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EXHIBIT 10.3.6
SUBLEASE AGREEMENT
SAN JACINTO METHODIST HOSPITAL
BAYTOWN, TEXAS
This SUBLEASE AGREEMENT is made and entered into as of the 1st day of
Nov. 1991 by and between SAN JACINTO METHODIST HOSPITAL, a Texas nonprofit
corporation ("Lessee") and C. A. Riser, M.D. ("Sublessee").
W I T N E S S E T H
WHEREAS, Lessee has leased certain net rentable space in the ▇▇▇▇▇
Court Building ▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ (the "Building") from Piping Rock
Corporation (the "Lessor"), owner of the Building and
WHEREAS, Lessee desires to sublease the space in the Building and
provide certain other services to the Tenant who is on the Medical Staff at San
Jacinto Methodist Hospital (the "Hospital") in Baytown; and
WHEREAS, Lessee desires to sublease space in the Building for
Sublessee's medical office practice and Sublessee also wishes to obtain the
other services offered by Lessee as enumerated in this Sublease Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein, the parties to this Sublease Agreement agree to as follows:
I. Sublease of Premises
1.1. Rented Space. Lessee hereby subleases to Sublessee 4,784
square feet (the "Premises") located in the Building.
1.2. Adjustments to Rented Space. The exact amount of square
feet comprising the Premises may be enlarged or reduced at
such later date when Sublessee approves the floor plans for
the Premises.
II. Rent
2.1. Basic Rent. The rental rate for the Premises shall equal
$0.06 per month for each square foot of net rentable area
subleased by Sublessee under terms and provisions hereof.
2.2. Rent Payable. Except as otherwise provided herein, monthly
rent shall be due and payable to Sublessor on the first day
of each calendar month during the term of this Sublease
Agreement.
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2.3. Late Charge. In the event any rent due and payable by
Sublessee is not received by Lessee within ten days after
it is due, Lessee may, at its discretion, charge interest
on the delinquent amount at the maximum legal rate from the
date due until the date paid.
2.4. Prorated Rent. If Sublessee's occupancy shall commence on a
date other than the first day of a calendar month, then
rent will be prorated for that month and the last month of
the term of this Sublease Agreement.
III. Use
3.1. Permitted Use. Sublessee may use and occupy the Premises
only for the purpose of operating a medical office practice
and purposes ancillary thereto. Sublessee agrees that
Sublessee and Sublessee's agents, employees and invitees
will at all times comply fully with the rules and
regulations of the Building from time to time adopted by
Lessor and Provided to Sublessee.
3.2. Continued Use. Sublessee agrees to maintain an active
full-time medical practice on the Premises at all times
during the term of this Sublease. "Maintaining an active
full-time medical practice" shall mean that Sublessee shall
conduct a medical office practice on Premises with a full
staff of employees during those regularly scheduled
business hours that are common and appropriate to a full-
time medical practice. Failure to maintain an active
medical practice on the Premises shall constitute a default
of this Sublease Agreement.
3.3. Common Areas. Sublessee and Sublessee's agents, employees
and invitees shall have the revocable, nonexclusive license
in common with others permitted by Lessor, to use the
common areas of the Building as they, may from time to time
exist, but all such common areas will remain within the
exclusive control of Lessor.
3.4. Access by Sublessor. Lessee may at any time, without
liability, enter the Premises for inspection, to supply
janitorial or other services, for emergency entry or to
alter or repair the premises or any portion of the
Building. No provision of this Sublease Agreement shall be
construed as obligating Lessee to perform any repairs,
alterations or decorations at the request of Sublessee,
except as otherwise expressly herein agreed to be performed
by Lessee.
IV. Laboratory, Radiology and Hospital Services
4.1. Laboratory and Radiology Services. Lessee agrees to provide
laboratory and radiology services for non-Medicaid patients
at the discounted rates listed on the Schedules attached
hereto. These prices are subject to renegotiation and
extension each January.
4.2. Relationship to Hospital. Although the Lessee hopes that
the quality and cost-effective nature of the Hospital's
services will commend themselves to the Sublessee's
patients, it is clearly understood that the choice of
services and
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the choice of service suppliers that the Sublessee makes on
behalf of the Sublessee's patients must be, and will be
made only with regard to the best interest of patients
themselves. Therefore, so that there will be no
misunderstanding, Lessee and Sublessee specifically
acknowledge that the Sublessee's initial and continued
ability to sublease space in the Building in no way
requires and in no way is contingent upon the admission,
recommendation, referral, or any other form of arrangement
by the Sublessee for utilization by patients or others of
any item or service offered by the Hospital.
