<PAGE>
EXHIBIT 99.10
AMENDED AND RESTATED
TRIPLE NET HOSPITAL BUILDING LEASE
between
PACIFIC COAST HOLDINGS INVESTMENT, LLC
(Landlord)
and
INTEGRATED HEALTHCARE HOLDINGS, INC.
(Tenant)
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AMENDED AND RESTATED
TRIPLE NET HOSPITAL BUILDING
LEASE
THIS
AMENDED AND RESTATED TRIPLE NET HOSPITAL BUILDING LEASE (the
"Amended
Lease") is made as of the 1st day of October, 2007, by and between
Pacific Coast
Holdings Investment, LLC, a California limited liability company
("Landlord")
and Integrated Healthcare Holdings, Inc. a Nevada corporation
("Tenant") and
does amend and restate that certain TRIPLE NET HOSPITAL AND MEDICAL
OFFICE
BUILDING LEASE dated March 3, 2005 ("Original Lease") and Amendment
No.1 to
Triple Net Hospital and Medical Office Building Amended Lease dated
as of March
8, 2005 ("Amendment No. 1") with reference to the following
facts:
RECITALS
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A.
Tenant acquired from Tenet Healthcare System ("Tenet") the real
property
more particularly described in Exhibit "A" attached hereto together
with all of
the buildings, improvements and fixtures located thereon
(hereinafter
collectively referred to as the "Property"). Concurrent with the
closing of the
transaction with Tenet, Tenant transferred title to the Property to
Landlord
whereupon Landlord leased the Property back to Tenant on the terms
and
conditions set forth in the Original Lease.
B.
Landlord and Tenant and Tenant's subsidiaries entered into a
loan
agreement with Medical Provider Financial Corporation II, a Nevada
corporation
("Med Cap"), dated as of February 28, 2005, whereby obligations of
Tenant and
Landlord to Med Cap were cross-collateralized (hereinafter the
"Current
Financing"). The original principal amount of the Current Financing
was an
aggregate amount of Eighty Million Dollars ($80,000,000) of which
Thirty Million
Dollars ($30,000,000) is a working capital non-revolving credit
line provided to
Tenant ("Operating Loan") and Fifty Million Dollars ($50,000,000),
subsequently
paid down to Forty-Five Million Dollars ($45,000,000), is a real
estate loan
provided to Landlord ("Real Estate Loan"). The Real Estate Loan is
secured by a
first trust deed lien recorded against Landlord's interest in the
Property
("Current Trust Deed"). All financing by Med Cap other than the
Real Estate Loan
is collectively referred to as the "Operating Company Loan".
Additionally Tenant
entered into an Accounts Purchase Agreement (APA) with Medical
Provider
Corporation I, a Nevada corporation, whereby billed accounts
receivable are
factored. Net advances on the sale of accounts receivable are
variable and range
approximately from $13 million to $22 million for various reporting
periods.
C.
Tenant defaulted under the Original Lease and Amendment No. 1
by
non-payment of the rent required thereby. Landlord and Tenant have
by separate
agreement resolved the issues related to that default.
D.
The annual Base Rent set forth in Section 2.2 of Seven Million
One
Hundred Thousand Dollars ($7,100,000) (until such time as the
conditions set
forth therein are meet) is at a rate below the fair market value of
the Property
and was established based upon the ability of the Tenant to pay,
rather than
upon market forces.
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E.
The annual Base Rent set forth in Section 2.2 of Eight Million
Three
Hundred Thousand Dollars ($8,300,000) (following the meeting of the
conditions
set forth therein) is acknowledged by the parties to be less than
or equal to
fair market rent and in no event greater than fair market rent.
F.
Landlord and Tenant and Tenant's subsidiaries propose to renew
the
Current Financing with Med Cap ("Med Cap Loan Renewal"). The Med
Cap Loan
Renewal would consist of the following instruments:
o A $45 million Real Estate Term
Loan bearing a fixed interest rate of 9% in
the
first year and 14% after the first year, used to repay amounts
owing
under the existing Real Estate Loan.
o A $35 million Non-Revolving Line
of Credit bearing a fixed interest rate of
9.25% per year, used to repay amounts owing under the existing
Operating
Loan, pay the origination fees on the other credit facilities and
for
working capital.
o A $10.7 million Convertible Term
Loan bearing a fixed interest rate of
9.25% per year, used to repay amounts owing under an existing $10.7
million
loan
to Tenant.
o A $50 million Revolving Line of
Credit Loan bearing a fixed interest rate
of
24% per year (subject to reduction to 18% if the $45 million Real
Estate
Term
Loan is repaid prior to its maturity) and an unused commitment fee
of
0.50% per year, used to finance Tenant's accounts receivable.
Each of the above instruments would (i) require a 1.5% origination
fee due at
funding, (ii) require monthly payments of interest and repayment of
principal
upon maturity in three years, (iii) be collateralized by all of the
assets of
Tenant and its subsidiaries and Landlord's interest in the real
estate
underlying Tenant's hospital facilities, and (iv) be guaranteed by
Orange County
Physicians Investment Network, LLC, and West Coast Holdings, LLC.
Tenant would
also issue to Med Cap a warrant to purchase 4.95% of Tenant's
outstanding shares
of common stock.
G.
The parties now wish to amend and restate the Original Lease
and
Amendment No. 1.
NOW,
THEREFORE, in consideration of the mutual covenants set forth
herein
and other valuable consideration, the receipt and adequacy of which
is hereby
acknowledged, the parties hereto do hereby amend and restate the
Original Lease
and Amendment No. 1 in its entirety to read in full as set forth in
this Amended
Lease as follows:
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ARTICLE I
TERMS
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1.1
Initial Lease Term. The initial term of this Amended Lease
("Initial
Term") shall commence on March 8, 2005 ("Commencement Date") and
shall terminate
on the date (referred to herein as the "Termination Date") which is
the earlier
of (a) the date on which this Amended Lease is terminated pursuant
to the terms
and conditions hereof, and (b) the last day of the month following
the
twenty-fifth (25th) anniversary of the Commencement Date ("Initial
Term
Expiration Date").
