1
Exhibit 10.17
LEASE AGREEMENT
THIS LEASE AGREEMENT, made as of the 1st day of October, 1996, by and
between County of Xxxxxx, State of Indiana, by and through its Board of
Commissioners and its County Council and Xxxxxx Memorial Hospital, a County
Hospital Organized Pursuant to the Acts of the General of Assembly of 1917,
Chapter 144, by and through its Board of Trustees, ("Lessor"), whose address is
c/x Xxxxxx County Auditor, Xxxxxx County Government Building, 00 X. Xxxxx
Xxxxxx, Xxxx, Xxxxxxx 00000 and Principal Knox Company, a Delaware corporation
("Lessee"), whose address is 0000 Xxxxxxx Xxxxx, Xxxxx X-00, Xxxxxxxxx,
Xxxxxxxxx 00000.
W I T N E S S E T H :
SECTION 1. LEASE OF PREMISES AND EQUIPMENT.
In consideration of the rents and covenants herein stipulated to be paid
and performed by Lessee and upon the terms and conditions herein specified,
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
property commonly known as Xxxxxx Memorial Hospital, Knox, Indiana, consisting
of: (i) the parcel(s) of land located in Xxxxxx County, Indiana, as described
on Schedule A, Part I attached hereto and made a part hereof for all purposes
(the "Land"); (ii) all buildings, structures, "Fixtures" (as hereinafter
defined) and other improvements of every kind including, but not limited to,
alleyways and connecting tunnels, sidewalks, utility pipes, conduits and lines
(on-site and off-site), parking areas and roadways appurtenant to such
buildings and structures presently situated upon the Land (collectively, the
"Improvements"); (iii) all easements, rights and appurtenances relating to the
Land and the Improvements (collectively, the "Appurtenant Rights"); (iv) all
equipment, machinery, fixtures, and other items of property, including all
components thereof, now and hereafter permanently affixed to or incorporated
into the Improvements, including, without limitation, all furnaces, boilers,
heaters, electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control, waste disposal,
air-cooling and air-conditioning systems and apparatus, sprinkler systems and
fire and theft protection equipment, all of which to the greatest extent
permitted by law, are hereby deemed by the parties hereto to constitute real
estate, together with all replacement, modifications, alterations and additions
thereto, (collectively the "Fixtures"); and (v) all equipment, furnishings,
furniture, trade fixtures and other personal property used in connection with
medical-surgical
2
hospital, urgent care and medical office building operations and businesses on
the Premises, all as more particularly described on Schedule B (collectively the
"Equipment"). The Land, the Improvements, the Appurtenant Rights and the
Fixtures are hereinafter referred to collectively as the "Premises."
SECTION 2. TERM.
2.1 The Premises and the Equipment are leased for a primary term (the
"Primary Term") and, at Lessee's option, two (2) additional extended terms (the
"Extended Terms"), unless and until the term of this Lease shall expire or be
terminated as hereinafter provided. The Primary Term shall be for twenty (20)
years commencing on October 1, 1996 (the "Commencement Date") and ending on
September 30, 2016. Following the Primary Term, Lessee shall have an option to
extend the term of this Lease for two (2) additional terms of ten (10) years
each. Such Extended Terms shall be on and subject to all of the same terms,
covenants and conditions as herein contained. The option for any Extended Term
shall be exercised only by written notice from Lessee to Lessor given no less
than six (6) months prior to the expiration of the Primary Term or the first
Extended Term, as the case may be. Unless specifically otherwise provided, the
terms and phrases "term," "term hereof" and "term of this Lease" shall include
the Primary Term and any Extended Term if exercised and in effect. "Lease Year"
shall mean the period beginning on the first day of the Primary Term and ending
at 12:00 midnight of the day prior to the first anniversary of the commencement
date of the Primary Term and each subsequent 12-month period within the term of
this Lease.
SECTION 3. AMOUNT AND MANNER OF PAYMENT OF RENT.
3.1 MINIMUM RENT. Lessee shall pay to Lessor in lawful money of the United
States, on the commencement date hereof, as partial prepayment of rent for the
Primary Term, the amount of Six Million Five Hundred Thousand Dollars
($6,500,000), by wire transfer to an account designated by Lessor, and
thereafter shall pay as fixed minimum rent ("Rent") for the Premises, the amount
of One Hundred Thousand Dollars ($100,000) per year during the first five (5)
Lease Years and the amount of Seventy-Five Thousand Dollars ($75,000) per year
during the remaining Lease Years of the Primary Term and any Extended Term,
payable quarterly in advance on the first day of each quarter, and subject to
adjustment as follows: (i) during the first Extended Term, if any, the Rent
shall be increased by a percentage equal to the percentage increase in the
Consumer Price Index-All items, for North Central metropolitan areas of 2,500 to
75,000 people ("CPI-NC"), for the period January 1, 2002 through to the end of
the Primary Term, and (ii) during the second Extended Term, if any, the Rent as
adjusted pursuant to clause (i) shall again by adjusted by a percentage equal to
the percentage increase in the CPI-NC during the period of the first
2
3
Extended Term. To the extent the adjustment of the Rent for any Extended Term
cannot be calculated prior to the date the first payment of Rent as adjusted
shall be due, then payments shall be made without adjustment, and any amount
thereafter determined to have been due with respect to such payments made
without adjustment shall be paid with the next quarterly installment following
determination of the adjustment, payable without interest or penalty if so paid.
All Rent shall be paid to Lessor at Lessor's address set forth above or at such
other address or to such person as Lessor or Lessor's successor may designate in
writing from time to time. Any installment of Rent which is not paid within 30
days of the date such installment shall be due (the "Payment Date") shall bear
interest at the rate of 8% per annum from the 31st day after such Payment Date
until such installment is paid. The parties agree that the allocation of the
Rent as between the Premises (Land, Improvements, Appurtenant Rights and
Fixtures) and the Equipment shall be set forth on Schedule C to be attached
hereto within 90 days of the commencement of the Term.
SECTION 4. COVENANTS OF LESSEE AND LESSOR.
4.1 PAYMENT OF RENT. Lessee shall pay Rent in the manner provided in
Section 3 without notice or demand.
4.2 MAINTENANCE AND REPAIR. (a) Lessee, at its own expense, will maintain
all parts of the Improvements in at least as good condition as they, now are,
except for ordinary wear, tear, depreciation and obsolescence and damage by fire
or other casualty. Lessee acknowledges that the roof of the premises is in need
of repair.
(b) All of the Equipment shall be maintained by Tenant in such repair
and condition as similar equipment is maintained in other hospitals similar to
and similarly located to the Premises in Indiana, but Lessee shall not be
required to maintain any of the Equipment in any better condition than it now
is. In the event that Tenant decides for any reason that any item or items of
Equipment are no longer required for its use, Lessee may dispose of the same in
accordance with the provisions of Section 7.2. If Tenant elects to replace any
damaged or deteriorated Equipment instead of repairing the same, such
replacement items of equipment shall become the property of Lessee, provided
that the acquisition of any such replacement items of equipment shall be subject
to the provisions of Section 7. Upon the expiration or earlier termination of
this Lease, Tenant shall return to Landlord all items of Equipment not
previously returned to Landlord in such condition they are required to be
maintained hereunder, ordinary wear and tear, damage and deterioration, and any
loss or damage ordinarily covered by a policy of fire and extended coverages
excepted. As used throughout this Section 4.2(b), "ordinary wear and tear" shall
mean the wear, tear, damage and deterioration that
3
4
would typically and ordinarily occur if used for a period of time equivalent to
the term of this Lease in a medical-surgical hospital facility similar to the
Premises.
