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EXHIBIT 10.16
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into this 16 day of December
1985, by and between UNION LABOR HOSPITAL ASSOCIATION, A California public
benefit corporation (hereinafter referred to as "LESSOR") and BRIM HOSPITALS,
INC., an Oregon corporation (hereinafter referred to as "Lessee").
ARTICLE 1
DEMISE OF LEASED PREMISES
Lessor for and in consideration of the rents, covenants and promises herein
contained to be kept, performed and observed by Lessee does hereby lease and
demise to Lessee, and Lessee does hereby rent and accept from Lessor, (i) all
real property and improvements, constituting The General Hospital, an 84-bed,
acute-care general hospital, located at 0000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx, (referred to as "the leased premises" or "the hospital"), and more
particularly described in Exhibits A and B attached hereto and made a part
hereof, (ii) all Group I, II and III Equipment, (iii) all the Hospitals patient
and employee records and all medical records, X-ray films and records,
laboratory records and medical and administrative libraries which are the
property of Lessor.
TO HAVE AND TO HOLD the said leased premises, together with all rights,
privileges, easements, appurtenances and immunities belonging to or in any way
appertaining to said leased premises, including, but not limited to, any and all
easements, rights, title and privileges of Lessor now or hereafter existing in,
to or under adjacent streets, sidewalks, alleys, party walls and property
contiguous to the leased premises and reversions which may hereafter accrue to
Lessor as owner of the leased premises by reason of the closing of any street,
sidewalk or alley.
ARTICLE 2
LEASE TERM
2.01 This Lease shall commence on January 1, 1986, (the "Commencement
Date") and shall be for a term of ten (10) years, renewable at the option of
Lessee for one additional five-year term at the end of the tenth year, upon
delivery by Lessee of its written notice to Lessor of its intent to renew within
180 days prior to the termination of the current term.
2.02 In the event Lessee does not extend this Lease after the expiration
of the initial lease term as provided in Paragraph 2.01, Lessor shall reimburse
Lessee, at the expiration of said term, the book value (as determined by the
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straight line method of depreciation) of any equipment installed by Lessee
during said term. Payment under this provision shall be made to Lessee within
ninety (90) days of such termination. Leasehold improvements are subject to the
provisions of Article 18, and are not intended to be covered in this Section.
2.03 If Lessee shall hold over after the expiration of the initial lease
term or any extension thereof, such tenancy shall be from month to month and on
the same terms as herein set forth.
ARTICLE 3
RENT
3.01 Lessee agrees to pay the Lessor as rental for the use and occupancy of
the leased premises pursuant to this lease as shown in the schedule in Exhibit C
attached hereto and made a part hereof. Said rental shall be due to Lessor
thirty (30) days before the due dates reflected in Exhibit C attached hereto.
3.02 All installments of rent shall be payable in lawful money of the
United States to the Lessor at the address set out herein for notice purposes,
or Lessee shall provide the rent to Lessor's agent at the Hospital, or as
otherwise agreed between the parties.
3.03 In the event that any rent installment is not paid on the date due,
that sum shall bear interest at the rate of ten (10) percent per annum from the
date due until payment is made.
ARTICLE 4
TAXES
4.01 In addition to the rental, Lessee covenants that it will pay and
discharge all taxes, assessments, water rates, meter charges and other charges
which may be assessed or which may be or may become liens upon the leased
premises or the interest therein of any beneficiary under any deed of trust, and
will make such payments or cause such payments to be made in due time to prevent
any delinquency thereon or any forfeiture or sale of the leased premises or any
part thereof, and will produce to the Lessor receipts for all such payments or
other evidences satisfactory to the Lessor. Lessee shall have the right in good
faith at its sole cost and expense (in its own name or in the name of Lessor, or
both, as Lessee may determine appropriate) to contest any such taxes, charges,
and assessments, and shall be obligated to pay the contested amount only if and
when it is finally determined to be due. It is agreed, however, that in no
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event will Lessor's interests or that of any beneficiary under any deed of trust
be threatened because of this provision.
4.02 Subject to the right of the Lessee to contest taxes, assessments and
governmental charges as hereinabove provided, Lessor may at any time that the
payment of any item of taxes, special assessments or governmental charges which
Lessee is obligated to pay under the provisions of Section 4.01 remain unpaid,
give written notice to Lessee of its default, specifying the same, and if Lessee
continues to fail to pay such item of taxes, special assessments or governmental
charges or to contest the same in good faith, then, at any time after ten (10)
days from such written notice, Lessor may pay the items specified in the notice
and Lessee covenants thereupon on demand to reimburse and pay Lessor any amount
so paid or expended in the payment of the items specified in the notice and any
penalties associated with such payment by Lessor.
ARTICLE 5
UTILITIES
Lessee shall pay or cause to be paid all charges for water, heat, gas,
electricity, sewers and any and all other utilities used on the leased premises
throughout the term of this lease including any connection fees.
ARTICLE 6
USE OF PREMISES
It is agreed that the use of the leased premises is and shall be limited to
the operation and maintenance of an acute-care or specialty hospital and related
facilities incidental thereto, including, but not limited to, parking facilities
or medical office buildings. Lessee agrees that it shall maintain and operate
the leased premises, and all engines, boilers, pumps, machinery, apparatus,
fixtures, fittings and equipment of any kind in or that shall be placed in any
building or building now or hereafter at any time in the leased premises, in
good repair, working order and condition, normal wear and tear excepted, and
that it will subject to all the other conditions of this Lease, from time to
time make or cause to be made all needful and proper replacements, repairs,
renewals and improvements so that the efficiency and value of the leased
premises shall not be impaired, normal wear and tear excepted.
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ARTICLE 7
IMPROVEMENTS AND BUILDINGS
7.01 Lessee shall maintain all improvements and buildings constructed on
the leased premises owned by Lessor in a good state of repair, normal wear and
tear excepted. Lessor shall have no obligation whatsoever with respect to
maintenance or repair of any improvements or buildings located on the leased
premises and owned by Lessor.
7.02 Should the leased premises or any portion of said premises, or any
building or improvement on said premises, be damaged or destroyed by any cause
whatsoever, Lessee shall within one (1) year from the date of such damage or
destruction, commence the work of repair, reconstruction or replacement of the
damaged or destroyed building and prosecute the same with reasonable diligence
so that the building shall be restored to substantially the condition it was in
prior to the casualty. During such repair and restoration, at Lessee's option,
this lease shall xxxxx and Lessee shall exercise its option according to Article
19 herein, or the lease shall not xxxxx and rent will continue to be due and
payable. Such option concerning replacement shall be exercised in writing within
forty-five (45) days after such destruction.
7.03 Notwithstanding any other provision of this Lease, Lessee may
terminate this Lease should the leased premises or the improvements on said
premises, be damaged or destroyed during the term of this Lease or any extension
thereof to such an extent it will cost more than 25 percent of the replacement
value of all improvements on said premises immediately prior to the damage or
destruction to restore said premises to the condition they were in immediately
prior to the damage or destruction. In such event, Lessee may exercise its
option to terminate this Lease by giving written notice of termination to Lessor
and this Lease shall be terminated as of 12:01 a.m. on, whichever last occurs,
the date the notice is given to Lessor or the date Lessee completes vacating
said premises; provided, however, that should Lessee terminate this Lease
pursuant to this section, all insurance proceeds payable because of the damage
or destruction shall be, first payable to the bank according to the then present
amount of the obligation to the bank as described in the Agreement, and the
remainder shall be apportioned as the respective interests of the Lessee and
Lessor in the remaining leasehold.
7.04 Lessee shall not suffer or permit any mechanics' liens or other liens
to be filed against the fee of the leased premises nor against Lessee's
leasehold interest in the land nor any buildings or improvements on the leased
premises by reason of any work, labor, services or materials
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supplied or claimed to have been supplied to Lessee or to anyone holding the
leased premises or any part thereof through or under Lessee unless Lessee is in
good faith contesting the claim or amount of any claim of any such mechanic or
materialman or other lien claimant, in which case, Lessee shall indemnify and
save Lessor harmless from any liability for damages occasioned thereby and shall
in the event of a final judgment of foreclosure on any such lien, cause the same
to be discharged and removed prior to the execution of such judgment.
7.05. The term "replacement value" as used herein shall mean the actual
replacement cost thereof from time to time, less exclusions provided in the
normal fire insurance policy. In the event either party believes that full
replacement value (with the then replacement cost less exclusions) has increased
or decreased, it shall have the right, but only, except as provided below, at
intervals of not less than five (5) years, to have such full "replacement value"
re-determined by the fire insurance company which is then carrying the largest
amount of fire insurance carried on the premises, hereinafter referred to as
"impartial appraiser". The party desiring to have full replacement value so
re-determined shall forthwith, on receipt of such determination by such
impartial appraiser, give written notice thereof to the other party hereto. The
determination of such impartial appraiser shall be final and binding on the
parties hereto, and Lessee shall forthwith increase, or may decrease, the amount
of insurance carried pursuant to this section, as the case may be, to the amount
so determined by the impartial appraiser. The requesting party shall pay the
fee, if any, of the impartial appraiser. If, during any such five-year period,
Lessee shall have made improvements to the premises, Lessor may at his own cost
have such full replacement value re-determined at any time after such
improvements are made, regardless of when the full replacement value was last
determined.
ARTICLE 8
EMINENT DOMAIN
8.01 A. "Eminent Domain" as used herein is the right of the government to
take private property for public use. As used in this Article, the words
"condemned" and "condemnation" are coextensive with such right, and a voluntary
conveyance by Lessor to the condemnor under threat of a taking under the power
of eminent domain in lieu of or after commencement of formal proceedings shall
be deemed a taking within the meaning of this article.
B. As used in this Article, the terms "total condemnation" and "total
taking" mean the taking of the entire leased premises under the power of eminent
domain or a
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taking of so much of the leased premises under such power as, in the judgment of
the parties, to prevent or substantially impair the conduct of Lessee's business
thereon.
C. As used in this Article, the terms "partial condemnation" and
"partial taking" mean any condemnation of the leased premises other than a total
taking as defined in subparagraph B of this section.
8.02 A. In the event that there shall be a total taking of the leased
premises during the lease term or any extension thereof under the power of
eminent domain as in this Article defined, the leasehold estate hereby created
shall cease and terminate as of the date title to the property is taken by the
person who will put it to public use or at the time the condemnor is authorized
to take possession of the property as stated in an order for possession,
whichever is earlier.
B. All compensation and damages awarded for such total taking shall
first be paid to the Bank of America to satisfy the obligations under the Note
Purchase Agreement, and Lessee shall have a claim thereto to the extent of the
remainder of the then current lease term, and hereby irrevocably assigns and
transfers to the Bank of America any prior rights it may have to compensation or
damages to which it may become entitled; provided, however, that Lessee shall be
entitled to receive any award made for the taking of or damage to Lessee's
fixtures and any improvements made by Lessee to the leased premises which Lessee
would have had the right to remove but for the condemnation, on expiration or
sooner termination of this lease.
C. On termination of this Lease by a total taking of the leased
premises under the power of eminent domain, all rentals and other charges
payable by Lessee to or on behalf of Lessor under the provisions of this Lease
shall be paid up to the date on which actual physical possession of the leased
premises shall be taken by the condemnor, and the parties hereto shall
thereafter be released from all further liability in relation thereto.
8.03 A. In the event that there shall be a partial taking of the leased
premises during the Lease term or any extension thereof under the power of
eminent domain as in the Article defined, this Lease shall terminate as to the
portion of the leased premises so taken on the date title to the property is
taken by the person who will put it to public use or at the time the condemnor
is authorized to take possession of the property as stated in an order for
possession, whichever is earlier, but this Lease shall at Lessee's option,
continue in force and effect as to the remainder of the leased premises,
provided, however, that the rent payable by Lessee for the balance of the term
where Lessee elects to continue the Lease shall be abated to the
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extent that it is fair, just, and equitable to both Lessee and Lessor, taking
into consideration, among other relevant factors, the number of licensed beds
and/or the square footage affected by such taking or condemnation. Such option
shall be exercised by Lessee in writing within forty-five (45) days after such
taking.
B. On such partial condemnation as in this section provided, all
compensation and damages awarded for such partial taking shall belong to and be
the sole property of Lessor, and Lessee shall have no claim thereto and hereby
irrevocably assigns and transfers any rights to share in the award, except to
receive any award made for the taking of, or damage to any fixtures or
improvements or to the leased premises which Lessee would have had the right to
remove but for the condemnation on expiration or sooner termination of this
Lease. In the event that this Lease is continued as to the portion of the
premises not condemned, any award made for alterations, modifications, or
repairs which may be reasonably required in order to replace the remaining
portion of the leased premises not taken to substantially the same condition it
was prior to the taking, shall be for Lessee's benefit so that it may place said
premises in a suitable condition for the continuance of Lessee's tenancy.
