NOTE :
THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR AN ACCEPTANCE OF AN
OFFER TO PURCHASE OR SELL. THIS DOCUMENT SHALL NOT BE BINDING ON
ANY PERSON OR ENTITY UNTIL IT IS DULY EXECUTED BY, DELIVERED TO AND
ACCEPTED BY EACH PARTY TO THIS DOCUMENT.
PURCHASE AND SALE
AGREEMENT
THIS
PURCHASE AND SALE AGREEMENT (this “Agreement” ), dated as
of the 1st day of March, 2006 ( “Effective Date”
), between HANOVER LASALLE MEDICAL OFFICE, L.L.C ., a
Delaware limited liability company (“ Hanover ”)
and VERDUGO LASALLE MEDICAL OFFICE, L.L.C ., a Delaware
limited liability company (“ Verdugo ”) (Hanover
and Verdugo, individually or collectively, as the context may
require, the “Seller” ), and COGDELL SPENCER
LP , a Delaware limited partnership (the
“Purchaser” ), provides:
THAT for and in
consideration of the mutual covenants and agreements contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Seller and the
Purchaser hereby agree as follows:
1.
Purchase and Sale . The Seller agrees to sell, assign,
transfer and convey to Purchaser and the Purchaser agrees to
purchase from Seller, all of Seller’s right, title and
interest in and to the following described property on all of the
terms and conditions set forth herein (collectively the “
Property ”, and the Richmond Property and the Verdugo
Property shall be referred to herein individually as an “
Individual Property ”).
1.1.1
A certain condominium unit described as Phase I, Unit No. 1 in
Hanover Medical Park, situated on that certain tract of land
situated in Mechanicsville, Virginia commonly known as Richmond
Memorial Medical Office Building I, 8220 Mechanicsville Road, and
described more particularly in Exhibit A-1
attached hereto and incorporated herein by reference (the “
Richmond Property ”) together with all rights and
appurtenances granted to the condominium unit owner under the
Declaration (as defined in Section 5.7 ).
1.1.2
Fee simple title in and to all of that certain tract of land
situated in Glendale, California commonly known as the Verdugo
Hills Professional Buildings, 1808 and 1818 Verdugo Boulevard, and
described more particularly in Exhibit A-2
attached hereto and incorporated herein by reference (the “
Verdugo Property ”), together with all rights and
appurtenances pertaining to such land, including without
limitation, all of Seller’s right, title and interest in and
to (i) all minerals, oil, gas and other hydrocarbon substances
thereon, (ii) all adjacent strips, streets, roads, alleys and
rights-of-way, public or private, open or proposed, (iii) all
easements, privileges, and hereditaments, whether or not of record,
and (iv) all access, air, water, riparian, development,
utility and solar rights (the items described in
Sections 1.1.1 and 1.1.2 above are collectively
referred to herein as the “Real Estate”
).
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1.2.
Improvements . The medical office building and all other
structures and improvements constructed on the (a) Richmond
Property; and (b) Verdugo Property (collectively, the
“Improvements” ).
1.3.
Personal Property . All of Seller’s right, title and
interest, in and to the following:
1.3.1
mechanical systems, fixtures and equipment comprising a part of or
attached to or located upon the Improvements;
1.3.2
site plans, surveys, plans and specifications, warranties, books,
records and floor plans in Seller’s possession which relate
to the Real Estate or Improvements (collectively, the
“Personal Property” ).
1.4.
Leases . All of Seller’s right, title and interest in
and to leases, licenses, rental agreements and other occupancy
agreements with tenants occupying all or any portion of the
Improvements (collectively, the “Leases” ), and
all security deposits, if any, held by Seller in connection with
the Leases.
1.5.
Contracts . Seller’s interest in all contract rights
related to the Real Estate, Improvements, Personal Property or
Leases to the extent assignable including, without limitation,
Seller’s interest in all of the maintenance, equipment,
service, supply, construction, commission, parking, management and
other contracts and all warranties, guarantees and bonds and other
agreements relating to the Improvements, Personal Property or
Leases (hereinafter defined collectively, the “Service
Contracts” ).
1.6.
Permits . Seller’s interest in and to all permits,
licenses, certificate of occupancy, and governmental approvals
which relate to the Real Estate, Improvements, Personal Property,
Leases, or Service Contracts to the extent assignable
(collectively, the “Permits” ).
2.
Payment of Purchase Price . The purchase price is Thirty-Six
Million Five Hundred Thousand and No/100 Dollars ($36,500,000.00) (
“Purchase Price” ). The parties hereto
acknowledge and agree that the Property is being purchased in gross
and not by the acre. The Purchase Price shall be paid to the Seller
in the following manner:
2.1.