4.3 TAXES AND UTILITIES. Lessee shall pay, prior to delinquency: all taxes,
assessments, levies, fees, water and sewer rents and charges, and all other
governmental charges, general and special, ordinary and extraordinary, foreseen
and unforeseen, which are during the Primary Term or any Extended Term hereof,
imposed or levied upon or assessed against (A) the Premises and the Equipment,
(B) any Rent or any additional rent or other sum payable by Lessee hereunder or
(C) this Lease, the leasehold estate hereby created or which arises in respect
of the operation, possession or use of the Premises. Lessee shall not be
required to pay any franchise, estate, inheritance, transfer, income or similar
tax of Lessor unless such tax is imposed, levied or assessed in substitution for
any other tax, assessment, charge or levy which Lessee is required to pay
pursuant to this Section 4.3. Lessee will furnish to Lessor, promptly after
demand therefor, proof of payment of all items referred to above which are
payable by Lessee. If any such assessment may legally be paid in installments,
Lessee may pay such assessment, together with any interest or penalties, in
installments; in such event, Lessee shall be liable only for installments,
together with any interest or penalties, which become due and payable during the
term hereof.
4.4 COMPLIANCE WITH LAWS. Lessee shall cause the Premises to be in
conformity with all laws, ordinances and regulations, and other governmental
rules, orders and determinations now or hereafter enacted, made or issued,
whether or not presently contemplated (collectively "Legal Requirements"),
applicable to the Premises or the use thereof.
4.5 INSURANCE.
(a) Lessee will maintain insurance on the Premises of the following
character:
(1) Insurance against loss by fire, flood, lightning, vandalism,
malicious mischief and other risks which at the time are included
under "extended coverage" endorsements with respect to the Premises,
in an amount not less than 100% of the actual replacement value of the
Improvements, exclusive of foundations, excavations, parking areas,
drives, underground utilities and all other land improvements.
(ii) Comprehensive public liability insurance against claims for
bodily injury, death or property damage occurring on, in or about the
Premises and adjoining streets and sidewalks, in the amounts of
4
5
$3,000,000 for bodily injury or death in any one occurrence and
$1,000,000 for property damage.
(iii) Worker's compensation insurance (including employers'
liability insurance, if requested by Lessor) to the extent required by
the law of the state in which the Premises are located and to the
extent necessary to protect Lessor and the Premises against worker's
compensation claims.
Such insurance shall be written by companies authorized to do business in the
State of Indiana and rated "A" or better by the Best's rating guide, and shall
name Lessor, the Healthcare Foundation of Xxxxxx County, Inc., and Xxxxxx
County, Indiana as additional insured parties; provided, that if there shall be
an additional cost, expense or premium for the inclusion of Lessor and/or Xxxxxx
County, Indiana as additional insured parties, then they shall bear such
additional costs if they choose to be additional insured parties. If the
Premises, or any part thereof shall be damaged or destroyed by fire or other
casualty, and if the estimated cost of rebuilding, replacing or repairing the
same shall exceed $300,000, Lessee shall notify Lessor and Mortgagee thereof.
4.6 SURRENDER OF PREMISES. Upon the expiration or termination of the
Primary Term, or if exercised, the last day of any Extended Term, Lessee shall
surrender the Premises to Lessor in the condition in which the Premises were
upon the commencement of the Primary Term, except as repaired, rebuilt,
restored, altered, added to, as permitted or required hereby; except for
ordinary wear and tear, normal deterioration and obsolescence and damage due to
causes reasonably beyond Lessee's control and, if this Lease shall be terminated
by Lessee pursuant to Section 12.1, except any damage resulting from any fire or
other casualty and not covered by policies of insurance not required under this
Lease.
4.7 USE OF PREMISES. Lessee may use and occupy the Premises for operation
of a medical surgical hospital or other health care facility or facilities and
the provision of such ancillary services and related, incidental uses as are
appropriate or desirable in conjunction with the operation of such health care
facilities and for any other purpose or purposes permitted by applicable Legal
Requirements and permitted by this Lease.
SECTION 5. TITLE AND CONDITION OF PREMISES.
5.1 TITLE TO PREMISES. Lessor covenants, represents and warrants that
Lessor has full right and lawful authority to enter into this Lease for the term
hereof, is lawfully seized of the Premises and has good and marketable title
thereto, free and clear of all liens and encumbrances except those listed on
Schedule A, Part II (the "Permitted Encumbrances").
5
6
5.2 CONDITION OF THE PREMISES. Except for the roof of the Premises, which
needs repair, the Premises and the Equipment are in good operating condition and
repair and are structurally sound and, except as set forth in Schedule D, there
are no material deferred maintenance items and none of the Equipment nor any of
the buildings, structures, fixtures or improvements which are part of the
Premises are in need of any maintenance, repair or replacement, except for
ordinary routine periodic maintenance of the kind usually required from time to
time at similar facilities.
5.3 QUIET ENJOYMENT. So long as no Event of Default has occurred and is
continuing, Lessee shall peaceably and quietly have, hold, occupy and enjoy the
Premises and the Personal Property and all the appurtenances thereto, without
hindrance or molestation from Lessor or any other persons and other entities
whatsoever.
SECTION 6. INDEMNIFICATION.
6.1 INDEMNIFICATION. Lessee shall indemnify and hold Lessor harmless
against any and all claims, liabilities, damages or losses resulting from injury
or death of any person or damage to any property occurring on or about the
Premises or in any manner in conjunction with the use or occupancy of the
Premises in whole or in part, unless the death, injury or damage was sustained
as a result of any tortious or negligent act of Lessor, or Lessor's agents or
employees.
SECTION 7. ALTERATIONS, ADDITIONS AND REMOVAL.
7.1 ALTERATIONS, ADDITIONS AND REMOVAL. Lessee may, at its expense, make
additions to and alterations of the Improvements, and construct additional
Improvements, provided that (i) the market value of the Premises shall not be
materially lessened thereby; (ii) such work shall be completed in a good and
workmanlike manner and in compliance with all applicable Legal Requirements and
the requirements of all insurance policies required to be maintained by Lessee
hereunder; (iii) no material part of the Improvements shall be demolished unless
(A) the same are replaced by other improvements which are required by Lessee in
connection with its intended use of the Premises, or (B) Lessor's prior consent
shall have been obtained, which consent shall not be unreasonably withheld and
(iv) Lessee provides to Lessor the blueprints, specifications, construction
plans and "as built" drawings of the Improvements. All such additions and
alterations shall be and remain part of the realty and become the property of
Lessor at the expiration or earlier termination of this Lease. Lessee may place
upon the Premises any trade fixtures, machinery, equipment, materials,
inventory, furniture and/or other personal property belonging to Lessee or third
parties (collectively, "Lessee's Personal Property"), whether or not the same
shall be affixed to the Premises, which are used in connection with any of
Lessee's
6
7
business operations on the Premises. Lessee may remove any of Lessee's Personal
Property at any time during the Primary Term and any Extended Term. Lessee shall
repair any damage to the Premises caused by such removal.
7.2 DISPOSAL OF EQUIPMENT. If Lessee shall determine at any time and from
time to time that any item or items of Equipment are obsolete or no longer
suitable for Lessee's use in connection with Lessee's business or operations at
the Premises, Lessee may sell, transfer, exchange, or otherwise dispose of such
item(s) in such manner as Lessee may deem appropriate. If requested by Lessee,
Lessor shall deliver to Lessee or to Lessee's designee a xxxx of sale, in form
and substance reasonably satisfactory to Lessee, duly executed and acknowledged
by Lessor, which shall be sufficient to convey and transfer to Lessee or its
designee all of Lessor's right, title and interest in and to the item(s), free
and clear of all liens and encumbrances whatsoever. Lessee may retain as its
sole and absolute property the proceeds, whether in cash or in exchange property
or otherwise, of any sale, transfer, exchange or other disposition of any such
items.