C. On termination of this Lease in whole or in part as herein
provided, all rentals and other charges payable by Lessee to or on behalf of
Lessor hereunder shall be paid up to the date on which actual physical
possession shall be taken by the condemnor, and, in the event that the Lease is
totally terminated, the parties hereto shall thereafter be released from all
further liability in relation thereto, and, in the event that the Lease is only
partially terminated, Lessee shall thereafter be liable only for rent in an
amount in proportion to the amount of the leasehold remaining.
ARTICLE 9
INSURANCE
9.01 Lessee covenants that it will promptly procure, or cause to be
procured, and will maintain insurance against loss or damage to the leased
premises by fire and perils covered by extended coverage insurance in an amount
at least equal to the amount of the Lessor's obligations to the Bank of America
and to other lenders from time to time outstanding hereunder, subject to
deductible conditions in an amount not to exceed $5,000. Lessee shall also
maintain boiler insurance in an amount customary for similar facilities and will
maintain public liability insurance in the minimum amount of $5,000,000
liability to any one person for personal injury, $500,000 liability to any one
person for property damage and $5,000,000 liability for any one accident, with a
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deductible amount of not more than $5,000 per person or $25,000 per occurrence.
Lessee will carry malpractice insurance in the minimum amount generally deemed
adequate for its business and consistent with insurance coverage or reserves as
maintained by hospitals of similar nature and size in the State of California.
Lessee will also carry business interruption insurance covering interruption of
the Hospital's operations at the leased premises in whole or in part by reason
of the total or partial suspension of or interruption in hospital operation
caused by the damage to or destruction of any part of the leased premises, with
such exceptions as are customarily imposed by insurers, covering a period of
suspension or interruption of at least two fifteen (15) calendar months, with a
minimum limit in an amount not less than the maximum payments to be made
pursuant to the rent for twelve (12) consecutive months thereafter. Lessee shall
maintain fidelity bonds on all its officers and employees who collect or have
access to or have custody of the revenues or any other funds of the Lessee in
such amount as is customarily carried by like organizations. Lessee further
covenants and agrees that it will at all times carry and maintain such other
insurance of the types and in amounts which are customarily carried by other
hospitals of a similar nature in the State of California. All policies
evidencing insurance required by this section shall be carried in the name of
Lessee, with the Lessor and the Bank of America as their interest may appear
named as additional insureds where such may be done without additional expense
to Lessee, and shall provide that all losses thereunder shall be made payable
directly to the Lessor, subject to this Agreement and Lessee's interests
hereunder, except for (1) all policies of fire and extended coverage insurance
carried by the Lessee on the leased premises, which shall be so written as to
make any loss payable to the Lessor and the Bank of America as their interests
may appear, and (2) liability insurance, which may be payable to the claimants
thereof.
9.02 In the event of any loss or damage covered by any policy of fire or
extended coverage insurance, any appraisal or adjustment of such loss or
settlement or payment of indemnity therefore which shall be agreed upon between
the Lessee and any insurer shall, upon the written request of the Lessor, be
consented to and accepted by the Bank of America. All insurance monies received
by Lessee on account of any loss or damage to the leased premises covered by any
policy of fire or extended coverage insurance under any of the provisions of
this Section 9.02 shall to the extent of the Bank's present day lien in the
Hospital be deposited with and held by the Bank of America in the Insurance
Proceeds Account which it has established pursuant to its loan agreement with
Lessor.
9.03 All insurance hereunder shall be carried by insurance companies
authorized to do business in the State of
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California or otherwise acceptable to Lessor and the Bank of America. In the
event that an insurance carrier not authorized to do business in the State of
California is selected by Lessee to write the insurance required by this lease,
Lessor shall not unreasonably withhold consent of said insurance company. Lessee
agrees to deliver to the Lessor and to the Bank of America before June 1 of each
year a certificate showing as of April 1 of such year a schedule in detail
setting forth the insurance policies purchased by the Lessee then outstanding
and in full force and effect upon or in connection with the leased premises,
including the names of the insurers which have issued the policies, the amounts
thereof, the property or risks covered thereby (including liability risks), the
expiration date of the policy and the fact, where applicable, that there is
attached to each policy a mortgage clause in favor of the Bank of America.
ARTICLE 10
INDEMNIFICATION
Lessor shall not be liable for any loss, damage or injury of any kind or
character to any person or property arising from any use of the leased premises
or any part thereof, or caused by any defect in any building, structure or other
improvement thereon or in any equipment or other facility therein, except that
Lessee shall have no liability for any loss, damage, or injury resulting from
any latent defect of which Lessee has neither actual nor constructive notice
thereof. Lessor shall not be liable for any loss, damage, or injury of any kind
or character to any person or property caused by or arising from any act or
omission of Lessee or of any of Lessee's agents, employees, licensees or
invitees, or by or from any accident on the land or any fire or other casualty
on the leased premises, or occasioned by the failure of Lessee to maintain the
leased premises in a safe condition, or arising from any other cause whatsoever.
Lessee hereby waives, on its behalf, all claims and demands against Lessor for
any such loss, damage or injury of Lessee, and hereby agrees to defend,
indemnify, save and hold Lessor entirely free and harmless from all liability
for any such loss, damage or injury of other persons and from all costs and
expenses arising therefrom but only to the extent that such loss, damage or
injury is not caused by or does not result from any action by the Lessor.
ARTICLE 11
ASSIGNMENT AND SUBLEASE
11.01 The Lessee will not sell, assign, mortgage or transfer this lease,
sublet the premises or any part thereof, or allow any transfer hereof, or allow
any lien upon the
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Lessee's interest by operation of law, without the prior written consent of the
Lessor, which consent shall not be unreasonably withheld by Lessor.
11.02 Any sale, assignment, mortgage, transfer or subletting of this lease
which is not in compliance with the provisions of this article shall be of no
effect and void. This provision is inapplicable if Lessee exercises the purchase
options granted to it under Article 15 or Article 19 herein below.
ARTICLE 12
INDIGENT CARE
12.01 Lessee shall provide for and care for all patients diagnosed by a
licensed staff physician as seriously ill or requiring emergency services
without regard for the ability of such patients to pay for services rendered in
the Hospital emergency room.
12.02 Lessor agrees to negotiate in good faith with Humboldt County,
California officials for the transfer of the Hospital's obligations and rights
under that certain Agreement dated October 31, 1975, between the County and
Lessor, to reimburse Lessor for medical services provided to indigent persons
and other County patients, pursuant to Paragraph 21.7 of said Transfer
Agreement. Lessor agrees to assign Lessee its rights, benefits, obligations and
interest in the aforementioned contract with the County.
ARTICLE 13
DEFAULT BY LESSEE
Should Lessee default in the performance of any covenant, condition or
agreement in this lease and such default is not corrected within twenty (20)
days after receipt of written notice thereof from Lessor, and Lessee has not
commenced to correct said default and is not diligently attempting to effect a
correction within ten (10) days after receipt of written notice from Lessor to
Lessee of such default, Lessor may declare this Lease and all rights and
interests created by it to be terminated. Whereupon, this lease shall cease and
come to an end as if that were the day originally fixed herein for the
expiration of the term hereof, except that Lessor shall be responsible for the
obligations provided in Section 2.02 herein. Lessor, its agents or attorney, may
resume possession of the leased premises and relet the same for the remainder of
the term at the best rent Lessor, its agent or attorney may obtain for the
account of Lessee, who shall make good any deficiency.
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ARTICLE 14
WARRANTIES
Subject to the interest of the Bank of America and the other obligees of
Lessor, Lessor covenants and agrees that Lessee, on paying the rent and other
charges herein provided for observing and keeping the covenants, conditions and
terms of this Lease on Lessee's part to be kept or performed shall lawfully and
quietly hold, occupy and enjoy the leased premises during the term of this Lease
and any extensions thereof without any hindrance, disturbance or ejectment by
Lessor, its successors or assigns, or by any other person or persons lawfully
claiming the same, except such portion of the leased premises, if any, as shall
be taken under the power of eminent domain.
ARTICLE 15
TRANSFER TO THIRD PARTY
Lessor grants to Lessee a right of first refusal to purchase the leased
premises on the same terms and conditions as a bona fide offer received by
Lessor for the leased premises by a third party or at the "option price"
referred to in Article 19, whichever is the lesser. After receipt of notice of
such bona fide offer and the terms thereof, Lessee shall have sixty (60) days to
give notice of exercise of its right of first refusal. The Closing shall take
place within ninety (90) days from the date Lessee exercises its option, or as
soon thereafter as Lessee is reasonably able to obtain all necessary national,
state, and local approvals. This option shall be binding on any party
subsequently obtaining title to the leased premises. Transfer to a third party
shall trigger the responsibilities of Lessor under Section 2.02 and Section
18.02 herein.
ARTICLE 16
SKILLED NURSING FACILITY OPERATIONS
16.01 Lessee has been notified by Lessor of Lessor's lease of certain of
Lessor's contiguous property to Coastal Care Center, Inc. The parties agree
that, except as provided herein, Lessee shall have no rights or responsibilities
relative to said Skilled Nursing Facility.
16.02 Lessee shall have a right of first refusal, should such right become
available to Lessor, with respect to the Skilled Nursing Facility upon sale of
the Skilled Nursing Facility to Coastal Care Center, Inc. (or any other third
party purchaser) and Coastal Care Centers' subsequent sale thereof. Lessee shall
also have the right of first refusal, should such right become available to
Lessor, to lease the
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Skilled Nursing Facility. The right shall be exercised on the same terms as
specified in Article 15 of this Lease. Lessor agrees to utilize its best efforts
to cause the lease agreement described in Section 16.01 to give Lessee the
benefit of this Section 16.02.
16.03 If Lessee or any other party shall purchase that Skilled Nursing
Facility, the net proceeds thereof, after all direct expenses to Lessor/Seller
of that sale, shall be applied by the Lessor/Seller to pay down the Promissory
Note given by Lessor to Bank of America dated January 26, 1979 (which Note is
secured by the real property which is the subject of this Lease). If the
proceeds of the nursing facility exceed the amount required to retire that Note
of January 26, 1979, all net excess proceeds shall be applied in payment of that
Promissory Note dated December 8, 1976, which Note was given by Lessor to Bank
of America and is secured by the real property which is the subject of this
Lease.
ARTICLE 17
LESSOR'S APPROVAL OF EQUIPMENT
Lessor shall have the right to approve equipment added to the Hospital
which cannot be removed without damaging the Hospital's physical facilities,
which expenditures exceed $10,000 per item. Lessor's approval shall not be
unreasonably withheld. Lessee shall make the request for such approval in
writing; when such request is received, the Lessor shall notify Lessee of its
decision in writing signed by the Lessor's Chairman within thirty-five (35) days
after receipt of such requests or such request shall be deemed approved. Lessee
may violate or ignore this provision without breaching or defaulting under this
Lease; provided, however, that should Lessee violate this provision, Lessor
shall have no obligations under Section 2.02 as to that item of equipment not
approved by Lessor. Lessee shall not remove such items on termination of the
Lease under Section 2.02 herein.
ARTICLE 18
LESSOR'S APPROVAL OF CAPITAL IMPROVEMENTS
18.01. Lessor shall have the right to approve those capital improvements
to the Hospital in excess of twenty-five thousand dollars ($25,000.00) which
cannot be removed without damaging the Hospital's facilities. Except as set
forth below, this approval is limited to the right to be provided and to approve
copies of plans and specifications for the construction of said capital
improvements, for the purpose of assuring that no improvement will compromise
the structural integrity of the Hospital or decrease the value of Lessor's
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property; further, Lessor shall have the right to inspect all construction and
to require that said construction of capital improvements is done in a
workmanlike manner.
18.02. In the event that (a) a proposed capital improvement would increase
the fair market value of Lessor's property, or result in the hospital offering
services not presently available, and (b) in the further event that said capital
improvement cannot be depreciated over the life of the initial term of the lease
or sooner in accord with generally accepted accounting principles, and (c) in
the further event that Lessee does not extend this lease after the expiration of
the initial lease term as provided in Paragraph 2.01, then Lessor shall
reimburse Lessee the actual book value of said capital improvements as
determined by the actual depreciation schedule used by Lessee. Lessee shall
utilize a depreciation schedule that depreciates the improvements as rapidly as
permitted under accounting principles generally accepted by the Hospital
Industry. Lessee shall provide Lessor, on an annual basis, copies of all book
entries relative to any such capital improvements at the time of each annual
review. Payment under this provision shall be made to Lessee within one hundred
eighty (180) days from the termination of the lease or as agreed otherwise
between the parties at the time of approval of said project by Lessor.
