EXHIBIT 10
AIRCRAFT HOURLY RENTAL AGREEMENT
THIS AGREEMENT made as of the 30th day of September, 2002, ("Agreement") by and
between Tomco II, LLC, a Tennessee Limited Liability Company ("Owner"), and HCA
Management Services, L.P., a Delaware Partnership ("Operator").
1. Rental of the Aircraft
Owner hereby agrees to rent to Operator from time-to-time a certain
aircraft, as identified on Exhibit A, (the "Aircraft"), which is owned
and registered at the FAA aircraft registry in the name of Owner. The
parties understand that the Aircraft will be available to Operator for
its operation and use hereunder for a series of rental periods that are
estimated to not exceed 100 hours in the aggregate during any annual
period during the Term. Owner retains the right to rent the aircraft to
any other operator. The Aircraft is being rented by Operator for the
purpose of transporting Operator's directors, officers, employees and
guests or the directors, officers, employees and guests of Operator's
subsidiaries in furtherance of its primary, non-transportation
business.
2. Term
The term of this Agreement ("Term") shall commence on the date hereof,
and shall continue for a period of ten (10) years, unless either party
terminates this Agreement pursuant to Section 17 of this Agreement.
3. Delivery of Aircraft
The Aircraft shall be delivered to Operator at the location indicated
on Exhibit A, or such other location upon which the parties may agree.
Each date on which Owner delivers possession of the Aircraft to
Operator is referred to in this Agreement as a "Delivery Date." Each
rental period shall commence with delivery and conclude with return of
the Aircraft to Owner. If requested by Owner, Operator shall execute a
Delivery and Acceptance Certificate in the form attached to this
Agreement each time Operator accepts delivery of the Aircraft.
4. Rental Period
The "Rental Period" shall consist of time commencing with delivery of
possession of the Aircraft to Operator until Operator returns the
Aircraft to Owner. The Aircraft shall be available to Operator at all
times other than when it is (a) previously scheduled by Owner or any
other operator or (b) otherwise unavailable, such as due to
maintenance.
5. Rent
Operator shall pay Owner the base rent as indicated on Exhibit A for
use of the Aircraft. The sum of the base rent and all other charges,
payments, and indemnities due to Owner by Operator hereunder are
hereinafter referred to as "Aggregate Rentals." After each use of the
Aircraft by Operator, Owner shall invoice Operator for rent based on
the number of hours flown by Operator. Operator shall pay the invoiced
amount within thirty (30) days after the invoice is sent. The hourly
charges shall be calculated based on the time from takeoff to landing
at destination of each leg of the trip as reflected on the Hobbs Meter.
Operator shall maintain accurate Aircraft and engine logs for the
Aircraft and make them available for examination by Owner. The base
rate on Exhibit A will be agreed to annually by the parties on the
anniversary of the execution date of this agreement. If no agreement is
reached, the rate used in the previous year will continue until such
time the parties agree to a change in that rate.
6. Certain Covenants of Operator. Operator agrees as follows:
a. Furnishing of Information
Operator shall furnish from time to time to Owner such
information regarding Operator's use, operation, or
maintenance of the Aircraft as Owner may reasonably request.
b. Lawful Use
The Aircraft shall not be used, operated or stored by Operator
in violation of any law or any rule, regulation, or order of
any government or governmental authority having jurisdiction
(domestic or foreign), or in violation of any airworthiness
certificate, license, or registration relating to the Aircraft
or its use, or in violation or breach of any representation or
warranty made with respect to obtaining insurance on the
Aircraft or any term or condition of such insurance policy.
Aircraft operations shall be limited to operations allowed
under Part 91 of Title 14 of the Code of Federal Regulations.
c. Aircraft Location
The Aircraft shall not be operated or located by Operator in
(i) any area excluded from coverage by the terms of insurance
covering the Aircraft, or (ii) any recognized or threatened
area of hostilities, unless fully covered to Owner's
satisfaction by war risk insurance.
d. Base of the Aircraft
The Aircraft shall be principally based as indicated on
Exhibit A unless otherwise approved by Owner.