V. Noncompetition
5.1. Covenant Not to Compete. Sublessee recognizes (i) that
Lessee's entering into this Sublease Agreement to provide
the services offered hereby is induced by the covenants and
assurances made by Sublessee, (ii) that Sublessee's
covenant not to compete is necessary to ensure the
continuation of Lessee's business and (iii) that
irreparable harm and damage will be done to Lessee in the
event that Sublessee competes with Lessee within the area
or areas described in this Section. Therefore, Sublessee
agrees that during the term of this Sublease Agreement,
Sublessee will not, directly or indirectly, own, manage,
operate, control or participate in the management or
control of, be employed by or retained to provide services
for, lend Sublessee's name to, or maintain or continue any
interest whatsoever in, another medical office building or
any enterprise within Lessee's primary and secondary
service areas offering services similar to those offered by
Lessee, including, but no limited to, laboratory services,
radiology services and hospital services. Notwithstanding
the foregoing, this section shall not be construed to
prohibit membership on a hospital medical staff.
5.2. Existing Competition. The foregoing covenant not to compete
shall not apply to the following interests presently held
by Sublessee:
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VI. Other Services, Utilities and Taxes.
6.1. Services and Utilities Provided. Lessee agrees to furnish
during reasonable hours of generally recognized business
days (to be determined by Lessee) electricity, gas, water
heating and air conditioning for ordinary uses, and
elevator, janitorial and sewage services.
6.2. Direct Obligations of Sublessee. Sublessee shall be
responsible for all telephone and other utility services
billed directly to Sublessee, and for all
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property taxes assessed against Sublessee's leasehold
improvements and personal property located in the Premises.
VII. Finish-Out Alterations and Maintenance and Repairs.
7.1. Initial Finish-Out. Initial finish-out of the Premises
shall be by mutual consent of Lessee and Sublessee.
7.2. Subsequent Alterations. Sublessee may not make any
subsequent alterations, additions or improvements to the
Premises without first obtaining Lessee's written consent
(except for installation of unattached, movable equipment
or furniture that may be installed without drilling,
cutting or otherwise defacing the Premises.)
7.3. Maintenance and Repairs. Lessor shall, at its expense,
maintain the roof, foundation and the structural soundness
of the exterior walls of the Building, including the
Premises and the common areas, in good repair and
condition, reasonable wear and tear excepted, and except
for repairs occasioned by the acts or omissions of
Sublessee, its patients, employees, licensees or
concessionaires (unless such act or omission results in
damage covered by valid and collectible fire and extended
coverage insurance policies and is collectible thereunder).
VIII. Term, Termination and Default.
8.1. Term. The term of this Sublease Agreement shall be for a
period of three (3) years, beginning on the day Sublessee
moves into the Premises.
8.2. Default. The following events shall be deemed to be events
of default by Sublessee under this Agreement;
(i) failure to pay rent under this
Sublease Agreement, and such failure continues for a
period to ten days thereafter;
(ii) failure to maintain an active
medical practice on the Premises as required by
Section 3.2 of this Sublease Agreement;
(iii) permanent desertion or vacation of
any substantial portion of the Premises; and
(iv) failure to comply with the covenant
not to compete as required by Section V of this
Sublease Agreement.
8.3. Remedies Upon Default. Upon the occurrence of any event of
default, Lessee shall have the right, in addition to any
other rights Lessee may have, at law or in equity to
terminate this Sublease Agreement. Upon such termination,
Sublessee shall surrender the Premises to Lessee, and if
Sublessee fails to do so, Lessee may, without prejudice to
any other remedy that it may have for possession or
arrearages in the payment of rent, enter
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the Premises and take possession of the premises and any
equipment and personal property located therein, and expel
or remove Sublessee and any other person who may be
occupying the Premises or any part thereof, by force if
necessary, without being liable for prosecution or any
claim of damages therefor.
IX. Insurance and Liability.
9.1. Insurance. Sublessee shall procure and maintain, at its sole
cost and expense, throughout the term of this Sublease
Agreement, a policy or policies of general liability and
malpractice insurance, including, without limitation,
professional liability, insuring both Lessee and Sublessee
against all claims, demands or actions arising out of or in
connection with the operation or maintenance of the
Premises, with limits of such policy or policies to be in
amounts not less than One Hundred Thousand Dollars
($100,000) per occurrence and Three Hundred Thousand
Dollars ($300,000) in the aggregate per annum. Each of the
policies described herein shall be written, to the extent
practicable, on standard forms customarily used in ▇▇▇▇▇▇
County, Texas, and shall contain (i) the agreement of the
insurer to give Lessee at least thirty (30) days written
notice prior to cancellation of or material change in such
policies or any of them and (ii) waiver of subrogation
rights against Lessee. Sublessee shall furnish Lessee with
a duplicate copy of all policies of insurance (or
certificates therefor.)
