "Control" means possession, direct or
indirect, of the power to elect or designate fifty percent (50%) or more of the
governing board, or to direct or cause the direction of the management and
policies of an entity, whether through the ownership of voting securities, by
contract, or otherwise. "Ownership" means the possession, direct or indirect,
of fifty percent (50%) or more of the outstanding securities of an entity.
Notwithstanding anything to the contrary set forth herein, Tenant may assign
this Lease or sublet all or any portion of the Facility without Landlord's
consent, and without paying any Sublease Profits to Landlord, to any person or
entity (i) affiliated with, controlled (directly or indirectly) by or under
common control (directly or indirectly) with Tenant or (ii) into or with which
Tenant is merged or consolidated or (iii) which acquires the stock or assets of
Tenant or any portion thereof.
14.2 Landlord may transfer or assign its interest in the Lease or in
the Facility at any time in its sole discretion, but only if the transferee or
assignee assumes all of Landlord's obligations in writing in favor of Tenant
post assignment, it being understood and agreed that the prior Landlord shall be
liable for obligations arising pre-assignment.
SECTION 15. ACCESS TO PREMISES. Landlord may enter the Facility at any
reasonable time upon reasonable prior notice during the Term for purposes of
inspection of the Facility, to market the Facility or to perform maintenance and
repair obligations imposed upon Landlord by this Lease.
SECTION 16. DEFAULTS BY TENANT.
16.1 The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant (individually, an "Event of
Default" and collectively, "Events of Default):
16.1.1 Failure by Tenant to pay Base Rental, Percentage Rental
or any other amounts payable to Landlord hereunder when due within ten (10)
days after written notice thereof by Landlord to Tenant; or
16.1.2 Failure by Tenant to perform any of its obligations
(other than monetary payments addressed under subsection 16.1.1 above)
under this Lease when due within thirty (30) days after the giving of
written notice thereof by Landlord to Tenant or such longer period of time
as is reasonably needed to perform such obligations under the
circumstances; or
16.1.3 Tenant shall become insolvent, or make a transfer in
fraud of creditors, or make an assignment for the benefit of creditors; or
16.1.4 Tenant shall file a petition under any section or chapter
of Title 11 of the United States Code relating to Bankruptcy, as amended,
or similar bankruptcy laws (the "Bankruptcy Code"), or under any
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similar law or statute of the United States or any state thereof; or there
shall be filed against the Tenant or a petition in bankruptcy or insolvency
or a similar proceeding, and any such proceeding filed against Tenant shall
not have been dismissed within sixty (60) days after its commencement; or
Tenant shall be adjudged bankrupt or insolvent in proceedings filed against
or by Tenant; or
16.1.5 A receiver, liquidator or trustee is appointed for
Tenant's property or any part thereof (the term "property" including,
without limitation, Tenant's interest in the Facility) and is not removed
within sixty (60) days after such appointment; or
16.1.6 The Facility or Tenant's effects or interest therein
should be levied upon or attached under process; or
16.1.7 Tenant shall take advantage of any debtors relief
proceedings under any present or future law whereby the Base Rental,
Percentage Rental or other amounts payable to Landlord hereunder or any
part thereof is or is proposed to be reduced or payment hereof deferred.