SECTION 8. LESSEE'S RIGHT TO MORTGAGE ITS LEASEHOLD INTEREST.
8.1 LESSEE'S RIGHT TO ENCUMBER AND MORTGAGE THIS LEASEHOLD. At any time
during the term of this Lease, Lessee may mortgage, hypothecate or otherwise
encumber Lessee's leasehold estate under this Lease in respect to both the
Premises and Equipment to secure indebtedness of Lessee under one or more
leasehold mortgages and may assign this Lease as security for such mortgage or
mortgages.
8.2 AMENDMENTS REQUIRED BY LEASEHOLD MORTGAGES. Lessor and Lessee shall
cooperate in including in this Lease by suitable amendment from time to time any
provision which may reasonably be requested by any proposed leasehold mortgagee
for the purpose of allowing such leasehold mortgagee reasonable means to protect
or preserve its lien upon Lessee's leasehold interest under this Lease on the
occurrence of a default under the terms of this Lease. Lessor and Lessee each
agree to execute and deliver (and to acknowledge, if necessary, for recording
purposes) any agreement necessary to effect any such amendment; provided,
however, that any such amendment shall not in any way affect Sections 2, 3 or
4.7 of this Lease, or Section 5.A.4 of Annex A hereto, or without the prior
written approval of Lessor, which will not be unreasonably withheld, modify any
other provision of this Lease in a manner which materially adversely affects
Lessor.
SECTION 9. MORTGAGES AND ENCUMBRANCES.
9.1 Subject to the provisions of Section 8, Lessee agrees that this Lease
may, at the option of Lessor, be subordinate to any mortgages, deeds to secure
debt or deeds of trust placed on the
7
8
Premises (such mortgages, deeds to secure debt or deeds of trust being
hereinafter collectively referred to as the "Mortgage") after the commencement
of the Primary Term; provided that, Lessor shall obtain from the holder of the
Mortgage (hereinafter referred to as the "Mortgagee") an agreement (a
"Nondisturbance Agreement") in recordable form providing in substance that so
long as no Event of Default has occurred and is continuing, the Mortgagee agrees
that:
(A) in any action or proceeding to foreclose the Mortgage or exercise
the rights of a secured party under the Uniform Commercial Code in effect in the
State of Indiana (the "UCC"), Lessee will not be made a party defendant and the
leasehold estate created by this Lease shall not be affected or terminated by
such action or proceeding or by any judgment or decree rendered therein;
(B) the Mortgagee shall be deemed to have disclaimed any interest in
all personal property, equipment, fixtures, merchandise and inventories owned,
supplied by or under the possession or control of Lessee;
(C) Lessee shall have and at all times may exercise all rights and
privileges to which it is entitled under this Lease;
(D) Lessee's possession and other rights and privileges shall not be
disturbed by the Mortgagee or by any foreclosure or other proceedings, or
action, including, without limitation, the exercise of the rights of a secured
party under the UCC, on the debt which the Mortgage secures or by anyone whose
rights were acquired as a result of such proceedings or action or by virtue of
a right or power contained in the Mortgage or the bond or note secured thereby;
and
(E) if the use, occupancy or title of the Premises or any part thereof
is taken, requisitioned or sold in, by or on account of any actual or threatened
eminent domain proceeding or other action by any person having the power of
eminent domain, or if the Premises or any part thereof is damaged or destroyed
by fire, flood or other casualty, Lessee shall have the right to receive and
apply toward restoration or replacement of the Premises in accordance with
Section 12.2, the "Net Proceeds" (as defined in Section 12.1), provided that
Lessee's right to terminate this Lease as provided in Section 12.1 has not been
exercised; and further provided that Lessee shall not have any right to the
proceeds derived from a taking only of land and not any portion of the Premises,
except to the extent necessary to repair or relocate signage or like matters
incident to the use of the Premises as an acute care hospital.
8
9
SECTION 10. ASSIGNMENTS AND SUBLEASES; MERGER AND SALE OF ASSETS.
10.1 ASSIGNMENTS AND SUBLEASES. Subject to the requirements of Section 4.7,
Lessee shall have the right to sublet the Premises or any part thereof from time
to time without the prior written consent of Lessor. Notwithstanding the
foregoing, Lessee shall not assign this Lease in whole or in part without the
consent of Lessor, which consent shall not be unreasonably withheld; provided
that, without the consent of Lessor, Lessee may assign this Lease to (i) any
subsidiary corporation or other entity owned at least 51%, directly or
indirectly, by Lessee; or (ii) to any person, firm or corporation who is the
purchaser of all or substantially all the assets and business of Lessee or is
the successor to substantially all the assets and business of Lessee by virtue
of a corporate merger or consolidation of, with or into Lessee, provided that
such purchaser, successor or assignee or the owner or ultimate parent of such
purchaser, successor or assignee has operational expertise and reputation
similar to Lessee and, in the reasonable best judgment of Lessee, sufficient
cash flow to perform its obligations hereunder. No such assignment as to which
the consent of Lessor is not required shall be effective unless each such
assignee by written instrument of law, shall assume and become bound to perform
and observe all of the covenants and agreements of Lessee under this Lease, but
Lessee shall not be released from liability for the payment of rent and for the
performance and observance of any of the other covenants and agreements of
Lessee under the Lease after the effective time of such assignment.
Nothing contained in this Section 10 shall be construed to prohibit or
restrict Lessee's right to permit patients of the hospital which is a part of
the Premises to occupy residential health care facilities therein or to permit
the physicians or other professionals to use or otherwise occupy office space
within the Premises. Each such assignment or sublease permitted hereunder shall
expressly be made subject and subordinate to the provisions of this Lease, and
no assignment or sublease permitted hereunder shall modify or limit any rights
or powers of Lessor hereunder or affect or reduce any obligation of Lessee
hereunder, and all such obligations shall continue in full effect as obligations
of a principal and not of a guarantor or surety, as though no assignment or
subletting had been made.
SECTION 11. PERMITTED CONTESTS. Notwithstanding any provision of this Lease
to the contrary, Lessee shall not be required, nor shall Lessor have the right,
to pay, discharge or remove any tax, assessment, levy, fee, rent (except Rent,
additional rent and any other sums due hereunder payable to or for the benefit
of Lessor), charge, lien or encumbrance, or to comply with any Legal Requirement
applicable to the Premises or the use thereof, as long as Lessee shall contest
the existence, amount or
9
10
validity thereof by appropriate proceedings which shall prevent the collection
of or other realization upon the tax, assessment, levy, fee, rent, charge, lien
or encumbrance so contested, and which also shall prevent the sale, forfeiture
or loss of the Premises or any Rent, or to satisfy the same or Legal
Requirements, and which shall not affect the payment of any Rent, provided that
such contest shall not subject Lessor to the risk of any criminal liability or
any material civil liability. Lessee shall give such reasonable security as may
be demanded by Lessor, or any mortgagee to insure ultimate payment of such tax,
assessment, levy, fee, rent, charge, lien, or encumbrance and compliance with
Legal Requirements and to prevent any sale or forfeiture of the Premises, any
Rent, any additional rent or any other sum required to be paid by Lessee
hereunder.
SECTION 12. CONDEMNATION AND CASUALTY.
12.1 (A) Except as hereinafter provided, if any of the Improvements shall
be damaged or destroyed by fire or any other casualty covered by a standard
policy of fire and extended coverage insurance, as required pursuant to Section
4.5 hereof, Lessee shall thereafter commence and diligently prosecute to
completion, at Lessee's sole expense, the repair or rebuilding of the
Improvements or portion thereof which was damaged, in a good and workmanlike
manner, in accordance with plans and specifications satisfactory to Lessee and
Lessor, which Lessor shall not unreasonably disapprove, provided that the
Improvements upon completion of such repair or rebuilding shall have a value
which is not substantially less than the value of the Improvements immediately
prior to the damage or destruction. All proceeds remaining after payment of the
costs of collection and recovery, if any ("Net Proceeds") shall be paid over to
Lessee to fund the costs of repair and rebuilding.
