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EXHIBIT 10.15
Lease and Security Agreement
by and between
Nationwide Health Properties, Inc.,
a Maryland corporation,
as "Landlord"
and
Brim Hospitals, Inc.,
an Oregon corporation
as "Tenant"
Dated April 11, 1994
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TABLE OF CONTENTS
Page
1. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Renewal Terms . . . . . . . . . . . . . . . . . . . . . . . 2
2. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Initial Term Minimum Rent . . . . . . . . . . . . . . . . 3
2.2 Initial Term Additional Rent . . . . . . . . . . . . . . . 3
2.3 Renewal Term Minimum Rent . . . . . . . . . . . . . . . . . 5
2.4 Renewal Term Additional Rent . . . . . . . . . . . . . . . 6
2.5 Total Rent . . . . . . . . . . . . . . . . . . . . . . . . 6
2.6 Rent Cap and Rent Floor . . . . . . . . . . . . . . . . . . 6
2.7 Proration for Partial Periods . . . . . . . . . . . . . . . 9
2.8 Absolute Net Lease . . . . . . . . . . . . . . . . . . . . 9
3. Taxes, Assessments and Other Charges . . . . . . . . . . . . . . 10
3.1 Tenant's Obligations . . . . . . . . . . . . . . . . . . . 10
3.2 Proration . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 Right to Protest . . . . . . . . . . . . . . . . . . . . . 10
3.4 Tax Bills . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Other Charges . . . . . . . . . . . . . . . . . . . . . . . 10
4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 General Insurance Requirements . . . . . . . . . . . . . . 11
4.2 Fire and Extended Coverage . . . . . . . . . . . . . . . . 11
4.3 Public Liability . . . . . . . . . . . . . . . . . . . . . 12
4.4 Professional Liability Insurance . . . . . . . . . . . . . 13
4.5 Workers Compensation . . . . . . . . . . . . . . . . . . . 13
4.6 Boiler Insurance . . . . . . . . . . . . . . . . . . . . . 14
4.7 Business Interruption Insurance . . . . . . . . . . . . . . 14
5. Use, Maintenance and Alteration of the Premises. . . . . . . . . 15
5.1 Tenant's Maintenance Obligations . . . . . . . . . . . . . 15
5.2 Regulatory Compliance . . . . . . . . . . . . . . . . . . . 15
5.3 Permitted Use . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Tenant Repurchase Obligation . . . . . . . . . . . . . . . 17
5.5 No Liens; Permitted Contests . . . . . . . . . . . . . . . 18
5.6 Alterations by Tenant . . . . . . . . . . . . . . . . . . . 18
5.7 Capital Improvements Funded by Landlord . . . . . . . . . . 20
5.8 Compliance With IRS Guidelines . . . . . . . . . . . . . . 21
5.9 Option to Reqacuire . . . . . . . . . . . . . . . . . . . . 21
6. Condition And Title Of Premises . . . . . . . . . . . . . . . . 24
7. Landlord and Tenant Personal Property . . . . . . . . . . . . . 25
7.1 Tenant Personal Property . . . . . . . . . . . . . . . . . 25
7.2 Landlord's Security Interest . . . . . . . . . . . . . . . 26
7.3 Financing Statements . . . . . . . . . . . . . . . . . . . 27
7.4 Intangible Property . . . . . . . . . . . . . . . . . . . . 28
7.5 Option to Purchase . . . . . . . . . . . . . . . . . . . . 29
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8. Representations And Warranties . . . . . . . . . . . . . . . . . . . 29
8.1 Due Authorization And Execution . . . . . . . . . . . . . . . . 29
8.2 Due Organization . . . . . . . . . . . . . . . . . . . . . . . 29
8.3 No Breach of Other Agreements . . . . . . . . . . . . . . . . . 29
9. Financial, Management and Regulatory Reports . . . . . . . . . . . . 29
9.1 Monthly Facility Reports . . . . . . . . . . . . . . . . . . . 29
9.2 Quarterly Financial Statements . . . . . . . . . . . . . . . . 30
9.3 Annual Financial Statement . . . . . . . . . . . . . . . . . . 30
9.4 Accounting Principles . . . . . . . . . . . . . . . . . . . . . 30
9.5 Regulatory Reports . . . . . . . . . . . . . . . . . . . . . . 30
10. Events of Default and Landlord's Remedies . . . . . . . . . . . . . 31
10.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . 35
10.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.3 Receivership . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.4 Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.5 Remedies Cumulative; No Waiver . . . . . . . . . . . . . . . . 38
10.6 Performance of Tenant's Obligations by Landlord . . . . . . . . 39
11. Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12. Damage by Fire or Other Casualty . . . . . . . . . . . . . . . . . . 40
12.1 Reconstruction Using Insurance . . . . . . . . . . . . . . . . 40
12.2 Surplus Proceeds . . . . . . . . . . . . . . . . . . . . . . . 41
12.3 No Rent Abatement . . . . . . . . . . . . . . . . . . . . . . . 41
13. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.1 Complete Taking . . . . . . . . . . . . . . . . . . . . . . . . 41
13.2 Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . 42
13.3 Cap on Awards . . . . . . . . . . . . . . . . . . . . . . . . 43
13.4 Lease Remains in Effect . . . . . . . . . . . . . . . . . . . . 43
14. Provisions on Termination of Term . . . . . . . . . . . . . . . . . 43
14.1 Surrender of Possession . . . . . . . . . . . . . . . . . . . . 43
14.2 Removal of Personal Property . . . . . . . . . . . . . . . . . 43
14.3 Title to Personal Property Not Removed . . . . . . . . . . . . 44
14.4 Management of Premises . . . . . . . . . . . . . . . . . . . . 44
14.5 Correction of Deficiencies . . . . . . . . . . . . . . . . . . 44
15. Notices and Demands . . . . . . . . . . . . . . . . . . . . . . . . 45
16. Right of Entry; Examination of Records . . . . . . . . . . . . . . . 46
17. Landlord May Grant Liens . . . . . . . . . . . . . . . . . . . . . . 46
18. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . 47
19. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
20. Preservation of Gross Revenues . . . . . . . . . . . . . . . . . . . 49
21. Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . 49
21.1 Hazardous Material Covenants . . . . . . . . . . . . . . . . . 49
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21.2 Tenant Notices to Landlord . . . . . . . . . . . . . . . . . 50
21.3 Extension of Term . . . . . . . . . . . . . . . . . . . . . 50
21.4 Participation in Hazardous Materials Claims . . . . . . . . 51
21.5 Environmental Activities . . . . . . . . . . . . . . . . . . 51
21.6 Hazardous Materials . . . . . . . . . . . . . . . . . . . . 51
21.7 Hazardous Materials Claims . . . . . . . . . . . . . . . . . 52
21.8 Hazardous Materials Laws . . . . . . . . . . . . . . . . . . 52
21.9 Remediation of Existing Environmental Condition . . . . . . 53
22. Assignment and Subletting . . . . . . . . . . . . . . . . . . . . 53
23. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 56
24. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . 57
25. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . 57
26. Conveyance by Landlord . . . . . . . . . . . . . . . . . . . . . 58
27. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . 58
28. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . 58
29. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 59
30. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 59
31. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . 59
32. Waiver and Subrogation . . . . . . . . . . . . . . . . . . . . . 59
33. Memorandum of Lease . . . . . . . . . . . . . . . . . . . . . . . 59
34. Incorporation of Recitals and Attachments . . . . . . . . . . . . 60
35. Titles and Headings . . . . . . . . . . . . . . . . . . . . . . . 60
36. Usury Savings Clause . . . . . . . . . . . . . . . . . . . . . . 60
37. Joint and Several . . . . . . . . . . . . . . . . . . . . . . . . 60
38. Survival of Representations, Warranties and Covenants . . . . . . 60
39. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . 61
EXHIBIT A Legal Description . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Landlord Personal Property . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Calculation of Additional Rent . . . . . . . . . . . . . . . C-1
EXHIBIT D Appraisal Process . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E Permitted Exceptions . . . . . . . . . . . . . . . . . . . . E-1
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EXHIBIT F Additional Rent Calculations . . . . . . . . . . . . . . . . . F-1
EXHIBIT G ALTA Survey . . . . . . . . . . . . . . . . . . . . . . . . . G-1
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LEASE AND SECURITY AGREEMENT
THIS LEASE AND SECURITY AGREEMENT ("Lease") is made and entered into as of
the 11th day of April, 1994 by and between Nationwide Health Properties, Inc.,
a Maryland corporation ("Landlord"), and Brim Hospitals, Inc., an Oregon
corporation ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord is the owner of that certain real property, all
improvements thereon and all appurtenances thereto, presently licensed as a one
hundred sixteen (116) bed hospital, located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ and more specifically described in Exhibit "A" attached hereto,
together with certain of the furniture, machinery, equipment, appliances,
fixtures, supplies and other personal property used in connection therewith as
more specifically described on Exhibit "B" attached hereto ("LANDLORD PERSONAL
PROPERTY"). The foregoing property owned by Landlord shall be collectively
referred to in this Lease as the "PREMISES"; and
WHEREAS, Brim, Inc., an Oregon corporation ("GUARANTOR") has agreed to
guarantee Tenant's obligations under this Lease; and
WHEREAS, Landlord desires to lease the Premises to Tenant, and Tenant
desires to lease the Premises from Landlord.
NOW THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein, Landlord hereby
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leases and lets unto Tenant the Premises for the term and upon the conditions
and provisions hereinafter set forth.
1. TERM.
1.1 TERM. The term of this Lease shall commence on April 14, 1994
and shall end on May 30, 2004 (the "INITIAL TERM") unless extended pursuant to
Section 1.2 or earlier terminated in accordance with the provisions hereof.
The Initial Term and all renewal terms are referred to collectively as the
"TERM".
1.2 RENEWAL TERMS. The Term may be extended for two (2) separate
renewal terms of ten (10) years each, upon the satisfaction of all of the
following terms and conditions:
1.2.1 Not more than five (5) days before or after the
date which is twelve (12) months prior to the end of the then current
Term, Tenant shall give Landlord written notice that Tenant desires
to exercise its right to extend the then current Term for one (1)
renewal term.
1.2.2 There shall be no Event of Default under this
Lease, either on the date of Tenant's notice to Landlord pursuant to
Section 1.2.1 above, or on the last day of the then current Term.
1.2.3 All other provisions of this Lease shall remain in
full force and effect and shall continuously apply throughout the
renewal term(s).
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2. RENT. During the Initial Term and all renewal terms Tenant shall pay
to Landlord minimum rent ("MINIMUM RENT") and additional rent ("ADDITIONAL
RENT") as follows:
2.1 INITIAL TERM MINIMUM RENT. During the first Lease Year of the
Initial Term Tenant shall pay to Landlord Minimum Rent of $407,247 annually.
During the second and all subsequent Lease Years of the Initial Term Tenant
shall pay to Landlord Minimum Rent of $419,464 annually. Such Minimum Rent
shall be paid in advance on the first business day of each calendar month in
equal monthly installments of $33,937.25 each during the first Lease Year of
the Initial Term and $34,955.33 each during the second and all subsequent Lease
Years of the Initial Term. If Landlord funds any additional improvements
pursuant to Section 5.7 below, during the first Lease Year such annual Minimum
Rent shall be increased by an amount equal to nine and 362/1000 percent
(9.362%) of the amount advanced by Landlord with a corresponding increase to
the monthly payment amount, and during all subsequent Lease Years of the
Initial Term such annual Minimum Rent shall be increased by an amount equal to
nine and 643/1000 percent (9.643%) of the amount advanced by Landlord with a
corresponding increase to the monthly payment amount.
2.2 INITIAL TERM ADDITIONAL RENT.
2.2.1 Commencing with the third Lease Year, and
continuing during the Initial Term, Tenant agrees to pay Additional
Rent to Landlord on a quarterly basis in arrears no more than 45 days
after the end of each calendar quarter. Such Additional Rent shall be
equal to two and one-half percent (2.5%) of the amount by
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which the Gross Revenues for the Lease Year through the applicable
quarter exceed the prorated Gross Revenues for the applicable portion
of the Base Year. Tenant shall accompany each payment of Additional
Rent with a completed calculation in the form of Exhibit "C" attached
hereto.
2.2.2 "GROSS REVENUES" shall be calculated according to
generally accepted accounting principles consistently applied
("GAAP") and shall be defined as all revenues generated by the
operation, sublease and/or use of the Premises in any way, excluding
(i) contractual allowances during the Term for ▇▇▇▇▇▇▇▇ not paid by
or received from the appropriate governmental agencies or third party
providers; (ii) all proper patient billing credits and adjustments
according to GAAP relating to health care accounting; and (iii)
federal, state or local sales or excise taxes and any tax based upon
or measured by said revenues which is added to or made a part of the
amount billed to the patient or other recipient of such services or
goods, whether included in the billing or stated separately.
2.2.3 "LEASE YEAR" shall be defined as the twelve (12)
month periods commencing on May 1 of each year of the Term.
2.2.4 The "BASE YEAR" during the Initial Term shall mean
the year ending on April 30, 1996.
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2.3 RENEWAL TERM MINIMUM RENT. The Minimum Rent for each renewal
term shall be expressed as an annual amount but shall be payable in advance in
equal monthly installments on the first business day of each calendar month.
Such annual Minimum Rent shall be equal to the product of:
2.3.1 the greater of (i) the fair market value of the
Premises on the date of Tenant's notice of exercise pursuant to
Section 1.2.1, but not to exceed Landlord's Original Investment
($4,350,000) (as increased under Section 5.7 below, if applicable)
increased by three percent (3%) per annum compounded annually or (ii)
Landlord's Original Investment ($4,350,000) as increased under
Section 5.7 below, if applicable; and
2.3.2 a percentage equal to three hundred fifty (350)
basis points over the 10 year United States Treasury rate in effect
on the date of Tenant's notice of exercise pursuant to Section 1.2.1.
If within ten (10) days of the date of Tenant's notice of exercise pursuant to
Section 1.2.1, Landlord and Tenant are unable to agree on the fair market value
of the Premises for purposes of this calculation, such fair market value shall
be established by the appraisal process described on Exhibit "D" attached
hereto. The Minimum Rent for the applicable renewal term must be finally
determined by such appraisal process on or before a date ninety (90) days after
Tenant's notice of exercise
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pursuant to section 1.2.1 or Tenant shall lose its right to extend the Term.
Landlord and Tenant acknowledge and agree that this Section is designed to
establish a fair market Minimum Rent for the Premises during the applicable
renewal terms.
2.4 RENEWAL TERM ADDITIONAL RENT. During each renewal term, Tenant
shall pay to Landlord Additional Rent on a quarterly basis in arrears no more
than 45 days after the end of each calendar quarter. The Additional Rent for
each renewal term shall be calculated as provided in Section 2.2 except that
the Base Year for the purpose of determining such Additional Rent shall be the
Lease Year immediately preceding the applicable renewal term.
2.5 TOTAL RENT. For all purposes of calculating and paying Minimum
Rent and Additional Rent under this Lease, the total of the Minimum Rent plus
Additional Rent payable by Tenant in any Lease Year will not be less than the
total Minimum Rent plus Additional Rent paid by Tenant for the previous Lease
Year.
2.6 RENT CAP AND RENT FLOOR.
2.6.1 Notwithstanding any of the other terms of this
Lease but subject to Sections 2.6.2 and 2.6.4, the total of the
Minimum Rent and Additional Rent due during each Lease Year shall
not: during the third Lease Year of the Initial-Term exceed $432,048
plus the product of .09933 times capital improvements funded by
Landlord pursuant to Section 5.7 of this Lease; and in all subsequent
Lease Years increase from one Lease Year to the next by an amount in
excess of (i) the applicable percentage, multiplied by (ii) the sum
of the Minimum Rent and the Additional Rent due during the
immediately preceding Lease
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Year. As used in the foregoing, the "applicable percentage" shall be
three percent (3%) in the fourth Lease Year of the Initial Term and
three and one-half percent (3.5%) in all subsequent Lease Years.
2.6.2 The terms of Section 2.6.1 shall have no
applicability in determining the Minimum Rent to be calculated for
any renewal term pursuant to Section 2.3 above. However, the terms of
Section 2.6.1 shall apply in calculating total rent from one year to
the next within a renewal term.
2.6.3 Notwithstanding any of the other terms of the
Lease but subject to Section 2.6.4, in no event shall the total of
Minimum Rent plus Additional Rent in the first Lease Year of any
renewal term exceed one hundred fifteen percent (115%) of the total
of the Minimum Rent plus Additional Rent paid or payable for the last
Lease Year in the Initial Term or preceding renewal term, as
applicable.
2.6.4 Notwithstanding any of the other terms of this
Section 2.6, the terms of Section 2.5 shall continue to apply such
that the sum of the Minimum Rent and the Additional Rent due during
any Lease Year shall in no event be less than the sum of the Minimum
Rent and the Additional Rent due during the immediately preceding
Lease Year.
2.6.5 To the extent that Section 2.6.1 operates to limit
the rent for any Lease Year, the amount of rent which would have
otherwise been paid or payable by Tenant will be carried forward on a
cumulative basis and
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will be paid by Tenant to Landlord in any subsequent Lease Year
(other than the first Lease Year of a renewal term) in which the
total of the Minimum Rent and Additional Rent is less than the
applicable percentage of the total of the Minimum Rent and Additional
Rent for the then immediately preceding Lease Year.