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e. Aircraft Operation
Operator will be in operational control of the Aircraft at all
times during each Rental Period. During each Rental Period,
Operator shall be solely responsible for its possession, use,
and operation of the Aircraft.
f. Aircraft Operation Expenses
During each Rental Period, Operator shall bear the following
operating costs: the cost of fuel, crew costs, expenses, and
employee benefits; landing, handling, and custom fees and
related charges; and all fines, fees, or penalties arising
directly or indirectly out of the Operator's use and operation
of the Aircraft.
g. Assignment
Operator shall not sell, transfer, assign, encumber or sublet
the Aircraft or its rights under this Agreement without
Owner's prior written consent, which consent may be withheld
in Owner's sole discretion, and no such action without Owner's
written consent shall be valid or effective.
h. Log Books
Operator shall maintain current and complete logs, books, and
records pertaining to the Aircraft during each Rental Period
in accordance with Federal Aviation Administration ("FAA")
rules and regulations and Operator shall deliver such records
in legible form to Owner when it returns the Aircraft pursuant
to Section 11 herein.
i. Pilots
The Aircraft shall, at all times during each Rental Period, be
operated by two (2) duly qualified, current, and rated
(appropriate to the Aircraft) pilots employed and contracted
for by Operator, at Operator's expense, whose licenses are in
good standing, who meet the requirements established and
specified by the insurance policies required hereunder, and by
the FAA, and any other reasonable requirements established by
Owner in writing and delivered to Operator from time to time.
j. Liens
Operator will not directly or indirectly create, incur, or
permit to be created as a result of Operator's acts or
omissions, any liens on or with respect to (i) the Aircraft or
any part thereof, (ii) Owner's title thereto or any interest
of Owner in or to the Aircraft, or (iii) Operator's interest
under this Agreement. Operator shall promptly, at its own
expense, take such action as may be necessary to promptly
discharge any such lien created, incurred, or permitted to be
created.
k. Taxes
Operator shall pay to and indemnify the Owner for, and hold
the Owner harmless from and against, all landing charges,
airport use fees, departure taxes and similar taxes, levies,
charges or fees imposed on Operator's operation and use of the
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Aircraft during any Rental Period whether imposed against or
levied upon Owner, Operator, or the Aircraft or any part
thereof by any federal or foreign government, any state,
municipal or local subdivision, any agency or instrumentality
thereof or other taxing authority.
7. Aircraft Maintenance and Registration
During the term of this agreement all maintenance, inspection, repair,
overhaul and modification costs will be borne by Owner. Owner shall
keep the Aircraft at all times in (a) fully operational, duly
certified, and airworthy condition, (b) condition adequate to comply
with all regulations of the FAA or any other governmental agency having
jurisdiction over the maintenance, use or operation of the Aircraft.
Operator shall return the Aircraft to Owner in accordance with Section
11 herein and in the same condition as existed when the Aircraft was
delivered to Operator, normal wear and tear excepted. During the Term,
Owner shall be responsible for maintaining U.S. registration of the
Aircraft in the name of Owner.
8. Inspection
Owner or its designee shall have the right, but not the duty, to
inspect the Aircraft at any reasonable time and upon reasonable notice.
Upon Owner's request, Operator shall advise Owner of the Aircraft's
location and, within a reasonable time and, provided there is no undue
inconvenience and delay to Operator, shall permit Owner to examine all
information, logs, documents, and Operator's records regarding or with
respect to the Aircraft and its use or condition.
9. Loss or Damage
a. Risk of Loss
Owner shall bear the risk of loss of its Aircraft, even while
the Aircraft is being used by Operator, and shall have the
sole right to insurance proceeds payable under hull insurance
policies maintained by it in the event of any loss or casualty
occurrence.
b. Repair or Replacement
No party shall be obligated to repair or replace its Aircraft
after a loss or casualty occurrence. If the Aircraft becomes
unavailable due to loss or casualty, either party shall have
the right to terminate this Agreement by written notice to the
other party.