ARTICLE 19
LESSEE'S PURCHASE OPTION
Lessor grants to Lessee, during the Lease term or any extensions or
renewals thereof, an option to buy the leased premises for an amount equal to
the unpaid outstanding long-term indebtedness of Lessor as of the date the
option is exercised. Lessee shall exercise its option hereunder by giving Lessor
written notice of its irrevocable intent to exercise the option. The Closing
shall take place within ninety (90) days from the date the Lessee exercises its
option, or as soon thereafter as Lessee is reasonably able to obtain all
necessary permits and approvals. Closing costs shall be apportioned as standard
in the local area. This option, during the Lease term or any extensions or
renewals thereof, shall be binding on any party subsequently obtaining title to
the leased premises subject to the rights of Lessor's mortgagees and other
obligees.
ARTICLE 20
GENERAL PROTECTIVE PROVISIONS
20.01 Lessee shall permit Lessor or Lessor's agents, representatives or
employees to enter onto the leased premises for the purpose of inspection to
determine whether Lessee is in compliance with the terms of this lease or for
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the purpose of showing the leased premises to prospective lessees, purchasers,
mortgagees or beneficiaries under trust deeds.
20.02 The relationship between Lessor and Lessee at all times shall remain
solely that of landlord and tenant, and shall not in any fashion be deemed a
partnership or joint venture.
20.03 Neither bankruptcy, insolvency, assignment for the benefit of
creditors nor the appointment of a receiver shall affect this lease so long as
all covenants of Lessor are continued in performance by Lessee or Lessor and
their respective successors or legal representatives.
20.04 No waiver by Lessor or Lessee of any default or breach of any
covenant, condition or stipulation herein contained shall be treated as a waiver
of any subsequent default or breach of the same or any other covenant, condition
or stipulation hereof.
ARTICLE 21
EMPLOYEES
Although Lessor understands and agrees that Lessor cannot bind Lessee
relative to the retaining of the present employees of the Hospital, Lessee
represents that it is the intention of Lessee to maintain the current staff and
that reasonable efforts will be made to insure that the transfer of the Hospital
does not result in the loss of employment for any current employees, provided
the present employees satisfy Lessee's employee performance standards. Nothing
in this provision shall be deemed to create any rights of said employees to
bring an action against Lessee for wrongful termination in the event they are
not so retained.
ARTICLE 22
COMPLIANCE WITH LEGAL REQUIREMENTS
Lessee shall at its sole cost and expense at all times throughout this
lease comply with all laws, statutes, ordinances, and governmental rules,
regulations and requirements now in force or which may hereafter be in force,
with the requirements of any board of fire underwriters or other similar body
now or hereafter constituted, with any direction or occupancy certificate issued
pursuant to any law by any public officer or officers, as well as the provisions
of all recorded documents affecting the leased premises, insofar as it relates
to or affects the condition, use or occupancy of the premises.
-14-
15
ARTICLE 23
MISCELLANEOUS
23.01 All sums other than rent, notices, demands or requests from one
party to another may be personally delivered or sent by mail, certified or
registered, postage prepaid, to the addresses stated in this paragraph, and
shall be deemed to have been given at the time of personal delivery or three
days after the time of mailing. Either party may change its address for notice
purposes hereunder but such change and shall become effective only upon actual
receipt of notice of such change.
All notices, demands or requests from Lessee to Lessor shall be given to
Lessor at 123 "F" Street, Eureka, California 95501, or at such other address as
Lessor shall request in writing.
All payments, notices, demands or requests from Lessor to Lessee shall be
given to Lessee, c/o K. Xxxxx XxXxxxxxxx, 000 X.X. 000xx Xxxxxx, Xxxxxxxx,
Xxxxxx 00000, or at such other address as Lessee shall request in writing.
23.02 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
23.03 This Agreement shall be construed under and in accordance with the
laws of the State of California.
23.04 In case of any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and this agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
23.05 This Agreement constitutes the sole and only agreement of the
parties hereto and supersedes any prior understandings or written or oral
agreements between the parties respecting the within subject matter.
23.06 No amendment, modification or alteration of the terms hereof shall
be binding unless the same be in writing, dated subsequent to the date hereof
and duly executed by the parties hereto.
23.07 In the event Lessor or Lessee breach any of the terms of this
agreement whereby the party not in default employs attorneys to protect or
enforce its rights hereunder and prevails, then the defaulting party agrees to
pay the other party reasonable attorneys' fees so incurred by such
-15-
16
other party, including attorneys' fees in all litigation and all appeals.
23.08 Lessor agrees that it will from time to time and at any reasonable
time execute and deliver to Lessee such other and further instruments and
assurances as Lessee may reasonably request approving, ratifying and confirming
this Lease and the leasehold estate created hereby and certifying that the same
is in full force and effect and that no default thereunder on the part of Lessee
exists except that if any default on the part of Lessee does exist, Lessor shall
specify in said certificates each such default.
23.09 The signatories to this lease for both Lessor and Lessee hereby
warrant that they have the authority to make this lease, and that their
signature to this lease is binding upon their corporation.
This Lease has been executed by the parties on the date and year first
above written.
LESSOR:
UNION LABOR HOSPITAL ASSOCIATION
By: /s/
------------------------------
Chairman, Board of Directors
ATTEST:
/s/
------------------------------
LESSEE:
BRIM HOSPITALS, INC.
By: /s/
-------------------------------
ATTEST:
/s/ Xxxxx XxXxxxxxxx
-----------------------------
-16-
17
EXHIBIT C
LEASE PAYMENT SCHEDULE
YEAR TOTAL AMOUNT DUE SCHEDULE OF PAYMENTS PER YEAR
---- ---------------- -----------------------------
1981 $1,595,736.00 January 1 $ 5,000.00
------------- -------------
May 1 1,018,875.00
-------------
November 1 313,500.00
-------------
December 1 258,361.00
-------------
1982 885,361.00 May 1 313,500.00
------------- -------------
November 1 313,500.00
-------------
December 1 258,361.00
-------------
1983 1,207,523.00 May 1 478,500.00
------------- -------------
November 1 470,662.00
-------------
December 1 258,361.00
-------------
1984 1,176,174.00 May 1 462,825.00
------------- -------------
November 1 454,988.00
-------------
December 1 258,361.00
-------------
1985 1,144,823.00 May 1 447,150.00
------------- -------------
November 1 439,312.00
-------------
December 1 258,361.00
-------------
1986 1,113,474.00 May 1 431,475.00
------------- -------------
November 1 423,638.00
-------------
December 1 258,361.00
-------------
1987 1,082,123.00 May 1 415,800.00
------------- -------------
November 1 407,962.00
-------------
December 1 258,361.00
-------------
1988 1,050,773.00 May 1 400,125.00
------------- -------------
November 1 392,287.00
-------------
December 1 258,361.00
-------------
1989 1,019,421.00 May 1 384,449.00
------------- -------------
November 1 376,611.00
-------------
December 1 258,361.00
-------------
1990 988,069.00 May 1 368,773.00
------------- -------------
November 1 360,935.00
-------------
December 1 258,361.00
-------------
Exhibit C
18
EXHIBIT C
LEASE PAYMENT SCHEDULE
YEAR AMOUNT DUE SCHEDULE OF PAYMENTS PER YEAR
---- ---------- -----------------------------
1991 $ 713,356.00 May 1 $353,097.00
------------ -----------
November 1 345,259.00
-----------
December 1 $ 5,000.00
-----------
1992 672,004.40 May 1 337,421.00
------------ -----------
November 1 329,583.00
-----------
December 1 5,000.00
-----------
1993 640,652.00 May 1 321,745.00
------------ -----------
November 1 313,907.00
-----------
December 1 $ 5,000.00
-----------
1994 699,500.00 May 1 306,069.00
------------ -----------
November 1 298,231.00
-----------
December 1 5,000.00
-----------
1995 577,948.00 May 1 290,393.00
------------ -----------
November 1 282,555.00
-----------
December 1 5,000.00
-----------
1996 546,596.00 May 1 274,717.00
------------ -----------
November 1 266,879.00
-----------
December 1 5,000.00
-----------
1997 515,244.00 May 1 259,041.00
------------ -----------
November 1 251,203.00
-----------
December 1 5,000.00
-----------
1998 483,892.00 May 1 243,365.00
------------ -----------
November 1 235,527.00
-----------
December 1 5,000.00
-----------
1999 452,510.00 May 1 227,689.00
------------ -----------
November 1 219,851.00
-----------
December 1 5,000.00
-----------
2000 416,155.00 May 1 212,013.00
------------ -----------
November 1 204,175.00
-----------
19
EXHIBIT "A" - HOSPITAL
TRACT 2
-------
DESCRIPTION
All that real property in the City of Eureka, County of Humboldt, State of
California, described as follows
PARCEL ONE
That portion of Parcel 2 of Parcel Map No. 1302, according to said map as
filed in the Recorder's Office of Humboldt County on May 18, 1978 in Book 11 of
Parcel Maps, Page 102, described as follows:
Beginning at the northeast corner of Parcel 2 of said parcel map;
thence along the boundary line of said Parcel 2 the following courses:
S 89 deg. 32'14"W, 331.09 feet;
S 00 deg. 19'47"E, 127.37 feet;
S 89 deg. 37'00"W, 79.27 feet;
S 00 deg. 23'07"E, 216.40 feet;
thence leaving said boundary line, S 00 deg. 23'07" E, 41.00 feet;
thence S 89 deg. 53'50" E, 22.53 feet to the beginning of a curve concave
to the south having a radius of 40 feet;
thence easterly along said curve 45.76 feet to a point in a non-tangent
line (a radial line through said point bearing N 65 deg. 39'14" E
thence S 4 deg. 56' W 9.43 feet to the beginning of a non-tangent curve
concave to the east having a radius of 500 feet, a radial line of said curve
through said beginning of curve bearing N 84 deg. 47'47" W;
thence southerly along said curve 181.81 feet (through an angle of 20 deg.
50'04")") to a point in a non-tangent line (a radial line of said curve through
said point bearing S 74 deg. 22'09" W);
thence S 16 deg. 57' E, 60.13 feet to the beginning of a non-tangent curve
concave to the west having a radius of 524.50 feet, a radial line of said curve
through said beginning of curve bearing N 73 deg. 25'28" E
thence southerly along said curve 36.50 feet (through an angle of 3 deg.
59'14") to the north line of Parcel 1 of said Parcel Map No. 1302;
thence along said north line S 74 deg. 29' E, 60.56 feet to an angle point
in said line;
thence along said north line N 89 deg. 48' E, 250.75 feet to the east line
of said Parcel 2;
thence along said east line N 0 deg. 12' W. 709.15 feet to the point of
beginning.
PARCEL TWO
Non-exclusive rights of way for ingress, egress and utilities in and over
Hardy Drive and Xxxxxxxx Drive as shown on the Record of Survey on file in the
Recorder's Office of Humboldt County in Book 31 of Surveys, page 97.
20
EXHIBIT "B" - HOUSES
TRACT 3
-------
DESCRIPTION
All that real property in the City of Eureka, County of Humboldt, State
of California, described as follows:
That portion of Parcel 2 of Parcel Map No. 1302, according to said map
as filed in the Recorder's Office of Humboldt County on May 10, 1978 in Book 11
of Parcel Maps, page 102, described as follows:
Beginning at the most westerly corner of Parcel 1 of said Parcel Map;
thence N 89 deg. 54'15" W. 229.05 feet to a point in a non-tangent curve
concave to the northeast having a radius of 275.0 feet, a radial line of said
curve through said point bearing S 66 deg. 20'17" W;
thence southerly along said curve 128.60 feet (through an angle of 26 deg.
47'37") to the south line of said Parcel 2, being the north line of 00xx Xxxxxx;
thence along said north line of 00xx Xxxxxx N 89 deg. 48' E, 303.55 feet to
the west line of Parcel 1 of said Parcel Map No. 1302;
thence along said west line, N 0 deg. 12' W. 100.0 feet to an angle point
in said line;
thence N 89 deg. 54'15" W. 150.94 feet to the point of beginning.
21
SHADED PORTIONS REFLECT PROPERTY
DESCRIBED IN EXHIBITS "A" AND "B"
[MAP]
22
0000-0000-0
Recorded-Official Records
Humboldt County, California
RECORDING REQUESTED BY, AND Xxxxxxx Xxxxxx, Recorder
WHEN RECORDED RETURN TO: Recorded by XXXXX & XXXXX
Rec Fee 25.00
Xxxxxxxx X. Xxxx Clerk: MM Total: 25.00
Xxxxx & Xxxxx Apr 18, 1995 at 12:34
Two Union Square CONFORMED COPY
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
COLLATERAL ASSIGNMENT OF OPTION
This COLLATERAL ASSIGNMENT OF OPTION (the "Assignment") is entered
into as of this 17th day of January, 1995, by and between Brim Hospitals, Inc.,
an Oregon corporation ("Hospitals") and Key Bank of Oregon, a national banking
association ("Agent").