2.6.6 To the extent that Section 2.6.3 operates to limit
the Minimum Rent for the first renewal term, the amount of rent which
would have otherwise been paid or payable by Tenant in such first
renewal term will be carried forward and will be paid in the second
renewal term (evenly divided over all of the months in such second
renewal term) to the extent that the Minimum Rent for such second
renewal term is less than one hundred fifteen percent (115%) of the
total of the Minimum Rent and Additional Rent for the last Lease Year
in the first renewal term.
2.6.7 Within sixty (60) days of the end of each Lease
Year, Tenant shall deliver to Landlord a report in the form attached
hereto as Exhibit F. certified by an officer or general partner of
Tenant, as applicable, setting forth the calculations set forth
therein. If said report provides that Tenant owes Landlord any sum of
money, Tenant shall accompany such report delivered to Landlord with
such funds. If said report provides that Landlord owes Tenant any sum
of money, such sum shall be applied as a credit against future
installments of Minimum Rent and Additional Rent due from Tenant to
Landlord: provided, however. if such sum is
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owed by Landlord to Tenant with respect to the last year of the Lease
Term, Landlord shall pay such sum to Tenant within thirty (30) days
of Landlord's receipt of the report in question.
2.7 PRORATION FOR PARTIAL PERIODS. The rent for any month during
the Term which begins or ends on other than the first or last calendar day of a
calendar month shall be prorated based on actual days elapsed.
2.8 ABSOLUTE NET LEASE. All rent payments shall be absolutely net
to the Landlord free of taxes (as described in Section 3.1 hereof),
assessments, utility charges, operating expenses, refurnishings insurance
premiums or any other charge or expense in connection with the Premises. All
expenses and charges, whether for upkeep, maintenance, repair, refurnishing,
refurbishing, restoration, replacement, insurance premiums, taxes, utilities,
and other operating or other charges of a like nature or otherwise, shall be
paid by Tenant. This provision is not in derogation of the specific provisions
of this Lease, but in expansion thereof and as an indication of the general
intentions of the parties hereto. Tenant shall continue to perform its
obligations under this Lease even if Tenant claims that Tenant has been damaged
by any act or omission of Landlord. Therefore, Tenant shall at all times remain
obligated under this Lease without any right of set-off, counterclaim,
abatement, deduction, reduction or defense of any kind, except in the event
that Landlord breaches its obligations under Section 18 or as otherwise
expressly provided therein. Tenant's sole right to
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recover damages against Landlord by reason of a breach or alleged breach of
Landlord's obligations under this Lease shall be to prove such damages in a
separate action against Landlord.
3. TAXES. ASSESSMENTS AND OTHER CHARGES:
3.1 TENANT'S OBLIGATIONS. Tenant agrees to pay and discharge
(including the filing of all required returns) any and all taxes (including but
not limited to real estate and personal property taxes, business and
occupational license taxes, ad valorem sales, use, single business, gross
receipts, transaction privilege, rent or other excise taxes) and other
assessments levied or assessed against the Premises or any interest therein
during the Term, prior to delinquency or imposition of any fine, penalty,
interest or other cost.
3.2 PRORATION. At the commencement and at the end of the Term, all
such taxes and assessments shall be prorated.
3.3 RIGHT TO PROTEST. Landlord and/or Tenant shall have the right,
but not the obligation, to protest the amount or payment of any real or
personal property taxes or assessments levied against the Premises; provided
that in the event of any protest by Tenant, Landlord shall not incur any
expense because of any such protest, Tenant shall diligently and continuously
prosecute any such protest and notwithstanding such protest Tenant shall pay
any tax, assessment or other charge before the imposition of any penalty or
interest.
3.4 TAX BILLS. Landlord shall promptly forward to Tenant copies of
all tax bills and payment receipts relating to the Premises received by
Landlord.
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3.5 OTHER CHARGES. Tenant agrees to pay and discharge, punctually
as and when the same shall become due and payable without penalty, all
electricity, gas, garbage collection, cable television, telephone, water,
sewer, and other utilities costs and all other charges, obligations or deposits
assessed against the Premises during the Term.
4. INSURANCE.
4.1 GENERAL INSURANCE REQUIREMENTS. Except as set forth herein,
all insurance provided for in this Lease shall be maintained under valid and
enforceable policies issued by insurers or reinsurers of recognized
responsibility, licensed (either admitted or not admitted) to do business in
the State of California, having a general policyholders rating of not less than
"A minus", a financial rating of not less than "Class V" in the then most
current Best's Insurance Report, and an overall performance rating of
"excellent." Any and all policies of insurance required under this Lease shall
name the Landlord as an additional insured and shall be on an "occurrence"
basis, or if on a "claims made" basis the Tenant shall provide for the purchase
of a one year tail at the expiration of the "claims made" policy in question.
In addition, Landlord shall be shown as the loss payable beneficiary under the
property insurance policy maintained by Tenant pursuant to Section 4.2. All
policies of insurance required herein may be in the form of "blanket" or
"umbrella" type policies which shall name the Landlord and Tenant as their
interests may appear and allocate to the Premises the full amount of insurance
required hereunder.
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Original policies or satisfactory certificates from the insurers evidencing the
existence of all policies of insurance required by this Lease and showing the
interest of the Landlord shall be filed with the Landlord prior to the
commencement of the Term and shall provide that the subject policy may not be
canceled except upon not less than ten (10) days prior written notice to
Landlord. Originals of the renewal policies or certificates therefor from the
insurers evidencing the existence thereof shall be deposited with Landlord not
less than ten (10) days prior to the expiration dates of the policies. Any
claims under any policies of insurance described in this Lease shall be
adjudicated by and at the expense of the Tenant or of its insurance carrier,
but shall be subject to joint control of Tenant and Landlord.
4.2 FIRE AND EXTENDED COVERAGE. Tenant shall keep the Premises
insured against loss or damage by fire, with extended coverage endorsement
covering loss or damage, by lightning, windstorm, explosion, smoke damage,
vehicle damage, sprinkler leakage, flood, vandalism, earthquake (if within an
earthquake zone Tenant will provide earthquake insurance as soon as practicable
after the commencement of the Initial Term), malicious mischief and such other
risks as are normally covered under such endorsement in the amounts that are
not less than the full insurable value of the Premises including all equipment
and personal property (whether or not Landlord Personal Property) used in the
operation of the Premises, but in no event less than Seven Million Six Hundred
Thousand Dollars ($7,600,000). The term "FULL INSURABLE VALUE" as used in this
Lease shall mean the greater of (i) Seven Million Six Hundred Thousand Dollars
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($7,600,000) or (ii) Landlord's Original Investment ($4,350,000) (as increased
under Section 5.7 below, if applicable) increased by three percent (3%) per
annum compounded annually from the date of this Lease.
4.3 PUBLIC LIABILITY. Tenant shall maintain general public
liability insurance (including products liability coverage) against claims for
bodily injury, death or property damage occurring on, in or about the Premises
and the adjoining sidewalks and passageways, such insurance to afford
protection to Landlord and Tenant of not less than Five Million Dollars
($5,000,000) with respect to bodily injury or death to any one person, not less
than Five Million Dollars ($5,000,000) with respect to any one accident, and
not less than One Million Dollars ($1,000,000) with respect to property damage;
provided, that Landlord shall have the right at any time hereafter to require
such higher limits as may be reasonable and customary for transactions and
properties similar to the Premises.
4.4 PROFESSIONAL LIABILITY INSURANCE. Tenant shall maintain
insurance against liability imposed by law upon Tenant and its Affiliates for
damages on account of professional services rendered or which should have been
rendered by Tenant or its Affiliates or any person for which acts Tenant or its
Affiliates is legally liable on account of injury, sickness or disease,
including death at any time resulting therefrom, and including damages allowed
for loss of service, in a minimum amount of Five Million Dollars ($5,000,000)
for each claim and One Hundred Million Dollars ($100,000,000) in the aggregate.
In
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the alternative, Tenant shall participate in the professional liability
insurance program provided by the California Hospital Insurance Company, which
provides professional liability insurance in an amount of not less than Five
Million Dollars ($5,000,000) for each claim.
4.5 WORKERS COMPENSATION. Tenant shall comply with all legal
requirements regarding worker's compensation, including any requirement to
maintain worker's compensation insurance against claims for injuries sustained
by Tenant's employees in the course of their employment.
4.6 BOILER INSURANCE. If required by Landlord in its reasonable
discretion, Tenant shall maintain boiler and pressure vessel insurance on any
fixtures or equipment which are capable of bursting or exploding, in an amount
not less than Five Million Dollars ($5,000,000) for damage to property, bodily
injury or death resulting from such perils.
4.7 BUSINESS INTERRUPTION INSURANCE. Tenant shall maintain, at its
expense, business interruption insurance insuring against loss of rental value
for a period not less than one (1) year.
[Remainder of page intentionally left blank]
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5. Use, Maintenance and Alteration of the Premises.
5.1 Tenant's Maintenance Obligations.
5.1.1 Tenant will keep and maintain the Premises in good
appearance, repair and condition and maintain proper housekeeping.
Tenant shall promptly make or cause to be made all repairs, interior
and exterior, structural and nonstructural, ordinary and
extraordinary, foreseen and unforeseen necessary to keep the Premises
in good and lawful order and condition and in substantial compliance
with all requirements for the licensing of hospitals (and nursing
homes if the Premises are subject to a nursing home license) in the
State of California and certification for participation in Medicare
and MediCal (or any successor programs) or as otherwise required
under all applicable local, state and federal laws.
5.1.2 As part of Tenant's obligations under this Section
5.1, Tenant shall be responsible to maintain, repair and replace all
Landlord Personal Property and all Tenant Personal Property in good
condition, ordinary wear and tear excepted, consistent with prudent
industry practice.
5.2 REGULATORY COMPLIANCE.
5.2.1 Tenant and the Premises shall comply with all
federal, state and local licensing and other laws and regulations
applicable to hospitals (and nursing homes if the Premises are
subject to a nursing
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home license) as well as with the certification requirements of
Medicare and MediCal (or any successor program). Further, Tenant
shall ensure that the Premises continue to be licensed as a hospital
with a licensed capacity of 116 beds fully certified for
participation in Medicare and MediCal (or any successor program)
throughout the Term and at the time the Premises are returned to
Landlord at the termination thereof, all without any suspension,
revocation, decertification or limitation. Further, Tenant shall not
commit any act or omission that would in any way violate any
certificate of occupancy affecting the Premises.
5.2.2 All inspection fees, costs and charges associated
with a change of such licensure or certification shall be borne
solely by Tenant. Tenant shall at its sole cost make any additions or
alterations to the Premises necessitated by, or imposed in connection
with, a change of ownership inspection survey for the transfer of
operation of the Premises from Tenant or Tenant's assignee or
subtenant to Landlord or Landlord's designee at the expiration or
termination of the Term.
5.3 PERMITTED USE. Tenant shall continuously use and occupy the
Premises during the Term, solely as a 116 bed licensed hospital.
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5.4 TENANT REPURCHASE OBLIGATION. If Tenant fails to comply with
Section 5.3, if the certification of the Premises under Medicare or MediCal (or
any successor program) is revoked, suspended or materially limited, or if the
hospital (or nursing home license, if any) of the Premises is revoked,
suspended or materially limited, then in addition to Landlord's other rights
and remedies under this Lease, Landlord shall have the right to put the
Premises to Tenant. If Landlord exercises such right, Tenant shall purchase
the Premises from Landlord for a cash price equal to the greater of Landlord's
Original Investment ($4,350,000) as increased under Section 5.7 below, if
applicable or the fair market value of the Premises on the date of Landlord's
notice of exercise; provided, however, in no event shall the cash price exceed
Landlord's Original Investment ($4,350,000) (as increased under Section 5.7
below, if applicable) increased by three percent (3%) per annum compounded
annually. Such fair market value shall be as agreed between Landlord and
Tenant. However, failing such agreement within ten (10) days of Landlord's
notice of exercise under this Section, such fair market value shall be
determined by the appraisal process set forth in Exhibit "D" attached hereto.
Within ninety (90) days of Landlord's exercise of its put under this Section
5.4, such purchase shall be consummated utilizing an escrow at a national title
company selected by Landlord. Such escrow shall be documented on such title
company's standard sale escrow instructions without representations or
warranties and without any due diligence or other contingencies in favor of the
buyer.
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Tenant shall pay all costs of such sale transaction. At the close of such sale,
Landlord shall deliver to Tenant title to the Premises subject only to those
title exceptions shown on Exhibit "E" attached hereto.
5.5 No Liens: Permitted Contests. Tenant shall not cause or permit
any liens, levies or attachments to be placed or assessed against the Premises
or the operation thereof for any reason. However, Tenant shall be permitted in
good faith and at its expense to contest the existence, amount or validity of
any lien upon the Premises by appropriate proceedings sufficient to prevent the
collection or other realization of the lien or claim so contested, as well as
the sale, forfeiture or loss of any of the Premises or any rent to satisfy the
same. Tenant shall provide Landlord with security satisfactory to Landlord in
Landlord's reasonable judgment to assure the foregoing. Each contest permitted
by this Section 5.5 shall be promptly and diligently prosecuted to a final
conclusion by Tenant.
5.6 ALTERATIONS BY TENANT. Tenant shall have the right of
altering, improving, replacing, modifying or expanding the facilities,
equipment or appliances in the Premises from time to time as it may determine
is desirable for the continuing and proper use and maintenance of the Premises
under this Lease; provided, however, that any alterations, improvements,
replacements, expansions or modifications in excess of Two Hundred Fifty
Thousand Dollars ($250,000) (exclusive of improvements funded by Landlord under
Section 5.7 below) in any rolling twelve (12) month period shall require the
prior written
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consent of the Landlord, which consent may not be unreasonably withheld. The
cost of all such alterations, improvements, replacements, modifications,
expansions or other purchases, whether undertaken as an on-going licensing,
Medicare or MediCal (or any successor program) or other regulatory requirement
or otherwise shall be borne solely and exclusively by Tenant (unless funded by
Landlord under Section 5.7) and shall immediately become a part of the Premises
and the property of the Landlord subject to the terms and conditions of this
Lease. All work done in connection therewith shall be done in a good and
workmanlike manner and in compliance with all existing codes and regulations
pertaining to the Premises and shall comply with the requirements of insurance
policies required under this Lease. In the event any items of the Premises have
become inadequate, obsolete or worn out or require replacement (by direction of
any regulatory body or otherwise), Tenant shall remove such items and exchange
or replace the same at Tenant's sole cost and the same shall become part of the
Premises and property of the Landlord except as the same is subject to
Landlord's option to purchase pursuant to Section 7.5 below. Notwithstanding
any of the other terms of this Section 5.6, all Landlord Personal Property
which is replaced by Tenant during the Term shall, at the end of the Term,
become the property of Landlord if either of the following conditions are
satisfied (i) if Tenant owns such property at the end of the Term, the property
shall automatically become the property of Landlord or (ii) if such property is
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leased by Tenant at the end of the Term, the property shall become the property
of Landlord and Landlord shall assume Tenant's obligations under such leases,
but only if (a) the lessor under such leases is directly and indirectly an
unrelated third party to Tenant and (b) the lease terms are customary to the
business practices of health care equipment leases as such practices exist at
the time of the execution of such leases and (c) within ninety days (90) prior
to the end of the Term, Tenant shall deliver to Landlord a report which in
reasonable detail describes the terms of such leases and identifies Landlord's
Personal Property.
5.7 CAPITAL IMPROVEMENTS FUNDED BY LANDLORD. In the event Tenant
desires to make a capital improvement or a related series of capital
improvements to the Premises which are completed in the first Lease Year,
Tenant may request that Landlord fund such improvements under this Section 5.7.
Tenant shall accompany such request with a description of such improvements in
reasonable detail, and Landlord shall have the right to inspect the
improvements completed by Tenant. Landlord shall not unreasonably withhold its
approval of the funding of such improvements. Landlord shall approve or
disapprove such funding within thirty (30) days of Tenant's written request
hereunder. Upon Landlord's approval of such request, Landlord shall promptly
reimburse Tenant for its customary and reasonable costs of completing such
capital improvements, provided that Landlord's reimbursement payments under
this Section 5.7 shall
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not exceed a total aggregate amount of One Million Dollars ($1,000,000). Each
and every capital improvement funded by Landlord under this Section 5.7 shall
immediately become a part of the Premises and shall belong to Landlord subject
to the terms and conditions of this Lease. Landlord and Tenant contemplate
there will be capital improvements exceeding a total aggregate amount of One
Million Dollars ($1,000,000) during the Term, and at Landlord's sole discretion
and subject to Landlord's Board of Directors approval, Landlord will consider
funding such improvements on terms then prevailing for like investments of
Landlord. If Landlord funds any capital improvements, Landlord's Original
Investment shall be increased for all purposes under this Lease by the amount
of the funds provided by Landlord for capital improvements.
5.8 COMPLIANCE WITH IRS GUIDELINES. Any improvement or
modification to the Premises shall satisfy the requirements set forth in
Sections 4(4).02 and .03 of Revenue Procedure 75-21, 1975-1 C.B. 715, as
modified by Revenue Procedure 79-48, 1979-2 C.B. 529. Landlord reserves the
right to refuse to consent to any improvement or modification to the Premises
if, in its judgment, such improvement or modification does not meet the
foregoing requirements.