9.2. Liability. Lessee shall not be liable to
Sublessee or to Sublessee's patients, employees, agents or
visitors, or to any other person or persons for any injury
or death to such persons or age to property on or about the
Premises caused by the negligence or misconduct of
Sublessee. Sublessee agrees to indemnify Lessee and hold
Lessee harmless from any loss, liability, claims, demands,
causes of action or expense, including attorneys' fees
arising out of any such damage, death, or injury; except
death or injury to persons or damage to property due to the
negligence or misconduct of the Lessee. Lessee agrees to
indemnify Sublessee and hold Sublessee harmless from any
loss, liability, claims, demands, causes of action or
expenses, including attorneys' fees, arising out of damage,
death, or injury caused by the negligence or misconduct of
Lessee; except death or injury to persons or damage to
property due to the negligence or misconduct of Sublessee.
X. Miscellaneous.
10.01. Assignment and Subletting. Sublessee shall not have the
right to assign this Sublease Agreement or to sublet the
whole or any part of the Premises, without the prior
written consent of Lessee and Lessor. Notwithstanding any
permitted assignment or subletting, Sublessee shall at all
times remain fully responsible and liable for the payment
of rent herein specified and for compliance with all of
Sublessee's other obligations under the terms and
conditions of this Sublease Agreement. Assignment with the
consent of Lessee shall be conditioned upon the written
acceptance by the prospective assignee of all the terms of
this Agreement. Lessee shall have the right to
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assign any of its rights and obligation under this Sublease
Agreement.
10.02. Legal Fees and Costs. In the event either party elects to
incur legal expenses to enforce or interpret any provision
of this Sublease Agreement, the prevailing party will be
entitled to recover such legal expenses, including, without
limitation, attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which
such party shall be entitled.
10.03. Choice of Law and Venue. The parties agree that this
Sublease Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, and that
the federal and/or state courts located in ▇▇▇▇▇▇ County,
Texas shall be the exclusive courts of jurisdiction and
venue for any litigation, special proceeding or other
proceedings as between parties that may be brought, or
arise out of, in connection with or by reason of this
Agreement.
10.04. Notice. Any notice, demand or communication required,
permitted, or desired to be given hereunder shall be deemed
effectively given when personally delivered or mailed by
prepaid certified mail, return receipt requested, to the
addresses following the signatures to this Sublease
Agreement.
10.05. Severability. In the event any provision of this Sublease
Agreement is held to be invalid, illegal or unenforceable
for any reason and in any respect, such invalidity,
illegality, or unenforceability shall in no event affect,
prejudice or disturb the validity of the remainder of this
Sublease Agreement, which shall be and remain in full force
and effect, enforceable in accordance with its terms.
10.06. Gender and Number. Whenever the context of this Sublease
Agreement requires, the gender of all words herein shall
include the masculine, feminine and neuter, and the number
of all worlds herein shall include the singular and plural.
10.07. Divisions and Headings. The divisions of this Sublease
Agreement into sections and subsections and the use of
captions and headings in connection therewith are solely
for convenience and shall have no legal effect in
construing the provisions of this Sublease Agreement.
10.08. Waiver of Breach. The waiver by either party of a breach or
violation of any provision of this Agreement shall not
operate as, or be construed to be, a waiver of any
subsequent breach of the same of other provision hereof.
10.09. Entire Agreement/Amendment. This Sublease Agreement
supersedes all previous contracts and constitutes the
entire agreement of whatsoever kind or nature existing
between or among the parties respecting the within subject
matter and no party shall be entitled to benefits other
than those specified herein. As between or among the
parties, no oral statements or prior written material no
specifically incorporated or referenced herein shall be of
any force and effect. The parties specifically acknowledged
that in entering into
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and executing this Sublease Agreement, the parties rely
solely upon the representations and agreements contained in
this Sublease Agreement and no others. All prior
representations or agreements, whether written or verbal,
not expressly incorporated or referenced herein are
superseded and no changes in or additions to this Sublease
Agreement shall be recognized unless and until made in
writing and signed by all parties hereto.
IN WITNESS WHEREOF, Lessee and Sublessee have each caused this
Agreement to be executed and to be effective as of the day and year first above
written.
LESSEE: SAN JACINTO METHODIST HOSPITAL
By: /s/▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇
President
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SUBLESSEE:
By: /s/Dr. C.A. Riser
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Dr. C.A. Riser
Print Name and Title
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