1.2
Option To Renew Property Lease Term. Landlord hereby grants to
Tenant
the option to extend the term of this Amended Lease (the "Option")
for one (1)
additional period of twenty-five (25) years, commencing upon the
Initial Term
Expiration Date (the "Option Period") upon each and all of the
following terms
and conditions:
(a) The Option shall be deemed exercised and this Amended Lease
shall
automatically renew for the Option Period unless Tenant gives to
Landlord, and
Landlord actually receives, on a date (the "Option Decline
Expiration Date")
which is at least one hundred and eighty (180) days prior to the
Initial Term
Expiration Date, a written notice stating that Tenant has declined
to exercise
the Option. If for any reason Landlord does not receive a written
notice from
Tenant stating that it has declined to exercise the Option at least
one hundred
and eighty (180) days prior to the Initial Term Expiration Date,
then the Option
shall automatically be deemed to have been exercised as herein
provided.
(b) Notwithstanding the foregoing, if as of the Option Decline
Expiration Date, a material default and breach of this Amended
Lease on the part
of Tenant has occurred and is continuing beyond the applicable cure
periods
referred to in Sections 15.1 below, as applicable, then the Option
shall not
become effective or exercised and the term of this Amended Lease
shall not be
extended beyond the Initial Term Expiration Date.
(c) In the event the Option is deemed to have been exercised,
as
provided herein, then all of the terms and conditions of this
Amended Lease
shall apply during the Option Period, except as otherwise provided
in this
Amended Lease.
ARTICLE II
RENT AND FINANCING
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2.1
Property Base Rent.
(a) The annual "Base Rent" shall be Eight Million Three Hundred
Thousand Dollars ($8,300,000), which shall be payable in equal
monthly
installments of Six Hundred Ninety-One Thousand Six Hundred
Sixty-Six and 67/100
Dollars ($691,666.67). Provided however, that until such time as
either (i)
Tenant refinances its A/R Financing with stated interest rate which
is less than
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Fourteen percent (14%) per annum (if the stated rate is a spread
over an index
rate such as two percent over 30 day LIBOR, then the stated
interest rate shall
be the sum of the spread and the index rate at the time the loan is
made) or
(ii) the Landlord refinances its Real Estate Loan, the annual Base
Rent shall be
reduced to Seven Million One Hundred Thousand Dollars ($7,100,000)
which shall
be payable in equal monthly installments of Five Hundred Ninety One
Thousand Six
Hundred Sixty-Six and 67/100 Dollars ($591,666.67).
(b) Landlord and Tenant hereby acknowledge and agree that the
rental
payments required pursuant to this Amended Lease are the product of
bona fide,
arms-length negotiations, without taking into account the volume or
value of any
actual or expected federal health care program or other referrals
to, or
business otherwise generated for, either Landlord or Tenant. The
rental payments
do not reflect any additional value Landlord or Tenant may
attribute to the
proximity or convenience of the Property to sources of referrals or
business
otherwise generated for which payment may be made in whole or in
part under any
federal health care program. Neither the entry into this Amended
Lease by the
parties nor the terms and conditions of this Amended Lease shall be
conditioned
on Landlord or Tenant (i) making referrals to the other, (ii) being
in a
position to make or influence referrals to the other, or (iii)
otherwise
generating business for the other.
2.2
CPI Adjustment. "Consumer Price Index" or "CPI" shall refer to the
All
Urban Consumers, Los Angeles-Riverside-Orange County, All Items
Index (Base
Period 1982-84=100) as published by the United States Department of
Labor,
Bureau of Labor Statistics in mid-January of each year relating to
the prior
calendar year (annual column) as published by the United States
Department of
Labor, Bureau of Labor Statistics ("Bureau"). In the event that the
Bureau shall
cease to publish said Consumer Price Index, then the successor or
such nearly
comparable index as reasonably determined by Landlord shall be
used. If the
Bureau substantially revises the manner in which the CPI is
determined, an
adjustment shall be made in the revised index which would produce
results
equivalent, as nearly as possible, to those which would be obtained
if the CPI
had not been so revised. If the 1982-84 average shall no longer be
used as an
index of 100, such change shall constitute a substantial revision.
If the CPI
becomes unavailable to the public because publication is
discontinued, or
otherwise becomes unavailable, or if equivalent data is not readily
available to
enable Landlord to make the adjustment to the revised index
referred to above,
Landlord shall substitute a comparable index based upon changes in
the cost of
living or purchasing power of the consumer dollar published by any
other
governmental agency or, if no such index is available, then a
comparable index
published by a major bank, other financial institution, university
or recognized
financial publication. On January 1st 2009 and on each January 1st
thereafter
(or as soon thereafter as available) the Consumer Price Index
figure for the
preceding year shall be determined, and the Base Rent for the
calendar year
shall be increased or decreased by the same percentage as the
percentage, if
any, by which the Consumer Price Index for the January of the
preceding year
shall have increased as compared with the Consumer Price Index for
the January
of the current year; provided, however, that in no event shall any
annual
increase in Base Rent under the provisions of this Section 2.2 be
less than two
percent (2%) or exceed six percent (6%) per year. Landlord shall
provide written
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notice of the CPI adjustment to Tenant. In the event that the
adjustment has not
been determined in time for any invoicing sent, then upon
determination of the
adjustment, Landlord shall send out adjustment invoice(s).