5.9 OPTION TO REACQUIRE. In consideration of the execution by
Tenant of this Lease and for other good and valuable
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consideration, the receipt and sufficiency of which is hereby acknowledged,
Landlord hereby grants to Tenant an option to acquire that certain portion of
the Premises which is described on that certain ALTA Survey dated April 4,
1994, prepared by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a copy of which is attached hereto as
Exhibit "G" as "Vacant Land" and as "Oak Trees", but not including a ten foot
(10') strip of land along the North edge of the asphalt located on the "Oak
Trees" portion of the Premises of such Survey, upon the satisfaction of all of
the following terms and conditions:
5.9.1 There shall be no Event of Default hereunder on
the date on which Tenant exercises such option and on the date on
which such conveyance is to close;
5.9.2 Landlord shall have received satisfactory evidence
that the portion of the Premises not to be released will have the
benefit of such easements and rights of way in, over and through the
portion of the Premises to be released as are, in Landlord's
judgment, necessary or desirable to provide or assure access to and
from, utility service to, parking for and common wall maintenance and
support to the remaining portion of the Premises;
5.9.3 Landlord shall have received satisfactory evidence
that the remaining portion after such conveyance comprises a legal
lot in compliance with all subdivision and zoning laws and for tax
assessment purposes;
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5.9.4 Landlord shall deliver title to the portion of the
Premises to be released subject to those title exceptions shown in
Exhibit "E";
5.9.5 Tenant shall pay all costs associated with the
transfer of Landlord's interest in the portion of the Premises to be
released, including, without limitation, Landlord's attorneys' fees.
5.9.6 The transfer documents for the portion of the
Premises to be released shall contain a use restriction satisfactory
to Landlord that so long as Landlord is the fee owner of any portion
of the Premises remaining subject to this Lease, the released portion
of the Premises shall be used solely for health care purposes, but
excluding acute care and nursing home purposes; provided, however,
that if Tenant desires to swap the released portion of the Premises
with that certain property adjacent to the Premises and which is
described on the above mentioned ALTA survey as "Existing Church (the
"CHURCH PROPERTY"), then the released portion of the Premises may be
used as a church;
5.9.7 The released portion shall be encumbered with a
covenant running with the land in favor of such portion of the
Premises remaining subject to this Lease that so long as Landlord is
the fee owner of any portion of the Premises remaining subject to
this Lease, the released portion of the Premises shall be used only
for health care
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purposes, but excluding acute care and nursing home purposes;
provided, however, that if the Church Property is swapped as
described in Section 5.9.6, then the released portion of the Premises
shall be burdened with a covenant running with the land in favor of
the portion of the Premises remaining subject to this Lease that such
released portion shall be used only for church purposes so long as
Landlord is the fee owner of any portion of the Premises remaining
subject to this Lease, and the Church Property shall be burdened with
a covenant running with the land in favor of the portion of the
Premises remaining subject to this Lease that the Church Property
shall be used only for health care purposes, but excluding acute care
and nursing home purposes, so long as Landlord is the fee owner of
any portion of the Premises remaining subject to this Lease.
5.9.8 If a portion of the Premises is released pursuant
to this Section 5.9, the Premises thereafter will consist of the
portion of the Premises remaining subject to this Lease, but there
will be no pro-rata reductions under this Lease for any purpose,
including, without limitation, Landlord's Original Investment or
determining rent for renewal terms.
6. CONDITION AND TITLE OF PREMISES. Tenant acknowledges that it is
presently engaged in the operation of hospital facilities in the State of
California and has expertise in the hospital industry for facilities similar to
the Premises. Tenant
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has thoroughly investigated the Premises, has selected the Premises to its own
specifications, and has concluded that no improvements or modifications to the
Premises are required in order to complete the Premises for its intended use.
Tenant accepts said Premises for use as a hospital under this Lease on an "AS
IS" basis and will assume all responsibility and cost for the correction of any
observed or unobserved deficiencies or violations. In making its decision to
enter into this Lease, Tenant has not relied on any representations or
warranties, express or implied, of any kind from Landlord. Tenant has examined
the condition of title to the Premises prior to the execution and delivery of
this Lease and has found the same to be satisfactory.
7. LANDLORD AND TENANT PERSONAL PROPERTY.
7.1 TENANT PERSONAL PROPERTY. Tenant shall install, affix or
assemble or place on the Premises all items of furniture, fixtures, equipment
and supplies not included as Landlord Personal Property as Tenant reasonably
considers to be appropriate for Tenant's use of the Premises as contemplated by
this Lease (the "TENANT PERSONAL PROPERTY"). Tenant shall provide and maintain
during the entire Term all Tenant Personal Property as shall be necessary in
order to operate the Premises in compliance with all requirements set forth in
this Lease. All Tenant Personal Property shall be and shall remain the property
of Tenant and may be removed by Tenant upon the expiration of the Term. However
if there is any Event of Default, Tenant will not
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remove the Tenant Personal Property from the Premises and will on demand from
Landlord, convey the Tenant Personal Property to Landlord by executing a ▇▇▇▇
of sale in a form reasonably required by Landlord. In any event, Tenant will
repair all damage to the Premises caused by any removal of the Tenant Personal
Property.
7.2 LANDLORD'S SECURITY INTEREST.
7.2.1 The parties intend that if Tenant defaults under
this Lease, Landlord will control the Tenant Personal Property and
the Intangible Property so that Landlord or its designee can operate
or re-let the Premises intact for use as a hospital.
7.2.2 Therefore, to implement the intention of the
parties, and for the purpose of securing the payment and performance
of Tenant's obligations under this Lease, Tenant, as debtor, hereby
grants to Landlord, as secured party, a security interest in and an
express contractual lien upon, all of Tenant's right, title and
interest in and to the Tenant Personal Property and in and to the
Intangible Property and any and all products and proceeds thereof, in
which Tenant now owns or hereafter acquires an interest or right,
including any leased Tenant Personal Property. This Lease constitutes
a security agreement covering all such Tenant Personal Property and
the Intangible Property. The security interest granted to Landlord in
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this Section 7.2.2. is intended by Landlord and Tenant to be
subordinate to any security interest granted in connection with the
financing or leasing of all or any portion of the Tenant Personal
Property so long as the lessor or financier of such Tenant Personal
Property agrees to give Landlord written notice of any default by
Tenant under the terms of such lease or financing arrangement, to
give Landlord a reasonable time following such notice to cure any
such default and to consent to Landlord's written assumption of such
lease or financing arrangement upon Landlord's curing of any defaults
thereunder. This security agreement and the security interest created
herein shall survive the termination of this Lease if such
termination results from the occurrence of an Event of Default.
7.3 FINANCING STATEMENTS. If required by Landlord at any time
during the Term, Tenant will execute and deliver to Landlord, in form
reasonably satisfactory to Landlord, additional security agreements, financing
statements, fixture filings and such other documents as Landlord may reasonably
require to perfect or continue the perfection of Landlord's security interest
in the Tenant Personal Property and the Intangible Property and any and all
products and proceeds thereof now owned or hereafter acquired by Tenant. Tenant
shall pay all fees and costs that Landlord may incur in filing such documents
in public offices and in obtaining such record searches as Landlord may
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reasonably require. In the event Tenant fails to execute any financing
statements or other documents for the perfection or continuation of Landlord's
security interest, Tenant hereby appoints Landlord as its true and lawful
attorney-in-fact to execute any such documents on its behalf, which power of
attorney shall be irrevocable and is deemed to be coupled with an interest.
7.4 INTANGIBLE PROPERTY. The term "INTANGIBLE PROPERTY" means all
rents, profits, income or revenue derived from the use of rooms or other space
within the Premises or the providing of services in or from the Premises;
documents, chattel paper, instruments, contract rights, deposit accounts,
general intangibles, choses in action, now owned or hereafter acquired by
Tenant (including any right to any refund of any taxes or other charges
heretofore or hereafter paid to any governmental authority) arising from or in
connection with Tenant's operation or use of the Premises; all licenses and
permits now owned or hereinafter acquired by Tenant, necessary or desirable for
Tenant's use of the Premises under this Lease, including without limitation, if
applicable, any certificate of need or other similar certificate; the right to
use any trade or other name associated with the operation of the Premises by
Tenant, including without limitation the name "Ojai Valley Community Hospital";
but shall not include any accounts receivable now owned or hereafter acquired
by Tenant.
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7.5 OPTION TO PURCHASE. At the end of the Term Landlord has the
option to purchase all Tenant Personal Property and to assume all leases for
Tenant Personal Property.
8. REPRESENTATIONS AND WARRANTIES. Landlord and Tenant do hereby each
for itself represent and warrant to each other as follows:
8.1 DUE AUTHORIZATION AND EXECUTION. This Lease and all
agreements, instruments and documents executed or to be executed in connection
herewith by either Landlord or Tenant were duly authorized and shall be binding
upon the party that executed and delivered the same.
8.2 DUE ORGANIZATION. Landlord and Tenant are duly organized,
validly existing and in good standing under the laws of the State of their
respective formations and are duly authorized and qualified to do all things
required of them under this Lease within the State of California.
8.3 NO BREACH OF OTHER AGREEMENTS. Neither this Lease nor any
agreement, document or instrument executed or to be executed in connection
herewith, violates the terms of any other agreement to which either Landlord or
Tenant is a party.
9. FINANCIAL, MANAGEMENT AND REGULATORY REPORTS.
9.1 Monthly Facility Reports. Within thirty (30) days after the
end of each calendar month during the Term, Tenant shall prepare and deliver
monthly financial reports, in the form Tenant generates internally, to Landlord
consisting of a balance
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sheet, income statement, total patient days, occupancy and payor mix concerning
the business conducted at the Premises.
9.2 QUARTERLY FINANCIAL STATEMENTS. Within forty-five (45) days of
the end of each of the first three quarters of the fiscal years of Guarantor,
Tenant shall deliver the unaudited quarterly consolidated financial statements
of Guarantor to Landlord.
9.3 ANNUAL FINANCIAL STATEMENT. Within ninety (90) days of the
fiscal year end of both Tenant and Guarantor, Tenant shall deliver to Landlord
any internally prepared annual financial statements of Tenant and an unaudited
draft of the annual consolidated financial statements of Guarantor. Within one
hundred twenty (120) days of the fiscal year end of Guarantor, Tenant shall
deliver to Landlord the annual consolidated financial statements of Guarantor
audited by a reputable certified public accounting firm. Notwithstanding any of
the other terms of this Section 9.3, if Tenant or Guarantor become subject to
any reporting requirements of the Securities and Exchange Commission (the
"SEC") during the Term, Tenant shall concurrently deliver to Landlord such
reports as are delivered to the SEC pursuant to applicable security laws.
9.4 ACCOUNTING PRINCIPLES. All of the reports and statements
required hereby shall be prepared in accordance with GAAP and Tenant's
accounting principles consistently applied.
9.5 REGULATORY REPORTS. In addition, Tenant shall promptly, but in
any event no later than ten (10) calendar days
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of receipt thereof deliver to Landlord all federal, state and local licensing
and reimbursement certification surveys, inspection and other reports received
by Tenant as to the Premises and the operation of business thereon, including,
without limitation, state department of health licensing surveys, Medicare and
MediCal (and successor programs) certification surveys and life safety code
reports. Within five (5) calendar days of receipt thereof, Tenant shall give
Landlord written notice of any violation of any federal, state or local
licensing or reimbursement certification statute or regulation including
without limitation Medicare or MediCal (or successor programs), any suspension,
termination or restriction placed upon Tenant or the Premises, the operation of
business thereon or the ability to admit patients, or any violation of any
other permit, approval or certification in connection with the Premises or its
business, by any federal, state or local authority including without limitation
Medicare or MediCal (or successor programs).
10. EVENTS OF DEFAULT AND LANDLORD'S REMEDIES.
10.1 EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an event of default on the part of Tenant hereunder ("EVENT OF
DEFAULT"):
10.1.1 The failure to pay within the applicable grace
period any Minimum Rent, Additional Rent, taxes or assessments,
utilities, premiums for insurance or other charges or payments
required of Tenant under this Lease. As used herein, the "applicable
grace period" shall be ten (10)
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calendar days from the date on which the applicable payment is due,
provided, however, following two (2) consecutive failures to pay as
described in this Section 10.1.1, or following any three (3) such
failures to pay in any rolling twelve (12) month period, the
applicable grace period shall be five (5) calendar days from the date
on which the applicable payment is due;
10.1.2 A material breach by Tenant of any of the
representations, warranties or covenants in favor of Landlord as set
forth in the Purchase and Sale Agreement of even date herewith;
10.1.3 A material default by Tenant or any Guarantor (or
any Affiliate of either) ("AFFILIATE" being defined to mean, with
respect to any person or entity, any other person or entity which
controls, is controlled by or is under common control with the first
person or entity) under any obligation other than this Lease owed by
Tenant or any Guarantor (or any Affiliate of either) to Landlord or
any Affiliate of Landlord (including without limitation any financing
agreement or any other lease), which default is not cured within any
applicable cure period provided in the documentation for such
obligation;
10.1.4 A default by Tenant or any Guarantor with respect
to any obligation with a principal amount of at least One Million
Dollars ($1,000,000) under any other lease or financing agreement
with any other party, which default
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is not cured within any applicable cure period provided in the
documentation for such obligation;
10.1.5 Any material misstatement or omission of fact in
any written report, notice or communication from Tenant or any
Guarantor to Landlord with respect to Tenant, any Guarantor or the
Premises;
10.1.6 An assignment by Tenant or any Guarantor of all or
substantially all of its property for the benefit of creditors;
10.1.7 The appointment of a receiver, trustee, or
liquidator for Tenant or any Guarantor, or any of the property of
Tenant or any Guarantor, if within three (3) business days of such
appointment Tenant does not inform Landlord in writing that Tenant or
Guarantor intends to cause such appointment to be discharged or
Tenant or Guarantor does not thereafter diligently prosecute such
discharge to completion within thirty (30) days after the date of
such appointment;
10.1.8 The filing by Tenant or any Guarantor of a
voluntary petition under any federal bankruptcy law or under the law
of any state to be adjudicated as bankrupt or for any arrangement or
other debtor's relief, or in the alternative, if any such petition is
involuntarily filed against Tenant or any Guarantor by any other
party and Tenant does not within three (3) business days of any such
filing inform Landlord in writing of the intent by Tenant or
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Guarantor to cause such petition to be dismissed, if Tenant or
Guarantor does not thereafter diligently prosecute such dismissal, or
if such filing is not dismissed within ninety (90) days after filing
thereof; and
10.1.9 The failure to perform or comply with any other
material Lease term or provision not requiring the payment of money,
including, without limitation, the failure to comply with the
provisions hereof pertaining to the use, operation and maintenance of
the Premises; provided, however, the default described in this
Section 10.1.9 is curable and shall be deemed cured, if: (i) within
three (3) business days of Tenant's receipt of a notice of default
from Landlord, Tenant gives Landlord notice of its intent to cure
such default; and (ii) Tenant cures such default within thirty (30)
days after such notice from Landlord, unless such default cannot with
due diligence be cured within a period of thirty (30) days because of
the nature of the default or delays beyond the control of Tenant, and
cure after such thirty (30) day period will not have a material and
adverse effect upon the Premises, in which case such default shall
not constitute an Event of Default if Tenant uses its best efforts to
cure such default by promptly commencing and diligently pursuing such
cure to the completion thereof, provided, however, no such default
shall continue for more than one hundred twenty (120) days from
Tenant's receipt of a notice of default from Landlord.
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10.2 REMEDIES. Upon the occurrence of an Event of Default, Landlord
may exercise all rights and remedies under this Lease and the laws of the State
of California available to a lessor of real and personal property in the event
of a default by its lessee (including Section 1951.2 of the California Civil
Code), and as to the Tenant Personal Property all remedies granted under the
laws of such State to a secured party under its Uniform Commercial Code.
Without limiting the foregoing, Landlord shall have the right to do any of the
following:
10.2.1 ▇▇▇ for the specific performance of any covenant
of Tenant under this Lease as to which Tenant is in breach;
10.2.2 Upon compliance with the requirements of
applicable law, Landlord may do any of the following: enter upon the
Premises, terminate this Lease, dispossess Tenant from the Premises
and/or collect money damages by reason of Tenant's breach, including
without limitation all rent which would have accrued after such
termination and all obligations and liabilities of Tenant under this
Lease which survive the termination of the Term;
10.2.3 Elect to leave this Lease in place and ▇▇▇ for
rent and/or other money damages as the same come due;
10.2.4 Before or after repossession of the Premises
pursuant to Section 10.2.2, and whether or not this Lease has been
terminated, Landlord shall have the right (but shall be under no
obligation) to relet any portion of
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the Premises to such tenant or tenants, for such term or terms (which
may be greater or less than the remaining balance of the Term), for
such rent, or such conditions (which may include concessions or free
rent) and for such uses, as Landlord, in its absolute discretion, may
determine, and Landlord may collect and receive any rents payable by
reason of such reletting. Landlord shall have no duty to mitigate
damages unless required by applicable law and shall not be
responsible or liable for any failure to relet any of the Premises or
for any failure to collect any rent due upon any such reletting.
Tenant agrees to pay Landlord, immediately upon demand, all expenses
incurred by Landlord in obtaining possession and in reletting any of
the Premises, including fees, commissions and costs of attorneys,
architects, agents and brokers;
10.2.5 Without limiting the generality of the foregoing,
it is specifically intended that Landlord shall be entitled as part
of its award to the measure of damages set forth in Section 1951.2(a)
(3) of the California Civil Code, and in that regard the damages
which Landlord may recover shall include the worth at the time of the
award of the amount of unpaid rent for the balance of the then
current Term after the time of award exceeds the amount of such
rental loss for the same period that Tenant proves could be
reasonably avoided;
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10.2.6 Sell the Tenant Personal Property in a
non-judicial foreclosure sale.