16.2 Upon the occurrence of an Event of Default, Landlord shall have
the option to do any one or more of the following, in addition to and not in
limitation of any other remedy permitted by law or equity or by this Lease:
16.2.1 Landlord may without notice or demand on Tenant terminate
this Lease in which event Tenant shall immediately surrender the Facility
in accordance with the provisions of this Lease to Landlord and remove all
of Tenant's effects therefrom; or
16.2.2 Without terminating this Lease, Landlord may reenter the
Facility and repossess itself thereof and expel all persons and effects
therefrom using such force as may be necessary and without being guilty of
trespass, forcible entry, or detainer or other tort and without being
liable for prosecution or any claim for damages therefor; or
16.2.3 Landlord may do whatever Tenant is obligated to do under
the terms of this Lease; and Tenant agrees to reimburse Landlord on demand,
as additional rental, for any expenses, including reasonable attorneys'
fees and interest at the Past Due Interest Rate, which Landlord may incur
in thus effecting compliance with Tenant's obligations under this Lease,
and Tenant further agrees that Landlord shall not be liable for any damages
resulting to the Tenant from such action; or
16.2.4 Landlord may terminate this Lease and recover from Tenant
all damages Landlord may incur by reason of Tenant's default including,
without limitation, all amounts previously due hereunder and a sum which at
the date of such termination represents the present value (discounted at a
rate equal to the then average rate for Moody's "AAA" rated corporate
bonds) of the excess, if any, of (i) the Base Rental, Percentage Rental and
other amounts that would have been payable hereunder by Tenant to Landlord
for the period commencing with the day following the date of such
termination and ending with the date set forth herein for expiration of the
full Term hereunder, over
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(ii) the aggregate reasonable rental value of the Facility for the same
period, all of which present value of such excess sum shall be deemed
immediately due and payable; or
16.2.5 Landlord may, without liability to Tenant and without the
same constituting the basis for any claim of constructive eviction and for
so long as such default continues, suspend furnishing or rendering to
Tenant any property, material, labor, utility or any other service Landlord
would or might otherwise be obligated to render or furnish Tenant either
hereunder, under separate agreements between Landlord and Tenant or under
applicable law, ordinance or regulation; or
16.2.6 In any case in which Landlord has recovered possession of
the Facility after an Event of Default, Landlord may allow the Facility to
remain unoccupied and collect Base Rental, Percentage Rental and other
amounts payable to Landlord hereunder as the same become due; or
16.2.7 In any case in which Landlord has recovered possession of
the Facility after an Event of Default, Landlord may occupy the Facility or
cause the Facility to be altered, divided or otherwise changed or prepared
for reletting and may relet the Facility or any part thereof at the best
price obtainable by reasonable effort without advertisement and by private
negotiations, as agent of Tenant or otherwise, for a term or terms to
expire prior to, at the same time as, or subsequent to the original
expiration date of this Lease and receive the rent therefor, applying the
same first to the payment of such expenses as Landlord may have incurred in
connection with the recovery of possession, preparing for reletting and the
reletting, including procurement, brokerage and reasonable attorneys' fees
and then to the payment of damages in amounts equal to the Base Rental,
Percentage Rental and all other amounts payable to Landlord hereunder and
to the cost and expense of performance of the other covenants of Tenant as
herein provided; and Tenant agrees, irrespective of whether Landlord has
relet, to pay to Landlord damages equal to the Base Rental, Percentage
Rental and other amounts payable to Landlord hereunder, less the net
proceeds of the reletting, if any, as ascertained from time to time, and
the same shall be payable by Tenant on the due dates as specified herein.
In reletting the Facility as aforesaid, Landlord may grant rent
concessions, and Tenant shall not be credited therewith. If Landlord
elects, pursuant hereto, actually to occupy and use the Facility or any
part thereof during any part of the balance of the Term, there shall be
allowed against Tenant's obligation for Base Rental, Percentage Rental or
other amounts payable to Landlord hereunder, during the period of
Landlord's occupancy, the reasonable value of such occupancy, not to exceed
in any event the Base Rental, Percentage Rental and other amounts herein
reserved, and such occupancy shall not be construed as a release of
Tenant's liability hereunder. In no event shall the Tenant be entitled to
any excess of the net proceeds of any such reletting over the Base Rental,
Percentage Rentals and other amounts reserved herein, any such excess being
the sole property of Landlord.
16.3 Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies herein provided or any other remedies
provided by law or
15
equity, nor shall pursuit of any remedy herein provided constitute a forfeiture
or waiver of any Base Rental, Percentage Rental and other amounts payable to
Landlord hereunder or of any damages accruing to Landlord by reason of the
violation of any of the terms, provisions and covenants herein contained. No
action taken by or on behalf of the Landlord shall be construed to be an
acceptance of a surrender of this Lease, or deemed to be evidence thereof.
Forbearance by Landlord to enforce one or more of the remedies herein provided
upon an Event of Default shall not be deemed or construed to constitute a waiver
of such default. Landlord shall, in any event, mitigate damages.