10. Insurance
Owner shall secure and maintain in effect at its own expense throughout
the term hereof such hull insurance covering the Aircraft against
Casualty Occurrence as Owner shall
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deem appropriate. Owner shall secure and maintain in effect at its own
expense throughout the term hereof public liability and property damage
with respect to the Aircraft for an amount not less than Ten Million
Dollars ($10,000,000) single limit liability coverage. The Aircraft
shall be operated with two pilots. Owner shall add Operator as an
additional insured under the liability insurance policy maintained by
Owner on its Aircraft (with such insurance being primary and
non-contributory, over any insurance coverage maintained by the
Operator with respect to claims pertaining to the Aircraft), but the
Operator shall have no claim to the proceeds of hull insurance, if any,
maintained with respect to such Aircraft. Owner's insurance policy
shall include a waiver of subrogation with respect to claims for loss
or damage to the Aircraft while being operated by the Operator under
this Agreement to the extent such claims are waived hereunder and shall
provide that as to the Operator the liability insurance coverage shall
not be invalidated by acts or negligence of any named insured. All
insurance required hereunder shall provide that coverage may not be
adversely reduced or canceled by the insurer without thirty (30) days'
prior written notice to the Operator. The Operator shall be furnished
with insurance certificates evidencing such insurance as of the date
hereof. Each party hereby waives all rights against the other party and
against those for whom the other party is legally responsible for all
losses covered by any insurance maintained hereunder or by any
additional or supplemental insurance maintained by a party on the
Aircraft or the use thereof. Owner shall be responsible for and provide
adequate written notice from the respective insurer that pilots of
Operator are approved to operate the Aircraft.
11. Return
Upon the termination or expiration of each Rental Period, Operator
shall return the Aircraft to the location designated on the Delivery
and Acceptance Certificate, if such a certificate was executed by
Operator, or another mutually agreeable location. All expenses for
delivery and return of the Aircraft shall be borne by Operator.
12. Owner's Disclaimer
EXCEPT AS OTHERWISE SET FORTH HEREIN, NEITHER OWNER (NOR ITS
AFFILIATES) MAKES, HAS MADE, OR SHALL BE DEEMED TO MAKE OR HAVE MADE,
ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR
ORAL, WITH RESPECT TO THE AIRCRAFT RENTED HEREUNDER OR ANY ENGINE OR
COMPONENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO
DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR
WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR
OPERATION, AIRWORTHINESS, SAFETY, PATENT, TRADEMARK OR COPYRIGHT
INFRINGEMENT, OR TITLE.
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13. Indemnification
a. General Indemnity
i. In the event that any claim is made or any suit filed
against Owner, or any affiliate of Owner, or any
officer, director or employee of Owner or an affiliate
of Owner ("Owner Indemnified Persons"), which claim or
suit relates to the possession, maintenance, condition,
storage, use, or operation of the Aircraft and is based
upon a transaction, incident or occurrence which
transpires during a Rental Period and is not
attributable to a breach by Owner of its obligations
hereunder or to the gross negligence or willful
misconduct of any Owner Indemnified Person, then, to the
extent not covered by the insurance required to be
maintained hereunder, Operator shall indemnify and hold
harmless the Owner Indemnified Persons against any and
all costs, expenses or judgments arising out of such
claim or suit (including, without limitation, reasonable
attorneys' fees and expenses).
ii. In the event that any claim is made or any suit filed
against Operator, or any affiliate of Operator, or any
officer, director or employee of Operator or an
affiliate of Operator ("Operator Indemnified Persons"),
which claim or suit relates to the possession,
maintenance, condition, storage, use, operation or
ownership of the Aircraft and is not based upon a
transaction, incident or occurrence which transpires
during a Rental Period or attributable to a breach by
Operator of its obligations hereunder or to the gross
negligence or willful misconduct of any Operator
Indemnified Person, then, to the extent not covered by
the insurance required to be maintained hereunder, Owner
shall indemnify and hold harmless the Operator
Indemnified Persons against any and all costs, expenses
or judgments arising out of such claim or suit
(including, without limitation, reasonable attorneys'
fees and expenses).
b. Survival
The parties' obligations under this Section 13 shall survive
termination of this Agreement and shall remain in effect until
all required indemnity payments have been made. All references
to Owner in this Section 12 include Owner and any consolidated
taxpayer group of which Owner is a member.
14. Operator's Default
Each of the following events shall constitute an "Event of Default"
hereunder (whatever the reason for such event of default and whether it
shall be voluntary or involuntary, or come about or be effected by
operation of law, or be pursuant to or in compliance with
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any judgment, degree, or order of any court of any order, rule, or
regulation of any administrative or governmental body):
a. Operator shall fail to make payment of any Aggregate Rental
within thirty (30) days after the same shall become due and
such failure shall continue for five (5) days after written
notice thereof from Owner to Operator; or
b. Operator shall fail to perform or observe any covenant,
condition, or agreement to be performed or observed by it
under this Agreement or any agreement, document, or
certificate delivered by Operator in connection herewith.