10.2.7 For the purpose of calculating Landlord's damages
in the event of Tenant's breach, Additional Rent shall be utilized at
the higher of the amount actually due or projected on the basis of
historical performance, but in no event shall such amount exceed the
limitations on rent increases set forth in Section 2.6 above.
10.3 RECEIVERSHIP. Tenant acknowledges that one of the rights and
remedies which may be available to Landlord under applicable law is to apply to
a court of competent jurisdiction for the appointment of a receiver to collect
the rents, issues, profits and income of the Premises and to manage the
operation of the Premises. Tenant further acknowledges that the revocation,
suspension or material limitation of the certification of the Premises for
provider status under Medicare or MediCal (or successor programs) and/or the
revocation, suspension or material limitation of the license of the Premises as
a 116 bed hospital under the laws of the State of California will materially
and irreparably impair the value of Landlord's investment in the Premises.
Therefore, in any of such events, and in addition to any other right or remedy
of Landlord under this Lease, Landlord may petition any appropriate court for
the appointment of a receiver to manage the operation of the Premises, to
collect and disburse all rents, issues, profits and income generated thereby
and to preserve or replace to the extent possible the nursing
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home license and provider certification of the Premises or to otherwise
substitute the licensee or provider thereof. Tenant hereby irrevocably
stipulates to the appointment of a receiver under such circumstances and for
such purposes and agrees not to contest such appointment.
10.4 LATE CHARGES. Tenant acknowledges that the late payment of any
Minimum Rent or Additional Rent will cause Landlord to lose the use of such
money and incur costs and expenses not contemplated under this Lease,
including, without limitation, administrative and collection costs and
processing and accounting expenses, the exact amount of which is extremely
difficult to ascertain. Therefore, if any installment of Minimum Rent or
Additional Rent is not paid within five (5) calendar days after the due date
for such rent payment, then Tenant shall thereafter pay to Landlord on demand a
late charge equal to ten percent (10%) of the amount of any installment of
Minimum Rent or Additional Rent not paid on the due date. Landlord and Tenant
agree that this late charge represents a reasonable estimate of such costs and
expenses and is fair compensation to Landlord for the loss suffered from such
nonpayment by Tenant.
10.5 REMEDIES CUMULATIVE; NO WAIVER. No right or remedy herein
conferred upon or reserved to Landlord is intended to be exclusive of any other
right or remedy, and each and every right and remedy shall be cumulative and in
addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No failure of Landlord to insist at any time
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upon the strict performance of any provision of this Lease or to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof as to any similar or different
breach (future or otherwise) by Tenant. A receipt by Landlord of any rent or
other sum due hereunder (including any late charge) with knowledge of the
breach of any provision contained in this Lease shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in a writing signed by Landlord.
10.6 PERFORMANCE OF TENANT'S OBLIGATIONS BY LANDLORD. If Tenant at
any time shall fail to make any payment or perform any act on its part required
to be made or performed under this Lease, then Landlord may, without waiving or
releasing Tenant from any obligations or default of Tenant hereunder, make any
such payment or perform any such act for the account and at the expense of
Tenant, and may enter upon the Premises for the purpose of taking all such
action thereon as may be reasonably necessary therefor. No such entry shall be
deemed an eviction of Tenant. All sums so paid by Landlord and all necessary
and incidental costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred in connection with the performance of
any such act by Landlord, together with interest at the rate of the Prime Rate
as reported daily by the Wall Street Journal plus 5% (or if said interest rate
is violative of any applicable statute or law, then the maximum
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interest rate allowable) from the date of the making of such payment or the
incurring of such costs and expenses by Landlord, shall be payable by Tenant to
Landlord on demand.
11. SECURITY DEPOSIT. Tenant has deposited with the Landlord the sum of
Two Hundred Three Thousand Six Hundred Twenty-four Dollars ($203,624)
representing a security deposit against the faithful performance of the terms
and conditions contained in this Lease. Landlord shall not be deemed a trustee
as to such deposit and shall have the right to commingle said security deposit
with its own or other funds. Interest thereon at the then current rate of
interest of a three month U.S. Treasury ▇▇▇▇ shall be paid by Landlord to the
Tenant on a quarterly basis in arrears. Tenant shall have the right to
substitute a letter of credit for such deposit on terms and issued by a
financial institution acceptable to Landlord.
12. DAMAGE BY FIRE OR OTHER CASUALTY.
12.1 RECONSTRUCTION USING INSURANCE. In the event of the damage or
destruction of the Premises, Tenant shall forthwith notify Landlord and
diligently repair or reconstruct the same as nearly as possible to its value,
condition and character immediately prior to such damage or destruction. Any
net insurance proceeds payable with respect to the casualty shall be used for
the repair or reconstruction of the Premises pursuant to reasonable
disbursement controls in favor of Landlord. If such proceeds are insufficient
for such purposes, Tenant shall provide the required additional funds. In the
event any such damage or
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destruction occurs during the last six (6) months of the Term, to the extent of
fifty percent (50%) or more of the replacement value of the Premises, Tenant
may, at Tenant's option, to be evidenced by notice in writing given to Landlord
within thirty (30) days after the occurrence of such damage or destruction,
elect to pay to Landlord any available insurance proceeds, including, without
limitation, business interruption insurance proceeds described in Section 4.7,
in which event this Lease shall terminate.
12.2 SURPLUS PROCEEDS. If there remains any surplus of insurance
proceeds after the completion of the repair or reconstruction of the Premises,
such surplus shall belong to and be paid to Tenant.
12.3 No Rent Abatement. Except as provided in Section 12.1 with
respect to the last six (6) months of the Term if Tenant exercises the option
provided therein, the rent payable under this Lease shall not ▇▇▇▇▇ by reason
of any damage or destruction of the Premises by reason of an insured or
uninsured casualty. Tenant hereby waives all rights under applicable law to
▇▇▇▇▇, reduce or offset rent by reason of such damage or destruction.
13. CONDEMNATION.
13.1 COMPLETE TAKING. If during the Term all or substantially all
of the Premises is taken or condemned by any competent public or quasi-public
authority, then Tenant may, at Tenant's election, made within thirty (30) days
of such taking by
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condemnation, terminate this Lease, and current Minimum Rent and Additional
Rent shall be prorated as of the date of such termination. The award payable
upon such taking shall be allocated between Landlord and Tenant as so allocated
by the taking authority. In the absence of such allocation by the taking
authority, the award shall be allocated as agreed by Landlord and Tenant.
Failing such agreement within thirty (30) days after the effective date of such
taking, the award shall be allocated between Landlord and Tenant pursuant to
the appraisal procedure described on Exhibit "D" attached hereto.
13.2 PARTIAL TAKING. In the event such condemnation proceeding or
right of eminent domain results in a taking of less than all or substantially
all of the Premises, the Minimum Rent and Additional Rental thereto shall be
abated to the same extent as the diminution in the fair market value of the
Premises by reason of the condemnation. Such fair market value shall be as
agreed between Landlord and Tenant, but failing such agreement within thirty
(30) days of the effective date of the condemnation such fair market value will
be determined by appraisal pursuant to Exhibit "D" attached hereto. Landlord
shall be entitled to receive and retain any and all awards for the partial
taking and damage and Tenant shall not be entitled to receive or retain any
such award for any reason. Landlord's Original Investment will be reduced for
all purposes under this Lease by reason of any award paid to Landlord under
this Section 13.2.
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13.3 CAP ON AWARDS. Notwithstanding any of the other terms of
Sections 13.1 and 13.2, in no event shall any awards allocated to Landlord for
the complete taking or partial taking of the Premises, as described in Sections
13.1 and 13.2, exceed Landlord's Original Investment ($4,350,000) (as increased
pursuant to Section 5.7, if applicable) increased by three percent (3%) per
annum compounded annually.
13.4 LEASE REMAINS IN EFFECT. Except as provided above, this Lease
shall not terminate and shall remain in full force and effect in the event of a
taking or condemnation of the Premises, or any portion thereof and Tenant
hereby waives all rights under applicable law to ▇▇▇▇▇, reduce or offset rent
by reason of such taking.
14. PROVISIONS ON TERMINATION OF TERM.
14.1 SURRENDER OF POSSESSION. Tenant shall, on or before the last
day of the Term, or upon earlier termination of this Lease, surrender to
Landlord the Premises (including all patient charts and records along with
appropriate patient consents,) in good condition and repair, ordinary wear and
tear excepted.
14.2 REMOVAL OF PERSONAL PROPERTY. If Tenant is not then in default
hereunder Tenant shall have the right in connection with the surrender of the
Premises to remove from the Premises all Tenant Personal Property (unless
Landlord exercises the option pursuant to Section 7.5) but not the Landlord
Personal Property (including the Landlord Personal Property replaced by
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Tenant or required by the State of California or any other governmental entity
to operate the Premises for the purpose set forth in Section 5.3 above). Any
such removal shall be done in a workmanlike manner leaving the Premises in good
and presentable condition and appearance, including repair of any damage caused
by such removal. At the end of the Term, Tenant shall return the Premises to
Landlord with the Landlord Personal Property (or replacements thereof) in the
same condition and utility as was delivered to Tenant at the commencement of
the Term, normal wear and tear excepted.
14.3 TITLE TO PERSONAL PROPERTY NOT REMOVED. Title to any of Tenant
Personal Property which is not removed by Tenant upon the expiration of the
Term shall, at Landlord's election, vest in Landlord; provided, however, that
Landlord may remove and dispose at Tenant's expense of any or all of such
Tenant Personal Property which is not so removed by Tenant without obligation
or accounting to the Tenant.
14.4 MANAGEMENT OF PREMISES. Upon the expiration or earlier
termination of the Term, Landlord or its designee, upon written notice to
Tenant, may elect to assume the responsibilities and obligations for the
management and operation of the Premises and Tenant agrees to cooperate fully
with Landlord or its designee to accomplish the transfer of such management and
operation without interrupting the operation of the Premises. Tenant shall not
commit an act or be remiss in the undertaking of any act that would jeopardize
the licensure or
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certification of the facility, and Tenant shall comply with all requests for an
orderly transfer of the hospital license, Medicare and Medical (or any
successor program) certifications and possession at the time of any such
surrender. Upon the expiration or earlier termination of the Term, Tenant
shall promptly deliver copies of all of Tenant's books and records relating to
the Premises and its operations to Landlord.
14.5 CORRECTION OF DEFICIENCIES. Upon termination or cancellation
of this Lease, Tenant shall indemnify Landlord for any loss, damage, cost or
expense incurred by Landlord to correct all deficiencies of a physical nature
identified by the California Department of Health Services in the course of the
change of ownership inspection and audit.
15. NOTICES AND DEMANDS. All notices and demands, certificates, requests,
consents, approvals, and other similar instruments under this Lease shall be in
writing and shall be deemed to have been properly given upon actual receipt
thereof or within two (2) business days of being placed in the United States
certified or registered mail, return receipt requested, postage prepaid (a) if
to Tenant, addressed to Brim, Inc., ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇ or at such other address as Tenant from time to
time may have designated by written notice to Landlord, (b) if to Landlord,
addressed to Nationwide Health Properties, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ with a copy to O'Melveny & ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
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▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: Real Estate Department Chairman, or at
such address as Landlord may from time to time have designated by written
notice to Tenant. Refusal to accept delivery shall be deemed delivery. If
Tenant is not an individual, notice may be made to any officer, general partner
or principal thereof. Notice to any one co-Tenant shall be deemed notice to all
co-Tenants.
16. RIGHT OF ENTRY; EXAMINATION OF RECORDS. Landlord and its
representative may enter the Premises at any reasonable time after notice to
Tenant for the purpose of inspecting the Premises for any reason including,
without limitation, Tenant's default under this Lease, or to exhibit the
Premises for sale, lease or mortgage financing, or posting notices of default,
or non-responsibility under any mechanic's or materialman's lien law or to
otherwise inspect the Premises for compliance with the terms of this Lease. Any
such entry shall not unreasonably interfere with patients, patient care, or any
other of Tenant's operations. During normal business hours, Tenant will permit
Landlord and Landlord's representatives, inspectors and consultants to examine
all contracts, books and records relating to Tenant's operations at the
Premises, whether kept at the Premises or at some other location, including,
without limitation, Tenant's financial records.
17. LANDLORD MAY GRANT LIENS. Without the consent of Tenant, Landlord
may, subject to the terms and conditions set forth below in this Section 17,
from time to time, directly or
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indirectly, create or otherwise cause to exist any lien, encumbrance or title
retention agreement ("ENCUMBRANCE") upon the Premises, or any portion thereof
or interest therein (including this Lease), whether to secure any borrowing or
other means of financing or refinancing or otherwise. Any such Encumbrance
shall provide that it is subject to the rights of Tenant under this Lease, and
shall further provide that so long as no Event of Default shall have occurred
this Lease and Tenant's occupancy hereunder, including without limitation
Tenant's right of quiet enjoyment provided in Section 18 and Tenant's right to
purchase the Premises pursuant to the Addendum attached hereto, shall not be
disturbed in the event any such lienholder or any other person takes possession
of the Premises through foreclosure proceeding or otherwise. Upon the request
of Landlord, Tenant shall subordinate this Lease to the lien of a new
Encumbrance on the Premises, on the condition that the proposed lender agrees
not to disturb Tenant's rights under this Lease so long as Tenant is not in
default hereunder.
18. QUIET ENJOYMENT. So long as there is no Event of Default by Tenant,
Landlord covenants and agrees that Tenant shall peaceably and quietly have,
hold and enjoy the Premises for the Term, free of any claim or other action not
caused or created by Tenant (excepting, however, intrusion of Tenant's quiet
enjoyment occasioned by condemnation or destruction of the property as referred
to in Section 12 and 13 hereof).
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19. APPLICABLE LAW. This Lease shall be governed by and construed in
accordance with the internal laws of the State of California without regard to
the conflict of laws rules of such State.
20. PRESERVATION OF GROSS REVENUES.
20.1 Tenant acknowledges that a fair return to Landlord on its
investment in the Premises is dependent, in part, on the concentration on the
Premises during the Term of the hospital business of Tenant and its Affiliates
in the geographical area of the Premises. Tenant further acknowledges that the
diversion of patient care activities from the Premises to other facilities
owned or operated by Tenant or its Affiliates at or near the end of the Term
will have a material adverse impact on the value and utility of the Premises.
20.1.1 Therefore, Tenant agrees that during the Term, and
for a period of one (1) year thereafter, neither Tenant nor any of
its Affiliates shall, without the prior written consent of Landlord,
operate, own, participate in or otherwise receive revenues from any
other licensed acute care hospital or skilled or intermediate nursing
home providing services or similar goods to those provided on or in
connection with the Premises and the permitted use thereof as
contemplated under this Lease, within a ten (10) mile radius of the
Premises.
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20.1.2 In addition, Tenant hereby covenants and agrees
that for a period of one year following the expiration or earlier
termination of this Lease, neither Tenant or its Affiliates shall,
without prior written consent of Landlord, hire, engage or otherwise
employ any management or supervisory personnel working on or in
connection with the Premises, unless such personnel approach Tenant
directly and request continued employment by Tenant.
20.2 Except as required by law or for medically appropriate
reasons, prior to and after Lease termination, Tenant will not recommend or
solicit the removal or transfer of any patient from the Premises to any other
nursing or health care facility.
20.3 The provisions of this Section 20 shall not apply to the
Acacias Care Center located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ or to any
of the following facilities which Tenants builds: assisted living facility,
independent living facility or dedicated Alzheimer's facility.
21. HAZARDOUS MATERIALS.
21.1 HAZARDOUS MATERIAL COVENANTS. Tenant's use of the Premises
shall comply with all Hazardous Materials Laws. In the event any Environmental
Activities occur or are suspected to have occurred in violation of any
Hazardous Materials Laws or if Tenant has received any Hazardous Materials
Claim against the Premises, Tenant shall promptly obtain all permits and
approvals
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necessary to remedy any such actual or suspected problem through the removal of
Hazardous Materials or otherwise, and upon Landlord's approval of the
remediation plan, remedy any such problem to the satisfaction of Landlord, in
accordance with all Hazardous Materials Laws and good business practices.
21.2 TENANT NOTICES TO LANDLORD. Tenant shall immediately advise
Landlord in writing of:
21.2.1 any Environmental Activities in violation of any
Hazardous Materials Laws,
21.2.2 any Hazardous Materials Claims against Tenant or
the Premises,
21.2.3 any remedial action taken by Tenant in response to
any Hazardous Materials Claims or any Hazardous Materials on, under
or about the Premises in violation of any Hazardous Materials Laws,
21.2.4 Tenant's discovery of any occurrence or condition
on or in the vicinity of the Premises that materially increase the
risk that the Premises will be exposed to Hazardous Materials,
21.2.5 all communications after the date hereof to or
from Tenant, any governmental authority or any other person relating
to Hazardous Materials Laws or Hazardous Materials Claims with
respect to the Premises, including copies thereof.
21.3 EXTENSION OF TERM. Notwithstanding any other provision of this
Lease, in the event any Hazardous Materials are
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discovered on, under or about the Premises in violation of any Hazardous
Materials Law, the Term shall be automatically extended and this Lease shall
remain in full force and effect until the earlier to occur of the completion of
all remedial action or monitoring, as approved by Landlord, in accordance with
all Hazardous Materials Laws, or the date specified in a written notice from
Landlord to Tenant terminating this Lease (which date may be subsequent to the
date upon which the Term was to have expired).