RECITALS
A. This Assignment concerns certain real property and the improvements
thereon (the "Property"), legally described on Exhibit A attached hereto. The
Property is subject to a Lease Agreement dated December 16, 1985, by and between
Union Labor Hospital Association ("Union Labor") and Hospitals, as amended or
otherwise modified by a First Amendment to Lease Agreement dated December 16,
1985, an Agreement Re Release of Real Property from Lease dated May 21, 1987, a
Third Amendment to Lease Agreement dated as of June 20, 1989 (the "Third
Amendment to Lease"), a Fourth Amendment to Lease Agreement dated June 18, 1992,
and a Fifth Agreement to Lease Between Union Labor Hospital Association and Brim
Hospitals, Inc. (the Lease Agreement, as so amended and as otherwise amended or
otherwise modified from time to time, being the "Lease"). The Lease Agreement or
a memorandum of the Lease Agreement was recorded in the records of Humboldt
County, California, on May 13, 1988, under number 9172, in volume 1873 official
records, at page 895.
B. Pursuant to Article 19 of the Lease (as amended by the Third
Amendment to Lease) Hospitals has been granted an option to purchase the
Property (the "Option").
C. Hospitals is also a Guarantor of certain obligations of its parent
company, Brim, Inc. (the "Company"), under the terms of that certain Revolving
Credit Agreement dated January 17, 1995, by and among Brim, Inc., Key Bank of
Oregon as agent, and the banks ("Banks") named as Banks therein (the "Credit
Agreement").
D. Hospitals has evidenced its guaranty of such obligations by
executing a Guaranty of approximate even date with the Credit Agreement.
E. Hospitals will benefit directly and indirectly from the entry of
the Company into the Credit Agreement.
1
23
F. It is a condition of the Banks agreement to extend certain credit
under the Credit Agreement that Hospitals assign as security for its Guaranty
the Option.
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:
1. ASSIGNMENT FOR SECURITY. As security for the payment and
performance of all Hospitals' obligations under that certain Guaranty of
approximate even date herewith, Hospitals hereby absolutely assigns to Agent all
Hospitals' right, title and interest in the Option; provided that, until an
Event of Default shall have occurred and be continuing under the Credit
Agreement, Agent shall have no right to exercise the Option.
2. PROCEDURE UPON DEFAULT. Upon the occurrence of an Event of Default
under the Credit Agreement and only so long as said Event of Default shall be
continuing, Agent shall be entitled to exercise all rights of a secured party
under the California Uniform Commercial Code Sections 9501 et. seq., and
following foreclosure of its security interest as provided therein, shall be
entitled to exercise the Option upon the terms and conditions provided in the
Option.
3. ASSIGNMENT PRESENT AND ABSOLUTE. This Assignment is present and
absolute, and until a reassignment of the Option to Hospitals pursuant to
Section 4 below, Hospitals shall retain no right to exercise the Option.
4. REASSIGNMENT. Agent agrees that at such time as no Loans are
outstanding under the Credit Agreement, and no further Commitment of the Banks
exists, and all obligations of the Company under the Credit Agreement have been
fully satisfied, Agent will execute and deliver a reassignment of the Option to
Hospitals, and will upon request provide written notice of such reassignment to
Union Labor. Agent further agrees that, upon the request of Hospitals, it will
reassign the Option to Hospitals or Hospital's nominee if, but only if, the
conditions specified in Section 2.12(a)-(c) of the Credit Agreement are
satisfied.
5. DEFINED TERMS. Terms used as defined terms herein and not defined
herein are used as defined in the Credit Agreement.
6. CONSENT TO RECORDATION. This Assignment shall be recorded in the
real property records of Humboldt County, California.
7. GOVERNING LAW. This Assignment shall be governed by the laws of the
State of California.
BRIM HOSPITALS, INC.
By /s/ Xxxx Xxxxxx
-----------------------------------
Its President
-----------------------------------
2
00
XXX XXXX XX XXXXXX, as Agent
By /s/
-----------------------------
Its Vice President
-----------------------------
The undersigned acknowledges the
foregoing Assignment and consents
thereto. This consent is subject to the
transferee's obtaining, at or around the
time title to the property is
transferred, the consent to and/or
approval of such transfer by the
Humboldt County Hospital Authority,
and/or any other similar approval which
may be required at such time.
UNION LABOR HOSPITAL ASSOCIATION
By SEE NEXT PAGE
----------------------------------
Its
----------------------------------
STATE OF OREGON
COUNTY OF MULTNOMAH
On March 15, 1995 before me Xxx X. Xxxxxx personally appeared Xxxx X. Xxxxxx of
Xxxx Hospitals, Inc., an Oregon corporation, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS by my hand and official seal.
Signature /s/ Xxx X. Xxxxxx (Seal)
-----------------------------------
Notary Public in and for said County and State
3
25
The undersigned acknowledges the foregoing Assignment and consents thereto,
which consent is subject to the procurement of any required approvals and/or
consents from any governmental authority and/or agency asserting jurisdiction in
connection with any transfer of title to the property.
UNION LABOR HOSPITAL ASSOCIATION
By: /s/
------------------------------
Its President
00
XXXXX XX XXXXXX
Xxxxxx xx Xxxxxxxxx
Xx March 15, 1995 before me Xxxxx X. Xxxxx personally appeared Xxxx X. Xxxxx of
Key Bank of Oregon, a national banking association, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS by my hand and official seal.
Signature /s/ Xxxxx X. Xxxxx
--------------------------------------- [Seal]
Notary Public in and for said County and State
STATE OF California
County of Humboldt
On March 21, 1995 before me Xxxxx X. Xxxxxxx personally appeared Xxx X. Xxxxxx,
M.D. of Union Labor Hospital Association, a California public benefit
corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS by my hand and official seal.
Signature Xxxxx X. Xxxxxxx [Seal]
-----------------------------
Notary Public in and for said County and State
4
27
ASSIGNMENT
Except as provided herein, the Union Labor Hospital Association
(hereinafter "the Association"), for value received, hereby assigns to The
Hospital Corporation of California (hereinafter "HCC"), all its existing rights
and obligations described in the Transfer Agreement dated October 31, 1975, and
Amendments thereto between the Association and the County of Humboldt, a copy of
which is attached hereto and incorporated by reference herein. It is understood
that the Assignment herein shall not include any rights or duties described in
the following provisions of the Transfer Agreement:
1. Paragraphs 4(b), 5(3) (iii), and 14(b).
2. Paragraph 21.2.6.
3. Paragraph 21.14, and all other rights and duties relative to
long-term care, said rights and duties having been previously assigned to
Coastal Care Centers, Inc., on or about May 15, 1980.
The Assignment herein is made upon the following terms and conditions:
1. The Association shall remain responsible and liable for all
obligations excepted from the Assignment herein.
2. HCC shall continue to make the General Hospital's services fully
available to Medi-Cal and Medicare recipients.
3. HCC shall make available to the Board of Supervisors and the County
Administrative Officer of the County of Humboldt, for inspection purposes only,
at its offices in the General
28
Hospital, Eureka, California, all public documents which can be released without
permission by the hospital, to the extent permitted by law.
4. If HCC, to whom the Association assigns certain of its rights and
duties under the October 31, 1975, contract between the Association and the
County of Humboldt, fails in any way to perform said duties as required by the
contract, the Association will perform or arrange for the satisfactory
performance of said duties.
5. Pursuant to the lease of the General Hospital by HCC from the
Association, HCC agrees to indemnify Humboldt County (the "County"), its
employees and the members of the County Board of Supervisors, both individually
and collectively, their successors or assigns, due to any claims concerning the
County's authority to approve the assignment of the Transfer Agreement dated
October 31, 1975, and the Amendments thereto between the Association and the
County of Humboldt (the "Assignment"), in any amounts not to exceed Ten Thousand
Dollars ($10,000.00). HCC shall reimburse County, on demand, for any payment by
County at any time after the date of that; Assignment with respect to any
liability, obligation, or claim to which the foregoing indemnity by HCC relates
up to Ten Thousand Dollars ($10,000.00)
6. Except as provided in Paragraph 5 above, the Association shall provide
legal defense to any action, suit or proceeding instituted to contest the
validity of this agreement, and shall hold County of Humboldt, its officers,
agents and employees, free and harmless from liability for loss, damage, or
injury to
-2-
29
It is further understood that this agreement shall become void and of no
effect in the event that Union Labor Hospital Association and/or the Hospital
Corporation of America and Hospital Corporation of California fails to perform
the conditions set forth in Humboldt County Resolution No. 81-26.
Wherefore, this Agreement Amendment has been executed this 24th day of
February, 1981.
COUNTY OF HUMBOLDT
By: /s/ Xxxxx Xxxxx
-------------------------
Chairman of the Board of
Supervisors of the County of
Humboldt, State of California
(SEAL)
ATTEST:
XXXXXX X. XXXXXXX
-----------------------------------
County Clerk and ex officio
Clerk of the Board of Supervisors
of the County of Humboldt, State
of California
By: Xxxxx X. Xxxxx
--------------------------
Deputy Clerk
UNION LABOR HOSPITAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxx
------------------------------
President
and
By: /s/
------------------------------
Secretary
APPROVED AS TO FROM:
/s/
------------------------------------
Special Counsel
- 2 -
30
persons or property arising out of or attributable to the Association assigning
its responsibility to operate the General Hospital facility to HCC.
7. Hospital Corporation of America (HCA), the parent company of HCC,
guarantees the performance by HCC of all the terms and conditions of this
Assignment which are obligations of HCC, and agrees to be bound thereby.
Dated: March 20, 1981 UNION LABOR HOSPITAL ASSOCIATION
By: /s/ Hampton
----------------------------
-3-
31
ACCEPTANCE OF ASSIGNMENT
Hospital Corporation of California hereby accepts the foregoing assignment,
and agrees to perform all duties and obligations to be performed by the Union
Labor Hospital Association under the contract as specified herein to the same
extent as if said corporation had been an original party thereto, and agrees to
save, indemnify, defend and hold the Union Labor Hospital Association harmless
from all liability for performance or nonperformance of such duties and
obligations.
HOSPITAL CORPORATION OF CALIFORNIA
Dated: 4/10/81 By: /s/ Xxxx X. Xxxxxx
------------------ --------------------------------
Attested By: /s/
--------------------------------
Hospital Corporation of America agrees to the terms and conditions of the
Assignment herein.
Dated: 4/10/81 HOSPITAL CORPORATION OF AMERICA
------------------
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Attested By: /s/
--------------------------------
APPROVAL OF ASSIGNMENT
The County of Humboldt consents to the assignment as set forth in Humboldt
County Resolution No. 81-26, provided however
-4-
32
that this consent shall become void and of no effect in the event that Union
Labor Hospital Association and/or the Hospital Corporation of America and
California fails to perform the conditions set forth in Humboldt County
Resolution No. 81-26.
Dated: February 24, 1987 COUNTY OF HUMBOLDT
By /s/ Xxxxx Xxxxx
-----------------------------------
Chairman of the Board of
Supervisors the County of
Humboldt, State of California
(SEAL)
ATTEST:
/s/ XXXXXX X. XXXXXXX
---------------------------------------------
County Clerk and ex officio
Clerk of the Board of Supervisors
of the County of Humboldt, State
of California
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Deputy Clerk
APPROVED AS TO FORM:
/s/
--------------------------------------------
Special Counsel
-5-
33
AGREEMENT PROVIDING FOR TRANSFER OF
OPERATIONAL CONTROL AND OWNERSHIP OF
HUMBOLDT MEDICAL CENTER TO GENERAL HOSPITAL
TWELFTH AGREEMENT AMENDMENT
That certain agreement dated October 31, 1975, by and between the COUNTY OF
HUMBOLDT and UNION LABOR HOSPITAL ASSOCIATION relative to transfer of Humboldt
Medical Center to General Hospital is hereby amended as follows:
1. Paragraph 21.2.1 is deleted.
2. Paragraph 21.2.2 is deleted.
3. Paragraph 21.2.3 is deleted.
4. Paragraph 21.2.5 is deleted.
5. The last sentence of Paragraph 21.3 is deleted.
6. Paragraph 21.4.3 is deleted.
7. Paragraph 21.4.4 is deleted.
8. Paragraph 21.7.1 is deleted. The following is substituted therefor:
"The County shall pay General for medical services rendered pursuant
to this Agreement at the Medi-Cal rate, less Return on Equity Portion. Such
rate shall include physicians' services performed by physicians who are
hospital based and whose services are billed by the hospital, such as
radiology, pathology, and emergency room physician services."
