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HomeMy WebLinkAboutA-08-699 VMC LEASE AMENDMENT-II.pdfSECOND AMENDMENT TO LEASE Valley Medical Center AGT08-669 FL-078 CAO/CMC This Second Amendment to Lease for the Valleg Medical Center (hereinafter "Second Amendment") is made and entered into this 1:b day of C>t.Cemlotr', 2008 (the "Execution Date of this Second Amendment") by and between the COUNTY OF FRESNO, a political subdivision of the State of California ("Landlord"), and FRESNO COMMUNITY HOSPITAL AND MEDICAL CENTER, a California nonprofit public benefit corporation ("Tenant"), collectively referred to herein as "the Parties" with reference to the following facts and objectives: RECITALS A. The Parties concurrently entered into that certain Master Agreement, Operating and Funding Agreement, Equipment Lease, Purchase of Services Agreement, and the VMC Lease (collectively defined in Section 1.28 of the Master Agreement as the "Transaction Documents," all of which are dated as of August 27, 1996 (the "Execution Date")) in consideration of the execution of each of the other documents, and all of such documents, including amendments thereto as set forth hereinafter, represent a single integrated transaction between the Parties. B. Capitalized terms utilized but not defined herein have the meanings set forth in the Transaction Documents. C. The VMC Lease (County lease number FL-078; the "Lease") is for Landlord's leasing to Tenant ofthe Valley Medical Center Facility, the Campus Clinics, and certain other land and improvements, collectively defined in Section 1.9 of the Lease as the "Leased Property." D. The Parties entered into that certain first Amendment to Transaction Documents, dated as of June 23, 1998 (the "First Amendment to Transaction Documents"). E. Pursuant to Article 3 of the Lease, Tenant extended the term of the Lease to October 6, 2004. F. The parties entered into that certain First Amendment to Lease for the VMC Lease, dated as of October 1, 2003, which further extended the term of the Lease until12:01 AM on January 1, 2009, and provided for other terms and conditions therein. G. The Parties entered into that certain Second Amendment to Transaction Documents, dated as of June 2, 2006. H. The Parties entered into that certain Third Amendment to Transaction Documents, dated as of June 26, 2007. 1 FL-078 CAO/CMC I. Tenant also has requested a further extension to the term of the Lease so that Tenant may have additional time in which to construct an ambulatory care center ("Ambulatory Care Center") on Tenant's own facilities at the Community Regional Medical Center and transition its services at the Campus Clinics, and its other activities, located at the Leased Property to such Tenant's facilities, a provision for a month-to-month hold over of such tenancy, and Landlord is agreeable to granting such extension, and to such other provisions, upon the terms and conditions provided herein. The Parties now wish to further amend the Lease as hereinafter set forth to provide for such further extension and such further terms and conditions. AMENDMENT IN CONSIDERATION of the foregoing Recitals, which are hereby incorporated herein by reference, and in further consideration of the mutual covenants contained herein and of other good and valuable consideration the sufficiency and receipt of which are hereby acknowledged, the Parties hereby further amend the Lease as follows: 1. Term. Article 3 of the Lease is deleted in its entirety and replaced with the following: "3 .1. The further extended term of this Lease shall be for one (1) year commencing upon 12:01:01 A.M. on January 1, 2009 (the "Effective Date of this Second Amendment") and expiring at 12:01 A.M. on January 1, 2010 (the "Third Extended Term"), unless this Lease is earlier terminated under the terms of this Lease. All references elsewhere in this Lease to the Lease term, for the period that this Second Amendment is in effect, shall mean the Third Extended Term. Nothing contained in this Lease expressly or impliedly grants Tenant a subsequent extension or a renewal of the term of this Lease, or the right to holding over for any period of time (except for the Permitted Holdover Period provided in section 25.5., herein), nor shall any Lease provisions referring to Tenant's holding over, whether authorized herein or unauthorized, constitute a waiver of any rights or remedies of Landlord provided in this Lease or at Law or in equity. 3.2. So long as Tenant is not in default of the Transaction Documents, Tenant, not later than October 1, 2009, may request of Landlord in writing, and Landlord may in its absolute discretion consider, a further extension to the term of this Lease that is subsequent to the Third Extended Term. If the Parties desire to subsequently extend the term of this Lease, such extension shall only be valid and enforceable if it is made by the Parties in writing pursuant to Section 27.7 of this Lease prior to the expiration of the Third Extended Term. Any extension of the term of this Lease may only be made in compliance with the requirements of this section 3.2. Nothing contained in this Lease expressly or impliedly grants Tenant a subsequent extension or a renewal of the term of this Lease, or the right to holding over for any period of time (except for the Permitted Holdover Period provided in section 25.5, herein), nor shall any Lease provisions 2 FL-078 CAO/CMC referring to Tenant's ability to request an extension of this Lease as provided herein, or to Tenant's holding over, whether authorized herein or unauthorized, constitute a waiver of any rights or remedies of Landlord provided in this Lease or at Law or in equity." 