(B) In the event that either (i) the damage or destruction with
respect to any building ("Building") which is a part of the Improvements is so
extensive that it cannot be rebuilt, restored or repaired as required in
Paragraph (a) of this Section 12.1 within 120 days after such occurrence, as
determined by Lessee in its reasonable judgment or (ii) any such damage or
destruction occurs during the last two years of the Primary Term, or the last
two years of any Extended Term, then Lessee shall have the right to terminate
this Lease with respect to the damaged or destroyed Building, but no other part
of the Premises, by giving written notice thereof to Lessor within 60 days
after the occurrence of such damage or destruction and such termination will be
effective retroactively as of the date of such damage or destruction; provided
that, if the Building which suffered such damage or destruction is the main
hospital building located on Tract 1 of the Premises, then Lessee shall have
the right to terminate this Lease by giving written notice thereof to Lessor
within 60 days after the occurrence of such damage or destruction and such
termination will
10
11
be effective retroactively as of the date of such damage or destruction. In
addition, if any Building is materially damaged or destroyed by any casualty not
covered by the standard policy of fire and extended coverage insurance, then
Lessee may terminate this Lease effective as of the date of such damage or
destruction by giving the other party written notice thereof within 60 days
after the occurrence of such damage or destruction. If Lessee exercises its
option to terminate this Lease in part on account of damage or destruction to a
Building, the parties shall promptly thereafter execute an amendment to this
lease which shall provide that such Building will be excised from the Premises,
and that Rent will be proportionately and equitably reduced. In the event of a
termination of this Lease, either in whole or in part, pursuant to Section
12.l(b), the Net Proceeds of insurance shall be paid over to Lessor, except that
Lessee shall be entitled to receive such portion of such proceeds which
represents the amount allocable to the value of the leasehold improvements made
by Lessee and Lessee's Personal Property.
12.2 (A) If (i) the Premises are taken by an entity with the power of
eminent domain ("Condemning Authority") or if the Premises are conveyed to a
Condemning Authority by a negotiated sale, or if part of the Premises is so
taken or conveyed such that any of the Improvements cannot be rebuilt so that
upon completion Lessee may again use the Premises without substantial
interference, or (ii) due to any such taking or conveyances, access to the
Premises or any part thereof by motor vehicles and trucks as operated by Lessee,
its contractors, employees, patients and invitees in the course of Lessee's
business as theretofore conducted, is substantially impaired or terminated;
then in any such event, Lessee may terminate this Lease by giving Lessor written
notice any time after the occurrence of any of the foregoing and such
termination shall be effective 60 days from the date possession is taken by the
Condemning Authority.
(B) If part of the Premises or any Building or a substantial part
thereof is so taken or conveyed without substantially interfering with the use
of the Premises as a whole, but only one or more of the Buildings thereon, this
Lease shall not terminate, except to the extent hereinafter provided. In such
event, however, (i) Lessee shall have the option to terminate this Lease in
respect to any Building which is subject to such taking or conveyance by
notifying within 60 days after the title is transferred to the Condemning
Authority, and Lessor shall be entitled to all awards and payments made or to be
made by the Condemning Authority, and (ii) if Lessee exercises such termination
option, Lessor shall apply such portions of any award or payment made to Lessor
for such taking or conveyance as is necessary to pay the cost of restoring the
Building and/or the Premises to a complete architectural unit suitable for
Lessee's use and business on the Premises. If Lessee exercises its option to
terminate this
11
12
Lease in part on account of a taking or conveyance of a Building or any
substantial part thereof as provided in clause (i) above, the parties shall
promptly thereafter execute an amendment to this Lease which shall provide that
the Building will be excised from the Premises, and that Rent will be
proportionately and equitably reduced.
(C) Except as provided below and in Paragraph (b) of this Section
12.2, all payments made for any such taking or conveyance shall be the property
of Lessor; provided, however, Lessor shall have no interest in any award or
payment or any portion of any such award or payment which is attributable to the
taking or conveyance of any trade fixtures, equipment and other personal
property that have been placed on or within the Premises by Lessee since the
Commencement Date or any leasehold improvements made by Lessee since the
Commencement Date, all of which shall be paid to Lessee.
(D) If this Lease is terminated pursuant to this Section 12, Lessor
and Lessee shall be released and discharged from all liabilities arising or
accruing under this Lease subsequent to the effective date of termination.
SECTION 13. RIGHT OF ENTRY.
Upon not less than 48 hours prior written notice to Lessee, Lessor and its
agents and designees may enter upon and examine the Premises at reasonable times
for the purpose of determining the condition of the Premises, and may show the
Premises to prospective purchasers, mortgagees or lessees as long as such
examination or showing shall not unreasonably interfere with the business
operations of Lessee on the Premises. In addition, Lessor may enter upon the
Premises at any time in the event of an emergency if so required in order to
protect the Premises.
SECTION 14. ESTOPPEL CERTIFICATE.
At any time and from time to time hereafter, Lessee, within 30 days after
request by Lessor, shall certify in writing to any mortgagee or purchaser,
proposed mortgagee or purchaser, or other person, firm or corporation specified
by Lessor, as to the validity and force and effect of this Lease, in accordance
with its tenor, as then constituted, as to the existence of any default on the
part of any party thereunder, as to the existence of any offsets, counterclaims
or defenses thereto on the part of Lessee, and as to any other matters relating
to this Lease which may be reasonably requested by Lessor.
12
13
SECTION 15. DEFAULT.
15.1 In the event Lessee shall default in the payment of rent or any other
sums payable by Lessee hereunder, and such default shall continue for a period
of ten (10) days after Lessee receives written notice thereof from Lessor; or,
if Lessee shall default in the performance of any other covenants or agreements
hereunder and such default shall continue for 30 days after written notice
thereof, or, if the default is of such a nature that it could not reasonably be
cured within such 30 days period and Lessee does not, within said 30 day period
commence to cure it and thereafter proceed, with due diligence, to cure it; or,
if Lessee shall fail to cause the Premises to be in conformity with the Legal
Requirements and all other contracts, agreements, covenants, conditions and
restrictions applicable to the ownership, occupancy or use of the Premises, as
set forth in Section 4.4 hereof, and such failure shall continue for 30 days
after written notice thereof, or if the failure is of such a nature that it
could not reasonably be cured within such 30-day period and Lessee does not,
within said 30-day period commence to cure it and thereafter proceed, with due
diligence, to cure it; then, and in addition to any and all other legal remedies
and rights, Lessor may perform such covenant or agreement and to the extent sums
are expended in connection therewith, and add such sums to the rent due from
Lessee to Lessor or, at the election of Lessor, may terminate this Lease and
retake possession of the Premises by eviction, reentry or otherwise. Such
re-entry shall not bar the right or recovery of rent or damages for breach of
covenants, nor shall the receipt of rent after conditions broken be deemed a
waiver of Lessor's remedies.
15.2 After a dispossession or removal in accordance with Section 15.1, the
rent shall be paid to the date of such dispossession or removal, (i) Lessor
shall use its reasonable best efforts to re-let the Premises or portions
thereof, either in the name of Lessor, Lessee or otherwise, for a term or terms
which may, at the option of Lessor, be less than or exceed the period which
would otherwise have constituted the balance of the term of this Lease, (ii)
Lessee shall pay Lessor monthly any deficiency between the rent due hereunder
and the amount, if any, of the rent collected on account of the new lease or
leases of the Premises for each month of the period which would otherwise have
constituted the balance of the term of this Lease (not including any renewal or
extension the commencement of which shall not have occurred prior to such
dispossession or removal), and (iii) Lessor shall have any and all other rights
and remedies available to it.