2.3
Base Rent Market Adjustment. Notwithstanding the CPI adjustment
provided for in Section 2.2 above, on the September 1, 2012 and
each five (5)
years thereafter the Base Rent shall be increased or decreased to
an amount
equal to the then current fair market rental rate ("Base Rent
Market
Adjustment"); provided, however, the fair value of Tenant's capital
improvements
and maintenance including but not limited to those improvements
required under
Section 7.2(a) shall be separately valued and excluded in the
valuation of the
Property in calculating the Base Rent Market Adjustment. Commencing
not less
than ninety (90) days prior to each anniversary in which the
Hospital Base Rent
may be adjusted, Landlord and Tenant shall attempt to agree on the
fair market
rental rate for the Property. If Landlord and Tenant are not able
to agree to
the fair market rental rate within thirty (30) days, Landlord and
Tenant shall
each choose an independent, MAI certified appraiser, with not less
than five (5)
years experience in leasing healthcare related facilities including
hospitals.
The two appraisers so appointed shall appoint a third appraiser,
similarly
qualified. Each appraiser shall independently determine the fair
market rental
rate. The three rates so determined will be averaged. The rate
determined by the
appraiser which varies the most from the average shall be discarded
and the two
remaining values and the average value shall be averaged and said
second average
shall constitute the fair market rental rate. Each party shall bear
the costs of
the appraiser appointed by that party and the parties shall equally
divide the
costs of the third appraiser.
2.4
Cross Payment Duties. Med Cap has agreed that Landlord may
refinance
the Real Estate Loan, and Med Cap upon the repayment of the Real
Estate Loan
will subordinate the Operating Company Loan and the lien upon the
Property
securing said Operating Company Loan to the Landlord's new loan or
any
subsequent loans. Tenant agrees to exercise its commercially
reasonable efforts
to cause Med Cap to enter into acceptable subordination agreements
and customary
inter-creditor agreements with Landlord's subsequent lenders;
provided, however,
that so long as the Operating Company Loan is collateralized by the
Property,
Tenant shall have an obligation and duty to Landlord to pay when
due all sums
coming due under the Operating Company Loan and to otherwise fully
comply with
all terms and conditions of the Operating Company Loan and so long
as the
Property is collateral for the Operating Company Loan Landlord
shall have an
obligation and duty to Tenant to pay when due all sums coming due
under the Real
Estate Loan and to otherwise fully comply with all terms and
conditions of the
Real Estate Loan. In the event that either party fails to make
required payments
or payment to Med Cap or in the case of Landlord to the party who
refinanced the
Real Estate Loan, then the other party may make such payment or
payments and in
addition to all other rights and remedies shall have the right to
offset such
payment against sums owed by the party to the other party.
2.5
Information and Notices. Tenant shall provide copies to Landlord of
all
notices, reports, information and communications received from any
lender and
responses thereto. During cross collateralization, the Landlord
shall provide
copies to Tenant of all notices, reports, information and
communications
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received from or responses to Med Cap and will provide accounting
records,
reports and management representations as reasonably required to
consolidate the
Landlord's financials in its reports filed with the Securities and
Exchange
Commission.
2.6
Cross Collateralization. The parties acknowledge that the Med Cap
Loan
Renewal will require cross collateralization of the Property for
among other
things the obligations of Tenant to Med Cap in connection with the
Operating
Company Loan. The Med Cap Loan Renewal will provide, however, that
the Real
Estate Loan may be paid off or refinanced at any time without
penalty whereupon
Med Cap shall subordinate the Operating Company Loan lien on the
Property to
Landlord's replacement financing and that Tenant will cooperate in
such payoff
or refinancing of the Real Estate Loan and shall exercise its best
efforts to
cause Med Cap to enter into subordination and inter-creditor
agreements
reasonably acceptable to Landlord's new lender. The parties
acknowledge that
Landlord may refinance from time to time and these duties shall
apply to each
such refinancing. Landlord shall have no obligation to provide
Property as
security or cross collateralization to any lender or financer of
Tenant other
than Med Cap. As soon as the cross collateralization has been
terminated,
Landlord shall have no further obligation to Tenant to provide the
Property as
collateral for any obligations of Tenant.
2.7
Invoicing for Base Rent. Landlord shall invoice Tenant for the
monthly
Base Rent due. Base Rent shall be due on or before fifth (5th) day
of the month.
Any partial month shall be prorated on a daily basis at the rate of
1/30th of
the monthly rent per day. So long as the Real Estate Loan is
cross
collateralized, Tenant may elect to make timely interest payments
directly to
Med Cap and deduct the amount paid from the rent due to Landlord
upon written
notice to Landlord. Such notice shall remain effective, and Tenant
may continue
to make timely interest payments directly to Med Cap, until Tenant
revokes its
election by subsequent notice to Landlord. Tenant shall indemnify
Landlord
pursuant to the indemnification provisions set forth in Article X
hereof from
and against any and all claims, actions, damages, liabilities and
expenses,
including reasonable attorneys fees and costs (collectively,
"Claims"), arising
out of Tenant's failure to comply with the provision of this
Section 2.7,
including any failure to timely pay Base Rent or interest payments
to Med Cap.
In the event following such election Tenant fails on two (2)
occasions in any
twelve (12) month period to make timely payment of the Real Estate
Loan, then
Landlord may by written notice to Tenant cancel Tenant's right to
make the afore
described payments of the Real Estate Loan.
2.8
Refinancing by Landlord. Landlord shall have the right to from time
to
time refinance the Real Estate Loan in Landlord's sole and absolute
discretion.
In connection with such refinancing, to the extent reasonably
available, Tenant
shall furnish any prospective lender for such refinancing with
Tenant's existing
current and historical financial statements and provide such
prospective lender
with such other information regarding the business or financial
condition of
Tenant as such prospective lender may reasonably request; provided,
however,
that Tenant shall not be required to prepare any financial
statements or other
documents that do not already exist and the prospective lender
shall be required
to provide Tenant with a written confidentiality agreement, in form
and
substance mutually acceptable to Landlord and Tenant, as a
condition of
receiving such statements, documents and other information from
Tenant.
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2.9
Other Charges. Except as otherwise expressly provided herein,
this
Amended Lease is what is commonly called a net-net-net lease, it
being
understood that Landlord shall receive the Base Rent free and clear
of any and
all impositions of real and personal Property taxes, or other taxes
(excepting
Landlord's income tax), insurance costs, costs of repair and
maintenance, liens
and all other charges, costs, expenses and liabilities in
connection with the
ownership and operation of the Property and the businesses
conducted thereon.