16.4 In no event shall Tenant be entitled to exercise any right,
power or option, otherwise available to or exercisable by Tenant hereunder, at
any time when Tenant is in default in the performance or observance of any of
the covenants, stipulations, agreements, terms, provisions or conditions on its
part to be performed or observed under this Lease beyond the expiration of all
applicable notice and cure periods.
16.5 Notwithstanding anything elsewhere herein to the contrary, in
the event that this Lease is attempted to be assumed under federal or state
bankruptcy law by a trustee in bankruptcy for Tenant or by Tenant as debtor in
possession (hereinafter collectively referred to "Tenant's Trustee") and there
exists an Event of Default or such state of facts which with the giving of
notice and the passage of time would constitute an Event of Default, such
attempted assumption shall not be effective unless Tenant's Trustee:
16.5.1 cures, or provides adequate assurance that it will
promptly cure, all Events of Default;
16.5.2 compensates, or provides adequate assurance that it will
promptly compensate, Landlord for any actual pecuniary loss to
Landlord resulting from all such Events of Default; and
16.5.3 provides "adequate assurance of future performance" (as
such term is herein defined) of Tenant's obligations and covenants
under this Lease.
16.6 For purposes of the foregoing Section 16.5, "adequate assurance
of future performance" shall be deemed to include, without limitation, adequate
assurance of the following:
16.6.1 the source of Base Rental, Percentage Rental and other
amounts payable to Landlord hereunder;
16.6.2 that assumption or assignment of this Lease shall not
breach any provision in any other lease, financing agreement or master
agreement relating to the Facility;
16.6.3 that assumption or assignment of this Lease shall not
violate the provisions of this Lease governing permitted use; and
16.6.4 that assumption or assignment of this Lease shall not
alter or affect materially any other obligation or duty of Tenant, nor be
used to circumvent the remainder of the provisions of this Lease.
16.7 Furthermore, Tenant's Trustee may assign this Lease only if
Tenant's Trustee assumes the Lease in accordance with the above provisions and
the assignee of
16
Tenant's Trustee provides adequate assurance of future performance of Tenant's
obligations and covenants under this Lease (whether or not an Event of Default
has occurred under the Lease), including, without limitation, the items listed
in Section 16.6 above.
16.8 If Landlord shall not be permitted to terminate this Lease as
provided herein because of the provisions of the Bankruptcy Code, the Tenant as
a debtor in possession or any trustee for Tenant agrees promptly, within no more
than fifteen (15) days upon request by Landlord to the Bankruptcy Court, to
assume or reject this Lease, and Tenant, on behalf of itself and any trustee,
agrees not to seek or request any extension or adjournment of any application to
assume or reject this Lease by Landlord with such Court. In no event after the
assumption of this Lease shall any then existing Event of Default remain uncured
for a period in excess of (i) ten (lO) days and (ii) the time period set forth
herein. In the event of a filing of a petition under the Bankruptcy Code,
Landlord shall have no obligation to provide Tenant with any service or
utilities as herein required unless Tenant shall have paid and is current in all
payments for such services.
16.9 If an Event of Default occurs, then in addition to any remedies
provided Landlord under Section 16.2 or at law or in equity, Landlord may retain
to be applied as partial damages, and not as a penalty any prepaid rents.
Should Landlord violate any of the provisions of this Lease, then
Tenant shall furnish Landlord with a written notice thereof (except in an
emergency). Should Landlord fail to correct said violation within a reasonable
time following delivery of such notice, or in an emergency, then, in any such
case, Tenant may cure such violation on Landlord's behalf, offset the cost
thereof against the rent and other sums due under this Lease and may also seek
and enforce any other lawful remedies to which it may be entitled.
SECTION 17. LANDLORD LIABILITY. The term "Landlord" as used in this Lease
means only the then-current owner of the Facility. Landlord shall be under no
personal liability with respect to any of the provisions of this Lease or with
respect to any claims or causes of action arising out of or related to the
Facility or this Lease, and Tenant shall look solely to the equity of the
Landlord in the Facility for the satisfaction of Landlord's liability under the
terms of this Lease or with respect to any such claims or causes of action.