15.3 If Lessee should fail to make any payment or cure any default
hereunder within the time herein permitted, Lessor, without being under any
obligation to do so and without thereby waiving such default, may make such
payment and/or remedy such other
13
14
default for the account of Lessee, and thereupon Lessee shall be obligated to,
and hereby agrees, to pay Lessor, upon demand, all costs, expenses and
disbursements (including reasonable attorneys' fees) incurred by Lessor in
taking such remedial action.
SECTION 16. ENVIRONMENTAL MATTERS.
16.1 Except as disclosed on Schedule E hereto, Lessor represents and
warrants to Lessee that, to the Lessor's knowledge, as of the date hereof no
"Hazardous Substances" (as hereafter defined) or any other toxic material or
medical waste are present on or in the Improvements or Land, except for
Hazardous Substances or other toxic materials or medical waste brought, kept or
used in the Premises in commercial quantities similar to those quantities
usually kept on similar premises by others in the same business or profession or
who operate medical facilities similar to those located in and on the Premises,
and which are used and kept in compliance with applicable public health, safety
and environmental laws; and Lessor shall indemnify Lessee against any and all
claims, demands, liabilities, losses and expenses, including consultant fees,
court costs and reasonable attorneys' fees, arising out of any breach of the
foregoing warranty.
16.2 Except for Hazardous Substances or other toxic materials or medical
waste brought, kept or used in the Premises in commercial quantities similar to
those quantities usually kept on similar premises by others in the same business
or profession or who operate medical facilities similar to those located in and
on the Premises, medical specialty, and which are used and kept in compliance
with applicable public health, safety and environmental laws, Lessee shall not
allow any Hazardous Substance, or other toxic material or medical waste to be
located in, on or under the Premises or allow the Premises to be used for the
disposal of any Hazardous Substance or other toxic material.
16.3 Lessee shall at all times and in all respects comply with all federal,
state or local laws, ordinances, regulations and orders applicable to the
Premises or the use thereof relating to industrial hygiene, the handling,
storage and disposal of medical waste, environmental protection, or the use,
analysis, generation, manufacture, storage, disposal or transportation of any
Hazardous Substance, toxic material or medical waste.
16.4 If Lessee becomes aware of the presence of any Hazardous Substance in
or on the Premises (except for those Hazardous Substances or other toxic
material or medical waste brought, kept or used in the Premises by Lessee in
commercial quantities similar to those quantities usually kept on similar
premises by others in the same business, profession or medical specialty and
which are used and kept in compliance with applicable public health, safety and
environmental laws) or if Lessee, or the Premises become
14
15
subject to any order of any federal, state or local agency to repair, close,
detoxify, decontaminate or otherwise cleanup the Premises, Lessee shall, at its
own cost and expense, carry out and complete any repair, closure,
detoxification, decontamination or other cleanup of the Premises; provided that
Lessee shall not be responsible for any of the foregoing relating to any
Hazardous Substance, or other toxic materials or medical waste located on, in or
under the Premises on the date of this Lease, all of which shall be the
responsibility of Lessor pursuant to Section 16.1 and Lessor shall promptly
execute and complete any required repair, closure, detoxification,
decontamination or other clean-up of the Premises. If either party fails to
implement and diligently pursue any such repair, closure, detoxification,
decontamination other cleanup of the Premises which it is required to do
hereunder, the other party shall have the right, but not the obligation, to
carry out such action and to recover all of the costs and expenses from the
other.
16.5 "Hazardous Substances" as such term is used in this Lease means any
hazardous or toxic substance, material or waste, regulated or listed pursuant to
any federal, state or local environmental law, including without limitation, the
Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the
Comprehensive Environmental Response Compensation and Liability Act, the
Resource Conversation and Recovery Act, the Federal Insecticide, Fungicide,
Rodenticide Act, the Safe Drinking Water Act and the Occupational Safety and
Health Act.
SECTION 17. NOTICES, DEMANDS AND OTHER INSTRUMENTS.
All notices, offers, consents and other instruments given pursuant to this
Lease shall be in writing and shall be validly given when actually delivered or
sent by a courier or express service guaranteeing overnight delivery, (a) if to
Lessor, addressed to it at its address set forth above, (b) if to Lessee,
addressed to Lessee at its address set forth above. Lessor and Lessee each may
from time to time specify, by giving 15 days notice to each other party, (i) any
other address in the United States as its address for purposes of this Lease and
(ii) any other person or entity that is to receive copies of notices, offers,
consents and other instruments hereunder.
SECTION 18. SEPARABILITY; BINDING EFFECT.
Each provision hereof shall be separate and independent and, the breach of
any such provision by Lessor shall not discharge or relieve Lessee from its
obligations to perform each and every covenant to be performed by Lessee
hereunder. If any provision hereof or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it is invalid or
15
16
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforceable to the extent permitted by law. All provisions
contained in this Lease shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of Lessor and Lessee to
the same extent as if each such successor and assign were named as a party
hereto. This Lease may not be changed, modified or discharged except by a
writing signed by Lessor and Lessee. Any such change, modification or discharge
made otherwise than as expressly permitted by this paragraph shall be void. This
Lease shall be governed by and interpreted in accordance with the laws of the
State of Indiana.
SECTION 19. HEADINGS AND TABLE OF CONTENTS.
The table of contents and the headings of the various Sections and
Schedules of this Lease have been inserted for reference only and shall not to
any extent have the effect of modifying, amending or changing the expressed
terms and provisions of this Lease.
SECTION 20. COUNTERPARTS.
This Lease may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
SECTION 21. MEMORANDUM OF LEASE.
Upon request of either party hereto, the parties shall execute and deliver
to each other duplicate originals of a Memorandum of this Lease, in recordable
form, containing the information required by law for recording the same.
SECTION 22. ASSIGNMENT OF EXISTING LEASES.
Lessor hereby assigns to Lessee all of its right, title and interest as
lessor under those certain leases affecting the Premises which are existing and
in effect as of the date of execution of this Lease listed on Schedule 3.7 (e)
of Annex A hereto attached hereto and made a part hereof (hereinafter the
"Existing Leases"), and Lessee hereby agrees to assume all Lessor's obligations,
covenants and agreements as lessor under the Existing Leases. Lessee shall be
entitled to collect and receive all such rents and other sums from the lessees
under the Existing Leases accruing on and after the Commencement Date, and
Lessee and Lessor agree that the Existing Leases shall upon this assignment
become subleases subject and subordinate to this Lease. Lessee shall notify each
of the lessees under the Existing Leases of this assignment.
SECTION 23. NO PARTNERSHIP.
16
17
The parties hereto intend the relationship created by this Lease to be that
of lessor and lessee and do not intend for the arrangement between them to be a
partnership.
SECTION 24. PURCHASE OF EQUIPMENT, LEASEHOLD IMPROVEMENTS AND NET WORKING
CAPITAL AT END OF TERM.
Upon expiration or earlier termination of this Lease (other than in
accordance with Section 25 hereof), Lessor shall purchase: (i) all of Lessee's
personal property, used in the operations of the Premises; (ii) all equipment
owned by Lessee and used by Lessee in the operation of the Premises; (iii) any
and all leasehold improvements constructed and/or installed by Lessee on or in
the Premises; (iv) the "Net Working Capital" of the Hospital as of the last day
of the Term, corresponding to the "Net Working Capital" items purchased by
Lessor at the commencement of this Lease pursuant to the provisions set forth in
Annex A hereto, and (v) the items described in Section l.l(f) of Annex A. The
purchase price paid by Lessor for such equipment shall be the then net book
value of such equipment, personal property and leasehold improvements at the
time of expiration or earlier termination of this Lease, based on Lessee's books
and records. Lessee shall transfer and convey the same by xxxx of sale, free of
all liens and Lessor shall pay the purchase price in cash with delivery of the
xxxx of sale.