2.10
Delinquent Rent. Tenant acknowledges that late payment of Base Rent
or
any additional rent by Tenant to Landlord will cause Landlord to
incur costs not
contemplated by this Amended Lease, and the exact amount of such
costs being
extremely difficult and impracticable to fix. Therefore, if any
installment of
Base Rent or any additional rent is not received within five (5)
days of when
due, Tenant shall pay Landlord the additional sum equal to the
actual costs
incurred by Landlord as the result of such late payment but in no
event less
than Five Thousand Dollars ($5,000) per late payment charge to
compensate
Landlord for costs incurred by reason of the delay in payment. The
parties agree
that this late charge represents a fair and reasonable estimate of
the costs
that Landlord will incur by reason of late payments. Additionally,
any payments
of Base Rent and any other sums payable by Tenant pursuant to the
terms of this
Amended Lease shall bear interest at the maximum legal rate.
2.11
Costs of Med Cap Loan Renewal. All costs and expenses, including,
but
not limited to, the parties' legal expenses, in connection with Med
Cap Loan
Renewal shall be borne by Landlord or Tenant, as applicable, who
incurred the
same. For example, Landlord shall be responsible for all fees,
costs and charges
in connection with the Real Estate Loan and Tenant shall be
responsible for all
fees, costs and charges attributable to the Operating Company
Loan.
ARTICLE III
LANDLORD'S REDEVELOPMENT RIGHTS
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3.1
Landlord's Redevelopment Rights. The parking facilities/lot located
at
1001 North Tustin Avenue, Santa Ana, California and parking
facilities/lot
located at 979 S. Anaheim Boulevard, Anaheim, California
(collectively, the
"Parking Facilities"), and the Administrative Building located at
1301 North
Tustin Avenue, Santa Ana, California (the "Administrative Building"
together
with the Parking Facilities, collectively, the "Redevelopment
Area") have the
potential to be developed for commercial or residential use, if
current parking
facilities are replaced with structured or other alternative
parking
arrangements or if a replacement building suitable for the
Permitted Uses as
reasonably determined by Tenant is made available to Tenant in the
event that
the Administrative Building and the land thereunder is being
redeveloped. The
Landlord shall have the right to replace said Parking Facilities
and
Administrative Building, and to designate all or a portion of the
Redevelopment
Area which is thereby made available for commercial or residential
development
(such right referred to herein as "Redevelopment Right"); provided
that Landlord
satisfies each of the following conditions and complies with its
obligations
under this Article III:
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(a) Landlord shall provide Tenant with written notice at least
one
hundred eighty (180) days in advance of entering into any
redevelopment
activities relating to the Redevelopment Area. Such notice shall
describe the
proposed project in reasonable detail (including, but not limited
to, describing
the proposed buildings to be constructed, the areas of the
Redevelopment Area
being affected, any anticipated interference with Tenant's
possession, use and
enjoyment of the Property, and the anticipated construction
commencement and
completion dates).
(b) Landlord shall be entitled to exercise its Redevelopment
Rights
solely with respect to all or a designated portion of the
Redevelopment Area.
(c) Landlord shall not exercise its Redevelopment Rights in a
manner
that competes with the healthcare services offered by Tenant at the
Property at
the time of the proposed redevelopment, so long as such healthcare
services are
customarily provided by hospitals at the time of the proposed
redevelopment,
including but not limited to, redeveloping any part of the
Redevelopment Area
for or on behalf of any individual or entity that engages in any
activities that
competes in the foregoing manner with any healthcare services then
provided by
Tenant at the Property; provided, however, that outpatient services
usually and
customarily provided as part of a physician's primary medical
practice for the
physician's patients and not offered to the general public
(including
solicitation of referrals from other physicians or providers of
such services)
shall be permitted even if such services are co-extensive with the
services
provided by Tenant at the hospital adjacent to the Redevelopment
Area subject to
Tenant's approval, which shall not be unreasonably withheld.
Subject to the
foregoing, Landlord may redevelop the Redevelopment Area as a
medical office
building or complex so long as Landlord complies with the
provisions of this
Section 3.1(c).
(d) Landlord shall provide Tenant with an opportunity to review
and
approve all redevelopment plans relating to the Redevelopment Area,
which
approval shall not be unreasonably withheld or delayed. The parties
acknowledge
that Tenant shall be deemed to have acted reasonably in
disapproving any
redevelopment plan if such plan (i) is incompatible with Tenant's
business or
operations from the Property, (ii) would result in unreasonable
interference
with Tenant's possession, use and enjoyment of the Property or
(iii) could
otherwise adversely affect or impair Tenant's business, operations,
and
activities at the Property, or its finances, reputation or business
licenses and
qualifications.
(e) At the time Landlord exercises its Redevelopment Rights,
Landlord
shall not be in default under the terms of this Amended Lease.
(f) Landlord shall exercise its Redevelopment Rights in
compliance
with all applicable law, rules, regulations, ordinances, orders and
permits and,
prior to commencing any redevelopment activities, shall secure all
necessary
consents, orders, permits or other authorization in connection with
its
redevelopment activities.
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(g) In exercising its Redevelopment Rights, Landlord shall not at
any
time unreasonably interfere with Tenant's possession, use and
enjoyment of any
Property listed in Exhibit A. Without limiting the generality of
the foregoing,
Landlord's exercise of the Redevelopment Rights shall not
unreasonably interfere
with Tenant's business operations at the Property, the use and
enjoyment of the
Property by Tenant and its employees, guests, patients and other
invitees for
the Permitted Uses, and street and pedestrian access to and from
the Property
nor impair the licensing or qualification of the Property for the
Permitted
Uses. The parties acknowledge that unreasonable interference shall
be
interpreted and applied in the context of a hospital environment
and, depending
upon the circumstances, interference which may not constitute
unreasonable
interference for a commercial office building may nonetheless
constitute
unreasonable interference for a hospital.