9. Paragraph 21.7.2 is deleted.
10. Paragraph 21.7.3 is deleted.
11. Paragraph 21.10 is deleted in its entirety (including subparagraphs
21.10.1 and 21.10.2).
It is understood that this Agreement shall have prospective application
only.
34
ASSUMPTION AGREEMENT
THIS AGREEMENT, dated December 31, 1985, by and among HOSPITAL CORPORATION
OF AMERICA, a Tennessee corporation (hereinafter "HCA"), HOSPITAL CORPORATION OF
CALIFORNIA, a California Corporation, ("HCC") and BRIM Hospital, Inc., an
Oregon Corporation (hereinafter "Brim") a subsidiary of HillHaven Corporation,
a Tennessee Corporation.
Preliminary Statement
On February 6, 1981, HCC and HCA entered into a lease agreement with the
Union Labor Hospital Association, a California public benefit corporation, for
the lease of the General Hospital in Eureka, California ("the Lease"). In
connection with such Lease HCC and HCA established certain deposits in Eureka,
California relating to the operation of the hospital, maintains certain
obligations for prepaid expenses, placed certain personnel in place at the
General Hospital and will collect certain receivables at the termination of such
Lease. Brim has entered into a lease to begin January 1st, 1986 with the Union
Labor Hospital Association concerning the General Hospital and will require the
services of a controller on a consulting basis at the
35
General Hospital for the period January 1, 1986 - March 31, 1986.
Now THEREFORE, in consideration of the premises, and the mutual covenants
and agreements of the parties hereinafter set forth, it is hereby agreed by and
among the parties as follows:
Section 1.01. Transfers. At the termination of Lease, HCC and HCA will sell
transfer, convey, assign and deliver to Brim all HCC'S and HCA's rights, title
and interest in the following:
a. Deposits. All deposits currently relating to the operation of the
General Hospital at such deposits' actual value as more specifically set
out in Exhibit A hereto.
b. Maintenance Agreement. All prepaid expenses relating to the operation of
the General Hospital at the remaining value of such prepaid expenses as
more specifically set out in Exhibit B hereto.
c. Inventory. All current inventory at the General Hospital as of December
31, 1985. The price will be determined by a physical inventory to be taken
on Monday, December 30 1985, adjusted for disbursements through midnight,
December 31, 1985.
HCA and HCC will accept liability for payments of all items included
in the physical inventory but not paid at December 31, 1985. Brim shall
accept liability for all items ordered during the normal course of
-2-
36
business through December 31, 1985 which are received after December 31,
1985.
d. Records. All patient medical records, minutes of the Board of Trustees,
the Medical Staff and quality assurance records. Brim shall afford HCA
reasonable access to such records and minutes to facilitate HCA's
collection of accounts, legal activities and responses to governmental
requirements. Such transfer will be made at no charge to Brim.
e. Prepaid Admissions' Deposits. All prepaid admissions' deposits for
future patient care at the General Hospital after the termination of the
Lease shall be transferred to Brim at no charge.
Section 1.02. Operational Issues. At the termination the Lease HCC and HCA
will xxxx Xxxx for certain services as follows:
a. A one time fee for access to HCA's Customer Support Services division on
the General Electric Computer System for a period of one year as more
specifically set out in Exhibit C hereto:
b. A monthly fee of Four Thousand Five Hundred Dollars ($4,500.00)
representing a portion of the salary and benefits of the HCA controller, at
the General Hospital, Xxxxx Xxxxxx. The controller shall manage the
controller functions of the General Hospital for Brim so long as the
controller is overseeing the collections of HCC/HCA's receivables in
Eureka,
-3-
37
California. The controller will remain an employee of HCA at all times
under the terms of this Agreement.
Section 2.01. Receivables. At the termination of the Lease HCC and HCA
shall retain all patient receivables incurred through the last day of the Lease.
These receivables shall be collected by employees of Brim under the supervision
of HCA's controller or such other person as HCA may designate. HCA shall pay
Brim the actual salaries, plus benefits (at twenty-five percent of the salaries)
to be billed to HCA at the end of each pay period with payment no later than
fifteen (15) days after receipt by HCA of such invoices for Brim employees'
time.
a. Under current Medicare regulations interim bills for Medicare patients
in-house on December 31, 1985 may not be processed. Upon discharge charges
accumulated under the Lease for HCA (from admissions through December 31,
1985) will be combined with charges accumulated under Brim (from January 1,
1986 through discharge) and billed to the program as one complete xxxx. All
payments received for these amounts (including DRG, patient deductibles and
co-insurance) shall be prorated on a basis of charges to charges between
HCA and Brim and paid to HCA by Brim no later than ten (10) days after
receipt by Brim.
Section 3.01. Brim agrees as a part of this Agreement to pay HCC and HCA no
later than fifteen (15) days after termination of the Lease the following:
a Deposits
b. Prepaid Expenses
-4-
38
c. Inventory
d. Monthly fees for Controller, To Be Paid per Section 1.02b
e. G.E. Service Agreement and Equipment Charges
(Exhibit C).
Section 4.01. Notices. All notices, requests, demands and other
communications shall be in writing and shall be deemed to have been duly given,
if delivered or mailed, first class postage prepaid, to the parties at their
respective addresses reflected on Exhibit D hereto.
Section 5.02. Cancellation or Amendment. This Agreement may not be
cancelled or amended other than by, and only by, a written instrument executed
by HCA, HCC, and Brim.
Section 5.03. Expenses. Each party to this Agreement shall pay its own
costs and expenses (including, without limitation, the fees and expenses of its
counsel, auditors, and accountants fees) incidental to the preparation and
carrying out of this Agreement.
Section 5.04. Survival of Representation and Warranties. The
representations and warranties and covenants contained herein shall survive
termination of the Lease and any investigation by the parties with respect
thereto.
Section 5.05. Attorneys' Fees. Should any party hereto institute any action
or proceeding in court to enforce any provision hereof of for damages by reason
of an alleged breach of any provision of this Agreement, the
-5-
39
prevailing party shall be entitled to recover from the losing party or parties
such amounts as the court may adjudge to be reasonable attorneys' fees for
services rendered to the prevailing party in such action or proceeding. The term
"prevailing party" as used in this Section 5.05 shall include, without
limitation, any party who is made a defendant in litigation without damages
and/or other relief may be sought against such party and a final judgment or
decree is entered into such litigation in favor of such party defendant.
Section 5.06. Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
Section 5.07. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
Section 5.08. Parties in Interest. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
Section 5.09. Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of California.
Section 5.10. Invalidity of Any Provisions. It is the intention of the
parties hereto that the provisions of this Agreement shall be enforced to the
fullest extent
-6-
40
permissible under the laws and public policies of each state and jurisdiction in
which such enforcement is sought, and that the unenforceability (or modification
to conform with such laws or public policies) of any provision of this Agreement
shall be deemed invalid or unenforceable in whole or in part, this Agreement
shall be deemed amended to delete or modify, in whole or in part, if necessary,
the invalid or unforceable provisions, or portions thereof, and to alter the
balance of this Agreement in order to render the same valid and enforceable.
Section 5.11. Entire Agreement. This Agreement expresses the whole
agreement between the parties, there being no representations, warranties, or
other agreements not herein set forth or provided for.
Section 5.12. Authorization for Agreement. The Execution and performance of
this Agreement by HCC, HCA and Brim has been duly authorized by all necessary
laws, resolutions or corporate action, and this Agreement constitutes the valid
and enforceable obligations of HCC; and Brim in accordance with its terms.
-7-
41
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
"HCC"
Hospital Corporation of California
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Administrator
"BRIM"
BRIM, a division of Hillhaven Corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
"HCA"
Hospital Corporation of America
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Administrator
-8-
42
EXHIBIT A
DEPOSITS
ARA $6.200.00
Total $6,200.00
Both balances were brought forward from ULHA. Files indicate balance audited by
Ernst & Whinney for 9/30/80 financial statements.
43
EXHIBIT B
PREPAID EXPENSES
VENDOR PURPOSE AMOUNT
------ ------- ------
California Thoracic Society Blood Gas Professional Testing $ 275.00
Elec. Office Equipment PMA's - typewriters,
18 @ $100. 00 each 1,800.00
Amer. Soc. of Hosp. Pharmacists Publication 450.00
Pitney Xxxxx 3 Months Postage Meter 125.61
Times Standard Public Notice/Liquor License 11.00
General Electric PMS for January 3,378.00
IBM PMA on 2 typewriters for 3 months 352.50
Xxxxxxxx Ultrasound PMA 681.25
Eureka Oxygen Manifold Rental 840.04
Xxxxxxx Electronics PMA 2,442.66
Radiometer America Service Contract Copiers 2,416.74
JCAH Survey Fee 1,300.00
----------
$14,072.80
==========
Xxxxx Cash Funds 375.00
----------
$14,447.80
44
EXHIBIT C
1. HCA shall provide EDP systems/services through our existing agreement with
General Electric.
2. Term: Beginning January 1, 1986 through mid-January, 1987 (coincident with
the final processing for the month of December, 1986).
3. Fees/Charges/Consulting:
(a) General Electric will xxxx direct for:
1. $4,500 one-time set-up fee to download and convert existing
master files for operational use by the new entity.
2. Monthly "Ongoing Systems Costs". per "General Electric's
Transaction Price Schedule" under the present master agreement
between HCA and GE. Should specific charges be modified/added or
deleted as to HCA, those charges shall be accepted as to this
agreement.
(b) HCA will xxxx directly for:
1. $2,400 one-time fee for access to HCA Customer Support Services
for the term of this agreement. Should this agreement terminate
prior to December 31, 1986, this fee shall be prorated at the
rate of $200 per month and the difference refunded.
4. The equipment which is the property of GE/HCA and all systems manuals and
documentation which is the property of HCA shall be returned to HCA at the
termination of this agreement.
5. HCA shall be held harmless for non-payment of charges direct-billed by
General Electric.
45
ONGOING SYSTEM COSTS
April 16, 1984
GENERAL ELECTRIC'S TRANSACTION PRICE SCHEDULE
*Invoiced Monthly to Participating Hospitals or Corporate*
Owned Hospital
Unit of Charge Per Unit
Description Measure Of Measure
----------- ------- ---------------
A. Basic Services
1. Inpatient Processing Patient Day .73
2. Outpatient Processing Outpatient Visit .20
3. Industrial Account Charge Transaction .05
Processing
4. Medical Reporting Each Final UB-82 Xxxx .25
Processing
5. Microfiche Copies Microfiche .25
(Mailed to Participating
Hospitals)
6. Long Term Beds Patient Day .40
(Psychiatric Hospitals)
7. Financial System Reports Patient Day .05
(Full System)
8. Financial Systems Reports Per User #, Per Month 100.00
(OIC Only)
9. Financial Systems Reports Per User #, Per Month 150.00
and General Ledger
Option (OIC Only)
10. Accounts Payable System Patient Day .06
11. Excess A/P Generated Each .10
Checks
12. Excess Vendors Each .05
13. Excess Vouchers Each .05
14. Alpha Vendor List Per Vendor .02
15. File Retention Per Account .10
Excess A/R Accounts
46
Owned Hospital
Unit Of Charge For Unit
Description Measure of Measure
----------- ------- ----------------
16. Excess A/R Follow-up Each Listed Excess .05
Listing Account
17. Excess A/R Statements Each Statement .10
18. Physicians Census Report Date Line .01
19. Care Unit Census Date Line .01
Report
20. Info Xxxx w/o Detail Each Xxxx .25
20A. Discharge Pay w/o Detail Each Xxxx .25
21. Info Xxxx w/Detail Each Xxxx .30
22. Final Xxxx w/Detail Each Xxxx .30
23. Interim Xxxx w/Detail Each Xxxx .30
24. Department Summary Xxxx Each Xxxx .10
25. Detailed A/R Aging Data Line .02
Report
26. Weekly A/R Cross Each Excess Listed A/R .02
Reference Report Account with No Current
Activity
27. Cumulative Credit Each Account Listed .03
Balanced Register
28. A/R Detailed Activity Date Line .01
Report
29. Collection Agency Each Record .02
Records Transmittal
30. Bad Debt Ledgers Each Record .05
31. Payroll Labels Each Label .04
31A. Requestable Payroll Labels Each Label .07
32. Payroll Custom Reports Data Line .02
33. Payroll Expanded Data Line .04
Custom Reports
34. Physicians Xxxx Each Xxxx .15
47
Owned hospital
Unit Of Charge Per Unit
Description Measure of Measure
----------- ------- ----------
35. Excess Inventory Date Line .01
Requests
36. Labor Productivity Each Department .50
Report
37. A/R Custom Reports Same As A/R
(Long Form) Follow-up
Listing
38. A/R Custom Reports Date Line .02
(Short Form) +.001 Per
Account
39. Employee Status Reports Per Employee .10
(Quarterly Fiche)
40. Employee Status Reports Per Employee .25
Special Request
41. Starr Workpapers Per Request 20.00
42. Requested Preliminary Per Request 20.00
Close Trial Balance
and Financial Statements
43. Notice of Admission Per Notice .05
44. A/P Cross-Reference Per Lines In Excess of .25
500 Line per Calendar
Month
45. Medical Staff Data Line .01
Activity Report Minm.5.00
46. Medicare DRG By Medical Data Line .02
Staff Member Report Minm 5.00
47. Patient Origin Index Each Report 5.00
Report
48. Financial Census Report Data Line .01
48
DEFINITIONS
DATA LINE:
A line on an output report containing the data pertinent to the content of
the report. This specifically excludes Header or Title lines.