SECTION 25. OPTION TO PURCHASE.
25.1 During the Term hereof, and for a period of one hundred twenty (120)
days thereafter, Lessor shall, prior to any proposed sale, transfer or
assignment of substantially all of the assets comprising Xxxxxx Memorial
Hospital (the "Hospital Assets"), provide Lessee with written notice of the
terms and conditions of the proposed sale, transfer or assignment, including the
identity of the proposed transferee and the proposed purchase price. Lessee have
a right of first refusal for ten (10) days from the receipt of such notice in
which to agree to provide a preliminary commitment to Lessor to consummate such
sale, transfer or assignment on the same price, terms and conditions contained
in the notice, and an additional twenty (20) days thereafter in which to comfirm
its commitment. If Lessee elects to acquire the Hospital Assets on such price,
terms and conditions, Lessee shall have ninety (90) days from the date on which
it received notice of the transaction in which to consummate such transaction.
If Lessee fails to consummate such transaction within such 90-day period, Lessee
shall be entitled to proceed with the sale, transfer or assignment of the
Hospital Assets as originally intended, provided that if Lessor does not
consummate such transaction within ninety (90) days thereafter, then the
provisions hereof shall apply again to any proposed transaction.
17
18
25.2 In the event of the purchase of the Leased Premises and the Equipment
by Lessee as provided in Section 25.1, Lessor shall convey to Lessee or its
designee by its general warranty deed and xxxx of sale, good, record and
marketable title to the Premises and the Equipment, subject only to Permitted
Exceptions, real estate taxes which are not delinquent and liens caused or
created by Lessee, but free and clear of all Mortgages, security deeds, liens,
encumbrances and security interests securing any indebtedness of Lessor. The
purchase price shall be paid in cash by wire transfer of immediately available
funds at the time of the closing; provided that if the Premises has suffered any
damage covered by the insurance described in Section 4.5, Lessor and the holders
of all Mortgages on the Premises shall pay to Lessee all of the proceeds of such
insurance not previously paid to Lessee, or to the extent such proceeds have not
been collected, assign to Lessee all of their respective rights and interests
therein to Lessee; or at its election Lessee may reduce the purchase price paid
by the amount of such proceeds and deduct such sum from the purchase price
payable at the closing. Each party shall be responsible for and shall pay 50% of
all other closing costs. Closing costs shall include the costs of title
insurance, a survey, any escrow charges, costs of recording deeds and all
documentary stamps and similar taxes on the recordation of the deeds. Each party
shall be responsible for the fees of its respective counsel.
25.3 Upon the completion of any such purchase, but not prior thereto
(whether or not any delay in the completion of or the failure to complete such
purchase shall be the fault of Lessor), this Lease and all obligations hereunder
(including, but not limited to, the obligations to pay rent and additional rent)
shall terminate, provided that neither party shall be released with respect to
obligations and liabilities of Lessee and Lessor, actual or contingent, under
this Lease which arose on or prior to the date of the closing of the purchase,
unless specific provision therefor shall be made in the instruments and
agreements relating to such purchase.
SECTION 26. DEPARTMENT OF HEALTH AND HUMAN SERVICES REGULATION.
Until the expiration of four years after the expiration or earlier
termination of the Term of this Lease, Lessor will make available to the
Secretary, U.S. Department of Health and Human Services, and the U.S.
Comptroller General, and their representatives, this Lease and all books,
documents, and records necessary to certify the nature and extent of Lessor's
costs with respect to this Lease and the Premises. If Lessor carries out any of
its duties under this Lease through a subcontract worth $10,000 or more over a
12-month period with a related organization, the subcontract will also contain
an access clause to permit access by
18
19
the Secretary, Comptroller General, and their representatives to the related
organization's books and records.
SECTION 27. SCHEDULES.
The following Schedules A [SECTION 1], B [SECTION 1], C [SECTION 3.1], D
[SECTION 5.2], E [SECTION 16.1] and F [SECTION 22], referred to in this Lease,
which Schedules are hereby incorporated by reference herein.
SECTION 28. ANNEX A.
Additional terms and conditions regarding the transaction provided for
herein, and regarding the purchase of certain assets and agreement as to the
certain covenants, are set forth in Annex A to this Lease, which is incorporated
herein by reference.
[THE NEXT PAGES ARE THE SIGNATURE PAGES]
19
20
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date and year first written above.
LESSOR:
COUNTY OF XXXXXX, STATE OF INDIANA,
BY AND THROUGH ITS BOARD OF
COMMISSIONERS
BY: /s/ Xxxxxxxx Xxxxx
--------------------------------
Xxxxxxxx Xxxxx, President
Attest:
/s/ Xxxxxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxxxxx X. Xxxxxxx
Auditor, Xxxxxx County, IN
XXXXXX COUNTY COUNCIL
By: /s/ Xxxx Xxxxxxxxxxx
--------------------------------
Xxxx Xxxxxxxxxxx, President
Attest:
/s/ Xxxxxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxxxxx X. Xxxxxxx
Auditor, Xxxxxx County, IN
BOARD OF TRUSTEES OF XXXXXX MEMORIAL
HOSPITAL, A COUNTY HOSPITAL ORGANIZED
PURSUANT TO THE ACTS OF THE GENERAL
ASSEMBLY OF 1917, CHAPTER 144
By: /s/ Xxxxxxxxx Xxxxxx
----------------------------------
Xxxxxxxxx Xxxxxx, Chairman
Attest:
/s/ Xxxxxx Xxxxxx Xxxxxxxx
--------------------------
Xxxxxx Xxxxxx Xxxxxxxx
Secretary
21
LESSEE:
PRINCIPAL XXXX COMPANY
By: /s/ Xxxxxx X. Xxxx
------------------------------
Xxxxxx X. Xxxx, President
Attest:
/s/ Xxxxxxx X. Xxxx
-------------------------
Xxxxxxx X. Xxxx
Secretary
22
SCHEDULE A - LANDS
LEASE AGREEMENT FOR XXXXXX MEMORIAL HOSPITAL
PART I
TRACT ONE--XXXXXX MEMORIAL HOSPITAL COMPLEX
Address: 000 Xxxx Xxxxxx Xxxx, Xxxx, Xxxxxxx 00000
A tract of land located in the Northeast Quarter of Section 27, Township 33
North, Range 2 West of the 2nd P.M., Xxxxxx County, Indiana, and more
particularly described as follows, to-wit:
Beginning at the Northeast Corner of the Northeast Quarter of said Section 27;
thence South 00 degrees 01 minutes 23 seconds East, 609 feet; thence West 495
feet to an iron pin and being the Northwest Corner of a tract surveyed by
Xxxxxxx X. Xxxxxxxxxx and occupied by the Knox City Fire Station, pursuant to
lease dated April 4, 1973 and recorded March 10, 1988 in the office of the
Recorder of Xxxxxx County, Indiana, in Miscellaneous Record FF, page 961; thence
South 117 feet; thence North 90 degrees West to the Southwest Corner of a tract
conveyed to the Board of Trustees of Xxxxxx Memorial Hospital by the Knox
Community School Corporation, by deed dated November 24, 1976 and recorded in
the office of the Recorder of Xxxxxx County, Indiana, in Deed Record 128, page
7; thence North 00 degrees 00 minutes West, 726 feet to the center of Xxxxxx
Road; and, thence North 90 degrees 00 minutes 00 seconds East 678 feet to the
point of beginning.
