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FY2018-24 Three-year Lease Agreement Of Borough Owned Facilities To Providence Health & Services- Washington dba Providence Kodiak Island Counseling CenterGV4t - no. PYW16-z� LEASE AGREEMENT ("Agreement") is entered into as of March 31, 2018 by and between Providence Health & Services -Washington (formerly known as Sisters of Providence in Washington and Providence Health System -Washington) dba Providence Kodiak Island Counseling Center (referred to herein as "Providence", "Tenant", or "PKICC"), and Kodiak Island Borough (referred to herein as "Landlord" or "KIB"). Providence and Landlord are sometimes referred to in this Amendment as a "Party" or, collectively, as the "Parties." RECITALS A. Since 1997, KIB and Providence have worked together to offer mental health services to the residents of the Kodiak Island Borough. Providence has had full autonomy over this program and has had quiet enjoyment of Borough facilities to house the mental health program. B. Providence and KIB entered into a Lease Agreement dated January 2, 1998, and amended April 21, 2007 ("Lease") pursuant to which Providence leased certain space from KIB. C. The Parties wish to enter into a new Lease of the same space at a cost of $10 per year for a period of up to three years. Subject to the Parties' termination rights as set forth in this Agreement, the term of the lease is through March 31, 2021. D. If a new lease agreement between the Parties is completed and executed prior to March 31, 2021 the current lease agreement will end and be replaced by the new lease agreement at that time. AGREEMENT TO LEASE: KIB agrees to lease to Providence and Providence agrees to occupy and take management responsibilities of the Premises described herein, for the term and upon the terms and conditions set forth in this Agreement. 1. PREMISES: The real estate which is the subject matter of this Agreement is described as follows: Certain office space within various buildings located on Lot 5A -1A, Military Reserve, U.S. Survey 2538 according to plat 95-04 recorded in the Kodiak Recording District, Third Judicial District, State of Alaska and more particularly described below. a. Building A, Kodiak Island Borough Mental Health Offices and Dorm Building Apartments A through G. b. Building B, Kodiak Island Borough Mental Health Offices and Dorm Building Apartments H through M. Including all buildings, appurtenances, and improvements thereto, as well as the existing parking areas as identified on Exhibit A, attached (herein referred to as "Premises"). Page 1 of 7 LEASE AGREEMENT TERMS OF AGREEMENT: 2.1 The Premises shall be leased to Providence by KIB for a term of three (3) years, commencing on March 31, 2018, through and including March 31, 2021, unless sooner terminated as hereinafter provided. 2.2 At the expiration of the term of this Agreement or upon the termination of this Agreement as provided for herein, Providence shall surrender possession of the Premises and all appurtenances to KIB as set forth under the terms of this Agreement. Providence shall own and may take clinical equipment, office equipment, furniture and fixtures purchased by Providence during the term of the lease. 3. LEASE PAYMENT SCHEDULE. The fixed annual lease payment during the term of this Agreement shall be Ten Dollars ($10.00) payable by Tenant on or before the first day of each contract year in advance, at the office of KIB or at such other place designated by KIB, without any prior demand therefor, and without any deduction or setoff whatsoever. 4. UTILITIES: Providence shall arrange and pay for all utilities and other services to be furnished to the Premises, including gas, fuel oil, electricity, sewer, water, telephone, snow removal, janitorial, security and garbage collection. 5. USE: Providence shall use and operate the Premises for a mental health program and for any additional health care related purposes as may be appropriate. Providence shall operate and maintain the premises under the Alaska Statutes and in accordance with the standards (if applicable) prescribed by the Alaska Department of Health and Social Services, The Joint Commission or another certifying body. 6. QUIET ENJOYMENT: KIB warrants that Providence, upon paying the rent and any other charges as provided for in this Agreement and upon performing all other obligations herein, shall quietly have, hold and enjoy the Premises without hindrance. 7. WARRANTY OF TITLE: KIB hereby warrants that it has good and marketable title to the Premises. 8. INSURANCE: 8.1 PROVIDENCE: Providence shall, at its expense, maintain throughout the term of this Agreement the following insurance: a) Insurance against loss or damage by fire and such other risks as may be included in the current KIB hazard insurance policy with extended coverage in an amount not less than the replacement value of the Premises from time to time. From time to time, Providence and KIB shall confer and agree on the appropriate replacement value of the Premises; b) Insurance against claims for personal injury and property damage occurring on the Premises under public liability and malpractice policies with limits of not less than $1,000,000 per person, $3,000.000 per occurrence and $500,000 for property damage arising out of any single occurrence. Such insurance policies may provide for partial self-insurance under the same terms as the policies for hospitals/facilities owned and operated by Providence. KIB shall be named as an additional insured party on each such policy of insurance, and certificates thereof shall be furnished to KIB. c) Providence shall notify KIB of any changes in coverage, including termination Page 2 of 7 LEASE AGREEMENT of coverage, 30 days prior to the change. 