Notwithstanding the foregoing, the provisions of this Section 17 shall not apply
with respect to Landlord's representations and obligations under Sections 4, 6,
10 and 32 and, in the case of any assignment by Landlord, the prior Landlord
shall have liability for obligations arising prior to such assignment and the
assignee shall have liability for obligations arising after the assignment.
SECTION 18. SURRENDER OF PREMISES. Tenant shall, upon expiration of the Term
granted or any earlier termination of this Lease, surrender to Landlord the
Facility in good condition and order excepting only for normal wear and tear and
excluding all trade fixtures, signs and other personal property which remain the
property of Tenant as provided in Section 8 hereof.
SECTION 19. EMINENT DOMAIN.
19.1 In the event that any portion of the building occupied by Tenant
on the Facility or any material portion of the Facility shall be appropriated or
taken under the power of eminent domain by any public or quasi-public authority,
then at the election of Tenant, this Lease shall
17
terminate and expire as of the date of such taking, and both Landlord and Tenant
shall thereupon be released from any liability thereafter accruing hereunder.
19.2 In the event that more than thirty percent (30%) of the square
footage of the parking area on the Facility is taken under the power of eminent
domain by any public or quasi-public authority and Landlord does not provide
adequate substitute parking for Tenant, then Tenant shall have the right to
terminate this Lease as of the date of the taking.
19.3 Notice of any termination relating to such eminent domain
proceeding must be given by the Tenant within sixty (60) days after receipt of
written notice of such taking.
19.4 In the event of any termination under this Section 19, both
Landlord and Tenant shall thereupon be released from any liability thereafter
accruing hereunder.
19.5 Landlord shall be entitled to receive the entire award or
proceeds from any such condemnation or purchase in lieu thereof, including any
award made or proceeds paid for the value of Tenant's interest under this Lease,
the Tenant hereby assigning to the Landlord the Tenant's interest in such award
and proceeds, if any; provided, however, nothing herein contained shall be
construed to preclude Tenant from prosecuting any claim directly against the
condemning authority for loss of business, and damage to and the cost of removal
of trade fixtures, furniture and other personal property belonging to Tenant so
long as no such claim diminishes or adversely affects Landlord's award. If this
Lease is terminated as herein above provided, all items of rent, additional rent
and other charges for the last month of Tenant's occupancy shall be prorated and
Landlord agrees to refund to Tenant any rent, additional rent or other charges
paid in advance.
19.6 If this Lease is not so terminated, Tenant shall remain in that
portion of the Facility which shall not have been appropriated or taken as
herein provided and Landlord shall promptly and fully restore the Facility as an
integrated unit, and during such period all rentals and other changes shall be
appropriately abated and/or reduced, and Landlord shall receive all compensation
or damages arising from the appropriation or taking. For the purpose of this
Section 19, a voluntary sale or conveyance in lieu of condemnation, but under
threat of condemnation shall be deemed an appropriation or taking under the
power of eminent domain.
SECTION 20. ATTORNEYS' FEES. In the event that either party shall institute
any action or proceeding against the other party arising out of or relating to
the Facility or the provisions of this Lease, or any default hereunder, then the
non-prevailing party agrees to reimburse the prevailing party for the reasonable
expenses of attorneys' fees and paralegal fees and disbursements incurred
therein by the prevailing party. Such reimbursement shall include all legal
expenses incurred prior to trial, at trial and at all levels of appeal and post
judgment proceedings.
SECTION 21. NOTICES. All notices and other communications hereunder shall be
(i) in writing (except to the extent otherwise expressly provided hereunder,
(ii) delivered by commercial overnight or same-day delivery service with all
delivery costs paid by sender, or by registered or certified mail with postage
prepaid, return receipt requested, (iii) deemed given, on the date and at the
time (if recorded) of delivery by the commercial delivery service, as shown in
the records thereof (if delivered by commercial
18
overnight or same-day delivery service), or on the date shown on the return
receipt (if delivered by registered or certified mail), and (iv) addressed to
the parties at their addresses specified below (or at such other address for a
party as shall be specified by like notice).