3.3. Any reference in this Lease to any period of renewal or extension after the Second Extended Term, or to any holding over period after the Second Extended Term, or any variations thereof to include any period after the Second Extended Term shall mean "the Third Extended Term, the Permitted Holdover Period, or any month of any other holding over by Tenant, respectively." The provisions of this Article 3 shall apply to the Third Extended Term, the Permitted Holdover Period, and any other holding over period, respectively, notwithstanding anything contained in the contrary in this Lease concerning the term of this Lease." 2. Rent. Section 5.1 ofthe Lease is deleted in their entirety and replaced with the following: "5.1. For purposes of this section 5.1, the parties agree that the square footage of the buildings 307,308,309,310,318,321,322,323,324,325 and 331 in Table 1 of Exhibit "A"( excluding the Reserved Space as defined in Article 23 hereof) occupying the Leased Property is assumed to be three hundred ninety eight thousand eight hundred thirty (398,830) square feet, provided however, the base monthly rent, below, is calculated without regard to Tenant's actual occupancy or any abandonment of any or all of such buildings. The base monthly rent for the Leased Property during the Third Extended Term, and the Permitted Holdover Period, respectively, shall be payable in advance of occupancy for each month as follows: (i) During the twelve (12) month period ofJanuary 1, 2009 to December 31, 2009: One Hundred Sixty Six Thousand, Six Hundred, Sixty Six Dollars and 67/100 ($166,666.67) per month for a total of Two Million Dollars and 001100 ($2,000,000.00) during such period. (ii) During the Permitted Holdover Period, from January 1, 2010 to December 31,2010: One Hundred Sixty Six Thousand, Six Hundred, Sixty Six Dollars and 67/100 ($166,666.67) per month for a total of Two Million Dollars and 00/100 ($2,000,000.00) during such period. 5.1.1. Although Landlord does not grant Tenant any right to holding over after the Permitted Holdover Period, the base monthly rent for the Leased Property during any month of such unauthorized holding over shall be payable in advance of such month in the amount of One Hundred Sixty Six Thousand, Six Hundred, Sixty Six Dollars and 671100 ($166,666.67) per month. 5.1.2. Notwithstanding section 5.2, herein, ifTenant abandons any portion of the Leased Property during the Third Extended Term, there shall not be any reduction or modification in, or proration of, the amount of rent payable for such period, nor shall there be any change in the due date of any such rent payment. 3 FL-078 CAO/CMC 5.1.3. Notwithstanding section 5.2, herein, if Tenant abandons any portion of the Leased Property during the Permitted Holdover Period, or during any month of any other holding over by Tenant, there shall not be any reduction or modification in, or proration of, the amount of rent payable for any month during either such period, respectively, nor shall there be any change in the due date of any such rent payment, respectively. 5.1.4. Tenant's obligation to pay rent to Landlord is absolute and unconditional. All rent hereunder shall be payable only in legal tender of the United States, without abatement, deduction or offset." 3. Rent. Section 5.5 of the Lease is amended as follows: The reference to ''the Second Extended Term" at line 5 of section 5.5 of the Lease is deleted and replaced with ''the Third Extended Term, the Permitted Holdover Period, or any month of any other holding over by Tenant, respectively." The references to "the Second Extended Term or extension or renewal of the this Lease or holding over" at lines 14 and 15 of section 5 of the Lease are deleted and replaced with "the Third Extended Term, the Permitted Holdover Period, or any month of any other holding over by Tenant, respectively." 4. Use. Sections 7.2.2.1 through 7.2.2.1.2 ofthe Lease are amended as follows: The references to "the Second Extended Term, and any renewal, extension and holding over period" at lines 12 and 13 of section 7 .2.2.1 of the Lease are deleted and replaced with "the Third Extended Term, the Permitted Holdover Period, or any month of any other holding over by Tenant, respectively." The references to "the Second Extended Term, and any renewal, extension and holding over period" at lines 11 and 13 of section 7 .2.2.1.1 of the Lease are deleted and replaced with "the Third Extended Term, the Permitted Holdover Period, or any month of any other holding over by Tenant, respectively." The reference to "the Second Extend [sic] Term, and any renewal, extension or holding over period" at line 8 of section 7 .2.2.1.2 of the Lease is deleted and replaced with "the Third Extended Term, the Permitted Holdover Period, or any month of any other holding over by Tenant, respectively." The references to "the Second Extended Term" at lines 12, 13, 15, and 19 of section 7.2.2.1.2 of the Lease are deleted and replaced with "the Third Extended Term, the Permitted Holdover Period, or any month of any other holding over by Tenant, respectively." 