Owner shall endeavor to provide Operator with written notice
and three (3) days to cure such breach, except in the case of
emergency or a continuing breach which cannot be cured; or
c. Any representation or warranty made by Operator in this
Agreement or any agreement, document, or certificate delivered
by the Operator in connection herewith is or shall become
incorrect in any material respect, and, if such a default is
susceptible of being corrected, Operator fails to correct such
default within three (3) days of a written notice of Owner
requesting correction of same; or
d. Operator shall become insolvent; or
e. Operator makes an assignment for the benefit of creditors, or
if a petition is file by or against Operator under any
bankruptcy or insolvency law; or
f. A receiver is appointed for Operator or any of Operator's
property.
15. Owner's Remedies
a. Remedies
Upon the occurrence of any Event of Default Owner may, at its
option, exercise any or all remedies available to Owner at law
or in equity, including, without limitation, any or all of the
following remedies, as Owner in its sole discretion shall
elect:
i. By notice in writing terminate this Agreement, whereupon
all rights of the Operator to the use of the Aircraft or
any part thereof shall absolutely cease and terminate,
but Operator shall remain liable as hereinafter
provided; and thereupon Operator, if so requested by the
Owner, shall at its expense promptly return the Aircraft
as required by Section 10 hereof, or Owner, at its
option, may, with or without legal process, enter upon
the premises where the Aircraft may be located and take
immediate possession of and remove the same. Operator
specifically authorizes Owner's entry upon any premises
where the Aircraft maybe located for the purpose of,
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and waives any cause of action Operator may have arising
from, a peaceful retaking of the Aircraft. Operator
shall, without further demand, forthwith pay to Owner as
liquidated damages for loss of a bargain and not as a
penalty, an amount equal to the total accrued and unpaid
Aggregate Rentals, plus all other accrued and unpaid
amounts due to Owner hereunder; and
ii. Perform or cause to be performed any obligation,
covenant, or agreement of Operator hereunder. Operator
agrees to pay all reasonable costs and expenses incurred
by Owner for such performance as additional Aggregate
Rental hereunder and acknowledges that such performance
by Owner shall not be deemed to cure said Event of
Default.
b. Costs and Attorneys' Fees
Operator shall be liable for all costs, charges, and expenses,
including reasonable legal fees and disbursements, incurred by
Owner by reason of the occurrence of any Event of Default or
the exercise of Owner's remedies with respect thereto.
c. Nonexclusive
No remedy referred to herein is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Owner at law or in
equity. Owner shall not be deemed to have waived any breach,
Event of Default or right hereunder unless the same is
acknowledged in writing by a duly authorized representative of
Owner. No waiver by Owner of any default or Event of Default
hereunder shall in any way be, or be construed to be, a waiver
of any future or subsequent default or Event of Default. The
failure or delay of Owner in exercising any rights granted it
hereunder upon any occurrence of any of the contingencies set
forth herein shall not constitute a waiver of any such right
upon the continuation or recurrence of any such contingencies
or similar contingencies and any single or partial exercise of
any particular right by Owner shall not exhaust the same or
constitute a waiver of any other right provided herein.
16. Operator's Remedy
Upon the occurrence of any breach by Owner of Owner's obligations
hereunder, Operator may, at its option, exercise any or all remedies
available to Operator at law or in equity, as Operator in its sole
discretion shall elect.
17. Termination
Either party may terminate this Agreement by providing the other party
written notice of termination at least thirty days (30) prior to the
date of termination. Within ten (10) days after the date of
termination, Owner shall provide Operator with an accounting of all
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outstanding charges or costs relating to this Agreement. Operator shall
pay to Owner any outstanding charges and costs for which it may be
responsible within thirty (30) days after receipt of such accounting.
Both parties agree to take all necessary action with respect to the FAA
and insurance companies to inform them of the termination of this
Agreement.
18. Notices
Unless specifically provided to the contrary herein all notices
permitted or required by this Agreement shall be in writing and shall
be deemed given if sent by commercial courier, or by registered mail or
certified mail, return receipt requested, postage prepaid, to the
address set forth herein below, or such other address as may hereafter
be designated by the addressee in a written notice to the other party.
Owner: Tomco II, LLC
3319 West End Avenue
Suite 900A
Nashville, TN 37203
Operator: HCA Management Services, L.P.