21.4 PARTICIPATION IN HAZARDOUS MATERIALS CLAIMS. Landlord shall
have the right, at Tenant's sole cost and expense and with counsel chosen by
Landlord, to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Hazardous Materials
Claims.
21.5 ENVIRONMENTAL ACTIVITIES shall mean the use, generation,
transportation, handling, discharge, production, treatment, storage, release or
disposal of any Hazardous Materials at any time to or from the Premises or
located on or present on or under the Premises.
21.6 HAZARDOUS MATERIALS shall mean (i) any petroleum products
and/or by-products (including any fraction thereof), flammable substances,
explosives, radioactive materials, hazardous or toxic wastes, substances or
materials known carcinogens or any other materials, contaminants or pollutants
which pose a hazard to the Premises or to persons on or about the Premises or
cause the Premises to be in violation of any
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Hazardous Materials Laws; (ii) asbestos in any form which is friable; (iii)
urea formaldehyde in foam insulation or any other form; (iv) transformers or
other equipment which contain dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty (50) parts per million or any
other more restrictive standard then prevailing; (v) medical wastes and
biohazards; (vi) radon gas; and (vii) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority or may or could pose a hazard to the health and safety
of the occupants of the Premises or the owners and/or occupants of property
adjacent to or surrounding the Premises.
21.7 HAZARDOUS MATERIALS CLAIMS shall mean any and all enforcement,
clean-up, removal or other governmental or regulatory actions or orders
threatened, instituted or completed pursuant to any Hazardous Material Laws,
together with all claims made or threatened by any third party against the
Premises, Landlord or Tenant relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Materials.
21.8 HAZARDOUS MATERIALS LAWS shall mean any laws, ordinances,
regulations, rules, orders, guidelines or policies relating to the environment,
health and safety, Environmental Activities, Hazardous Materials, air and water
quality, waste disposal and other environmental matters.
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21.9 REMEDIATION OF EXISTING ENVIRONMENTAL CONDITION. Tenant
covenants and agrees to take all action required to complete or cause to be
completed the remediation of the environmental condition of the Premises and
property adjacent to the Premises as described in that certain Report of Site
Assessment dated June 16, 1993 prepared by Construction Testing & Engineering,
Inc., as such assessment has been supplemented by further investigation and
remediation activities. All remedial work shall be performed as required by the
Environmental Health Division of the County of Ventura Resource Management
Agency and such other local, State or Federal agencies that have or may obtain
jurisdiction with respect to the Premises, and Tenant shall diligently perform
such remediation until it obtains a written notice from the County, or other
agencies, if applicable, indicating that the remediation is closed and that no
further action need be taken with respect to the environmental condition.
Tenant shall deliver to Landlord copies of all test results, reports and
communications obtained or prepared with respect to such activities.
22. ASSIGNMENT AND SUBLETTING. Tenant shall not, without the prior
written consent of Landlord, which may be withheld at Landlord's sole
discretion, voluntarily or involuntarily assign or hypothecate this Lease or
any interest herein or sublet greater than ten percent (10%) of the gross
building area of the Premises or any part thereof. For the purposes of this
Lease, a management or similar agreement shall be considered to be an
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assignment of this Lease by Tenant (except if such agreement is with an
Affiliate of Tenant). Any of the foregoing acts without such consent shall be
void but shall, at the option of Landlord in its sole discretion, constitute an
Event of Default giving rise to Landlord's right, among other things, to
terminate this Lease. Without limiting the foregoing, this Lease shall not, nor
shall any interest of Tenant herein, be assigned or encumbered by operation of
law without the prior written consent of Landlord which may be withheld at
Landlord's sole discretion. Notwithstanding the foregoing, Tenant may without
Landlord's consent assign this Lease or sublet the Premises or any portion
thereof to a wholly-owned subsidiary of Tenant or Guarantor, provided that such
subsidiary fully assumes the obligations of Tenant under this Lease, Tenant
remains fully liable under this Lease, any Guarantor remains fully liable with
respect to its guaranty of this Lease, the use of the Premises remains
unchanged, and no such assignment or sublease shall be valid and no such
subsidiary shall take possession of the Premises until an executed counterpart
of such assignment or sublease has been delivered to Landlord. Anything
contained in this Lease to the contrary notwithstanding, Tenant shall not
sublet the Premises on any basis such that the rental to be paid by the
sublessee thereunder would be based, in whole or in part, on either the income
or profits derived by the business activities of the sublessee, or any other
formula, such that any portion of the sublease rental received by Landlord
would fail to qualify as "rents from real
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property" within the meaning of Section 856(d) of the U.S. Internal Revenue
Code, or any similar or successor provision thereto.
22.1 For the purposes of this Lease, the sale, assignment, transfer
or other disposition of the stock of Tenant and/or any Guarantor, which results
in a change in the person, persons, entity or entities which ultimately exert
effective control over the management of the affairs of Tenant and/or Guarantor
as of the date hereof, shall be deemed to be an assignment of the Lease.
22.2 Notwithstanding anything to the contrary contained in Section
22.1, in no event shall an initial public offering of Guarantor be deemed to be
an assignment of the Lease; provided, however, that after such initial public
offering of Guarantor and without limiting Section 22.1, any sale, assignment,
transfer or other disposition of the voting stock of Guarantor which results in
twenty-five percent (25%) or more of the voting stock of Guarantor being held
by any person or entity or related group of persons or entities who did not
have such ownership after the initial public offering shall be deemed to be an
assignment of the Lease.
22.3 In the event that this Lease is deemed to be assigned pursuant
to Section 22.1 or Section 22.2, Landlord shall, at Landlord's sole discretion
(i) consent to the assignment or (ii) put the Premises to Tenant. If Landlord
puts the Premises to Tenant, Tenant shall purchase the Premises from
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Landlord for a cash price equal to the greater of Landlord's Original
Investment ($4,350,000) (as increased under Section 5.7, if applicable), or the
fair market value of the Premises on the date of Landlord's notice of exercise
of its option hereunder. Such fair market value and purchase shall be
determined and conducted as set forth in Section 5.4
23. INDEMNIFICATION. To the fullest extent permitted by law, Tenant
agrees to protect, indemnify, defend and save harmless Landlord, its directors,
officers, shareholders, agents and employees from and against any and all
foreseeable or unforeseeable liability, expense loss, costs, deficiency, fine,
penalty, or damage (including without limitation punitive or consequential
damages) of any kind or nature, including reasonable attorneys' fees, from any
suits, claims or demands, on account of any matter or thing, action or failure
to act arising out of or in connection with (a) this Lease (including, without
limitation, the breach by Tenant of any of its obligations hereunder), (b) the
Premises, or (c) the operations of Tenant on the Premises, including without
limitation all Environmental Activities on the Premises, all Hazardous
Materials Claims or any violation by Tenant of a Hazardous Materials Law with
respect to the Premises; provided, however, such indemnity shall not extend to
any such suit, claim or damage which is caused solely by the willful misconduct
or gross negligence of Landlord, its directors, officers, agents and employees.
Upon receiving knowledge of any suit, claim or demand asserted by a third party
56
62
that Landlord believes is covered by this indemnity, Landlord shall give Tenant
notice of the matter. Tenant shall defend Landlord against such matter at
Tenant's sole cost and expense with legal counsel satisfactory to Landlord.
Landlord may elect to defend the matter with its own counsel at Tenant's
expense.
24. HOLDING OVER. If Tenant shall for any reason remain in possession of
the Premises after the expiration or earlier termination of this Lease, such
possession shall be a month-to-month tenancy during which time Tenant shall pay
as rental each month, 1 1/2 times the aggregate of the monthly Minimum Rent
payable with respect to the last Lease Year plus Additional Rent allocable to
the month, all additional charges accruing during the month and all other sums,
if any, payable by Tenant pursuant to the provisions of this Lease with respect
to the Premises. Nothing contained herein shall constitute the consent, express
or implied, of Landlord to the holding over of Tenant after the expiration or
earlier termination of this Lease, nor shall anything contained herein be
deemed to limit Landlord's remedies pursuant to this Lease or otherwise
available to Landlord at law or in equity.
25. ESTOPPEL CERTIFICATES. Tenant shall, at any time upon not less than
five (5) days prior written request by Landlord, execute, acknowledge and
deliver to Landlord or its designee a statement in writing, executed by an
officer or general partner of Tenant, certifying that this Lease is unmodified
and in full force and effect (or, if there have been any modifications, that
57
63
this Lease is in full force and effect as modified, and setting forth such
modifications), the dates to which Minimum Rent, Additional Rent and additional
charges hereunder have been paid certifying that no default by either Landlord
or Tenant exists hereunder or specifying each such default and as to other
matters as Landlord may reasonably request.
26. CONVEYANCE BY LANDLORD. If Landlord or any successor owner of the
Premises shall convey the Premises in accordance with the terms hereof,
Landlord or such successor owner shall thereupon be released from all future
liabilities and obligations of Landlord under this Lease arising or accruing
from and after the date of such conveyance or other transfer as to the Premise
and all such future liabilities and obligations shall thereupon be binding upon
the new owner.
27. WAIVER OF JURY TRIAL. Landlord and Tenant hereby waive any rights to
trial by jury in any action, proceedings or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising
out of or in any way connected with this Lease, including, without limitation,
the relationship of Landlord and Tenant, Tenant's use and occupancy of the
Premises, or any claim of injury or damage relating to the foregoing or
the enforcement of any remedy hereunder.
28. ATTORNEYS' FEES. If Landlord or Tenant brings any action to interpret
or enforce this Lease, or for damages for a alleged breach hereof, the
prevailing party in any such action shall be entitled to reasonable attorneys'
fees and costs as
58
64
awarded by the court in addition to all other recovery, damages and costs.
29. SEVERABILITY. In the event any part or provision of the Lease shall
be determined to be invalid or enforceable, the remaining portion of this Lease
shall nevertheless continue in full force and effect.
30. COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same agreement.
31. BINDING EFFECT. Subject to the provisions of Section 22 above, this
Lease shall be binding upon and inure to the benefit of Landlord and Tenant and
their respective heirs, personal representatives, successors in interest and
assigns.
32. WAIVER AND SUBROGATION. Landlord and Tenant hereby waive to each
other all rights of subrogation which any insurance carrier, or either of them,
may have as to the Landlord or Tenant by reason of any provision in any policy
of insurance issued to Landlord or Tenant, provided such waiver does not
thereby invalidate the policy of insurance.
33. MEMORANDUM OF LEASE. Landlord and Tenant shall, promptly upon the
request of either, enter into a short form memorandum of the Lease, in form
suitable for recording under laws of the State of California in which reference
to this Lease shall be made. The party requesting such recordation shall pay
all costs and expenses of preparing and recording such memorandum of this
Lease.
59
65
34. INCORPORATION OF RECITALS AND ATTACHMENTS. The recitals and exhibits,
schedules, addenda and other attachments to this Lease are hereby incorporated
into this Lease and made a part hereof.
35. TITLES AND HEADINGS. The titles and headings of sections of this
Lease are intended for convenience only and shall not in any way affect the
meaning or construction of any provision of this Lease.
36. USURY SAVINGS CLAUSE. Nothing contained in this Lease shall be deemed
or construed to constitute an extension of credit by Landlord to Tenant.
Notwithstanding the foregoing, in the event any payment made to Landlord
hereunder is deemed to violate any applicable laws regarding usury, the portion
of any payment deemed to be usurious shall be held by Landlord to pay the
future obligations of Tenant as such obligations arise and, in the event Tenant
discharges and performs all obligations hereunder, such funds will be
reimbursed to Tenant upon the expiration of the Term. No interest shall be paid
on any such funds held by Landlord.
37. JOINT AND SEVERAL. If more than one person is the Tenant hereunder,
the liability of such persons under this Lease shall be joint and several.
38. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All of the
obligations, representations, warranties and covenant of Tenant under this
Lease shall survive the expiration or earlier termination of the Term.
60
66
39. INTERPRETATION. Both Landlord and Tenant have been represented by
counsel and this Lease has been freely and fairly negotiated. Consequently, all
provisions of this Lease shall be interpreted according to their fair meaning
and shall not be strictly construed against any party.
Executed as of the date indicated above.
TENANT:
BRIM HOSPITALS, INC.,
an Oregon corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Its: President
LANDLORD:
NATIONWIDE HEALTH PROPERTIES, INC.,
a Maryland corporation
By: /s/
---------------------------------
Its: Vice President
61
67
EXHIBIT "A"
Legal Description
PARCEL 1:
A part of Tract No. 8 of the Bard Subdivision of the Rancho Ojai, in the City of
Ojai, County of Ventura, State of California, as per map thereof recorded in
Book 5, Page 25 1/2 of Maps, in the office of the County Recorder of said
County, described as follows:
Beginning at a 1-inch iron pipe set in the Southerly line of ▇▇▇▇▇▇▇ Road
(formerly Matilija Road) at the Northeast corner of that certain parcel of land
as conveyed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by deed recorded in Book 29, Page 262
of Official Records; thence from said point of beginning,
1st: South 73(degrees) 24' East 139.24 feet along the Southerly line of said
▇▇▇▇▇▇▇ Road to a ford axle set at the Northwest corner of that certain parcel
of land as conveyed to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by deed recorded in Book 67, Page 181 of
Official Records; thence,
2nd: South 18(degrees) 36' West 749.59 feet along the Westerly line of said
lands of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Southwesterly prolongation of same; at 175.00
feet a ford axle set at the Southwest corner of said lands of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇;
at 749.59 feet a 1-inch iron pipe; thence,
3rd: North 73(degrees) 24' West 146.88 feet to a 1-inch iron pipe set the
Southeast corner of said lands of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, thence,
4th: North 19(degrees) 11' East 749.90 feet along the Easterly line of said
lands of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to the point of beginning.
PARCEL 2:
A portion of Tract No. 8 of the Bard Subdivision of Rancho Ojai, in the City of
Ojai, County of Ventura, State of California, according to the map recorded in
Book 5, Page 25 1/2 of Maps, the office of the County Recorder of said County,
described as follows:
Beginning at the Northeast corner of the land described in deed to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and wife, recorded July 1, 1953 in Book 1142, Page 222, Official
Records; thence along the East line of said land,
1st: South 19(degrees) 11' West 751.50 feet to an angle point therein; thence,
A-1
68
2nd: South 73(degrees) 24' East 219 feet, more or less to the most Westerly
corner of the land conveyed to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and wife by deed recorded in Book
680, Page 483 of Official Records; thence along the West line of said land of
▇▇▇▇▇▇▇▇▇,
3rd: North 19(degrees) 11' East 749.90 feet to a point on the South line of
Cuyama Road (formerly ▇▇▇▇▇▇▇▇ ▇▇▇▇) ▇▇ feet wide; thence along the Southerly
line of said land,
4th: North 73(degrees) 24' West 218.96 feet to the point of beginning.
EXCEPT from the Northerly 1.885 acres of said land an undivided 60% of all oil,
gas and other hydrocarbon substances, without the right of entry above a depth
of 500 feet from the surface of said land for the development of said oils and
minerals, as reserved by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, et ux., in deed recorded February
19, 1959 in Book 1704, Page 278, Official Records.
PARCEL 3:
A portion of Tract No. 8 of the Bard Subdivision of Rancho Ojai, in the City of
Ojai, County of Ventura, State of California, according to the map recorded in
Book 5, Page 25-1/2 of Maps, in the office of the County Recorder of said
County, described as follows:
Commencing at the Northeast corner of the land described in deed to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and wife, recorded July 1, 1953 in Book 1142, Page 222 of Official
Records; thence along the East line of said land, South 19(degrees) 11' West
751.50 feet to an angle point therein, said point being to the true point of
beginning; thence continuing along said East line,
1st: South 16(degrees) 11' West 362.25 feet to a point in the Northerly line of
that certain strip of land conveyed to Ventura County by deed recorded in Book
384, Page 436 of Official Records; thence
2nd: South 74(degrees) 55' East 205.80 feet to the Southwest corner of the land
described in Parcel 1 deeded to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, et al., recorded
September 17, 1958 in Book 1654, Page 451 of Official Records; thence along the
West line of the land last referred to,
3rd: Northerly in a direct line to the Northwest corner of said land, at the
most Westerly corner of the land conveyed to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and wife by deed
recorded in Book 680, Page 483, Official Records; thence,
4th: North 73(degrees) 24' West 219 feet, more or less to the point of
beginning.