If to Landlord:
--------------
c/o Charter Medical Corporation
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
If to Tenant:
------------
c/o Ramsay Health Care, Inc.
One Poydras Plaza
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: President
SECTION 22. REMEDIES. All rights and remedies of Landlord and Tenant herein
created or otherwise extending at law are cumulative, and the exercise of one or
more rights or remedies may be exercised and enforced concurrently or
consecutively and whenever and as often as deemed desirable.
SECTION 23. SUCCESSORS AND ASSIGNS. All covenants, promises, conditions,
representations and agreements herein contained shall be binding upon, apply and
inure to the parties hereto and their respective heirs, executors,
administrators, successors and assigns; it being understood and agreed, however,
that the provisions of Section 14 are in nowise impaired by this Section 23.
SECTION 24. WAIVER. The failure of either Landlord or Tenant to insist upon
strict performance by the other of any of the covenants, conditions and
agreements of this Lease shall not be deemed a waiver of any subsequent breach
or default in any of the covenants, conditions and agreements of this Lease.
SECTION 25. HOLDING OVER. If Tenant or any party claiming under Tenant remains
in possession of the Facility or any part thereof after any termination or
expiration of this Lease, Landlord, in Landlord's sole discretion, may treat
such holdover as an automatic renewal of this Lease for a month-to-month tenancy
subject to all the terms and conditions of this Lease except that Base Rental
shall double.
SECTION 26. RELATIONSHIP BETWEEN PARTIES.
26.1 The parties hereto agree that it is their intention hereby to
create only the relationship of landlord and tenant, and no provision hereof, or
act of either party hereunder, shall ever be construed as creating the
relationship of principal and agent, or a partnership, or a joint venture or
enterprise between the parties hereto.
26.2 Notwithstanding anything herein to the contrary and
notwithstanding the length of the Term, this contract shall create the
relationship of "landlord" and "tenant" between Landlord and Tenant; no estate
shall pass out of Landlord; Tenant has only a contractual interest not subject
to levy and sale and not assignable or subject to encumbrance by Tenant except
with Landlord's written consent, which consent may be withheld in Landlord's
sole discretion.
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SECTION 27. COVENANT OF TITLE AND QUIET ENJOYMENT. Landlord covenants that it
has full right, power and authority to make this Lease and that Tenant or any
permitted assignee or sublessee of Tenant, upon the payment of the rentals and
performance of the covenants hereunder, shall and may peaceably and quietly
have, hold and enjoy the Facility during the Term without interference from any
parties whomsoever.
SECTION 28. RECORDING. Neither this Lease nor any memorandum or "short-form"
of this Lease shall be recorded by either party.
SECTION 29. FORCE MAJEURE. In the event that either party hereto shall be
delayed or hindered in or prevented from the performance required hereunder by
reason of strikes, lockouts, labor troubles, failure of power, riots,
insurrection, war, acts of God or other reason of like nature not the fault of
the party delayed in performing work or doing acts, such party shall be excused
for the period of delay. The period of the performance of any such act shall
then be extended for the period of such delay.
SECTION 30. CONSENT. Wherever in this Lease Landlord or Tenant is required to
give its consent or approval, such consent or approval shall not be unreasonably
withheld or delayed, unless indicated otherwise in the provision creating the
necessity for such consent.
SECTION 31. TENANT'S AUTHORITY. If Tenant is a corporation or partnership, the
officers or partners of Tenant (as the case may be) executing this Lease on
Tenant's behalf make the following warranties and representations upon which
Landlord is relying in agreeing to lease the Facility to Tenant in accordance
with the terms of this Lease:
31.1 that Tenant has been duly organized, is validly existing and is
in good standing in the State of Utah;
31.2 that Tenant has been duly qualified and is, as of the date
hereof, in good standing to transact business in the State of Utah; and
31.3 that the officers or partners executing this Lease on Tenant's
behalf have been duly authorized by all necessary corporate or partnership
action to execute the same, and that upon the execution hereof, this Lease shall
be the valid and binding obligation of Tenant.