TRACT TWO--XXXXXX MEMORIAL HOSPITAL PROFESSIONAL BUILDING
Address: 000 Xxxx Xxxxxx Xxxx, Xxxx, Xxxxxxx 00000
A tract of land commencing at a point on the Section line 985.5 feet East of the
Northwest corner of the Northwest Quarter of the Northwest Quarter of Section
26, Township 33 North, Range 2 West of the 2nd P.M.; thence East on the Section
line 159.5 feet, more or less, to a point 175 West of the Northeast corner of
the Northwest Quarter of the Northwest Quarter of said Section 26; thence South
292 feet; thence East 125 feet to the West line of Xxxxxx Street extended;
thence South 20 feet, more or less, to the Northeast corner of Lot number 8 in
Block 1 of Xxxxx X. Xxxxxx'x Subdivision No. 1 recorded in Plat Book 2, Page 179
in the Office of the Recorder of Xxxxxx County, Indiana; thence West, on the
North line of said Block 1, 284.5 feet, more or less, to a point 16 feet East of
the Northwest corner of Lot 6 in said Block 1, thence North 312 feet, more or
less, to the point of beginning. EXCEPT: A tract of land commencing at a point
1145 feet east and 292 feet south of the northwest corner of the Northwest
Quarter of the Northwest Quarter of Section 26, Township 33 North, Range 2 West
of the 2nd
23
SCHEDULE A-LANDS
P.M., which point is also 175 feet west of the east line of the Northwest
Quarter of the Northwest Quarter of said Section 26; thence east 125 feet to the
west line of Xxxxxx Street extended; thence south 20 feet, more or less, to the
northeast corner of Lot No. 8 in Block 1 of Xxxxx X. Xxxxxx'x Subdivision No. 1
recorded in Plat Book 2, page 179, in the Office of the Recorder of Xxxxxx
County, Indiana; thence west on the north line of said Block 1, 125 feet, more
or less, to a point 20 feet south of the point of beginning; thence north 20
feet to the point of beginning.
TRACT 3--XXXXXX MEMORIAL HOSPITAL FAMILY HEALTH SERVICES
Address: 000 Xxxxx Xxxx Xxxxxx, Xxxx, Xxxxxxx 00000
Xxx 0 xx Xxxxx 0 xx Xxxxxxx Addition to the Town of Knox, Xxxxxx County,
Indiana.
PART II
TRACT 1--
The legal description set forth above on Tract 1 is for the entire complex of
Xxxxxx Memorial Hospital bounded on the north by Xxxxxx Road, on the east by
Xxxxxx Street (U. S. Highway 35), on the south by the Knox Fire Station and
Xxxxxxxx Drive, and on the west by Main Street.
Included in that complex are the main buildings for Xxxxxx Memorial Hospital,
the helipad, parking areas and medical clinic operated by Foundation for Xxxxxx
Memorial Hospital. The improvements constituting the medical clinic are situated
upon the lands which were conveyed to the Board of Trustees of Xxxxxx Memorial
Hospital and leased from the manufacturer provider of the modular building
constituting the medical clinic.
On the Main Street side of the complex is situated an ambulance facility
operated by the Emergency Medical Services of Xxxxxx County under the auspices
of the Board of Commissioners of Xxxxxx County. The ambulance facility has been
located on the site by way of a License granted the County of Xxxxxx by the
Board of Trustees of Xxxxxx Memorial Hospital, a copy of which License is
attached as Schedule A-1.
Also situated on Tract 1 on the Xxxxxx Street Side is a retail business known as
Knox Pizza Xxxx pursuant to a Lease originally granted Xxxxxx Xxxxx by the Board
of Aviation Commissioners of Xxxxxx County when that part of Tract 1 was a part
of the Xxxxxx County Airport. The Board of Commissioners of Xxxxxx County,
Indiana, following the relocation of the Xxxxxx County Airport, dedicated the
land occupied by Xxxxxx Xxxxx to the Board of Trustees of Xxxxxx Memorial
Hospital and authorized the Board of Trustees
24
SCHEDULE A-LANDS
of Xxxxxx Memorial Hospital to terminate the Lease with Xxxxxx Xxxxx when the
land was needed to be used for Xxxxxx Memorial Hospital. Notice to terminate
tenancy was issued Xxxxxx Xxxxx and, following the failure of Xxxxxx Xxxxx to
remove herself from the possession of the land and improvements, an action was
filed in the Xxxxxx Circuit Court entitled "The Board of Trustees of Xxxxxx
Memorial Hospital vs. Xxxxxx Xxxxx, Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx" under
Cause No. 75C01-9408-CP-220. A copy of the Lease from the Board of Aviation
Commissioners with Xxxxx is attached as Schedule A-2 and the Dedication of the
land by the Board of Commissioners of Xxxxxx County, Indiana occupied by Xxxxxx
Xxxxx to Xxxxxx Memorial Hospital is attached as Schedule A-3.
ASSIGNMENT OF RIGHTS TO POSSESSION
Lessor, County of Xxxxxx, State of Indiana, by and through its Board of
Commissioners of Xxxxxx County, Indiana and its Xxxxxx County Council, and the
Board of Trustees of Xxxxxx Memorial Hospital, a County Hospital organized
pursuant to the Acts of the General Assembly of 1917, Chapter 144, by and upon
the execution of lease agreement of the buildings, lands and property of Xxxxxx
Memorial Hospital, as a County Hospital, with Principal Hospital
Company/Principal Xxxx Company, hereby assigns unto Principal Hospital Company
and Principal Xxxx Company, Delaware corporations, all rights to possession of
the real estate described on Schedule A-3, rights as Lessor under Lease dated
February 4, 1967 by and between the Xxxxxx County Board of Aviation
Commissioners and Xxxxxx Xxxxx (Schedule A-2) and to act as plaintiff by
substituting themselves for current plaintiff under Cause No. 75C01-9408-CP-220
in the Xxxxxx Circuit Court in the County of Xxxxxx, State of Indiana, under
cause of action entitled "The Board of Trustees of Xxxxxx Memorial Hospital vs.
Xxxxxx Xxxxx, Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx".
Part of Tract 1 from Schedule A-Lands, as attached to the Lease, is:
(a) Titled in the name of Xxxxxx County Hospital Association pursuant to
the terms of a Lease for construction of an addition to and renovation of Xxxxxx
Memorial Hospital;
(b) Is further subject to a Trust Indenture executed by the Xxxxxx County
Hospital Association and the American State Bank of North Xxxxxx, Indiana,
Trustee, (now known subsequent to merger as Indiana Federal Bank for Savings)
dated July 1, 1991 and recorded August 19, 1991 in Mortgage Record 149, page
987, in the office of the Recorder of Xxxxxx County, Indiana, securing the sum
of $3,800,000.00; and
(c) Is also subject to a Lease executed by Xxxxxx Memorial Hospital
Association, Lessor, and the County of Xxxxxx, Indiana, acting by and through
the Board of Commissioners of Xxxxxx County, the Xxxxxx County Council, and the
Board of
25
Trustees of Xxxxxx Memorial Hospital, dated May 29, 1991 and recorded July 29,
1991 in Miscellaneous Record "HH", page 714, in the office of the Recorder of
Xxxxxx County, Indiana.
That part of the real estate described as Tract 1 on Schedule A attached to the
Lease which is the subject of the foregoing is more particularly described on
the attached Exhibit Schedule 3.7(a)(l).