A-2
69
EXHIBIT "B"
Landlord Personal Property
B-1
70
Page 1
LANDLORD PERSONAL PROPERTY
C FAS ASSET DATE
L NUMBR DESCRIPTION LOCATN Co ACQRD
A 00001 LAMINAR AIR FL 7021 06/87
A 00004 FACSIMILE MACH 8510 06/87
A 00005 REFURB AIR CON 06/87
A 00013 POWER GENERATO 8480 08/87
A 00015 MEDICATION CAR 7050 09/87
A 00016 WATER SOFTENER 8480 09/87
A 00017 OPERATING ROOM 7021 09/87
A 00018 DIETARY EQUIPM 8340 10/87
A 00019 PEDIATRIC SCAL 6170 10/87
A 00020 LAB DICTATION 7060 10/87
A 00021 CHILD BEARING 6160 11/87
A 00022 2 ROTARY VANE 8480 11/87
A 00023 MINOR SURGERY 7021 11/87
A 00024 ICEMAKER 8340 10/88
A 00029 ▇▇▇▇▇▇▇ COUNTE 7010 06/88
A 00030 WATER HEATER 6202 07/88
A 00031 HEAT EXCHANGE/ 7021 07/88
A 00032 INTERCOM SYSTE 7030 07/88
A 00033 BEAR VENTILATO 7180 08/88
A 00034 INTERCOM CONV 7030 10/88
A 00035 EMPLOYEE NAME 8650 10/88
A 00036 PHYSICAL THERA 7200 10/88
A 00037 PC & PRINTER 8610 11/88
A 00038 ULTRASOUND PRO 7165 01/89
A 00039 COAG ANALYZER 7060 01/89
A 00041 FETAL HEART MO 6160 04/89
A 00042 BOILER 8480 02/89
A 00043 TRACTION TABLE 7200 04/89
A 00044 STRETCHER BEDS 7030 05/89
A 00045 PHONE RELOCATE 8550 02/90
A 00046 HYPO/HYPERTHER 6010 12/89
A 00047 INFANT WARMER 6170 09/89
A 00048 MONITOR CABLE 6160 04/90
A 00049 BP MONITOR 7230 04/90
A 00050 WORD PROCESSIN 8610 04/90
A 00051 SNU A/C ▇▇▇▇▇▇ 6202 01/90
A 00055 SNU A/C ▇▇▇▇▇▇ 6202 09/89
A 00056 SNU A/C ▇▇▇▇▇▇ 6202 12/89
A 00062 LASER JET PRIN 8510 05/90
A 00063 ARTHROSCOPE 7021 07/90
A 00064 BRONCHOSCOPE 7021 07/90
A 00068 PORTABLE WHIRL 7200 10/90
71
Page 2
C FAS ASSET DATE
L NUMBR DESCRIPTION LOCATN Co ACQRD
A 00069 FOOD MAINTENAN 8340 10/90
A 00071 CABLE/TERMINAL 8540 10/90
A 00072 PT EXAM TABLE 7200 10/90
A 00073 WATER SYSTEM 8480 10/90
A 00074 WATER SYSTEM 8480 11/90
A 00075 FACSIMILE MACH 8530 11/90
A 00078 CHOLECYSTO MAC 7021 12/90
A 00083 CONV OUTLETS 6202 03/91
A 00084 SPIROMETER 7080 03/91
A 00085 U.S. STIM UNIT 7165 03/91
A 00086 REFRIGERATOR 8340 04/91
A 00087 REFRIGERATOR 8340 04/91
A 00088 VENTILATOR 7180 04/91
A 00089 AUTOCLAVE 7420 04/91
A 00091 AUTOCLAVE INST 7120 05/91
A 00092 COMPUTERS - 2 8510 05/91
A 00093 COMPUTERS - LAB 7060 05/91
A 00094 MODEMS - MED R 8700 05/91
A 00095 GI COAGULATOR 7420 06/91
A 00096 GI COAGULATOR 7420 06/91
A 00098 SNU WATER HEAT 6202 07/91
A 00104 GENERATOR FUEL 8480 09/91
A 00105 NIT OXIDE TANK 7010 09/91
A 00109 DRAPES-ACUTE R 6080 09/91
A 00115 CABINETS - PHA 7170 12/91
A 00119 CURTAINS - ER 7021 01/92
A 00123 REFRIGERATOR-B 7060 01/92
A 00124 MICRO 100 WIRE 7021 01/92
A 00125 FLOOR CARE MAC 8460 01/92
A 00126 DEFIB MONITOR 6010 01/92
A 00128 BLOOD PRESSURE 6160 01/92
A 00129 WIRE SHELVING 8420 01/92
A 00153 HEALTH PROMO C 8480 11/87
A 00154 M/S RENOV-DRS 7021 11/87
A 00155 SNF/CDU RENOV- 6202 10/87
A 00156 SNF/CDU FURNIT 6202 10/87
A 00157 DIET. FOOD STA 8340 10/87
A 00159 C-ARM SURGERY 7021 01/88
A 00160 PORTABLE X-RAY 7170 01/88
A 00161 FURNITURE-MED/ 6080 03/88
A 00163 FURNITURE-MED/ 6080 04/88
A 00164 PHONE SYSTEM 8480 04/88
72
Page 3
C FAS ASSET DATE
L NUMBR DESCRIPTION LOCATN Co ACQRD
A 00171 ▇▇▇▇▇▇ O/R SAW 7021 09/89
A 00173 A/C UNIT - DP 8540 02/90
A 00175 SNU A/C UNITS 6202 09/89
A 00178 O.R. CABINETS 7021 02/89
A 00276 HEAT,VENTILATI 6015 06/87
A 00279 A/C 5 TONE LEN 6080 06/87
A 00281 A/C NPHCA-024 7010 06/87
A 00283 A/C UNIT INSTA 7021 06/87
A 00285 LIGHTING-NEW L 7060 06/87
A 00286 AIR CONDITIONI 7060 06/87
A 00288 FUME HOOD, VAC 7060 06/87
A 00291 GENERATOR SET 7140 06/87
A 00292 ELEC WIRING/CT 7145 06/87
A 00293 ELEC FEED/WIRI 7145 06/87
A 00294 INSTALL CABS/C 7230 06/87
A 00296 EXHAUST FAN #7 8470 06/87
A 00297 A/C ECOMIZER, V 8470 06/87
A 00299 LIGHTS & FLORE 8470 06/87
A 00301 GAS TANK OVERF 8470 06/87
A 00302 PIPE INSULATIO 8470 06/87
A 00304 INSTALL GENERA 8480 06/87
A 00306 INSTALL HAND R 8480 06/87
A 00307 WATER HEATER 1 8480 06/87
A 00308 A/C CONDENSOR 8480 06/87
A 00309 A/C CONDENSOR 8480 06/87
A 00310 A/C CONDENSOR 8480 06/87
A 00311 BOILER STEAM F 8480 06/87
A 00312 INSTALL BOILER 8480 06/87
A 00314 FIXED EQUIP AD 8610 06/87
A 00315 BAL FWD FIXED 8610 06/87
A 00316 FIXED EQUIP AD 8610 06/87
A OO317 FIXED EQUIP AD 8610 06/87
A 00318 FIXED EQUIP AD 8610 06/87
A 00323 FIRE SUPPRESSI 8610 06/87
A 00324 AIR DUCTS THER 8610 06/87
A 00325 INSTL HANDRAIL 8610 06/87
A 00333 BED HOSP ELEC 6015 06/87
A 00335 BED HOSP ELEC 6015 06/87
A 00336 BED HOSP ELEC 6015 06/87
A 00337 BED HOSP ELEC 6015 06/87
A 00338 BED HOSP ELEC 6015 06/87
A 00339 LIFT/SCALE - 2 6015 06/87
73
Page 4
C FAS ASSET DATE
L NUMBR DESCRIPTION LOCATN Co ACQRD
A 00341 MEDI PREP 6015 06/87
A 00392 MISC. CABS,TAB 6081 06/87
A 00393 BED HOSP ELEC 6081 06/87
A 00403 ICE MACHINE 6081 06/87
A 00428 BED HOSP ELEC 6081 06/87
A 00429 BED HOSP ELEC 6081 06/87
A 00430 BED HOSP ELEC 6081 06/87
A 00431 BED HOSP ELEC 6081 06/87
A 00432 BED HOSP ELEC 6081 06/87
A 00433 BED HOSP ELEC 6081 06/87
A 00434 BED HOSP ELEC 6081 06/87
A 00435 BED HOSP ELEC 6081 06/87
A 00439 MEDICATION CAR 6081 06/87
A 00450 BED HOSP ELEC 6160 06/87
A 00451 BED HOSP ELEC 6160 06/87
A 00452 BED HOSP ELEC 6160 06/87
A 00453 BED HOSP ELEC 6160 06/87
A 00455 BED HOSP ELEC 6160 06/87
A 00458 VACUUM EXTRACT 6160 06/87
A 00478 INCUBATOR OHIO 6170 06/87
A 00479 INCUBATOR INFA 6170 06/87
A 00483 LIGHT, WARMING 6170 06/87
A 00534 MISC CABS, TAB 6181 06/87
A 00535 IMPRINTER-▇▇▇▇ 6181 06/87
A 00576 COUCH - FABRIC 6181 06/87
A OO582 MISC TABLES & 6202 06/87
A 00675 FIBERGLASS BAT 6202 06/87
A 00684 12 DINING ROOM 6202 06/87
A 00687 OB TABLE 7010 06/87
A 00691 INFANT INCUBAT 7010 06/87
A 00697 BIRTHING BED 7010 06/87
A 00707 SURG INSTR - C 7021 06/87
A 00708 TABLE OR AFFIL 7021 06/87
A 00709 LIGHT OR ORBIT 7021 06/87
A 00720 MICROSCOPE O/R 7021 06/87
A 00734 ENT BINOC VIEW 7021 06/87
A 00736 LARYNGOSCOPE 7021 06/87
A 00740 COLONFIBERSCOP 7021 06/87
A 00741 ORTHOPEDIC TAB 7021 06/87
A 00742 SURGICAL LIGHT 7021 06/87
A 00746 SAW, SAGITTAL 7021 06/87
A 00747 OPERATING TABL 7021 06/87
74
Page 5
C FAS ASSET DATE
L NUMBR DESCRIPTION LOCATN Co ACQRD
A 00763 STERILIZER CAS 7050 06/87
A 00764 STERILIZER 7050 06/87
A 00765 AERATOR 7050 06/87
A 00766 PRINTER 7050 06/87
A 00796 CENTRIFUGE - S 7060 06/87
A 00800 CENTRIFUGE REF 7060 06/87
A 00801 CHEMISTRY ANAL 7060 06/87
A 00803 CELL WASHER 7060 06/87
A 00829 CRYOSTAT 7070 06/87
A 00830 TISSUE PROCESS 7070 06/87
A 00831 MICROSCOPE A/O 7070 06/87
A 00836 PULMONARY FUNC 7080 06/87
A 00837 HOSP BED 3 CR 7080 06/87
A 00840 MOBILE X-RAY U 7140 06/87
A 00841 MOBILE C-ARM 7140 06/87
A 00844 X-RAY SYSTEM 7140 06/87
A 00845 X-RAY SYSTEM 7140 06/87
A 00863 MOBILE X-RAY U 7140 06/87
A 00892 VENTILATOR 7180 06/87
A 00899 BED-POSTURAL D 7180 06/87
A 00931 STRETCHER - 62 7230 06/87
A 00932 STRETCHER - M 7230 06/87
A 00933 STRETCHER - TR 7230 06/87
A 00944 POTS, PANS, DI 8340 06/87
A 00945 DINING RM TABL 8340 06/87
A 00949 FREEZER - TRAU 8340 06/87
A 00955 MEAT SLICER 8340 06/87
A 00972 UTILITY REFRIG 8340 06/87
A 00974 FOOD SERVICE T 8340 06/87
A 00975 FOOD SERVICE T 8340 06/87
A 00976 FOOD SERVICE T 8340 06/87
A 00981 15' SERVING CO 8340 06/87
A 00983 HOOD EXHAUST 8340 06/87
A ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ 8340 06/87
A 00998 OVEN/RANGE - D 8340 06/87
A 01015 MISC EQUIP-CHA 8460 06/87
A 01016 MISC EQUIP-CHA 8460 06/87
A 01023 FLOOR MACH NSS 8460 06/87
A 01065 CABINET 8510 06/87
A 01120 PERFORATOR 8540 06/87
A 01191 TABLE, ▇▇▇▇▇▇ 8610 06/87
75
Page 6
C FAS ASSET DATE
L NUMBER DESCRIPTION LOCATN Co ACQRD
A 01205 WOOD CABINETS 8610 06/87
A 01273 MONITOR ▇▇▇ H/ 6015 06/87
A 01274 MONITOR ▇▇▇ H/ 6015 06/87
A 01275 MONITOR ▇▇▇ H/ 6015 06/87
A 01276 MONITOR ▇▇▇ H/ 6015 06/87
A 01277 NONITOR ▇▇▇ H/ 6015 06/87
A 01278 RECEIVER TELEM 6015 06/87
A 01279 RECEIVER TELEM 6015 06/87
A 01283 MONITOR ▇▇▇ H/ 6015 06/87
A 01284 DEFRIBILLATOR 6015 06/87
A 01288 MONITOR, DINAM 6015 06/87
A 01289 PACEMAKER, TEM 6015 06/87
A 01298 CURTAINS 6080 06/87
A 01299 MATTRESS MAXIF 6080 06/87
A 01317 DEFIBRILLATOR 6081 06/87
A 01324 CARPETING 6081 06/87
A 01326 MATTRESSES 6081 06/87
A 01334 MONITOR, INFANT 6160 06/87
A 01336 MONITOR EGG/RE 6170 06/87
A 01344 CARPET COU HAL 6181 06/87
A 01346 CHAIR SCALE 6202 06/87
A 01350 MONITOR FETAL 7010 06/87
A 01352 LECTURESCOPE L 7021 06/87
A 01353 OSTEO COMPRESS 7021 06/87
A 01369 VIDEO SYS MICR 7021 06/87
A 01370 PROJECTOR CINE 7021 06/87
A 01373 PROJECTOR 7021 06/87
A 01375 CAMERA - ARTHR 7021 06/87
A 01377 LAMINECTOMY 7021 06/87
A 01378 OSTEO COMPRESS 7021 06/87
A 01379 FIBEROPTIC EQU 7021 06/87
A 01381 MONTIOR FOR PA 7021 06/87
A 01382 DRILL MICRO 50 7021 06/87
A 01383 ARTHROSCOPIC S 7021 06/87
A 01384 OXIMETER, OXYGE 7021 06/87
A 01385 ARTHROSCOPIC R 7021 06/87
A 01387 DRILL MAXI AIR 7021 06/87
A 01388 LAPAROSCOPE 7021 06/87
A 01391 ANES UNIT-OHIO 7040 06/87
A 01393 MONITOR-BLOOD 7040 06/87
A 01394 MONITOR VITAL 7040 06/87
A 01395 NON VITAL SIGN 7040 06/87
76
Page 7
C FAS ASSET DATE
L NUMBR DESCRIPTION LOCATN Co ACQRD
A 01398 ANES MACHINE M 7040 06/87
A 01410 COUNTER-NUC ME 7060 06/87
A 01412 CHEMISTRY ANAL 7060 06/87
A 01414 URINOMETER 7060 06/87
A 01415 CONSOLE TISSUE 7060 06/87
A 01418 CULTURE & SENS 7060 06/87
A 01421 ANALYZER-PH/BL 7080 06/87
A 01422 BLOOD GAS ANAL 7080 06/87
A 01423 ABG INTERPRETA 7080 06/87
A 01424 EKG MACHINE 7110 06/87
A 01429 IMAGE INTENSIF 7140 06/87
A 01430 CHEST GRID PIC 7140 06/87
A 01433 PROCESSOR X-RA 7140 06/87
A 01435 ILLUMINATOR X- 7140 06/87
A 01438 CONSOLE-ULTRAS 7140 06/87
A 01440 LINEAR RAY MOO 7146 06/87
A 01441 ULTRASOUND ▇▇▇ ▇▇▇▇ ▇▇/▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇ 06/87
A 01443 COMPAQ COMPUTE 7170 06/87
A 01445 WHEELWRITER 5' 7170 06/87
A 01451 SENSOR CABLE T 7180 06/87
A 01457 DEFIBRILLATOR 7230 06/87
A 01460 BLOOD PRESSURE 7230 06/87
A 01461 RADIO ANTENNA 7230 06/87
A 01470 CARPETING 8460 06/87
A 01471 DRAPE/CUBE/CUR 8460 06/87
A 01479 CARPET 75 SQ Y 8470 06/87
A 01481 PLUMBERS SNAKE 8470 06/87
A 01491 CARPETING-2ND 8480 06/87
A 01494 PAPER SHREDDER 8510 06/87
A 01495 PHOTOCOPIER 8560 06/87
A 01497 PERSONAL COMPU 8510 06/87
A 01508 MICROFICHE REA 8540 06/87
A 01511 PHOTOCOPIER 8560 06/87
A 01512 EQUIP ADDTION 8610 06/87
A 01518 TYPEWRITER-QUI 8610 06/87
A 01519 WHEELWRITER - 8610 06/87
A 01522 COPIER ▇▇▇ ▇▇▇▇ 06/87
A 01524 STIMULATION EQ 8610 06/87
A 01536 WHEELWRITER 40 8700 06/87
A 01540 RHTTHM SIMULAT 8740 06/87
77
Page 8
C FAS ASSET DATE
L NUMBR DESCRIPTION LOCATN Co ▇▇▇▇▇
A 01552 Dr. Lounge Fur 8610 05/88
A 01553 Health Promo F 8740 05/88
A 01559 PATIENT TVS 03/92
A 01560 M/R LASER PRIN 04/92
A 01561 FRAMED TVS 03/92
A 01562 ICEMAKER 03/92
A 01577 MICROTOME 03/92
A 01578 PT RM CURTAINS 6160 01/92
A 01579 FLOOR CARE EQ. 8460 01/92
A 01580 OB PULSE OXIME 01/92
A 01581 STERILIZER BAS 7420 01/92
A 01585 LAP CHOLI 7021 07/92
A 01586 IBM SYSTEM/36 8540 07/92
A 01587 VIP-RX COMPUTE 7170 07/92
A 01589 FUNITURE-MULT 9310 07/92
A 01590 LOBBY FURN-MUL 9310 07/92
A 01591 MISC FRAMED PR 8610 07/92
A 01592 MISC FRAMED PR 8610 07/92
A 01594 COMPUTER TERMI 9310 07/92
A 01595 ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇ 07/92
A 01596 MEDICAL CLINIC 9312 07/92
A 01597 BIOHAZARD HAMP 8460 07/92
A 01600 DRAPES-MULT S 9310 07/92
A 01607 FIBROSCOPE REP 7021 07/92
A 01609 RX CABINETS 7170 07/92
A 01611 ADMITTING EMBO 09/92
A 01612 AG PROCESSOR R 12/92
A 01614 OR JV EQUIP 10/92
A 01615 FIBERSCOPE REP 07/93
A 01616 OR VIDEO EQUIP 02/93
A 01618 PURCH. COMPUTE 10/92
A 01619 P.T. EXER EQPT 03/93
A 01636 M/SPEC TERMINA 07/92
A 01638 ACCUTEMP/08 AI 05/93
A 01640 ACCUTEMP AIR C 06/93
78
EXHIBIT "C"
Calculation of Additional Rent
CALCULATION OF ADDITIONAL RENT
FOR THE ___ MONTHS ENDED ______
LEASE YEAR TO DATE GROSS REVENUES I
_____________
BASE YEAR GROSS REVENUES ______________ II
NUMBER OF MONTHS INTO LEASE YEAR ______________ III
PRORATED BASE YEAR GROSS REVENUES (II/12*III) _____________ IV
CURRENT LEASE YEAR TO DATE GROSS REVENUES
IN EXCESS OF PRORATED BASE YEAR GROSS
REVENUES (I-IV, BUT NOT LESS THAN 0) _____________ V
CURRENT LEASE YEAR TO DATE ADDITIONAL
RENT (V*__%) _____________ VI
PRIOR PAYMENTS OF CURRENT YEAR ADDITIONAL
RENT WITH RESPECT TO THE:
PREVIOUS LEASE YEAR MINIMUM RENT
AND ADDITIONAL RENT _____________ VII
MAXIMUM ANNUAL RENT INCREASE
(VII*__% FROM SECTION 6.2.1
OF THE LEASE) _____________ VIII
PRORATED MAXIMUM ANNUAL RENT
(VIII / 12) * 111 _____________ IX
TOTAL PRIOR PAYMENTS OF CURRENT
LEASE YEAR ADDITIONAL RENT _____________ X
BALANCE DUE (LESSOR OF
VI-X OR IX-X) _____________ XI
C-1
79
EXHIBIT "D"
Appraisal Process
If Landlord and Tenant are unable to agree upon the Fair Market Value of the
Premises within any relevant period provided in this Lease, each shall within
ten (10) days after written demand by the other select one MAI Appraiser to
participate in the determination of fair market value. Within ten (10) days of
such selection, the MAI Appraisers so selected by Landlord and Tenant shall
select a third MAI Appraiser. The three (3) selected MAI Appraisers shall each
determine the fair market value of the Premises within thirty (30) days of the
selection of the third appraiser. To the extent consistent with sound appraisal
practices as then existing at the time of any such appraisal, and if requested
by Landlord, such appraisal, shall be made on a basis consistent with the basis
on which the Premises was appraised at the time of its acquisition by Landlord.