SECTION 32. LANDLORD'S AUTHORITY. If Landlord is a corporation or partnership,
the officers or partners of Landlord (as the case may be) executing this Lease
on Landlord's behalf, make the following warranties and representations upon
which Tenant is relying and agreeing to lease the Facility from the Landlord in
accordance with the terms of this Lease:
32.1 that Landlord has been duly organized, is validly existing and
in good standing in the State of Utah;
32.2 that Landlord has been duly qualified and is, as of the date
hereof, in good standing to transact business in the State of Utah;
32.3 that the officers or partners executing this Lease on Landlord's
behalf have been duly authorized by all necessary corporate or partnership
action to execute the same, and that upon the execution hereof, this Lease shall
be the valid and binding obligation of Landlord; and
20
32.4 that Landlord has obtained all necessary consents, approvals,
authorization, or other action by, or filing with, any federal, state or local
governmental authority necessary in connection with the execution and delivery
by the Landlord of this Lease and the consummation of the transactions
contemplated hereby.
SECTION 33. SEVERABILITY. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provisions shall remain in full force and
effect.
SECTION 34. GOVERNING LAW. This Lease shall be governed by the laws of the
State of Utah.
SECTION 35. MORTGAGEE'S RIGHTS.
35.1 This Lease shall be subject and subordinate to any trust deeds,
deeds to secure debt, security deeds, or mortgages or any liens resulting from
any other method of financing or refinancing (all of which shall hereinafter be
called "Mortgage") now or hereafter encumbering all or any part of the Facility,
and to all advances made or hereafter to be made upon the security thereof, and
renewals and extensions of all or any part thereof but only on condition that
the holder of any such Mortgage recognizes and agrees not to disturb the tenancy
of Tenant under this Lease pursuant to a written agreement in Tenant's favor.
This provision shall be self-operative and no further instrument of
subordination shall be required to establish the priority of any such Mortgage
over this Lease.
35.2 If the holder of any Mortgage (a "Mortgagee") elects to have
this Lease superior to its Mortgage and signifies its election in the instrument
creating its lien or by separate recorded instrument, then this Lease shall be
superior to such Mortgage.
35.3 Within ten (10) days after request therefor by Landlord, the
Tenant agrees to execute and deliver in recordable form an estoppel certificate
to any Mortgagee, proposed mortgagee, purchaser, proposed purchaser, Landlord or
other party designated by any of the foregoing certifying (if such be the case)
that this Lease is unmodified and in full force and effect (and if there has
been modification, that the same is in full force and effect as modified and
stating the modifications); that there are no defenses or offsets against the
enforcement therefor or stating those claimed by the Tenant; and stating the
date to which rentals and other charges have been paid. Such certificate shall
also include such other information as may be reasonably required by Landlord.
In the event Tenant fails to execute and deliver such an estoppel certificate
within ten (10) days after the request therefor, Landlord is hereby expressly
empowered and authorized to execute such a certificate in the name of Tenant,
and as the act of Tenant, as attorney-in-fact for Tenant, the power and
authority herein conveyed being coupled with an interest and irrevocable.
35.4 In the event of any foreclosure, sale under power of sale under
the Mortgage, or sale in lieu of foreclosure or sale under power under any such
Mortgage, this Lease shall, at the election of the purchaser at said sale
continue in full force and effect, and Tenant will, upon request, attorn to and
acknowledge said purchaser or lessor, as the case may be, as Landlord hereunder,
but only if such purchaser recognizes and does not disturb the tenancy of Tenant
under this Lease pursuant to a written agreement in Tenant's favor.
21
35.5 Notwithstanding anything to the contrary setforth herein,
Landlord agrees to deliver, and no rentals or other charges under this Lease
shall accrue or be due and payable unless and until Landlord shall have
delivered, a non-disturbance agreement from the current mortgagee(s) in form and
substance reasonably acceptable to Tenant.
SECTION 36. BROKERS. Tenant and Landlord represent to each other that neither
has had any dealings with any real estate brokers or agents in connection with
the negotiation of this Lease. Landlord and Tenant shall indemnify and hold
each other harmless from and against any and all liability and cost which the
indemnified party may suffer in connection with real estate brokers claiming by,
through or under the indemnifying party for any commission, fee or payment in
connection with this Lease.