(h) If any Parking Facility is being affected by Landlord's
exercise
of its Redevelopment Rights, Landlord shall provide Tenant with the
use of
reasonable temporary off site parking to be located within a two
(2) mile radius
of the Property being affected by the proposed redevelopment while
the
structured or other alternative parking arrangements are being
completed (the
"Replacement Parking Facilities"). The Replacement Parking
Facilities shall
contain at least the same number of parking spaces made available
to Tenant for
the Property being affected by the proposed redevelopment
immediately prior to
Landlord's exercise of its Redevelopment Rights.
(i) If all or any portion of the Administrative Building is
rendered
untenantable for its Permitted Use in connection with Landlord's
exercise of its
Redevelopment Rights, then Landlord shall provide Tenant with a
replacement
building located within a five (5) mile radius of the
Administrative Building
suitable for Tenant's use as reasonably determined by Tenant (the
"Replacement
Building"). The Replacement Building shall be substantially the
same quality and
size (by rentable square footage) as the Administrative
Building.
(j) If Landlord's exercise of its Redevelopment Rights results in
a
material reduction in the use or functionality of the Parking
Facilities,
Administrative Building, or any other facilities leased by Tenant
hereunder for
its Permitted Use, then the parties shall agree upon an equitable
reduction in
the Base Rent and any other charges under this Amended Lease to
reflect the
reduction in use or functionality. Replacement of surface parking
with properly
designed and built structured parking shall NOT be deemed a
reduction in use of
functionality.
(k) Upon exercising its Redevelopment Rights with respect to
any
particular Redevelopment Area, such Redevelopment Area shall be
excluded from
any and all terms of this Amended Lease and Tenant shall have no
obligation with
respect to such Redevelopment Area nor bear any costs, expenses or
liabilities
associated therewith, including but not limited to, obligations
with respect to
Base Rent, taxes, operating expenses and all other costs, expenses
and
liabilities associated with or related to such Redevelopment
Area.
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3.2
Cooperation by Tenant. Subject to Landlord's satisfaction of
the
conditions and obligations set forth in this Article III with
respect to its
Redevelopment Rights, Tenant agrees to reasonably cooperate with
Landlord
regarding the exercise of its Redevelopment Rights, which
cooperation shall
include, but is not limited to, the use of the Replacement Parking
Facilities
and Replacement Building, as applicable.
3.3
Indemnification by Landlord. Landlord, for itself and its
successors
and assigns, hereby agrees to indemnify, defend, and hold Tenant,
and Tenant's
stockholders, agents, representatives, employees, guests, invitees
and
attorneys, free and harmless from and against any and all Claims in
connection
with or arising out of the exercise by Landlord of its
Redevelopment Rights
under this Article III.
3.4
Tenant's Share of Sales and Rental Proceeds.
(a) In the event of any sale of all or any portion of the
Redevelopment Area, Tenant shall receive twenty percent (20%) of
the difference
between the (1)sale price minus (2) the fair market value of such
Redevelopment
Area prior to its redevelopment plus the Landlord's expenses of
redevelopment
(assuming it is still leased and subject to the Amended Lease).
(b) In the event of any lease of all or any portion of the
Redevelopment Area, Tenant shall receive twenty percent (20%) of
the amount of
rent received by Landlord net of all direct expenses attributable
to the
Redevelopment Area.
(c) The fair market value or fair market rental value of all or
any
portion of the Redevelopment Area shall be calculated under this
Section 3.4 in
accordance with the valuation procedures set forth in Section
2.3.
3.5
Dispute Resolution. Any dispute relating to provisions of this
Article
III (including, without limitations, any dispute as to whether
Landlord has
unreasonably interfere with Tenant's possession, use and enjoyment
of the
Property, or as to whether Tenant has exercised reasonable
discretion in
withholding its approval of any redevelopment plans) shall be
resolved through
Expedited Arbitration in accordance with the procedures set forth
under Section
20.22(d) of this Amended Lease.
ARTICLE IV
TAXES
-----
4.1
Real Property Taxes. Tenant shall pay, as additional rent, when and
as
the same become due, and prior to delinquency, all taxes, both
general and
special, and other charges, including transient occupancy taxes and
rental
taxes, if any, lawfully imposed or assessed against the Property,
including but
not limited to any and all licenses, fees or charges, improvement
bonds,
ordinary and extraordinary, general and special, foreseen and
unforeseen, which
may be lawfully levied, assessed or imposed during the term of this
Amended
Lease upon or against Tenant or the Property, and/or the businesses
conducted
thereon, and including any future tax adopted in lieu of a Property
tax, any and
all general and special taxes, including any increase in such taxes
resulting
from a "change in ownership" of Landlord or Tenant (as defined in
California
Revenue and Taxation Code Section 60, et seq.).
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Where any assessment may, at the option of the taxpayer, be payable
in
installments, Tenant shall have the right to exercise the option,
and Tenant's
liability for the payment of the assessment shall be limited to the
payment of
the installments which become due during the term of this Amended
Lease.
If
separate bills are not sent directly to Tenant, Landlord shall
furnish
Tenant, upon receipt by Landlord, with true copies of each bill to
be paid by
Tenant in whole or in part.
4.2
Tax Contest. Upon written application, Tenant shall furnish to
Landlord
for inspection, and for such use as may be proper for the
protection of
Landlord's interest in the Property, written evidence duly
certified that any
and all taxes, assessments or charges required to be paid by Tenant
hereunder
have been paid, satisfied or otherwise discharged. Tenant, at its
sole cost and
expense, shall have the right to employ and exhaust all available
remedies to
protest and contest the amount of any liability for any taxes,
assessments,
licenses, fees or charges imposed or assessed against the Property,
or otherwise
to seek reduction or refund. Tenant shall post a bond (or, in lieu
thereof,
equivalent cash collateral) to prevent enforcement of any lien
resulting from
the foregoing. If Landlord has records or other documentation that
will assist
Tenant in protesting and / or contesting the tax imposed Landlord
shall, upon
request, provide same to Tenant.