4 FL-078 CAO/CMC 5. Maintenance, Structural Alterations. Section 8.1 of the Lease is amended as follows: The references to ''the Second Extended Tenn" at lines 8, 9, and 14 of section 8.1 are deleted and replaced with "the Third Extended Tenn, the Pennitted Holdover Period, or any month of any other holding over by Tenant, respectively." 6. Right of Entry. Section 19 .1.4 of the Lease is deleted in its entirety and replaced with the following: "19.1.4 Show the Leased Property to prospective brokers, agents, buyers, tenants, or persons interested in an exchange, at any time; and" 7. Licensing. Article 24 of the Lease is amended as follows: The reference to "the tenn hereof and any extensions or holding over period" is deleted and replaced with ''the Third Extended Tenn, the Pennitted Holdover Period, or any month of any other holding over by Tenant, respectively." 8. Surrender of Premises; Holding Over. Section 25.1 of the Lease is deleted in its entirety and replaced with the following: "25.1 On the earlier to occur of the expiration of the Third Extended Tenn, or the Pennitted Holdover Period, respectively, or often (10) calendar days after any earlier tennination, under the tenns of this Lease, of the Third Extended Tenn, or the Pennitted Holdover Period, respectively, Tenant shall surrender to Landlord the Leased Property in the condition which exists on the Effective Date of the First Amendment, subject to ordinary wear and tear, and all Tenant's improvements and alterations thereto in the condition which existed on the date such Tenant's improvements and alterations were completed (subject to ordinary wear and tear occurring during the Third Extended Tenn, or the Pennitted Holdover Period, respectively). If this Lease tenninates because of a tennination of the Master Agreement and the Operating and Funding Agreement, then Tenant shall also transfer to Landlord or Landlord's designee, at Landlord's option, any and all patients, patient records, and any and all documents of every kind whatsoever necessary to enable Landlord to continue operation of the Leased Property, and including at least a three (3} day supply of necessary inventory and operational items, and shall cooperate in the efforts of Landlord or its designee to hire fonner staff members of Landlord. The provisions of this Article 25 shall survive the tennination of this Lease." 9. Surrender ofPremises; Holder Over. Section 25.5 of the Lease is deleted in its entirety and replaced with the following: "25.5 During the Third Extended Tenn, Tenant will be transitioning certain activities to be carried out by Tenant on the Leased Property to Tenant's own facilities. To reasonably accommodate Tenant's completion ofthe construction of the Ambulatory Care Center, and transition of such activities from the Leased Property to Tenant's own 5 FL-078 CAO/CMC facilities, the Parties agree that, provided that Tenant is not then in default of this Lease, and provided further that this Lease is not earlier terminated or extended under the terms ofthis Lease, if Tenant remains in possession of the Leased Property after expiration of the Third Extended Term, (i) Tenant's occupancy of the Leased Property shall be a month-to-month tenancy at the base rent provided in subdivision (ii) of section 5.1, herein, (ii) such month-to-month tenancy of the Leased Property shall otherwise continue to be on all of the same terms and conditions of this Lease, (iii) subject to the immediately following subdivision (iv), Landlord's permission of such month-to-month tenancy of the Leased Property shall in any event expire at 12:01 A.M. on January 1, 2011 (collectively, all such permitted month-to-months tenancies of the Leased Property are the "Permitted Holdover Period"), and any possession of the Leased Property, or any portion thereof, by Tenant, thereafter shall be without Landlord's consent, and thereupon shall be deemed to be an unlawful detainer of the Leased Property by Tenant, and shall be governed by section 25.3, herein, and any applicable Laws, and (iv) either Party may terminate such month-to-month tenancy of the Leased Property upon giving at least thirty (30) days' advance written notice thereof to the other Party, provided that such termination of such month-to-month tenancy of the Leased Property shall be as of 12:01 A.M. on the day immediately following the last month permitted herein of such tenancy (By way of example, and not as a limitation, if Tenant properly gives such notice to Landlord on January 15, 2010, Tenant