SECTION 37. TIME OF THE ESSENCE. Time shall be of the essence in interpreting
the provisions of this Lease.
SECTION 38. ENTIRE AGREEMENT; CONSTRUCTION OF AGREEMENT. This Lease contains
all of the agreements, representations, warranties and understandings of the
parties hereto with respect to matters covered or mentioned in this Lease and no
prior agreement, letters, representations, warranties, promises or
understandings pertaining to any such matters shall be effective for any such
purpose. This Lease may be amended or added to only by an agreement in writing
signed by the parties hereto or their respective successors in interest. All
parties acknowledge and agree that they have been represented by counsel and
that each of the parties has participated in this drafting of this Lease.
Accordingly, it is the intention and agreement of the parties that the language,
terms and conditions of this Lease are not to be construed in any way against or
in favor of any party hereto by reason of the responsibilities in connection
with the preparation of this Lease.
SECTION 39. EQUIPMENT PROVISIONS.
39.1 THE LANDLORD, BEING NEITHER THE MANUFACTURER OF, NOR A SUPPLIER
OF, NOR A DEALER IN THE EQUIPMENT, MAKES NO WARRANTY,EXPRESS OR IMPLIED, TO
ANYONE, AS TO THE FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN,
CONDITION, CAPACITY, PERFORMANCE OR ANY OTHER ASPECT OF THE EQUIPMENT OR ITS
MATERIAL OR WORKMANSHIP. In addition, the Landlord makes no warranty as to the
treatment of this Lease, for tax or accounting purposes. The Landlord further
disclaims any liability for loss, damage or injury to the Tenant or third
parties as a result of any defects, latent or otherwise, in the Equipment
whether arising from the Landlord's negligence or application of the laws of
strict liability. The Tenant agrees to lease and is leasing the Equipment "AS
IS." The Landlord shall have no obligation to maintain, repair, test, adjust or
service the Equipment.
39.2 During the Term, the Landlord hereby assigns to the Tenant,
solely for the purpose of prosecuting a claim relating to the Equipment, all of
the rights, if any, which the Landlord may have pursuant to any warranty to
other representations of any supplier, manufacturer or other vendor with respect
to the Equipment.
39.3 The Tenant, at its own expense, shall (i) maintain and keep the
Equipment in good repair, condition and working order, (ii) use the Equipment
lawfully and (iii) not after the Equipment without the Landlord's prior written
consent, which shall not be unreasonably withheld. If the manufacturer of the
Equipment suggests a standard maintenance schedule, such schedule will
constitute minimum maintenance compliance, and the Tenant, upon request, will
supply the Landlord with evidence of such compliance. In
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addition, the Tenant shall cause the Equipment to be operated in accordance with
any applicable supplier's, manufacturer's or other vendor's manual or other
instruction book supplied by Landlord to Tenant by competent and qualified
personnel. The Equipment shall not be removed from the Building without the
Landlord's prior written consent, which consent shall not be unreasonably
withheld. The Landlord shall have the right to inspect the Equipment at any
reasonable time upon reasonable prior notice.
39.4 Upon the expiration or termination of this Lease and upon the
request of the Landlord, the Tenant shall return, at its own expense, the
Equipment to the Landlord in good repair, condition and working order, ordinary
wear and tear excepted.
39.5 The Tenant shall bear all risks of loss of and damage to the
Equipment from any cause from the date hereof, ordinary wear and tear excepted.
The occurrence of any such loss or damage shall not relieve the Tenant of any
obligation hereunder. In the event of loss or damage, the Tenant, at the
Landlord's option, shall (i) place the damaged Equipment in good repair,
condition and working order, (ii) replace lost or damaged Equipment with like
Equipment in good repair, condition and working order with documentation
evidencing clear title thereto in the Landlord or (iii) pay to the Landlord the
value of the Landlord's residual interest in the lost or damaged Equipment.
Upon the Landlord's receipt of the payment described in clause (iii) above, the
Tenant and/or the Tenant's insurer shall be entitled to the Landlord's interest
in the lost or damaged Equipment for salvage purposes, in its then-condition and
location, as is, without warranty, express or implied.