4.3
Personal Property Taxes. Tenant shall pay, before delinquency,
all
taxes and assessments levied against any personal Property that is
located on
the Property.
ARTICLE V
UTILITIES
---------
5.1
Utilities. In addition to the rents, taxes, and other charges
herein
provided, Tenant shall pay, or cause to be paid, as additional
rent, all charges
for public or private utility services, including, but not limited
to, those for
water, sewage, electricity, gas, telephone and other utility
services, including
trash collection supplied to and used on the Property.
ARTICLE VI
USE OF THE PROPERTY
-------------------
6.1
Use of the Property. Tenant shall use the Property for the
"Permitted
Uses" which shall mean all of the following: (i) the ownership
and/or operation
of an acute care hospital; (ii) the ownership and/or operation of a
facility for
or a business engaged in delivering health care services; (iii) any
other uses
or operations which are supportive to the delivery of health care
services; and
(iv) any other uses reasonably related to the foregoing. Landlord
and Tenant
understand and acknowledge that the term of this Amended Lease is
at least 25
years and the health care industry may change over time and,
therefore, Landlord
and Tenant agree that in applying and interpreting the foregoing
definition of
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Permitted Uses and uses not permitted under in the Redevelopment
Area,
flexibility will be required to meet the changes which occur over
time in the
health care industry. Tenant shall not use or permit the Property
to be used for
any other purpose without the prior written consent of Landlord,
which consent
may be granted or withheld in the sole and absolute discretion of
the Landlord.
ARTICLE VII
MAINTENANCE, ALTERATIONS IMPROVEMENTS
-------------------------------------
7.1
Maintenance and Repair. Tenant shall, at Tenant's sole cost, keep
and
maintain the Property in good and sanitary order, condition and
repair,
including, without limitation, interior and exterior walls, roof,
foundation,
and equipment. Tenant hereby accepts the Property in its as-is
condition
existing as of the Commencement Date, subject to all applicable
zoning,
municipal, county and state laws, ordinances and regulations
governing and
regulating the use of the Property.
7.2
Alterations and Improvements.
(a) Tenant shall be responsible financially and in all other
respects
for making and paying for any alterations or improvements to the
Property
required in order to enable Tenant to use the Property for the
Permitted Uses,
including without limitation any and all seismic retrofitting
required by
applicable law including, but not limited to, repairs, alterations,
improvements
of any nature or anything else which may be required for compliance
with SB
1953, and further including without limitation any structural or
non-structural
alterations. All alterations, improvements, additions and
installations (whether
or not such installations constitute trade fixtures of Tenant),
which may be
made to the Property by Tenant, including but not limited to, floor
coverings,
paneling, doors, drapes, built-ins, moldings, sound attenuation,
lighting and
telephone or communication systems, conduit, wiring and outlets
shall be made
and done in a good and workmanlike manner and of good and
sufficient quality and
materials and shall be the Property of Landlord and remain upon and
be
surrendered with the Property at the expiration of the Amended
Lease. The fair
value of capital maintenance and improvements made and paid for by
Tenant shall
be separately valued and excluded in establishing the Base Rent
Market
Adjustment under Section 2.3.
(b) Tenant shall promptly pay and discharge all claims for work
or
labor done, supplies furnished or services rendered and shall keep
the Property
free and clear of all mechanic and materialman liens in connection
therewith.
Landlord shall have the right to post or keep posted on the
Property, or in the
immediate vicinity thereof, any notices of non-responsibility for
any
construction, alteration, or repair of the Property by Tenant. If
any such lien
is filed, Landlord may, but shall not be required to take such
action or pay
such amount as may be necessary to remove such lien; and Tenant
shall pay to
Landlord as additional rent any such amounts expended by Landlord
within five
(5) days after notice is received by Tenant of the amount expended
by Landlord.
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ARTICLE VIII
COMPLIANCE WITH LAWS
--------------------
8.1
Generally. Tenant, as additional rent, at its sole cost and
expense,
shall make any and all additions to, repairs and alterations in,
the
Improvements, the Property which may be required by law or
governmental
authority applicable to Tenant's operations, and shall otherwise
observe and
comply with any and all public laws, ordinances, regulations,
agreements, and
covenants, conditions and/or restrictions of public record
applicable to the
Property. Tenant shall be obligated to obtain, at its sole effort,
cost and
expense, all permits, approval and licenses required for its
operation at the
Property, or for alteration, addition to or repair of the
Improvements due to
its operations. Each party represents and warrants to the other
party that it
shall not knowingly violate any federal, state or local laws or
regulations by
entering into this Amended Lease or performing its obligations
hereunder.
8.2
Hazardous Substances - Reportable Uses; Required Consent. The
terms
"Hazardous Substance" and "Hazardous Substances" shall mean any
hazardous or
toxic materials as those terms are defined by law, including,
without
limitation, (i) petroleum and petroleum by-products to the extent
they are
hazardous, (ii) polychlorinate biphenyls, (iii) all substances now
or hereafter
designated as "hazardous substances, "hazardous materials" or
"toxic substances"
pursuant to the Comprehensive Environmental Response, Compensation
and Liability
Act of 1980 (CERCLA), 42 U.S.C. Section 9601 et seq., as amended by
the
Superfund Amendments and Reauthorization Act of 1986 (SARA), the
Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean
Air Act, 42
U.S.C. Section 7401 et seq., the Hazardous Materials Transportation
Act, 49
U.S.C. Section 1801 et seq., or the Resource, Conservation and
Recovery Act, 42
U.S.C. Section 6901 et seq., or (vi) all substances now or
hereafter designated
as hazardous substances, hazardous materials, or toxic substances
under any
other federal, state or local laws or in any regulations adopted
and
publications promulgated pursuant to said laws.