Tenant shall pay the fees and expenses of any MAI Appraiser retained pursuant
to this Exhibit.
In the event either Landlord or Tenant fails to select a MAI Appraiser within
the time period set forth in the foregoing paragraph, the MAI Appraiser
selected by the other party shall alone determine the fair market value of the
Premises in accordance with the provisions of this Exhibit and the fair market
value so determined shall be binding upon Landlord and Tenant.
In the event the MAI Appraisers selected by Landlord and Tenant are unable to
agree upon a third MAI Appraiser within the time period set forth in the first
paragraph of this Exhibit, either Landlord or Tenant shall have the right to
apply at Tenant's expense to the presiding judge of the court of original trial
jurisdiction in the county in which the Premises is located to name the third
MAI Appraiser.
Within five (5) days after completion of the third MAI Appraiser's appraisal,
all three MAI Appraisers shall meet and a majority of the MAI Appraisers shall
attempt to determine the fair market value of the Premises. If a majority are
unable to determine the fair market value at such meeting, the three appraisals
shall be added together and their total divided by three. The resulting
quotient shall be the fair market value of the Premises. If, however, either or
both of the low appraisal or the high appraisal are more than ten percent (10%)
lower or higher than the middle appraisal, any such lower or higher appraisal
shall be disregarded. If only one appraisal is disregarded, the remaining two
appraisals shall be added together and their total divided by two, and the
resulting quotient shall be such fair market value. If both the lower appraisal
and higher appraisal are disregarded as provided herein, the middle appraisal
shall be such fair market value. In any event, the
D-1
80
result of the foregoing appraisal process shall be final and binding.
"MAI APPRAISER" shall mean an appraiser licensed or otherwise qualified
to do business in the State and who has substantial experience in performing
appraisals of facilities similar to the Premises and is certified as a member
of the American Institute of Real Estate Appraisers or certified as a SRPA by
the Society of Real Estate Appraisers, or, if such organizations no longer
exist or certify appraisers, such successor organization or such other
organization as is approved by Landlord.
D-2
81
EXHIBIT "E"
Permitted Exceptions
1. The standard printed exceptions, conditions and exclusions
from coverage contained in the standard coverage owner's title policy then
prevailing in use at the title company which consummates the sale transaction.
2. Any matters which an accurate survey of the Premises may
show.
3. Any matters shown as title exceptions in that certain ALTA
owner's policy of title insurance issued by Chicago Title Insurance Company in
favor of Landlord in connection with Landlord's acquisition of the Premises
from Tenant.
4. Such other matters burdening the Premises which were created
with the consent or knowledge of Tenant or arising out of Tenant's acts or
omissions.
E-1
82
EXHIBIT "F"
Annual Additional Rent Calculations
Premises: ________________
Lease Year Ending ________________
Preliminary Additional Rent
Current Year Gross Revenue $ __________(A)
Base Year Gross Revenue $ __________(B)
Current Year Incremental Revenue (A - B) $ __________(C)
Preliminary Current Year Additional Rent (__% of C) $ __________(D)
Add amount of unpaid rent accumulated from
prior Lease Years pursuant to Section
2.6.5 of the Lease $ __________(E)
Preliminary Additional Rent (D + E) $ __________(F)
Maximum Additional Rent
Prior Year Minimum Rent (Adjusted for increases
pursuant to Section 5.7 of the Lease, if any) $ __________(G)
Prior Year Additional Rent $ __________(H)
Prior Year Total Rent (G + H) $ __________(I)
Times (1 + Applicable Percentage) from Section
2.6.1 of Lease (I times [1 + Applicable
Percentage] $ __________(J)
Less Current Year Minimum Rent $ __________(K)
Equals: Maximum Additional Rent Due (J - K) $ __________(L)
Additional Rent Due
Additional Rent Due (lesser of F or L) $ __________(M)
Additional Rent paid by Tenant (refund paid by Landlord) for
current year
First Quarter (paid on) $ ______________
Second Quarter (paid on) $ ______________
Third Quarter (paid on) $ ______________
Fourth Quarter (paid on) $ ______________
Total Additional Rent Paid this Lease Year $ ______(N)
Additional Rent due from Tenant (to be refunded
by Landlord if less than zero) (M - N) $ ______
Accumulation pursuant to Section 2.6.5
of the Lease (D - M, but not less
than zero) $_______
F-1
83
The undersigned represents, warrants and certifies to Nationwide Health
Properties, Inc., a Maryland corporation, after due investigation, that the
foregoing information is true, correct and complete.
Tenant
Brim Hospitals, Inc.
By:
-------------------------
Its:
---------------------
F-2
84
EXHIBIT "G"
ALTA Survey
(Attached)
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ 1:
A part of Tract No. 8 of the Bard Subdivision of the Rancho Ojai, in the City of
Ojai, County of Ventura, State of California, as per map thereof recorded in
Book 5, Page 25 1/2 of Maps, in the office of the County Recorder of said
County, described as follows:
Beginning at a 1-inch iron pipe set in the Southerly line of ▇▇▇▇▇▇▇ Road
(formerly Matilija Road) at the Northeast corner of that certain parcel of land
as conveyed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by deed recorded in Book 29, Page 262
of Official Records; thence from said point of beginning,
1st: South 73(degrees) 24' East 139.24 feet along the Southerly line of
said ▇▇▇▇▇▇▇ Road to a ford axle set at the Northwest corner of that
certain parcel of land as conveyed to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by deed recorded
in Book 67, Page 181 of Official Records; thence,
2nd: South 18(degrees) 36' West 749.59 feet along the Westerly line of said
lands of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Southwesterly prolongation of same;
at 175.00 feet a ford axle set at the Southwest corner of said lands
of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇; at 749.59 feet a 1-inch iron pipe; thence,
3rd: North 73(degrees) 24' West 146.88 feet to a 1-inch iron pipe set at
the Southeast corner of said lands of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
thence,
4th: North 19(degrees) 11' East 749.90 feet along the Easterly line of said
lands of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to the point of beginning.
PARCEL 2:
A portion of Tract No. 8 of the Bard Subdivision of Rancho Ojai, in the City of
Ojai, County of Ventura, State of California, according to the map recorded in
Book 5, Page 25 1/2 of Maps, in the office of the County Recorder of said
County, described as follows:
Beginning at the Northeast corner of the land described in deed to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and wife, recorded July 1, 1953 in Book 1142, Page 222, Official
Records; thence along the East line of said land,
1st: South 19(degrees) 11' West 751.50 feet to an angle point therein;
thence,
2nd: South 73(degrees) 24' East 219 feet, more or less to the most Westerly
corner of the land conveyed to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and wife by deed
recorded in Book 680, Page 483 of Official Records; thence along the
West line of said land of ▇▇▇▇▇▇▇▇▇,
3rd: North 19(degrees) 11' East 749.90 feet to a point on the South line of
Cuyama Road (formerly ▇▇▇▇▇▇▇▇ ▇▇▇▇) ▇▇ feet wide; thence along the
Southerly line of said land,
4th: North 73(degrees) 24' West 218.96 feet to the point of beginning.
EXCEPT from the Northerly 1.885 acres of said land an undivided 60% of all oil,
gas and other hydrocarbon substances, without the right of entry above a depth
of 500 feet from the surface of said land for the development of said oils and
minerals, as reserved by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, et ux., in deed recorded February
19, 1959 in Book 1704, Page 278, Official Records.
PARCEL 3:
A portion of Tract No. 8 of the Bard Subdivision of Rancho Ojai, in the City of
Ojai, County of Ventura, State of California, according to the map recorded in
Book 5, Page 25-1/2 of Maps, in the office of the County Recorder of said
County, described as follows:
Commencing at the Northeast corner of the land described in deed to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and wife, recorded July 1, 1953 in Book 1142, Page 222 of Official
Records; thence along the East line of said land, South 19(degrees) 11' West
751.50 feet to an angle point therein, said point being to the true point of
beginning; thence continuing along said East line,
1st: South 16(degrees) 11' West 362.25 feet to a point in the Northerly
line of that certain strip of land conveyed to Ventura County by deed
recorded in Book 384, Page 436 of Official Records; thence
2nd: South 74(degrees) 55' East 205.80 feet to the Southwest corner of the
land described in Parcel 1 deeded to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, et al.,
recorded September 17, 1958 in Book 1654, Page 451 of Official
Records; thence along the West line of the land last referred to,
3rd: Northerly in a direct line to the Northwest corner of said land, at
the most Westerly corner of the land conveyed to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
wife by deed recorded in Book 680, Page 483, Official Records; thence,
4th: North 73(degrees) 24' West 219 feet, more or less to the point of
beginning.
[DIAGRAM]
86
EASEMENTS PER CHICAGO TITLE INSURANCE CO. NO. 575226-6
(6) 20' WIDE ROAD EASEMENT RESERVED B ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ PER BOOK 41.
PAGE 297 OFFICIAL RECORDS
(7) 6' WIDE UTILITY EASEMENT TO SOUTHERN CALIFORNIA EDISON CO. PER BOOK
1809. PAGE 525 OFFICIAL RECORDS
(8) PUBLIC STREET EASEMENT TO THE CITY OF OJAI PER BOOK
3260. PAGE 255 OFFICIAL RECORDS
(9) 6' WIDE UTILITY EASEMENT TO SOUTHERN CALIFORNIA EDISON CO. PER BOOK
3550. PAGE 211 OFFICIAL RECORDS
(11) 6' WIDE UTILITY EASEMENT TO SOUTHERN CALIFORNIA EDISON CO. PER BOOK
3606. PAGE 279 OFFICIAL RECORDS
(11A) CENTERLINE 10' WIDE UTILITY EASEMENT TO SOUTHERN CALIFORNIA EDISON CO.
PER BOOK 3606. PAGE 279 OFFICIAL RECORDS
[Diagram of [Diagram of
OJAI VALLEY ONE STORY BUILDING
COMMUNITY HOSPITAL
OJAI MANOR
(1&2 STORY BUILDING)] CONVALESCENT HOSPITAL
NEW BEGINNINGS
REHABILITATION
CENTER]
87
[SURVEY]
SURVEY CERTIFICATION
To NATIONWIDE HEALTH PROPERTIES, INC., a Maryland corporation, or its designee
and CHICAGO TITLE INSURANCE COMPANY:
This is to certify that this map or plat of survey is based on a field
survey made on April 1, 1994, by me or directly under my supervision in
accordance with "Minimum Standards Detail Requirements for ALTA/ACSM Land Title
Surveys" jointly established and adopted by ALTA and ACSM in 1988, and to the
best of my professional knowledge, information and belief,
a) correctly represents the facts found at the time of survey;
b) except as shown on survey map, there are no discrepancies between
the boundary lines of the subject property as shown on the survey map
and as described in the legal description of record;
c) the boundary line dimensions as shown on the survey map form a
mathematically closed figure within +/- 0.01 foot;
d) except as shown on survey map, the boundary lines of the subject
property are contiguous with the boundary lines of all adjoining
parcels, roads, highways, streets or alleys as described in their
most recent respective legal descriptions of record;
e) the field survey meets the accuracy requirements of a Class A
survey defined therein;
f) the subject property does not lie within a flood zone as determined
by the United States Department of Housing and Urban development; and
g) The Premises do not lie within an "Earthquake Special Studies Zone"
as designated under ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Special Studies Zone Act (Sections
2621-2630), inclusive, of the California Public Resources Code.
/s/ ▇.▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ LS #5948 CA
[SEAL]
LICENSED LAND SURVEYOR
WM. ▇. ▇▇▇▇▇▇▇
EXP. 12/96
NO. 5948
STATE OF CALIFORNIA
ALTA SURVEY
OJAI MEDICAL CENTER
VENTURA COUNTY ASSESSOR'S PARCEL
19-0-110-04, 19-0-110-33 and ▇▇▇-▇-▇
▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
DATE: APRIL 4, 1994 SHEET: 1 OF 1
88
[ASBUILT SURVEY]
----------------------
Scale 1 degree - 40 degrees
BOOK 4000, PAGE 604
OFFICIAL RECORDS
1.75 ACRES
BOOK 29, PAGE 262
OFFICIAL RECORDS
3.76 ACRES
BOOK 680, PAGE 483
OFFICIAL RECORDS
2.47 ACRES
BOUNDARY SURVEY
----------------------
Scale 1 degree - 100 degrees
89
ADDENDUM TO LEASE
(OPTION TO PURCHASE)
THIS ADDENDUM is dated as of April 11, 1994 and is attached to and made a
part of that certain Lease and Security Agreement of even date herewith (the
"LEASE") by and between Nationwide Health Properties, Inc., a Maryland
corporation ("LANDLORD"), and Brim Hospitals, Inc., an Oregon corporation
("TENANT").