Specifications for Individual reports may exclude certain Summary or Total
Lines.
EXCESS ACCOUNTS RECEIVABLE ACCOUNTS:
Those accounts in the Accounts Receivable application that are determined
to have a balance aged over 180 days as of preliminary close.
EXCESS ACCOUNTS RECEIVABLE FOLLOW-UP:
The number of account entries appearing on the Follow-Up Collection List
Reports produced by the Accounts Receivable application throughout a given
month in excess of 25% of the number of accounts on file at the end of said
month. The number of account entries are accumulated weekly. At Month-End,
the calculation is: multiply number of accounts on file by .25 and subtract
the accumulated number of account entries. A positive result represents
excess Accounts Receivable Follow-Up entries.
EXCESS ACCOUNTS RECEIVABLE STATEMENTS:
The number of statements printed for all accounts purged from the Accounts
Receivable file at the end of a given month in excess of three (3) per
inpatient and/or outpatient visits. This figure is arrived at on an account
level by multiplying number of visits by 3, and subtracting this from
number of statements generated for this account. Any positive result is
accumulated by hospital, and represents excess Accounts Receivable
statements.
INDUSTRIAL ACCOUNT:
An account is so classified in the Accounts Receivable application. Said
accounts are identified by the characters "IND" in positions 68 through 70
on the Patient Data Record of the A/R Master File.
OUTPATIENT VISIT:
All charge transactions representing services provided to an outpatient in
a single day, and posted to said outpatient's account during the period
being invoiced. Said charge transactions are also known as "Type 6
Procedures."
49
PATIENT DAY:
Is the unit of measure of an account having lodging facilities provided and
services rendered to one inpatient.
WEEKLY A/R CROSS REFERENCE ACCOUNTS WITH NO CURRENT ACTIVITY:
The unit of measure for the Weekly A/R Cross-Reference Report is each
account appearing on the report that has had no activity in the current
month, i.e., since last Preliminary Closing.
EXCESS VENDORS:
A record on the Accounts Payable Master File. Each occurrence of record
represents one vendor for one hospital. The number of excess vendors is
arrived at by having the application count the number of vendor records for
a hospital, and subtracting 1000 from this count of records. Any positive
result is accumulated by hospital and represents excess vendors.
EXCESS VOUCHERS:
Basically, over 90 days from input date to pay date. For each Voucher
record, the application adds 90 days to the date the voucher was first
placed on file and subtracts the result from the date of the run. A
positive result represents an excess voucher for a hospital.
EXCESS A/P GENERATED CHECKS:
The number of checks printed for a hospital in a calendar month is counted
by the Accounts Payable application. At the end of every calendar month,
500 is subtracted from this hospital count and any positive result is
excess checks.
EXCESS INVENTORY REQUESTS:
Each hospital is entitled to four of each type of Inventory. When a user
makes the fifth or subsequent request within any calendar year, they will
be considered excess and be billed accordingly.
50
Union Labor Hospital Association
(GENERAL HOSPITAL)
Eureka, California
Insured Mortgage Note (Series A)
$6,600,000 San Francisco, California
December 8, 1976
Union Labor Hospital Association, a California non-profit corporation doing
business under the name GENERAL HOSPITAL (the "Hospital"), for value received,
hereby promises to pay to BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
(the "Bank"), or order, on or before December 1, 2002, in accordance with the
provisions hereof, at such place as the holder hereof may from time to time
specify, the lesser of $6,600,000 or the aggregate amount of advances made by
the Bank, as indicated on Schedule I hereto, as part of its payment of the
purchase price for the Series A Notes pursuant to that certain Note Purchase
Agreement (the "Note Purchase Agreement") by and between the Hospital and the
Bank dated December 8, 1976 (the "principal amount"), in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for public and private debts, and to pay from and after the date hereof interest
on the unpaid balance of the principal amount semi-annually on the first days of
June and December (the "Interest Payment Dates") in such coin or currency at the
rate of nine and one-half percent (9-1/23) per annum.
51
or the first Interest Payment Date following the payment in full by the Hospital
of the Series B notes issued pursuant to the Note Purchase Agreement (the "First
Principal Payment Date"), and on each Interest Payment Date thereafter, the
Hospital shall make equal semi-annual principal payments in an amount equal to
two and one-half percent (2-1/2%) of the initial principal amount of the Series
A Notes until the earlier of December 1, 2002, or the Interest Payment Date on
which the entire principal amount shall have been paid. Optional prepayments of
principal and payments of prepayment premiums, if any may be made on the dates
and in the amounts provided in Section 2 hereof.
This is one of a series of Insured Mortgage Notes (Series A) executed by
the Hospital to the Bank in the aggregate principal amount of up to $6,600,000.
All of such notes shall be payable and secured pari passu and are herein
collectively referred to as the "Note" or "Notes".
All optional payments required or permitted hereunder are expressed in the
aggregate for all of the Notes and shall be applied pro rata to the Notes in
accordance with their respective principal amounts (except where Section 2.4 of
this Note may provide otherwise).
1. Security. Payment of this Note is (i) secured by a Deed of Trust of even
date herewith (the "Deed of Trust") affecting the Hospital's interest in certain
real and personal property located in Humboldt County, California, and (ii)
insured under the California Health Facility Construction Loan Insurance Law.
2
52
2. Payment of principal.
2.1 Optional Prepayment Through Income or Gifts. The Hospital may on any
Interest Payment Date after the First Principal Payment Date, and upon notice as
provided in Section 2.5 hereof, prepay without premium a portion of the
principal amount of the Series A Notes: provided, however, that no such
pre-payment may be made unless (a) the aggregate of any prepayment of principal
of the Series A Notes under this Section 2.1 shall be in an amount greater than
$25,000 but not in any one year greater than five percent (5%) of the aggregate
principal of the Series A Notes, (b) the aggregate prepayments of
principal on the Series A Notes under this Section 2.1 shall not at any time
exceed the amount of $3,000,000 and (c) no such prepayment of principal under
this Section 2.1 may be made directly or indirectly from, or in anticipation of
the use of, borrowed funds if such borrowing may be effected for a similar term
at a lower rate of interest. In addition, prior to December 1, 1986, the
Hospital may prepay all or a portion of the principal amount of the Series A
Notes in excess of that permitted in clause (a) above if the conditions set
forth in clauses (b) and (c) above have been complied with and upon the payment
of a premium as follows:
If prepayment is made during Prepayment premium shall
12-month period ending be the following percentage
of principal amount prepaid:
---------------------------- ----------------------------
in the year:
1977 9.5
1978 9.12
1979 8.74
3
53
If prepayment is made during Prepayment premium shall be
12-month period ending the following percentage of
in the year principal amount prepaid
-------------------------- ---------------------------
1980 8.36
1981 7.98
1982 7.6
1983 7.22
1984 6.84
1985 6.46
1986 6.08
The foregoing right of the Hospital under this Section 2.1 to make prepayments
of the principal amount of the Notes shall not be cumulative, and any such
permitted prepayment upon a particular date which is not exercised by the
Hospital upon such date shall thereupon cease and lapse and be of no further
force and effect.
2.2 Optional Prepayment From Any Source. The Hospital may, on any Interest
Payment Date on or after December 1, 1986, upon notice as provided in Section
2.5 hereof, prepay the entire principal amount of the Series A Notes remaining
unpaid, or any portion thereof, if in addition the Hospital pays a prepayment
premium as follows:
4
54
If prepayment is made during Prepayment premium shall be
12-month period ending the following percentage of
principal amount prepaid:
---------------------------- ---------------------------
in the year:
1985 6.08
1987 5.7
1988 5.32
1989 4.94
1990 4.56
1991 4.18
1992 3.8
1993 3.42
1994 3.04
1995 2.66
1996 2.28
1997 1.9
1998 1.52
1999 1.14
2000 .76
2001 .38
2002 .00
The premium provided for in this Section 2.2 shall not apply to any prepayment
which qualifies for prepayment without premium under Section 2.1.
5
55
provide any new financing, in whatever term contemplated by the Hospital in
conjunction with a request made pursuant to this Section 2.4. The Hospital
further agrees that it will not undertake any such financing, with any other
parties, without first giving such consenting Noteholders, in proportion to
their respective holdings of Series A Notes, the opportunity, after having 30
days advance written notice, to provide such financing on the same terms as may
be available from any other party.
2.5 Notice of Prepayment. Written notice of each intended prepayment shall
be given by the Hospital to the holder of this Note not less than thirty (30)
days in the case of a prepayment under Sections 2.1, 2.2 or 2.4 hereof and not
less than sixty (60) days in the case of a prepayment under Section 2.3 hereof
prior to the date fixed for prepayment, specifying such date, the principal
amount of the Note to be prepaid on such date and the premium if any, applicable
to such prepayment.
2.6 Maturity of Prepayments. In the event the Hospital gives written notice
of its intention to make an optional prepayment hereunder, the principal amount
to be prepaid shall become due and payable on the date fixed for prepayment
together with any required premium and accrued interest.
2.7 Application of Optional Prepayments. All partial prepayments of this
Note, whether with
7
56
or without premium, shall be applied in discharge of the installments of
principal (including the maturity payment) coming due hereunder in the inverse
order of the maturity of such installments of principal and shall not reduce any
of the mandatory payments.
3. Miscellaneous. This Note shall be construed in accordance with and
governed by the laws of the State of California. The captions of the paragraphs
of this Note are for convenience of reference only and shall not define or limit
any of the terms or provisions hereof. Any notice specified herein shall be made
in accordance with the Deed of Trust by which these Notes are secured, under and
pursuant to the Note Purchase Agreement, and shall be deemed to have been given
upon the earlier of the receipt thereof or five (5) business days following the
sending thereof.
If any Event of Default, as defined in the Note Purchase Agreement, shall
occur, the entire unpaid principal amount of this Note, together with accrued
interest and prepayment premium, may, without notice, at the option of the
holder hereof be declared immediately due and payable. Notwithstanding any
provision herein or in the Note Purchase Agreement or the Deed of Trust, the
total liability for payment hereunder in the nature of interest shall not exceed
the limits imposed by the usury laws of the State of California
8
57
attorney be employed or expenses be incurred to compel payment of this Note or
any portion of the indebtedness evidenced hereby, the prevailing party shall be
entitled to its expenses and reasonable attorney's fees.
The Note is issued under and pursuant to the terms and conditions of the
Note Purchase Agreement. Said Note Purchase Agreement and the Deed of Trust
contain provisions for the acceleration of the maturity hereof upon the
happening of certain stated events as set forth therein. The rights of the
holder hereof in the event of a default are more particularly set forth in the
Note Purchase Agreement and the Deed of Trust. Any term specially defined in the
Note Purchase Agreement shall have the same meaning herein.
Each advance made by the holder hereof as part of the payment of the
purchase price hereof shall be recorded on Schedule A hereto by the holder
hereof, and, if requested upon presentation therefor, acknowledged by the
Hospital.
The undersigned, and any endorsers or guarantors hereof, jointly and
severally waive diligence, presentment, protest and demand and also notice of
protest, demand, dishonor and nonpayment of this Note, and expressly agree that
this Note, or any payment hereunder, may be extended from time to time by the
holder hereof, and consent to the acceptance by the holder hereof of further
security or the release by the holder hereof of any security for this Note, all
without in any way affecting the liability of the undersigned and any endorsers
or guarantors hereof. No extension
9
58
of time for the payment of this Note, or an installment hereof, made by
agreement by the holder hereof with any person now or hereafter liable for the
payment of this Note shall affect the original liability under this Note of the
undersigned, even if the undersigned is not a party to such agreement.
IN WITNESS WHEREOF, the undersigned have set their hands and affixed
the seal of the Hospital this 8th day of December, 1976.