8.3
Reportable Use. Tenant shall not engage in any activity in, on or
about
the Property that constitutes a Reportable Use (as hereinafter
defined) of
Hazardous Substances without the express prior written consent of
Landlord and
compliance in a timely manner, at Tenant's sole cost and expense,
with all
Applicable Law (as defined hereinafter). Reportable Use shall mean
(i) the
installation or use of any above or below ground storage tank (ii)
the
generation, possession, storage, use, transportation, or disposal
of a Hazardous
Substance that requires a permit from, or with respect to which a
report and
notice, registration or business plan is required to be filed with
any
governmental authority, or to which any Applicable Law requires
that a written
notice be given to persons entering or occupying the Property or
neighboring
properties. Notwithstanding the foregoing, Tenant may, without
Landlord's prior
consent, but in full compliance with all Applicable Law, use,
generate and store
any ordinary and customary materials reasonably required to be used
by Tenant in
the normal course of Tenant's business permitted on the Property by
the terms of
this Amended Lease, so long as such use does not result in, or
materially
increase the risk of, environmental contamination or damage, taking
into account
the use of the Property as a hospital and the other Permitted Uses
of the
Property under this Amended Lease.
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<PAGE>
8.4
Duty to Inform Landlord. If Tenant's officers, directors or
general
manager know, or have reasonable cause to believe, that it has
released a
Hazardous Substance or created a condition involving or resulting
from same,
that has come to be located on, in or under the Property, the
Improvements or
adjoining properties, other than as previously consented to by
Landlord or as
provided by this Lease, Tenant shall promptly give written notice
of such fact
to Landlord. Tenant shall also within three (3) business days after
receipt of
Landlord's written request, and to the extent reasonably available
provide
Landlord with a reasonable opportunity to inspect any statement,
report, notice,
registration, application, permit, business plan, license, claim,
action or
proceeding given to, or received from, any governmental authority
or private
party concerning the presence, spill, release, discharge of, or
exposure to any
Hazardous Substance or contamination in, on or about the Property,
including,
but not limited to, such documents as may be involved in any
Reportable Uses
involving the Property.
8.5
Indemnification. Tenant shall indemnify, protect, defend and
hold
Landlord, its agents, employees, members and lenders, if any, and
the Property
harmless from and against any and all loss of rents and/or damages,
liabilities,
judgments, costs, claims, liens, expenses, penalties, attorneys
fees and
consultants fees arising out of or involving the presence, storage,
use or
transport of any Hazardous Substance or storage tank resulting from
its actions
or operations, provided, however, that nothing in this section
shall make the
Tenant responsible for any action, inaction, operation, conduct or
condition
caused by the Landlord, for which the Landlord will be responsible.
Tenant's
obligations under this Section shall include, but not be limited
to, the effects
of any contamination or injury to person, Property or the
environment suffered
by Landlord caused by Tenant's actions, including the cost of
investigation
(including consultant's and attorney's fees and testing), removal,
remediation,
restoration, and/or abatement thereof, or of any contamination
therein involved.
The parties agree that provision shall supersede and replace any
contrary
indemnity provision of any other agreement, which shall be of no
further force
or effect.
8.6
Tenant's Compliance With Applicable Laws. Tenant shall, at
Tenant's
sole cost and expense, fully, diligently and in a timely manner
comply with all
"Applicable Law", which term shall mean all laws, rules,
regulations,
ordinances, directives, covenants, easements, and restrictions of
record,
permits, the requirements of any applicable federal, state or
municipal
governmental authority, applicable fire insurance, underwriter or
rating bureau,
relating, in any manner, to the operation of the businesses being
conducted at
the Property by Tenant and its permitted licensees, invitees, and
independent
contractors, including, but not limited to, matters pertaining to
(i) industrial
hygiene (ii) environmental conditions on, in, under, or about the
Property,
including soil and ground water contamination, (iii) the use,
generation,
manufacture, production, installation, maintenance, removal,
transportation,
signage, spill or release of any Hazardous Substances or storage
tank), (iv) the
American with Disabilities Act of 1990, as amended, (v) OSHA, (vi)
the
California Building Code, and (vii) Title 24 now in effect which
may hereinafter
come into effect, and whether or not reflecting a change in policy
from any
previous existing policy. Tenant shall, within ten (10) business
days after
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<PAGE>
receipt of Landlord's written request, and to the extent reasonably
available,
provide Landlord with a reasonable opportunity to inspect all
permits,
registrations and certificates, evidencing Tenant's compliance with
any material
Applicable Law specified by Landlord and shall promptly upon
receipt notify
Landlord, in writing, of any written claim, notice, citation,
warning, complaint
or report by the responsible government agency asserting or
alleging a failure
by Tenant to comply with any such Applicable Law or any written
claim, notice,
citation, warning, complaint or report asserting or alleging the
failure of the
Property to comply with any such Applicable Law.
ARTICLE IX
INTENTIONALLY DELETED
---------------------
ARTICLE X
EXCULPATION AND INDEMNITY
-------------------------
10.1
Waiver of Landlord Liability. Landlord shall not be liable for
any
loss, damage or injury of any kind or character to any person or
property (a)
arising from any use and/or condition and extent of the Property,
or any part
thereof including, without limitation, environmental contamination,
(b) caused
by any defect in the equipment or other facility located therein,
(c) caused by
or arising from any act or omission of Tenant, or any of its
agents, employees,
licensees or invitees, (d) arising from or in connection with the
conduct of any
business, occupation, transaction, event or other activity
occurring on the
Property, (e) arising from any accident on the Property or any fire
or casualty
thereon, or (f) occasioned by the failure of Tenant to maintain the
Property in
a safe condition, except as occasioned by the act, negligence, or
gross
negligence of any duty by Landlord or its agents or employees
occurring after
the Commencement Date or as occasioned by a breach of this Amended
Lease by
Landlord. Subject to the foregoing limitation, Tenant, as a
material part of the
consideration of this Amended Lease, hereby waives, on its behalf,
all claims
and damages against Landlord for any such loss, damage or injury to
Tenant.