Provided no Event of Default has occurred under the Lease as of Tenant's
exercise of its option to purchase the Premises pursuant to this Addendum or at
the closing date established to consummate the purchase of the Premises
pursuant to Tenant's exercise of such option, Tenant shall have the option to
purchase the Premises upon the following terms and conditions:
(a) Not more than five (5) days before or after the date
which is twelve (12) months prior to the end of the then current Term,
Tenant shall exercise its option to purchase all but not less than all of
the Premises by giving Landlord written notice thereof;
(b) The purchase price for the Premises shall be payable in
cash by Tenant and shall be equal to the fair market value of the Premises
on the date of Tenant's exercise of its option pursuant to this Addendum
adjusted to take out any increase in value attributed to any improvements
to the Premises made by Tenant and not funded or reimbursed by Landlord,
provided that such purchase price shall not (i) be less than Landlord's
Original Investment ($4,350,000) as increased pursuant to Section 5.7 of
the Lease or decreased under Section 13.2 of the Lease, if either is
applicable, nor (ii) exceed Landlord's Original Investment ($4,350,000)
(as increased pursuant to Section 5.7 of the Lease or decreased under
Section 13.2 of the Lease, if either is applicable) increased by three
percent (3%) per annum compounded annually from the date of this Lease to
the date of Tenant's notice of exercise of option hereunder. If within ten
(10) days of the date of Tenant's exercise of its option under this
Addendum Landlord and Tenant are unable to agree on the fair market value
of the Premises, such fair market value shall be established by the
appraisal process described on Exhibit "D" to the Lease. Such fair market
value must be finally determined by a date ninety (90) days after Tenant's
exercise of its option under this Addendum or Tenant shall lose its right
to purchase the Premises;
(c) Once the purchase price is established pursuant to the
above, Landlord as seller and Tenant as buyer shall immediately open an
escrow to consummate such purchase at a national title company selected by
Landlord on the following
1
90
terms: (i) the form of such instructions to be then signed by Landlord and
Tenant shall be such title company's standard sale escrow instructions
without any representations or warranties and without due diligence or
other contingencies in favor of the buyer, (ii) the purchase price shall
be payable in cash by Tenant upon the expiration of the then current Term,
(iii) all transaction costs shall be divided between Landlord and Tenant
according to the customary practices in Southern California, (iv) at
close, Landlord shall deliver title to the Premises subject only to those
title exceptions shown on Exhibit "E" to the Lease, (v) the sale escrow
instructions shall provide for a deposit equal to five percent (5%) of the
purchase price and shall provide that the deposit may be retained by
Landlord as liquidated damages in the event of any breach by Tenant of the
terms of the escrow instructions (provided, however, such liquidated
damages shall relate only to Landlord's damages by reason of a breach of
the escrow instructions and shall in no way liquidate or limit Landlord's
damages by reason of a breach of the Lease), and (vi) the escrow
instructions shall otherwise be in form and substance reasonably
satisfactory to Landlord and Tenant.
(d) If Tenant fails to close the escrow for any reason other
than a breach by Landlord, then Landlord shall have the right to extend
the Term for an additional year. The Additional Rent and Minimum Rent
during such year extension period shall be calculated as if on the date of
Tenant's exercise of its option pursuant to this Exhibit Tenant had
instead exercised its right under Section 1.2 of the Lease to extend the
Term for a renewal term.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Addendum as of the day and year first above written.
"LANDLORD" "TENANT"
Nationwide Health Properties, Inc., Brim Hospitals Inc.,
a Maryland corporation an Oregon corporation
By: By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ----------------------------
Its: Its: President
------------------------------ ---------------------------
2
91
AMENDMENT OF LEASE DOCUMENTS,
CONSENT AND REAFFIRMATION
(OJAI VALLEY COMMUNITY HOSPITAL)
THIS AMENDMENT OF LEASE DOCUMENTS, CONSENT AND REAFFIRMATION
("AGREEMENT") is made as of December 16, 1996 by and among NATIONWIDE HEALTH
PROPERTIES, INC., a Maryland corporation ("LANDLORD"), BRIM HOSPITALS, INC., an
Oregon corporation ("TENANT"), and BRIM, INC., an Oregon corporation
("GUARANTOR").
R E C I T A L S:
A. Landlord and Tenant have entered into that certain Lease and
Security Agreement dated as of April 11, 1994 with respect to the Ojai Valley
Community Hospital (the "LEASE"). All capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed to such terms in the
Lease.
B. Pursuant to that certain Guaranty of Lease dated as of April 11,
1994 (the "LEASE GUARANTY") executed by Guarantor, as guarantor, in favor of
Landlord, Guarantor agreed to guarantee the obligations of Tenant under the
Lease. Pursuant to that certain Guaranty of Obligations dated as of April 11,
1994 (the "ACQUISITION GUARANTY") executed by Guarantor, as guarantor, in favor
of Landlord, Guarantor agreed to guarantee the obligations of Tenant under that
certain Purchase and Sale Agreement dated as of April 11, 1994, by and between
Tenant, as seller, and Landlord, as buyer. The Lease Guaranty and the
Acquisition Guaranty are collectively referred to herein as the "GUARANTIES."
C. In accordance with the terms of that certain Letter of Credit
Agreement dated as of April 11, 1994, by and between Guarantor and Landlord,
and accepted and agreed to by Tenant (the "L/C AGREEMENT"), Guarantor has caused
a letter of credit in the amount of Two Hundred Three Thousand Six Hundred
Twenty-Four Dollars ($203,624.00) to be issued to Landlord as additional
security for the performance of Tenant's obligations under the Lease and
Guarantor's obligations under the Lease Guaranty.
D. The Lease, the Lease Guaranty, the L/C Agreement, together with
all other documents, agreements or instruments evidencing and/or securing the
transactions contemplated by the Lease shall be collectively referred to herein
as the "LEASE DOCUMENTS".
E. Concurrently herewith and pursuant to the terms and conditions
of that certain Investment Agreement dated as of November 21, 1996, by and
between Guarantor, Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV, L.P., a Illinois
limited partnership, ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ (the "RECAPITALIZATION
AGREEMENT"), guarantor will be recapitalized, and concurrently therewith
Principal Hospital Corporation, a Delaware corporation, will merge with and
into a wholly-owned subsidiary of Guarantor (collectively, the
RECAPITALIZATION/MERGER
1
92
TRANSACTIONS"), which Recapitalization/Merger Transactions will result in a
change in control over the management of the affairs of Guarantor.
F. Tenant and Guarantor have requested that Landlord (i)
consent to the Recapitalization/Merger Transactions, which consent is required
under the terms of the Lease, and (ii) waive its rights to put the
Premises to Tenant as a result of such Recapitalization/Merger Transactions.
Landlord has agreed to consent to such requests of Tenant and Guarantor, in all
cases upon and in consideration of the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing Recitals and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. CONSENT BY LANDLORD.
(a) Upon the terms and conditions contained
herein and subject to the satisfaction of the conditions precedent
set forth in Section 7 of this Agreement, Landlord hereby consents
to the Recapitalization/Merger Transactions, and Landlord hereby
waives any right it may have under the Lease Documents, including,
without limitation, Section 22.3 of the Lease, to put the Premises
to Tenant or to declare a default under the Lease Documents as a
result of such Recapitalization/Merger Transactions.
(b Tenant and Guarantor each acknowledge and
agree that this consent is made solely for the benefit of Tenant
and Guarantor and shall not be deemed, nor shall the same
constitute, a waiver by Landlord of any rights under the Lease
Documents, as amended and modified pursuant to the terms hereof,
in the event of any subsequent event, including, without
limitation, any subsequent event which may result in a deemed
assignment of the Lease.
2. NO RELEASE. Nothing contained herein shall be deemed or
construed to constitute a release of Tenant or Guarantor from any of their
respective obligations under the Lease Documents.
3. AMENDMENTS TO LEASE. Subject to the satisfaction of the
conditions precedent set forth in Section 7 of this Agreement, the Lease is
hereby amended as follows:
(a) The security deposit required under Section
11 of the Lease shall be increased to the sum of Five Hundred
thousand Dollars ($500,000).
(b) Section 10.1.4 of the Lease is hereby
deleted in its entirety and the following is substituted therefor:
"A default by Tenant or any Guarantor with
respect to any obligation with a principal
amount of at least One Million Dollars
($1,000,000) under any other lease or
financing agreement with any other party,
including, without
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limitation, that certain Credit Agreement dated as of
December 17, 1996 among First Union National Bank of
North Carolina, a national banking association, as agent
thereunder, the Lenders (as such term is defined
therein) and Guarantor, which default is not cured
within any applicable cure period provided in the
documentation for such obligation;"
(c) In addition to the option to purchase the Premises
granted to Tenant by Landlord in the Addendum to Lease (Option to Purchase),
the Lease is amended to provide that Tenant shall have an additional option to
purchase the Premises upon the following terms and conditions:
(i) No later than December 3, 1997, Tenant shall
exercise its option to purchase all but not less than all of the
Premises by giving Landlord written notice thereof;
(ii) The purchase price for the Premises shall be
payable in cash by Tenant and shall be equal to the product of (A)
Landlord's Original Investment ($4,350,000) as increased pursuant to
Section 5.7 of the Lease or decreased under Section 13.2 of the
Lease, if either is applicable, and (B) one hundred eleven percent
(111 %); and
(iii) Landlord, as seller, and Tenant, as buyer, shall
immediately open an escrow to consummate such purchase at a national
title company selected by Landlord on the following terms: (A) the
form of such instructions to be then signed by Landlord and Tenant
shall be such title company's standard sale escrow instructions
without any representations or warranties and without due diligence
or other contingencies in favor of the buyer, (B) the purchase price
shall be payable in cash by Tenant no later than ninety (90) days
after Tenant's notice of exercise of its option to purchase, (C)
Tenant shall pay all transaction costs, including, without
limitation, all attorneys' fees and costs incurred by Landlord in
connection with such transaction, (D) at close, Landlord shall
deliver title to the Premises subject only to those title exceptions
shown on Exhibit "E" to the Lease, (D) the sale escrow instructions
shall provide for a deposit equal to five percent (5%) of the
purchase price and shall provide that the deposit may be retained by
Landlord as liquidated damages in the event of any breach by Tenant
of the terms of the escrow instructions (provided, however, such
liquidated damages shall relate only to Landlord's damages by reason
of a breach of the escrow instructions and shall in no way liquidate
or limit Landlord's damages by reason of a breach of the Lease), and
(E) the escrow instructions shall otherwise be in form and substance
reasonably satisfactory to Landlord and Tenant.
4. AMENDMENTS TO L/C AGREEMENT. Subject to the
satisfaction of the conditions precedent set forth in Section 7 of this
Agreement, the L/C Agreement is hereby amended as follows:
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(a) The first sentence of Section l(b) of the
L/C Agreement is hereby deleted in its entirety and the following is
substituted therefor:
"The aggregate amount of all issued and
outstanding Letters of Credit shall, at all
times during the term hereof as provided in
Section 5 be Five Hundred Thousand Dollars
($500,000) (the "LETTER OF CREDIT
AMOUNT")."
5. REPRESENTATIONS AND WARRANTIES. Tenant and Guarantor
each hereby represent and warrant that:
(a) all of the representations and warranties
set forth in the Lease and the Guaranties, as applicable, are true
and correct as of the date hereof as through originally make herein;
(b) Tenant is in full compliance with Section
21.9 of the Lease;
(c) this Agreement has been duly and validly
authorized, executed and delivered by Tenant and Guarantor and
constitutes the legally valid, binding and enforceable obligation of
Tenant and Guarantor which has not and will not constitute a breach
or default under any agreement, court order, judgment or law by or
under which Tenant or Guarantor are bound or may be affected,
subject to bankruptcy, insolvency and similar laws affecting the
rights of creditors generally;
(d) the Lease Documents are in full force and
effect and are binding upon Tenant and Guarantor in accordance with
their respective terms, subject to bankruptcy, insolvency and
similar laws affecting the rights of creditors generally; and
(e) no Event of Default exists under the Lease
or Guaranties as modified by this Agreement and no event exists
which, with the giving of notice or the passage of time, or both,
would give rise to an event of Default under the Lease or Guaranties
as modified by this Agreement.
6. REAFFIRMATION OF OBLIGATIONS.
(a) Notwithstanding the modifications to the
Lease contained herein, Tenant hereby acknowledges and reaffirms it
obligations under the Lease (including, without limitations, it
obligations concerning the environmental condition of the Premises
set forth in Section 21.9 of the Lease and its indemnification
obligations set forth in Section 23 of the Lease) and the other
Lease Documents.
(b) Notwithstanding the modifications to the
Lease contained herein, Guarantor hereby acknowledges and reaffirms
it obligations under the Guaranties, the L/C Agreement and all
documents executed by Guarantor in connection therewith, and further
agrees that any reference made in the Lease Guaranty or the L/C
Agreement to the Lease
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or any terms or conditions contained therein, shall mean such Lease,
terms or conditions as modified by this Amendment.
7. CLOSING CONDITIONS, Landlord shall have no obligation to
execute this Agreement, and the consent of Landlord set forth in Section 1
above shall not be effective prior to the closing of the
Recapitalization/Merger Transactions and prior to the date (the "EFFECTIVE
DATE") that Tenant and/or Guarantor, as applicable, has delivered or caused to
be delivered to Landlord the following items, all of which shall be
satisfactory in form and content to Landlord and, if applicable, duly executed
(and acknowledged where necessary) by the appropriate parties thereto:
(a) This Agreement;
(b) A replacement Letter of Credit, additional
Letter of Credit or an amendment to the Letter of Credit (as defined
in the L/C Agreement) increasing the Letter of Credit Amount (as
defined in the L/C Agreement) to Five Hundred Thousand Dollars
($500,000); and
(c) A copy of the fully-executed
Recapitalization Agreement.
8. ADDITIONAL REQUIREMENTS. Within thirty (30) days after
the Effective Date, Tenant and/or Guarantor, as applicable, shall deliver or
cause to be delivered to Landlord the following items, all of which shall be
satisfactory in form and content to Landlord and, if applicable, duly executed
(and acknowledged where necessary) by the appropriate parties thereto:
(a) Any other material agreements entered into
by Guarantor with respect to the Recapitalization/Merger
Transactions which relate in any manner to the sale of Guarantor's
stock;
(b) Certified copies of all of the
organizational documents with respect to Tenant and Guarantor which
have not previously been delivered to Landlord (e.g., amendments to
Articles of Incorporation and Bylaws and related filings with the
State of Oregon), together with evidence satisfactory to Landlord
that each of Tenant and Guarantor have taken all necessary action to
authorize such party to execute, deliver and be bound by this
Agreement and the other documents to be executed and delivered
pursuant to the terms hereof;
(c) Funds from Tenant and/or Guarantor in an
amount sufficient to pay all attorneys' fees and costs incurred by
Landlord in connection with this transaction; and
(d) Such other documents, materials or
information as Landlord may reasonably require.
9. SURVIVAL. The covenants, representations and warranties
of Tenant and Guarantor set forth herein shall survive the consummation of the
transactions contemplated hereunder.
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10. EVENTS OF DEFAULT. The breach or default by Tenant
and/or Guarantor of any term, covenant, agreement, condition, provision,
representation or warranty contained herein, and the expiration of any
applicable cure period set forth in any applicable Lease Document, shall
constitute an "Event of Default" under the applicable Lease Document(s) and
shall give Landlord the right, exercisable at Landlord's sole discretion, to
pursue any or all of its applicable rights and remedies under such Lease
Document(s).
11. EFFECT OF AGREEMENT. Except as expressly provided in
this Agreement, the terms and conditions of the Lease Documents shall remain
unmodified and in full force and effect.
12. MISCELLANEOUS.
(a) Notices. The parties hereto notify each other that
its address for receipt of notice hereunder or under the Lease
Documents is as follows:
TO TENANT AND/OR GUARANTOR:
Brim, Inc.
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
The ▇▇▇▇▇▇▇▇▇ Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
TO LANDLORD:
Nationwide Health Properties, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and General Counsel
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
(b) NO WAIVER. No waiver of any breach of any
representation or agreement contained herein shall be construed to be
a subsequent waiver of that representation or agreement or of any
subsequent breach thereof or of this Agreement.
(c) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.
(d) BURDEN AND BENEFIT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their successors
in interest and assigns.
(e) ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties relating to the subject matters
contained herein. Any oral representations or statements concerning
the subject matters herein shall be of no force or effect. No
variations or modification of this Agreement shall be valid and
enforceable, except by an agreement in writing, executed and approved
in the same manner as this Agreement.
(f) HEADINGS. The headings used in this Agreement are for
convenience only, and are not to be considered in connection with the
interpretation or construction of this Agreement.
(g) FURTHER INSTRUMENTS. Each party will, whenever and as
often as it shall be reasonably requested so to do by another party,
cause to be executed, acknowledged or delivered, any and all such
further instruments and documents as may be necessary or proper, in
the reasonable opinion of the requesting party, in order to carry out
the intent and purpose of this Agreement.
(h) COUNTERPARTS. This Agreement may be executed and
acknowledged in counterparts, all of which executed and acknowledged
counterparts shall together constitute a single document. Signature
and acknowledgment pages may be detached from the counterparts and
attached to a single copy of this document to physically form one
document.
(i) ATTORNEYS' FEES. In the event of any dispute or
litigation concerning the enforcement, validity or interpretation of
this Agreement, or any part thereof, the losing party shall pay all
costs, charges, fees and expenses (including reasonable attorneys'
fees) paid or incurred by the prevailing party, regardless of whether
any action or proceeding is initiated relative to such dispute and
regardless of whether any such litigation is
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prosecuted to judgment. For the purpose of this Agreement, the term
"attorneys' fees" or "attorneys' fees and costs" shall mean the fees
and expenses of counsel to the parties hereto, which may include
printing, photostating, duplicating and other expenses, air freight
charges, and fees billed for law clerks, paralegals and others not
admitted to the bar but performing services under the supervision of
an attorney. The terms "attorneys' fees" or "attorneys' fees and
costs" shall also include, without limitation, all such fees and
expenses incurred with respect to appeals, arbitrations and bankruptcy
proceedings, and whether or not any action or proceeding is brought
with respect to the matter for which such fees and expenses were
incurred.
(j) Submission of Agreement. The submission of this
Agreement to Tenant or Guarantor or any of their respective agents or
attorneys, for review or signature, does not constitute a commitment
by Landlord to enter into this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LANDLORD: NATIONWIDE HEALTH PROPERTIES, INC.
a Maryland corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
TENANT: BRIM HOSPITALS, INC.,
an Oregon corporation
By: /s/
------------------------------
Its: President and C.E.O.
---------------------------
GUARANTOR: BRIM, INC.,
an Oregon corporation
By: /s/
------------------------------
Its: Chief Executive Officer
-------------------------
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