UNION LABOR HOSPITAL ASSOCIATION
By
---------------------------------
[SEAL]
ATTEST:
----------------------------------------
Secretary
10
59
ADDENDUM TO ASSIGNMENT
The following is hereby added to and made a part of the Assignment of
Union Labor Hospital Association's rights and obligations described in the
Transfer Agreement dated October 31, 1975, and Amendments thereto, between the
Association and the County of Humboldt.
1. The Assignment is conditioned upon:
a. The continued operation of The General Hospital facility by
Brim Hospitals, Inc., in compliance with all applicable State and Federal laws
and regulations concerning the quality of health care.
b. Any subsequent assignments of the Transfer Agreement being
subject to the written approval of the Board of Supervisors.
c. The County receiving and reviewing proof of insurance from
Union Labor Hospital Association with limits of Five Million Dollars
$5,000,000.00 regarding exposure arising from its indemnification of the County.
2. The Assignment shall be in full force and effect for so long as Brim
Hospitals, Inc., is operating The General Hospital, as lessee or owner, and
shall terminate and be of
60
no force or effect at such time as Brim Hospitals, Inc. discontinues operation
of The General Hospital.
Dated: UNION LABOR HOSPITAL ASSOCIATION
By:
--------------------------------
Dated: BRIM HOSPITALS, INC.
By:
--------------------------------
Dated: COUNTY OF HUMBOLDT
By:
--------------------------------
Chairman of the Board of
Supervisors of the County of
Humboldt, State of California
(SEAL)
ATTEST:
------------------------------------
County Clerk and ex officio
Clerk of the Board of Supervisors
of the County of Humboldt, State
of California
By:
---------------------------------
Deputy Clerk
APPROVED AS TO FORM:
------------------------------------
Xxxxxx X. Xxxxxx
County Counsel
61
FIRST AMENDMENT TO LEASE AGREEMENT BETWEEN
UNION LABOR HOSPITAL ASSOCIATION, INC.,
AND BRIM HOSPITALS, INC.
Union Labor Hospital Association, a California Public Benefit
Corporation, and Brim Hospitals, Inc., an Oregon Corporation, hereby make a
first amendment to that Lease Agreement dated December 16, 1985, entered into by
the parties hereto, in the following particulars:
It is hereby agreed between the parties as follows:
1. There is added to page 3, Article 6, after the first sentence of
said paragraph, ending with "office buildings" the following language: "Lessee
understands and fully agrees that it is expressly prohibited from operating at
the premises a skilled nursing facility, extended care facility, immediate care
facility, or long-term care facility."
2. There is added to page 12, Article 16.04, the following language:
"In the event that Lessee or any other party shall make principal payment, in
any amount, on the promissory note given by Lessor to Bank of America dated
January 26, 1979, which payment reduces the amount of
62
Lessor's quarterly payments due the Bank of America then Lessee's payment under
this lease shall be reduced correspondingly."
Dated: 12/16/85 UNION LABOR HOSPITAL ASSOCIATION
By: /s/ Xxx X. Xxxxxx, M.D.
--------------------------------
Dated: 12/16/85 BRIM HOSPITALS, INC.
By: /s/ K. Xxxxx XxXxxxxxxx
--------------------------------
63
SECOND AMENDMENT TO LEASE AGREEMENT BETWEEN
UNION LABOR HOSPITAL ASSOCIATION, INC.,
AND BRIM HOSPITALS, INC.
Union Labor Hospital Association, a California Public Benefit
Corporation, and Brim Hospitals, Inc., an Oregon Corporation, hereby make a
second amendment to that Lease Agreement dated December 16, 1985, entered into
by the parties hereto, as follows:
The parties agree that the Lease Agreement is and shall be subject to
the Regulatory Agreement executed by and between Union Labor Hospital
Association, (dba General Hospital) and the Director of the Office of Statewide
Health Planning for the State of California, dated as December 8, 1976, and
recorded December 8, 1976, in Book 1381 of Official Records, page 606, under
Recorder's File No. 23780, a copy of which is attached hereto and incorporated
herein (hereafter Regulatory Agreement); further, should any conflict arise or
exist between the terms and conditions of the Lease Agreement and the Regulatory
Agreement the terms and conditions of the Regulatory Agreement shall apply and
prevail .
Except as specifically set forth herein and as in the first amendment
to the lease, the lease shall remain in full force and effect as originally
agreed.
Dated: 9/16/86 UNION LABOR HOSPITAL ASSOCIATION
By: /s/ Xxx X. Xxxxxx, M.D.
--------------------------------
Dated: 9/9/86 BRIM HOSPITALS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
JRM:Mrm
9/8/86
64
THIRD AMENDMENT TO LEASE AGREEMENT
BETWEEN
UNION LABOR HOSPITAL ASSOCIATION, INC.
AND
BRIM HOSPITALS, INC.
Union Labor Hospital Association, a California Public Benefit
Corporation, and Brim Hospitals, Inc., an Oregon Corporation, hereby make a
Third Amendment to that Lease Agreement dated December 16, 1985, as amended (the
Lease). This Amendment shall be in replacement and clarification of certain
portions of the Lease as follows:
1. Section 3.01. Attached to this Amendment and marked Exhibit C is a
revised Exhibit C which replaces in full Exhibit C as attached to the Lease.
Rents shall be due 30 days before the dates shown on Exhibit C. The parties
acknowledge that Lessee has paid rent pursuant to the attached Exhibit C through
May 31, 1989, which includes the 30-day advance payment of the amount due June
15, 1989, on the C Note.
2. Article 19. Article 19 of the Lease is clarified to resolve a patent
ambiguity with respect to the term "outstanding long-term indebtedness". This
term has always meant the amount equal to the unpaid rent as reflected on
Exhibit C as reduced under other provisions of the Lease at the date of the
closing of the purchase resulting from the exercise of the option.
1
65
3. Article 16.03. Article 16.03 of the Lease is clarified to resolve a
patent ambiguity with respect to the application of net proceeds being applied
to debt. The understanding of the parties has always been the unpaid rent as
reflected on Exhibit C shall be reduced by any amounts paid pursuant to Section
16.03 of the Lease (i) to the Lessor, (ii) as a payment on the promissory note
given by Lessor to Bank of America dated January 26, 1979, or (iii) as a payment
on the promissory note dated December 8, 1976, given by Lessor to Bank of
America. In addition, for this purpose, the unpaid rent shall be reduced by any
amounts received by Lessor or paid on either of the promissory notes described
immediately above as either insurance proceeds or condemnation proceeds not used
for repair or replacement of the damaged or condemned property or amounts paid
in lieu thereof as a result of an event described in Section 7, 8 or 9 of the
Lease.
4. Article 19. Article 19 of the Lease is amended by adding the
following sentence to the end of Article 19 as follows:
"Lessor agrees that, at closing, Lessor will transfer title to the
leased premises to Lessee free and clear of all liens or encumbrances
except those created by Lessee."
5. General. Lessee acknowledges that the option to purchase the leased
premises under the terms and conditions originally agreed as clarified by this
Third Amendment to the Lease was essential to its leasing the premises. Lessor
agreed to the
2
66
original option to purchase, as clarified, because Lessor believes its primary
responsibility was to provide quality health care to the residents of Eureka and
its surrounding area; in order to serve the health care needs of the community,
it was necessary to enter into the Lease with Lessee, including the provision
providing the option to purchase. By so having agreed, Lessor has assured that
General Hospital has been operating and providing health care to the community
since January 1, 1986.
Dated as of June 20, 1989.
LESSOR:
UNION LABOR HOSPITAL ASSOCIATION
By: /s/ Xxx X. Xxxxxx, M.D.
--------------------------------
Xxx X. Xxxxxx, M.D.
LESSEE:
BRIM HOSPITALS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
President
--------------------------------
3
67
EXHIBIT C
LEASE PAYMENT SCHEDULE
Year A Note C Note
1986 May 1 $433,975.00 $888,155.27 payable
Nov. 1 426,138.00 monthly; 84 monthly
installments of
1987 May 1 $418,300.00 $10,573.28 plus
Nov. 1 410,462.00 interest of the Bank
America's Reference
1988 May 1 $402,625.00 Rate plus 1/2% on the
Nov. 1 394,787.00 outstanding balance,
with each payment being
1989 May 1 $386,949.00 made on the 15th day of
Nov. 1 379,111.00 each month beginning
January 15, 1986.
1990 May 1 $371,273.00
Nov. 1 363,435.00
1991 May 1 $355,597.00
Nov. 1 347,759.00
1992 May 1 $339,921.00
Nov. 1 332,083.00
1993 May 1 $324,245.00
Nov. 1 316,407.00
1994 May 1 $308,569.00
Nov. 1 300,731.00
1995 May 1 $292,893.00
Nov. 1 285,055.00
1996 May 1 $277,217.00
Nov. 1 269,379.00
1997 May 1 $261,541.00
Nov. 1 253,703.00
1998 May 1 $245,865.00
Nov. 1 238,027.00
1999 May 1 $230,189.00
Nov. 1 222,351.00
2000 May 1 $214,513.00
Nov. 1 206,675.00
68
FOURTH AMENDMENT TO LEASE AGREEMENT
BETWEEN
UNION LABOR HOSPITAL ASSOCIATION, INC.,
AND
BRIM HOSPITALS, INC.
Union Labor Hospital Association, a California Public Benefit
Corporation (hereinafter Lessor), and Brim Hospitals, Inc., an Oregon
Corporation (hereinafter Lessee) hereby make a fourth amendment to that Lease
Agreement dated December 16, 1985, entered into by the parties hereto, as
follows:
RECITALS
A. Lessor and lessee have entered into a Lease Agreement dated December
16, 1985. The Lease Agreement was amended by a First Amendment to Lease
Agreement dated December 16, 1985, a Second Amendment to Lease Agreement dated
September 9, 1985 and September 16, 1985, an Agreement Re: Release of Property
from Lease dated May 21, 1987, and a Third Amendment to Lease Agreement dated
June 20, 1989. These are hereafter referred to as the "Lease Agreement".
B. Lessee and The Hillhaven Corporation, a Tennessee Corporation
(hereinafter referred to as Hillhaven), have entered into a Purchase and Sale
Agreement dated as of March 31, 1988, pursuant to which Hillhaven may condition
or otherwise control the modification of the Lease Agreement.
In consideration of the mutual covenants contained in the agreement,
the parties agree as follows:
69
1. Lessor shall pay to lessee the sum of $400,000.00 (Four Hundred
Thousand Dollars).
2. In consideration therefor, lessor shall (a) obtain a release from
Hillhaven of any interest or control it may have retained in the Lease
Agreement, and (b) Article 16.03 at page 12 of the Lease Agreement and the
reference to Article 16.03 at page 2 of the Third Amendment to Lease Agreement
shall have no force or effect and shall be stricken from the Lease Agreement in
its entirety.
3. No amendment, modification or alteration of the terms hereof shall
be binding unless the same be in writing, dated subsequent to the date hereof
and duly executed by the parties hereto.
4. In all other respects, lessor and lessee hereby ratify and confirm
the provisions of the Lease.
This modification of the Lease Agreement has been executed by the
parties on the date and year first above written.
Lessor:
UNION LABOR HOSPITAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------------
Xxxxxxx X. Xxxxxx, Xx.
Board of Directors
ATTEST:
/s/ Xxxxx X. Xxxxxxx
------------------------------------
70
Lessee:
BRIM HOSPITALS, INC.
Dated: 6/18/92
By: /s/ Xxxx X. Xxxxxx
--------------------------------
ATTEST:
/s/ K. Xxxxx XxXxxxxxxx
------------------------------------
71
FIFTH AGREEMENT TO LEASE
BETWEEN UNION LABOR HOSPITAL ASSOCIATION
AND
BRIM HOSPITALS, INC.
UNION LABOR HOSPITAL ASSOCIATION, a California Public Benefit
Corporation, (hereinafter "Lessor") and Brim Hospitals, Inc., an Oregon
Corporation (hereinafter "Lessee") make a Fifth Amendment to that Lease
Agreement dated December 16, 1985, and entered into by the parties hereto, as
follows:
RECITALS
Lessee finances various equipment at the subject premises as well as at
other hospitals through MetLife Capital Corporation. Metlife Capital Corporation
requires that the landlord agree, subordinate, and waive any claims, demands,
or rights that Lessor may have or acquire with respect to equipment so financed.
Lessee has requested that Lessor sign the "Landlord's Waiver and Agreement", a
copy of which is attached hereto as Exhibit "A".
In consideration of the mutual covenants contained in the Agreement,
the parties agree as follows:
1. Lessor will execute the Landlord's Agreement and Waiver;
2. Lessee agrees that, by Lessor's signing, Lessor has not approved
equipment added to the Hospital which cannot be removed without damaging the
Hospital's physical facilities, as set forth in Article 17 of the Lease
Agreement. In order for Lessee to have any rights to payment for equipment
installed pursuant to paragraph 2.02 of the Lease
72
Agreement, Lessee agrees it must clearly and separately follow the requirements
of Article 17 of the Lease.