Tract 3 on Schedule A-Lands, attached to the Lease, was sold to the Hospital's
Foundation with the provision that Xxxxxx X. Xxxxx, M. D., the then owner, would
have the privilege and right to the use of an office within the building upon
the real estate for the purpose of continuing as he saw fit his private medical
practice at no cost to Xxxxxx X. Xxxxx, M. D. The lease of the real estate at
000 Xxxxx Xxxx Xxxxxx, Xxxx, Xxxxxxx to Principal Hospital Company/Principal
Xxxx Company is subject to the right reserved by Xxxxxx X. Xxxxx, M. D. to the
use of an office within that building.
26
L E A S E
THIS AGREEMENT made this 4th day of February 1967, by and between
XXXXXX COUNTY BOARD OF AVIATION COMMISSIONERS hereinafter called the Lessor,
party of the first part and Xxx. Xxxxxxx (Xxxxxx) Xxxxx, hereinafter called
party of the second part;
WITNESSETH:- That it is hereby agreed as follows:-
(1) The Lessor shall grant and the lessee shall accept a lease on that tract
of land described as follows, to wit;-
A tract of land beginning 40 feet West of a point 485 feet South of a point
which is at the Northwest corner of section 27, Township 33 North; Range 2
West, in Xxxxxx County, Indiana; thence West 100 feet Thence South 120 feet;
thence East 100 feet; thence North 120 feet to place of beginning.
(2) Said lease shall be for a period of five (5) years and lessor
hereby grants lessee the right and option to renew and extend this lease, each
extension being a separate one year period, like terms and conditions due
hereunder at the commencement of each extension period. That said Board of
Xxxxxx County Aviation Commissioners reserve the right to cancel this lease upon
thirty days notice under one or more of the following conditions:
(a) When lessee shall be guilty of any illegal action on said property or upon
airport premises or of violating the rules of proper conduct on an airport as
set forth by the Civil Aeronautics Commission or by this Board.
(b) Whenever by reason of State or Federal laws or regulations, the said lease
or the purpose of which said land is used; becomes deterimental to or violates
the general public use of said Airport for any purpose, including transmission
of mail, freight and passengers.
SCHEDULE A-2
27
(3) That for and in consideration of the agreement of the lessor to lease the
lessee agrees to pay for said leased real estate the sum of two hundred forty
($240.00) dollars, said being computed at the rate of $0.02 per square foot and
payable in advance. This lease, shall renew this lease by paying to the lessor
on or before the expiration date of this lease or any additional term, the sum
of $240.00 in advance, such sum as the Board shall have designated as rental for
extended terms.
(4) It is agreed that the real estate may be used for the operation of a
restaurant; all of which shall be constructed of fireproof materials, and upon
the expiration of this lease all property so erected may be removed by lessee if
the same is done properly and without necessary delay or cost to the Board of
Aviation Commissioners.
(5) Lessee shall have the right to let or assign all or any part of said
premises to tennants, occupants or other persons which he shall elect and such
tennants, occupants or other persons may exercise any and all rights and be
subject to all regulations governing lessee under this lease.
IN WITNESS WHEREOF: said parties set forth their hand and seals the day and
year first above mentioned.
XXXXXX COUNTY BOARD OF AVIATION COMM.
Lessors
/s/ Xxx Xxx
--------------------------------------
Xxx Xxx
/s/ Xxx. Xxxxxxx (Xxxxxx) Xxxxx
--------------------------------- /s/ Xxx X. Xxxxxxxxxx
Xxx. Xxxxxxx (Xxxxxx) Xxxxx --------------------------------------
Lessee Xxx X. Xxxxxxxxxx
--------------------------------------
Xxxxxxx X. Xxx
--------------------------------------
Xxxxxxx X. Xxx
28
DEDICATION OF LAND TO
XXXXXX MEMORIAL HOSPITAL
Whereas, Xxxxxx County is the owner of the following described real estate,
to-wit:
A parcel of land in the Northeast 1/4 of Section 27, Township
33 North, Range 2 West, in Xxxxxx County, Indiana, more
particularly described as follows: Commencing at the Northeast
corner of said Section 27; thence South (Assumed), along the
East line of section, a distance of 362 feet; thence North 89
degrees 50 ft. 40 inches West a distance of 40 feet to the
Point of Beginning; thence South a distance of 243 feet,
thence North 89 degrees 50 ft. 40 inches West a distance of
455 feet; thence North a distance of 126 feet; thence South 89
degrees 50 ft. 40 inches East a distance of 307 feet; thence
North a distance of 88 feet; thence South 89 degrees 50 ft. 40
inches East a distance of 148 feet to the Point of Beginning.
Containing 1.615 acres, more or less.
hereinafter referred to as the Real Estate, and
Whereas, the Real Estate abuts to the East on the present land heretofore
dedicated to the Board of Trustees of the Xxxxxx Memorial Hospital for hospital
use, and
Whereas, the Board of Trustees of the Xxxxxx Memorial Hospital have
requested the Board of Commissioners of the County of Xxxxxx to dedicate the
Real Estate for hospital use in order that the Board of Trustees of the Xxxxxx
Memorial Hospital may plan for future hospital expansion of the Xxxxxx Memorial
Hospital and may plan for the use of the Real Estate in conjunction with the
present operation of the Xxxxxx Memorial Hospital, and
Whereas, the County does not now have any present use for the Real Estate
and the Board of Commissioners of the County of Xxxxxx can forsee of no future
use for this land by the County other than in conjunction with the operation of
the Xxxxxx Memorial Hospital,
SCHEDULE A-3
29
Whereas, the Xxxxxx County Board of Aviation Commission on February 4, 1967,
leased a portion of the aforesaid lands to Xxx. Xxxxxxx Xxxxx for the purposes
of a restaurant more particularly described as follows:
A tract of land beginning 40 feet West of a point 485 feet South of a
point which is at the corner of Section 27, Township 33 North, Range 2
West, in Xxxxxx County, Indiana; thence West 100 feet; thence South 120
feet; thence East 100 feet; thence North 120 Feet to the place of
beginning.
for the annual sum of Two Hundred Forty dollars ($240.00) per year and Whereas,
it is the feeling of the County that so long as said property is occupied for
restaurant purposes that said annual rental shall be paid to said County;
however, it is the opinion of the County that the occupancy of the aforesaid
lands for restaurant purposes should continue only so long as said land is not
needed for hospital purposes and in the event, at some future date, should the
Board of Trustees of the Xxxxxx Memorial Hospital desire to terminate said lease
and to use said land for hospital purposes, they shall have every right so to
do.
Now therefore, be it resolved that the following described real estate,
to-wit:
A parcel of land in the Northeast 1/4 of Section 27, Township 33 North,
Range 2 West, in Xxxxxx County, Indiana, more particularly described as
follows: Commencing at the Northeast corner of said Section 27; thence
South (Assumed), along the East line of section, a distance of 362
feet; thence North 89 degrees 50 ft. 40 inches West a distance of 40
feet to the Point of Beginning; thence South a distance of 243 feet,
thence North 89 degrees 50 ft. 40 inches West a distance of 455 feet;
thence North a distance of 126 feet; thence South 89 degrees 50 ft. 40
inches East a distance of 307 feet; thence North a distance of 88 feet;
thence South 89 degrees 50 ft. 40 inches East a distance of 148 feet to
the Point of Beginning. Containing 1.615 acres, more or less.
30
be and the same is hereby dedicated to the Board of Trustees
of the Xxxxxx Memorial Hospital for the use of the Xxxxxx
Memorial Hospital, and the possession, control and management
thereof is hereby vested in the Board of Trustees of the
Xxxxxx Memorial Hospital.
Dated this 20th day of December, 1976, by the Xxxxxx County Board of
Commissioners in their xxxxxxxx in the Courthouse, at Knox, Indiana, with
the following members present:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxxxx
-------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxx
XXXXXX COUNTY COMMISSIONERS
ATTEST:
/s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx, County Auditor