10.2
Tenant Indemnification. Tenant, for itself and its successors
and
assigns, hereby agrees to indemnify, defend and hold Landlord, and
Landlord's
members, managers, agents, representatives, employees and
attorneys, free and
harmless from and against any and all Claims in connection with or
arising out
of (i) any loss of life, personal injury and/or damage to Property
arising from
or out of any occurrence in, upon or at the Property if caused by
negligent,
gross negligent or willful act of Tenant, (ii) the occupancy or use
by Tenant of
the Property, or any part thereof excluding any portion of the
Property released
pursuant to Article III hereof, or (iii) arising from or out of
Tenant's failure
to comply with any provision of this Amended Lease (including,
without
limitation, Tenant's failure to timely pay Base Rent or comply with
the
provisions of Section 2.7 hereof), excepting any Claims caused
solely by the
act, negligence, or gross of negligence of any duty by Landlord or
its agents or
employees or by a breach of this Amended Lease by Landlord. Any
Claims caused in
part by the act, negligence, or gross of negligence of any duty by
Landlord or
its agents or employees or by a breach of this Amended Lease by
Landlord shall
be subject to allocation as provided in Section 10.4 hereof.
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<PAGE>
10.3
Landlord Indemnification. Landlord, for itself and its successors
and
assigns, hereby agrees to indemnify Tenant, and Tenant's
stockholders,
directors, agents, representatives, employees, invitees, guests and
attorneys,
free and harmless from and against any and all Claims in connection
with or
arising out of (i) any loss of life, personal injury and/or damage
to Property
arising from or out of any occurrence in, upon or at the Property
if caused by
negligent, gross negligent or willful act of Landlord, or (ii)
arising from or
out of Landlord's failure to comply with any provision of this
Amended Lease,
excepting any Claims caused solely by the act, negligence, or gross
negligence
of any duty by Tenant or its agents or employees or by a breach of
this Amended
Lease by Tenant. Any Claims caused in part by the act, negligence,
or gross
negligence of any duty by Tenant or its agents or employees or by a
breach of
this Amended Lease by Tenant shall be subject to allocation as
provided in
Section 10.4 hereof.
10.4
Joint Liability. In the event that Landlord and Tenant may be
held
jointly liable for any Claim asserted for which indemnification is
sought under
this Amended Lease, Landlord and Tenant hereby agree to contribute
to the amount
of expenses (including reasonable attorney's fees), judgments,
fines and amounts
paid in settlement actually and reasonably incurred in connection
with such
Claim in such proportion as is appropriate to reflect (i) the
relative fault of
Landlord on the one hand and Tenant on the other in connection with
the events
which resulted in such Claim, and (ii) the relative benefits, if
any, received
by the Landlord on the one hand and the Tenant on the other in
connection with
the events which resulted in such Claim, as well as any other
relevant equitable
consideration.
10.5
Claims for Indemnification. Whenever any claim arises for
indemnification under this Agreement, the Party seeking
indemnification (in each
such case, the "Indemnified Party") must notify the Party or
Parties from whom
indemnification is being sought (in each such case, the
"Indemnifying Party") of
such claim in writing promptly and in no case later than thirty
(30) days after
such Indemnified Party has actual knowledge of the facts
constituting the basis
for such claim. Each Indemnified Party will also so notify the
Indemnifying
Party promptly and in no case later than fifteen (15) days after
the Indemnified
Party has actual knowledge of the commencement of any legal
proceedings with
respect to any such claim. The failure of any Indemnified Party to
give timely
notice hereunder shall not affect rights to indemnification
hereunder, except to
the extent that the Indemnifying Party has been damaged by such
failure. Such
notice will specify all facts known to such Indemnified Party
giving rise to the
indemnification sought and the amount or an estimate of the amount
of the
obligation or liability arising from such indemnifying event.
10.6
Defense of Third-party Claims.
(a) If any lawsuit or enforcement action is filed by a third
party
against any Indemnified Party, written notice thereof shall be
given to the
Indemnifying Party as promptly as practicable (and in any event
within fifteen
(15) days after the service of the citation or summons). The
failure of any
Indemnified Party to give timely notice hereunder shall not affect
rights to
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<PAGE>
indemnification hereunder, except to the extent that the
Indemnifying Party has
been damaged by such failure. After such notice, if the
Indemnifying Party shall
acknowledge in writing to the Indemnified Party that the
Indemnifying Party is
obligated under the terms of its indemnity hereunder in connection
with such
lawsuit or action, then the Indemnifying Party shall be entitled,
if it elects
to do so, at its own cost, risk and expense, (i) to take control of
the defense
and investigation of such lawsuit or action, and (ii) to employ and
engage legal
counsel of its own choice, but, in any event, reasonably acceptable
to the
Indemnified Party, to handle and defend the same. The Indemnifying
Party shall
not, without the written consent of the Indemnified Party, which
shall not be
unreasonably withheld, conditioned or delayed, settle or compromise
any Claim or
consent to the entry of any judgment which does not include an
unconditional
written release by the claimant or plaintiff of the Indemnified
Party from all
liability in respect of such Claim, or settle or compromise any
Claim if the
settlement imposes equitable remedies or material obligations on
the Indemnified
Party other than financial obligations for which such Indemnified
Party will be
indemnified hereunder. No Claim which is being defended in good
faith by the
Indemnifying Party in accordance with the terms of this Agreement
shall be
settled or compromised by the Indemnified Party without the written
consent of
the Indemnifying Party, which consent shall not be unreasonably
withheld.
(b) If the Indemnifying Party fails to assume the defense of
such
lawsuit or action within thirty (30) days after receipt of the
claim notice, the
Indemnified Party against which such lawsuit or action has been
asserted will
(upon delivering notice to such effect to the Indemnifying Party)
have the right
to undertake, at the Indemnifying Party's cost and expense,