shall be obligated to pay the full amount of rent as provided herein for all of January 2010 and for all ofFebruary 2010, and such month-to- month tenancy ofTenant shall terminate as of 12:01 A.M. on March 1, 2010). All such transitioning of all of such Tenant activities from the Leased Property shall be carried out by Tenant in a manner that permits the licensure of the Hospital to be maintained, if possible, in suspense if appropriate. No such transitioning or abandonment of any portion of the Leased Property by Tenant shall result in any reduction or modification in, or proration of, the amount of rent payable by Tenant to Landlord hereunder during the Permitted Holdover Period, nor shall there be any change in the due date of any such rent or the Permitted Holdover Period. No such notice of termination of such month-to-month tenancy by Tenant shall result in any reduction or modification in, or proration of, the amount of rent payable by Tenant to Landlord hereunder during the Permitted Holdover Period, nor shall there be any change in the due date of any such rent, respectively. Nor shall any such transitioning or abandonment otherwise affect the Parties' respective rights and obligations under this Lease during the Third Extended Term, or the Permitte« Holdover Period. Without limiting any of Landlord's rights or remedies provided in this Lease or at Law or in equity, if there is any holding over of the Leased Property, or any portion thereof, by Tenant that is not expressly authorized in writing by Landlord, then all of the same terms and conditions of this Lease, including Tenant's obligations to pay rent to Landlord, and to pay any other amounts, upon all of the same terms and conditions of this Lease, shall continue to apply to such unauthorized holding over by Tenant, except that Tenant's holding over of the Leased Property, or any portion thereof, shall be deemed to be an unlawful detainer of the Leased Property by Tenant." Either or both ofthe Parties may record this Second Amendment in the Office of the County Recorder. The Parties shall cause their respective signatures on this Second Amendment to be notarized to facilitate recordation thereof. This Second Amendment 6 FL-078 CAO/CMC shall not affect any portion of the Lease prior to the Effective Date of this Second Amendment. This Second Amendment shall become valid and enforceable against the Parties, according to its terms and conditions, upon its approval and execution by the Parties, and the approval and execution of the guarantees by Tenant's guarantors in favor of Landlord, as provided hereinbelow. Each party represents and warrants to the other party that each person executing this Second Amendment is duly authorized by the party on whose behalf such execution is made, and that such person's authority has not been terminated or revoked at the time of such execution. Except as otherwise modified by Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill 7 FL-078 CAO/CMC this Second Amendment, the Lease, as previously amended, shall continue in full force and effect according to all of its same terms and conditions. IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of the day and year first hereinabove written. FRESNO COMMUNITY HOSPITAL AND MEDICAL C~N R By ______ ~r------------------ Tim A. J slin, Chief Executive Officer Date u 1-z. .for Mailing Address: Fresno and R Streets Fresno, CA 93721 (Guarantees continue on next page) 8 COUNTY OF FRESNO By~-- Henry R. Perea, Chairman Board o~~rvisws Date Utll 0 ~ 2008 ATTEST: Bernice E. Seidel, Clerk to Bo~d ofS~up isors Bycit_!b~ Deputy Mailing Address: 2281 Tulare Street, Fresno, CA 93721 Attention County Administrative Officer ECOMMENDED ette, ounty Administrative Officer APPROVED AS TO ACCOUNTING FORM: Vicki Crow, C.P.A, Auditor-Controller/Treasurer-Tax Collector By 0Ju £~1- APPROVED AS TO LEGAL FORM: Janelle E. Kelley, Interim County Counsel By~~ P~~~cjvJ /lpJj FL-078 CAO/CMC GUARANTEES OF COMMUNITY HOSPITALS OF CENTRAL CALIFORNIA AND SIERRA HOSPITAL FOUNDATION. In consideration of the payment of the sum of One Hundred Dollars ($1 00.00) to each of them, the receipt of which is hereby acknowledged, the undersigned, jointly and severally, hereby guarantee to Landlord satisfaction of any liability that Tenant may incur to Landlord as a result of any failure by Tenant to timely perform each and all of its . obligations under the Lease, as amended, and this Second Amendment to the Lease, and all of the other Transaction Documents, as amended. The foregoing shall not, however, require any guarantor hereunder, itself, to provide any of the Medical Services at any time. Each guarantor, below, represents and warrants to Landlord that the person executing the respective guarantee, below, is duly authorized by the guarantor on whose behalf such execution is made, and that such person's authority has not been terminated or revoked at the time of such execution. SIERRA HOSPITAL FOUNDATION Fund: 0001 Sublcass: 10000 Org: 0415 Account: 3404 9 COMMUNITY HOSPITALS OF CENTRAL CALIFORNIA Date ___ _,,-"-t.._(.,__""'._t-'r=> ______ _