8.2 KIB: KIB shall, at its expense, maintain throughout the term of this Agreement appropriate insurance to cover all conditions, events and liabilities arising out of its actions and activities relating to the premises. 9. MAINTENANCE AND REPAIRS: Providence shall cause the Premises to be maintained and repaired in accordance with all state and local codes, and keep the Premises in a condition at all times reasonably acceptable to KIB, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. KIB shall budget and perform and/or pay for up to $20,000 of minor and/or major maintenance annually. If minor and/or major maintenance needs exceed $20,000 in a single year, the parties will negotiate both the timing of the maintenance and the party or parties responsible for the cost. In the event that the Parties are unable to reach agreement in connection with any such negotiation, either Party terminate this Agreement with no less than 90 days written notice to the other Party. 10. CONDITION ON SURRENDER: Upon termination or expiration of this Agreement, Providence shall surrender the Premises to KIB in substantially the same condition as exists on the date hereof, except for reasonable wear and tear. 11. IMPROVEMENTS AND ALTERATIONS: Providence shall make no alterations in, or additions or improvements to, the permanent structure of the Premises without first obtaining the written consent of KIB. Any additions and improvements made to the permanent structure of the Premises shall remain upon and be surrendered with such Premises as a part thereof at the expiration of the term of this Agreement, by lapse of time or as otherwise provided herein. Lessor shall comply with all Federal, state and local laws applicable to its ownership and leasing of the Property, including, without limitation, laws applicable to the construction, ownership, alteration or operation of all Buildings, structures, and facilities located thereon, and obtain all necessary permits, licenses and similar items at its own expense. 12. ADMISSION TO MENTAL HEALTH PROGRAMS: Providence shall provide services in connection with the mental health programs operated at the Premises without regard to race, color, religion, gender, age, national origin, sexual orientation, disability, source of payment, financial circumstances or any other factor prohibited by law or regulation. 13. INDEMNIFICATION: Providence hereby agrees to indemnify and hold KIB harmless from and against any and all claims and demands for injury or death to persons and damage to property arising from Providence's use and/or possession of the Premises or from the conduct of its business during the term hereof, and will defend KIB from any claim of liability on account thereof. Providence shall have no obligation for, and KIB agrees, to the extent permitted by law, to indemnify and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of KIB or its agents or employees, or any claims arising out of acts or omissions which occurred prior to the date when Providence assumed the lease and operation from KIB. KIB agrees, to the extent permitted by law, to indemnify and hold Providence harmless from and against any and all claims and demands for injury or death to persons and damage to property arising from KIB's acts or omissions, including any claims arising from any breach or default in the performance of any obligation on KIB's part to be performed under the provisions of this lease agreement. Page 3 of 7 LEASE AGREEMENT 14. RIGHT TO ENTER PREMISES: Upon reasonable notice, Providence shall permit KIB, its agents and employees to have access to and to enter the Premises at all reasonable and necessary times to inspect the Premises. 15. DEFAULT REMEDIES: "Event of Default" means any one or more of the following events, whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body: a) Failure to pay rent required by Section 3 when such rent becomes due and payable, and continuance of such failure to pay for a period of ten (10) days; or b) Default in the performance, or breach of any other covenant or warranty by Providence under this Agreement, and continuance of such default or breach for a period of thirty (30) days after there has been given, by registered or certified mail, to Providence by KIB as written notice specifying such default or breach and requiring it to be remedied stating that such notice is a notice of default hereunder: or If an Event of Default by Providence occurs, KIB may terminate this agreement, excluding Providence from possession of the Premises and use its best efforts to lease the Premises to another from the account of Providence, holding Providence liable for the difference between the rentals received and the rentals which would have been receivable hereunder; and take whatever action at law or in equity may appear necessary or appropriate to collect the rent then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of Providence under this Agreement. 16. TERMINATION: At any time either KIB or Providence may terminate this Agreement by one year's written notice to the other party. This Agreement shall terminate one year from the date of such notice without further action by either party and shall be of no further force and effect other than to perform any obligation incurred but not paid prior to the termination. If a new lease agreement for a replacement facility is completed and executed prior to February 28, 2021 the current lease agreement may be terminated by PKICC with 90 days notice. 