One Park Plaza
Nashville, TN 37203
ATTN: President
19. Entire Agreement
The terms and conditions of this Agreement constitute the entire
agreement between the parties as to the subject matter hereof and
supersede all prior written and oral negotiations, representations, and
agreements, if any, between the parties on such matters and shall be
binding upon the parties, their successors, assigns, and legal
representatives.
20. Modification of Agreement
No change or modification hereof or waiver of any term or condition
hereof shall be effective unless the change or modification is in
writing and signed by both parties.
21. Time of the Essence
Time is of the essence in this Agreement.
22. Headings
The headings of Sections and subsections of this Agreement are included
for convenience only and shall not be used in its construction or
interpretation.
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23. Governing Law
THE PARTIES HERETO ACKNOWLEDGE THAT THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ALL RESPECT IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF
THE STATE OF TENNESSEE (WITHOUT REGARD TO ITS CHOICE OF LAWS RULES).
24. Truth-in-Leasing
a. OWNER CERTIFIES THAT THE AIRCRAFT HAS BEEN MAINTAINED AND
INSPECTED DURING THE 12 MONTHS PRECEDING THE EXECUTION OF THIS
AGREEMENT UNDER PART 91 OF THE FEDERAL AVIATION REGULATIONS.
b. OPERATOR, HCA MANAGEMENT SERVICES, L.P., ONE PARK PLAZA,
NASHVILLE, TENNESSEE 37203 CERTIFIES THAT OPERATOR, AND NOT
OWNER, IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT
UNDER THIS AGREEMENT DURING EACH RENTAL PERIOD. OPERATOR AND
OWNER FURTHER CERTIFY THAT THEY EACH UNDERSTAND THEIR
RESPECTIVE RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE
FEDERAL AVIATION REGULATIONS.
c. OPERATOR UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON
OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS
CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT
OFFICE
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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed as of the year and day first above written. THIS AGREEMENT
SHALL NOT BE EFFECTIVE UNTIL EXECUTED ON BEHALF OF EACH PARTY.
OWNER: OPERATOR:
Tomco II, LLC HCA MANAGEMENT SERVICES, L.P.
By: /s/ Thomas R. Frist, Jr. By: CMS GP, LLC
------------------------------ Its: General Partner
Thomas F. Frist, Jr., M.D.
President By: /s/ A. Bruce Moore, Jr.
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A. Bruce Moore, Jr.
President
DELIVERY AND ACCEPTANCE CERTIFICATE
This Certificate is delivered by the undersigned Operator ("Operator") pursuant
to the Aircraft Agreement dated as of September 30, 2002 ("Agreement"), and in
connection with the following aircraft ("Aircraft") rented thereunder:
Manufacturer: Cessna Aircraft Corporation
Model: Cessna 560
Serial Number: 560-0573
Registration Number: N 162TF
Operator hereby certifies that the Aircraft (including all pertinent operational
equipment and logs and maintenance manuals) has been delivered to Operator, that
Operator has caused its duly qualified expert to inspect the Aircraft (and all
pertinent operational equipment and logs and maintenance manuals), and that,
based upon such inspection (which is entirely to Operator's satisfaction),
Operator hereby accepts the Aircraft as of the Delivery Date specified below for
all purposes of the Agreement (including, without limitation, "operational
control" thereof as such term is used and defined under the Federal Aviation
Regulations). Operator will have operational control commencing at the beginning
of each Rental Period and ending upon the return of the Aircraft to Owner at the
end of each Rental Period throughout the term of this Agreement. Operator hereby
further certifies that the following information is true and correct:
Delivery Date: The date of Operator's execution of this Certificate.
Delivery Time: ________________
Delivery Location: Nashville, TN, BNA
Return Date: __________________
Anticipated Return Time: ___________
Return Location: Nashville, TN, BNA
OWNER: WITNESS:
Tomco II, LLC By:
--------------------------------
By: Date:
------------------------------------ -------------------------------
Date:
--------------------------------
OPERATOR:
HCA MANAGEMENT SERVICES, L.P.
By:
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Date:
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EXHIBIT A
AIRCRAFT IDENTIFICATION
Manufacturer: Cessna Aircraft Corporation
Model: Cessna 560
Serial Number: 560-0573
Registration Number: N 162TF
BASE RENT
$1,200 per Hobbs Hour
HOME BASE
Nashville, TN
BNA