3. Lessor may revoke its consent to Exhibit "A" on 15 days' written
notice. Any such revocation shall be as to equipment acquired after the
effective date of revocation.
Lessor:
UNION LABOR HOSPITAL
ASSOCIATION
Dated: 6/23/94 By: /s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------------
Lessor
BRIM HOSPITALS, INC.
Dated: 6/30/94 By: /s/ Xxxx X. Xxxxxx
--------------------------------
Attest:
/s/ Xxxxx X. Xxxx
------------------------------------
73
When recorded please
return to: DIW Transaction No. 2011394
MetLife Capital Corporation
C-97550
Xxxxxxxx, XX 00000
Lessee/Borrower Brim Hospitals, Inc. dba The General Hospital
-------------------------------------------------
Premises 0000 Xxxxxxxx Xxxxxx
-------------------------------------------------
Xxxxxx, XX
-------------------------------------------------
LANDLORD'S AGREEMENT AND WAIVER
Lessee/Borrower has applied to MetLife Capital Corporation ("MetLife")
for financing of the following described equipment:
Various new and used medical equipment together with an accessions,
attachments, and additions thereto and replacements thereof.
("Equipment"). Lessee/Borrower intends to locate the Equipment on the Premises
legally described as follows:
MetLife is willing to enter into said transaction only if Landlord subordinates
and waives as to MetLife any claims, demands or rights Landlord may have or
hereafter acquire with respect to the Equipment.
1. Subject to the terms hereof, Landlord by this agreement does hereby
waive and relinquish to MetLife, its successors and assigns, all rights, claims
and demands of every kind against the Equipment now located or to be located on
the above Premises, including but not limited to the right of foreclosure, levy,
execution, sale and distraint for unpaid rent or other rights arising under real
property law or by contract which Landlord now has or may hereafter acquire on
any of the Equipment presently or hereafter financed or leased by MetLife.
2. Landlord agrees that the Equipment shall at all times be considered
to be personal property and shall not constitute a fixture or become part of the
Premises. Landlord agrees that MetLife may remove the Equipment from the
Premises at all reasonable times, and Landlord will give MetLife not less than
sixty (60) days written notice if MetLife shall be required to remove the
Equipment; provided however, that MetLife will either repair any damage caused
by such removal or reimburse Landlord for the reasonable cost thereof
74
3. This Agreement and Waiver shall be binding upon successors,
transferees and assigns of Landlord and shall inure to the benefit of the
successors and assigns of MetLife. Landlord will provide MetLife with a legal
description of the Premises upon request.
4. This Agreement and Waiver may be recorded at any time by MetLife,
is successors and assigns.
IN WITNESS WHEREOF, the undersigned Landlord has executed this
Agreement and Waiver this 27th day of June, 1994
[CORPORATE SEAL] LANDLORD: UNION LABOR HOSPITAL ASSN.
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Attest:
By: Xxxxxxx X. Xxxxxx
----------------------------- -----------------------------------
Its Treasurer
-----------------------------------
ACKNOWLEDGMENT
--------------
STATE OF CALIFORNIA
COUNTY OF HUMBOLDT
On this 27th day of June, 1994, before me, a Notary Public, personally
appared Xxxxxxx X. Xxxxxx, and ________________________, to me known to be
the Treasurer, ULHA and _____________________, respectively, of __________, who
executed the foregoing instrument and acknowledged the said instrument was the
free and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned.
/s/ Xxxx X. Xxxxxxx
------------------------------------
NOTARY PUBLIC in and for the State of
California, residing at Arcata
My commission expires May 2, 1997.
[NOTARIAL SEAL]
XXXXX X. XXXXXXX
COMM 3994024
NOTARY PUBLIC
HUMBOLDT COUNTY, CALIFORNIA
MY COMMISSION EXPIRES MAY 2, 1997
75
documents necessary to establish this release, in exchange for the following.
ULHA will construct and own a building designed for and used for
purposes of housing the equipment, which will be located on the parcel of
property contained in Exhibit "B", and in which building Partnership shall
house and operate the equipment.
Further, ULHA and Partnership must execute with Brim an agreement
whereby Brim shall retain the right of approval and consent, which approval and
consent shall not be unreasonably withheld, in regards to the following aspects
of the building and the services provided by Partnership on the property
described in Exhibit "B":
1. The design, appearance,, and quality of the construction of the
building;
2. Any and all signing visible from the outside of the building;
3. What individuals and/or businesses shall occupy the building;
4. What services shall be provided in the building, including, but not
limited to, the right to reject any business or service in competition with The
General Hospital.
IT IS FURTHER AGREED between Brim and ULHA that, in the event that the
building is completed and the Partnership no longer occupies said building, Brim
may lease the building
76
from ULHA under the same terms and conditions of the lease between ULHA and the
Partnership.
In addition, in the event that Brim exercises its option to purchase
the General Hospital property, the parties hereto agree that said purchase shall
include the property described in Exhibit "B" hereto, said return conditioned
upon Brim purchasing the building erected to house the equipment; the purchase
price shall be the sum of Two Hundred Thousand Dollars $200,000.00).
Unless otherwise agreed by the parties, the purchase price shall be
paid in cash at the time of the closing of the purchase from Brim of The
General Hospital property as described in Exhibit A.
The lease between Brim and ULHA relative to The General Hospital
property shall remain in full force and effect as originally executed except as
specifically set forth in this agreement. This agreement represents the entirety
of the agreement between the parties with respect to its subject matter. This
agreement can be amended only by written agreement signed by the parties . The
invalidity of any provision of this agreement shall not affect the validity and
enforceability of the remainder of the agreement.
Should any litigation be commenced among the parties hereto or their
personal representatives concerning any provision of this agreement or the
rights and duties of any person in relation thereto, the party or parties
prevailing in such litigation shall he entitled, in addition to such
77
other relief as may be granted, to a reasonable sum as and for their or his
attorney's fees in such litigation which shall be determined by the court in
such litigation or in a separate action brought for that purpose. This agreement
will be governed by and construed in accordance with the laws of the State of
California, and venue for any litigation shall he Humboldt County, California.
This Agreement shall be of so force or effect if construction on the
project contemplated by this Agreement is cot commenced by January 1, 1988,
unless extended by written agreement of the parties hereto.
Dated: 5/21/87 UNION LABOR HOSPITAL ASSOCIATION
----------------
By:
------------------------------------
Dated: 5/21/87 BRIM HOSPITALS, INC.
----------------
By:/s/ Xxxx X. Xxxxxx
------------------------------------
78
GUARANTY OF WORKING CAPITAL
---------------------------
For good and valuable consideration, receipt of which is hereby
acknowledged, and to induce Union Labor Hospital Association, a California
Public Benefit Corporation (Landlord), to enter into the Lease (the "Lease")
dated 12/16/85, with Brim Hospitals Inc., an Oregon corporation ("Tenant"),
Brim & Associates, Inc., an Oregon corporation, and The Hillhaven Corporation, a
Tennessee corporation, (individually and collectively referred to herein as
"Guarantor"), do hereby agrees as follows:
1. Guarantor does hereby absolutely, irrevocably and unconditionally
guarantee to make available from time to time to Tenant such sums of operating
capital as may be needed by Tenant for the purpose of conducting Tenant's
business operations in accordance with the terms of the Lease up to a maximum
sum total of Three Million Dollars ($3,000,000.00). Said sum shall be made
available to Tenant in the form of intercompany loans evidenced by a proper
journal entry on the books and records of Guarantor.
2. Within ninety (90) days of each anniversary of the Lease,
Guarantor shall provide Landlord with a schedule which discloses the amount of
funds made available to the date thereof to Tenant pursuant to this Agreement.
Said schedule shall indicate the date and amount of each loan and shall be
acknowledged in writing to be accurate by the Treasurer or Chief Financial
Officer of Hillhaven. Notwithstanding the foregoing, Guarantor's failure to
provide said schedule shall not be deemed to be a breach of its obligations
hereunder until Guarantor is given 30 days notice of its failure to comply with
said obligations.
3. If Guarantor fails to comply with the provisions of paragraph 1
above, and said failure causes Tenant to default in the performance of either
its obligations under the Lease or its obligations to any third party incurred
in connection with its obligations under the Lease, then Guarantor shall be
deemed a guarantor of Tenant's obligations pursuant to the terms of the Lease
and Landlord may proceed directly against Guarantor to enforce the provisions of
the Lease in the event of Tenant's default under the terms thereof.
79
4. The obligations of Guarantor under this Guaranty are independent of
the obligations of Tenant under the Lease and a separate action or actions may
be brought and prosecuted against Guarantor for breach of its obligations
hereunder whether or not an action is brought against Tenant or Tenant is joined
in any such action or actions.
5. Guarantor waives all rights under Section 2845 of the California
Civil Code. Landlord may, at its election, exercise any right or remedy it may
have against Tenant or any security now or hereafter held by Landlord,
including, without limitation, the right to foreclose on any security by
Judicial or nonjudicial sale, without affecting or impairing in any way the
liability of Guarantor hereunder except to the extent the obligations of Tenant
under the Lease may thereby be paid or satisfied. Guarantor waives any defense
arising out of the absence, impairment or loss of any right of reimbursement or
subrogation or other right or remedy of Guarantor against Tenant or any such
security, whether resulting from such election by Landlord or otherwise.
Guarantor waives any setoff, defense or counterclaim which the Tenant or
Guarantor may have or claim to have against Landlord. Guarantor waives all
presentments, demands for performance, protests, notices of protest, notices of
dishonor, notices of acceptance of this Guaranty. Guarantor does not waive
notices of nonperformance, notices of default or diligence.
6. Guarantor authorizes Landlord and Tenant to amend or modify any
provision of the Lease or extend or renew the term of the Lease, provided,
however, that Landlord shall give Guarantor notice thereof. Guarantor further
authorizes Landlord to settle or compromise any or all of the obligations of
Tenant under the Lease, provided, however. that Landlord shall give Guarantor
notice thereof. Guarantor shall be and remain bound under this Guaranty
notwithstanding Landlord's taking any of the foregoing actions and it waives the
provisions of Civil Code Section 2819.
80
7. Guarantor assumes the responsibility for being and keeping itself
informed of the financial condition of Tenant and of all other circumstances
bearing upon the risk of nonperformance of the Lease which diligent inquiry
would reveal and agrees that except as otherwise provided herein, Landlord has
no duty to advise Guarantor of information known to Landlord regarding such
condition or any such circumstances.
8. If any provision of this Guaranty is held to be invalid or
unenforceable, the validity and enforceability of the other provisions of this
Guaranty shall not be affected. Landlord shall have the right, without any
consent from but with notice to Guarantor, to assign this Guaranty in whole or
in part. This Guaranty shall bind and inure to the benefit of Landlord and
Guarantor and their respective successors and assigns.
9. All notices and other communications required or permitted under
this Guaranty shall be effective and properly given only if made in writing and
either hand delivered or mailed by first class mail, postage prepaid, to the
party intended at the address set forth below, or at such other address as may
be designated by written notice to the other party. All notices, demands or
requests to Landlord shall be given at 123 "F" Street, Xxxxxx, Xxxxxxxxxx 00000.
All notices, demands or requests to Lessee shall be given at 000 X. X. 000xx
Xxxxxx, Xxxxxxxx, Xxxxxx 00000. If any such notice or other communication
hereunder is mailed, such notice shall be effective within three (3) days of the
date such notice is deposited in the mail. If any such notice or other
communication hereunder is hand delivered, such notice shall be effective on the
date of hand delivery.
10. The parties agree that the losing party shall pay all costs and
expenses, including reasonable attorneys' fees, which are incurred by the
prevailing party in connection with any litigation brought to enforce or
interpret this Guaranty.
11. This Guaranty shall be governed by and construed in accordance with
the laws of the State of California. Guarantor consents to jurisdiction and
service of process within California for any action arising under this Guaranty.
12. All obligations contained herein shall be joint and several
obligations of each of the undersigned.
81
Executed this 17th day of January, 1986.
LANDLORD:
UNION LABOR HOSPITAL ASSOCIATION
BY:/s/
--------------------------------
ITS: President
-------------------------------
TENANT:
BRIM HOSPITALS, INC.
An Oregon Corporation
BY:/s/ K. Xxxxx XxXxxxxxx
--------------------------------
ITS: President
-------------------------------
GUARANTOR:
BRIM & ASSOCIATES, INC.
An Oregon Corporation
BY:/s/
--------------------------------
ITS: President
-------------------------------
GUARANTOR:
THE HILLHAVEN CORPORATION
A Tennessee Corporation
BY:/s/
--------------------------------
ITS: Vice Pres.
-------------------------------