17. NOTICES: All notices, demands, or other writings in this Agreement provided to be given, made or sent, or which may be given, made or sent, by either party hereto to the other, shall be deemed to have been given, made or sent when made in writing and deposited in the United States Mail, Registered or Certified Mail, postage prepaid, and addressed as follows: KIB: Borough Manager Kodiak Island Borough 710 Upper Mill Bay Road Kodiak, Alaska 99615 Providence: Senior Vice President and Chief Executive Officer Providence Health & Service Alaska 3760 Piper Street, Suite 3007 Anchorage, Alaska 99508 Page 4 of 7 LEASE AGREEMENT The address to which any notice, demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such party as above provided. 18. ASSIGNMENT AND SUBLEASE: Providence may assign this Agreement and may sublease the Premises, in whole or In part, only with the prior consent of the KIB. Independent apartments that are leased to Individuals receiving services from PKICC do not require prior consent from KIB. Income derived from subleases to the Premises must be Included in the annual financial report to KIB. Providence may not mortgage or grant a security interest in this Agreement or leasehold Interest. Nothing herein will prevent Providence from leasing space to psychologists or other mental health providers. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the Assignee. 19. DAMAGE OR DESTRUCTION: When all or any part of the Premises is destroyed or damaged by forces beyond the control of Providence, the KIB may proceed promptly to replace, repair, rebuild and restore the Premises to substantially the same condition as existed before the laking or event causing the damage or destruction in accordance with the terms outlined In Section 9. Rent shall be abated in the event of any destruction of, damage to, or taking all or any part of the Premises In proportion to the square footage which is unusable by Providence. Representatives from Providence and representatives from KIB shall meet quarterly to discuss building maintenance and Improvement needs, project progression, planned projects, and quarterly maintenance costs. Meetings shall take place in January, April, July, and October of each year. 20. CONDEMNATION: If the Premises, or such part thereof as in the reasonable opinion of Providence renders the remainder unusable for its purpose, shall be acquired by eminent domain, then this Agreement shall cease and terminale as of the date that possession is taken In such proceeding. 21. WAIVER OF SUBROGATION: KIB and Providence, both on their own behalf and on behalf of all others claiming through or under either of them, hereby mutually waive and release all claims, liabilities and causes of action against the other and the agents, servants, employees and invitees of each other, for all loss, damage to or destruction of the Premises or any portion thereof, as well as the fixtures, equipment, supplies and other property of either party located In, upon or about the Premises resulting from fire or other perils covered by standard fire and extended coverage Insurance, whether caused by the negligence of any of said persons or entities or otherwise, except to the extent such waiver would violate or otherwise abrogate the terms of such insurance coverage. 22. MISCELLANEOUS: All covenants and agreements In this Agreement by KIB or Providence shall bind their successors and assigns, whether so expressed or not. In case any provision in this Agreement shall be invalld, Illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not In any way be affected or impaired thereby. None of the terms, conditions, covenants or provisions of this Agreement can be waived by either party except by appropriate written Instrument. The waiver by either party or any breach of any term, condition, covenant or provision herein contained shall not be deemed a waiver of the same of any term, condition, covenant, or provision herein contained or of any subsequent breach of the same or any other term, condition, covenant or provision herein. This Agreement shall be construed in accordance with the laws of the Stale of Alaska. Nothing in this Agreement, express or Implied, shall give to any person, other than the parties hereto, and their Page 5 of 7 LEASE AGREEMENT successors and assigns, any benefit or other legal or equitable right, remedy or claim under this Agreement. Providence shall provide to the Kodiak Island Borough an annual report showing revenues and expenses related to the PKICC. The annual report shall be submitted to the Kodiak Island Borough Finance Director by June 30 of each year, and shall detail all programs and services offered by Providence In connection with programs operated at the Premises during that reporting year as well as any revenue collected from subletting of the KIB- owned facility in compliance with Section 18 of this agreement. The Parties have executed this Agreement on the date first above written. PROVIDENCE Providence Health & Services — Washington dba Providence Ko iak Island Counseling Center By Bruce La o eux Its SVP and la ka Region Chief Executive Page 6 of 7 LEASE AGREEMENT LANDLORD Its Mana fer 5, h. 64 A a n / I Page 7 of 7 LEASE AGREEMENT i r J i , jr I it'll i v a H!j ":i a n / I Page 7 of 7 LEASE AGREEMENT