39.6 The Tenant shall pay all sales, use, excise, personal property,
stamp, documentary and ad valorem taxes, license and registration fees,
assessments, fines, penalties and other similar charges imposed on the
ownership, possession or use of the Equipment during the Term and all taxes
(except the Landlord's federal or state income or similar taxes) imposed on the
Landlord or the Tenant with respect to any and all rent and monetary payments
hereunder. The Tenant shall reimburse the Landlord upon demand for all such
taxes paid by or advance by the Landlord. The Tenant shall file all returns
required therefor and furnish copies to the Landlord upon request.
39.7 In the event Tenant determines that any item of Equipment has
become obsolete, worn out or is no longer needed by Tenant in the operation of
the Facility, the obsolete, worn out or surplus item shall, at Landlord's
option, be delivered to Landlord for its own use, sold to a third party and the
net proceeds of sale paid directly to Landlord, or otherwise disposed of
pursuant to Landlord's direction. Tenant shall notify Landlord in writing of
any such obsolete, worn out or surplus Equipment, requesting instructions. If
Landlord does not instruct Tenant as to the disposition of such Equipment within
two (2) weeks after written request by Tenant, Tenant may dispose of the items
of Equipment identified in the request in any manner it sees fit. Upon the
disposition of any item of obsolete or surplus Equipment, this Lease shall
terminate with respect to such item of Equipment, with no adjustment to the rent
payable to Landlord hereunder. All replacement of obsolete or worn out
Equipment, and any additional furniture, fixtures and equipment purchased by
Tenant in connection with the Facility, shall be at Tenant's expense, and shall
be owned by Tenant. Landlord shall have no obligation to replace any Equipment
determined by Tenant to be obsolete, worn out or surplus.
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SECTION 40. RECORDING OF MEMORANDUM. The parties shall, simultaneously
herewith, execute and deliver a memorandum of lease (which notes Tenant's
purchase option) in recordable form for recordation in the appropriate land
records.
SECTION 41. TENANT'S OPTION TO PURCHASE. During the period ending six months
after the date hereof, Landlord and Tenant shall negotiate in good faith on the
terms and conditions of an option by Tenant to purchase the Facility at a
designated price, with all bank and other third party approvals of the terms and
conditions of the option having been obtained.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officer or partner, as applicable, to execute this Facility Lease
Agreement on the day and year first mentioned.
LANDLORD:
--------
Signed, sealed and delivered CHARTER CANYON BEHAVIORAL HEALTH
in the presence of: SYSTEM, INC., a Utah corporation
[SIGNATURE IS ILLEGIBLE] By: [SIGNATURE IS ILLEGIBLE]
---------------------------- -------------------------------
Executive Assistant Title: Director of Operations
---------------------------- ----------------------------
TENANT:
------
Signed, sealed and delivered BOUNTIFUL PSYCHIATRIC HOSPITAL
in the presence of: INC., a Utah corporation
[signature is illegible] By: [SIGNATURE IS ILLEGIBLE]
---------------------------- -------------------------------
Title: President
---------------------------- ----------------------------
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The undersigned, Ramsay Health Care Inc. ("Guarantor"), personally
guarantees to Landlord the full performance and observance of all the
agreements, obligations and liabilities to be performed and observed by Tenant
pursuant to this Lease, without requiring any notice of non-payment or non-
performance, or proof, or notice, or demand to hold Guarantor responsible
hereunder, all of which Guarantor expressly waives, and specifically agrees that
the validity of this guaranty and the obligations of Guarantor hereunder shall
in no wise be terminated, affected or impaired by reason of the assertion of
Landlord against Tenant of any of the rights or remedies reserved to Landlord
pursuant to the provisions of this Lease.
Guarantor acknowledges and agrees that its liability hereunder shall be
primary in nature, and that with respect to any right of action that shall
accrue to Landlord under this Lease, Landlord may, at its option, proceed
against Guarantor under this guaranty without commencing any suit or action
against Tenant.
RAMSAY HEALTH CARE, INC.
By: [SIGNATURE IS ILLEGIBLE]
--------------------------
Name:
Title: President / Coo