Deposits . The Purchaser shall, within one (1) business
day following the full execution of this Agreement, deposit with
Chicago Title Insurance Company, 19 East Fayette Street, Baltimore,
MD 21202, Attention: Debra Lee (the “Escrow
Agent” ) an earnest money deposit of Five Hundred
Thousand and No/100 Dollars ($500,000.00) , (the
“Deposit” ), which Deposit shall be held in an
interest-bearing escrow account with interest to accrue for the
benefit of the party entitled to the Deposit hereunder. The Deposit
shall be (i) applied toward the Purchase Price in the event
Closing (as hereinafter defined) occurs hereunder, or
(ii) returned to the Purchaser in the event the Purchaser
exercises the Purchaser’s expressed right hereunder to
terminate this Agreement and receive a refund of the Deposit, or
(iii) delivered to and retained by the Seller pursuant to the
terms and provisions hereof in the event the Purchaser defaults
hereunder, or in the event the Seller is otherwise entitled to
retain the Deposit hereunder.
2.2.
Balance of Purchase Price . The Purchaser shall pay the
balance of the Purchase Price, as adjusted pursuant to
Section 5.9 and Article 8 hereof, to the
Seller at Closing
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in cash by
making a wire transfer of immediately available federal funds to an
account at a financial institution designated in writing by the
Seller.
2.3.
Sale of Entire Property Only . Purchaser has no right to
purchase, and Seller has no obligation to sell, less than all of
the Property, it being the express agreement and understanding of
Purchaser and Seller that, as a material inducement to Seller and
Purchaser to enter into this Agreement, Purchaser has agreed to
purchase, and Seller has agreed to sell, all of the Property,
subject to and in accordance with the terms of this
Agreement.
2.4
Deferred Maintenance Credit . At Closing, Purchaser shall
receive a credit from Seller against the Purchase Price in the
amount of Five Hundred Twenty-One Thousand Dollars ($521,000), of
which $461,000 is allocated to the Verdugo Property as
consideration for certain deferred maintenance relating to the roof
replacement, elevator repairs and other miscellaneous improvements,
and the remaining $60,000 of which is allocated to the Richmond
Property as consideration for certain deferred maintenance relating
to the gutters and boiler.
3.
Seller’s Representations, Warranties and Covenants
.
3.1.
The Seller hereby makes the following representations as of the
date hereof:
3.1.1
Organization . Seller is duly formed, validly existing and
in good standing under the laws of the state of its organization,
and is duly qualified to transact business and in good standing in
the state in which the Property is situated.
3.1.2
Authority/Consent . Seller is the owner of the fee simple
interest and or condominium interest, as applicable, in the
Property and possesses all requisite power and authority, has taken
all actions required by its organizational documents and applicable
law, and has obtained all necessary consents to execute and deliver
this Agreement and to consummate the transactions contemplated by
this Agreement. This Agreement has been, and all of the documents
to be delivered by Seller at the Closing will be, authorized and
properly executed and constitute, or will constitute, as
appropriate, the valid and binding obligation of Seller,
enforceable in accordance with their terms.
3.1.3
Litigation . To Seller’s knowledge, no material
action, suit or other proceeding (including, but not limited to,
any condemnation action) is pending or threatened that concerns or
involves the Property or Seller’s interest in the
Property.
3.1.4
Leases . Attached as Exhibit B hereto is
a true, correct and complete list of the Leases (and all
assignments thereof), and all subleases (that are in Seller’s
possession) of rentable area in the Improvements. To Seller’s
knowledge, except for the Leases, assignments and subleases
referenced on the list attached hereto as
Exhibit B , there are no occupancy agreements,
leases, lettings, tenancies or subtenancies in effect which will
affect the Property after Closing.
3.1.5
Violations of Law . Seller has not received written notice
from any governmental authority of any material violations of any
federal, state, county or municipal laws, ordinances, orders,
regulations and requirements affecting the Property or any portion
thereof (including the conduct of business operations thereon),
except for those certain written notices
3
issued by the
City of Glendale, California with respect to certain alleged
municipal code violations, all of which have been remedied prior to
the date hereof, with the exception of that certain notice dated
February 28, 2006 with respect to the required performance of
standpipe testing at 1808 Verdugo and fire alarm testing at 1818
Verdugo, which testing is scheduled to occur on March 2, 2006.
Seller has not received notice of any proposed or actual
condemnation actions or changes in zoning to the
Property.
3.1.6
Foreign Person . Seller is not a “foreign
person,” “foreign trust” or “foreign
corporation” within the meaning of the United States Foreign
Investment in Real Property Tax Act of 1980 and the Internal
Revenue Code of 1986, as subsequently amended.
3.1.7
Declaration . Seller has not received notice from any party,
and is not aware of, any violation of the Declaration (as defined
in Section 5.7 ) with respect to Seller or the
Property.
3.1.8
Environmental . Seller has not received written notice from
any party of any adverse environmental condition affecting the
Property.
3.2.
Each Seller, as to its individual Property only (Richmond as to the
Richmond Property and Verdugo as to the Verdugo Property) hereby
covenants to Purchaser as follows:
3.2.1
Property Information . Purchaser acknowledges that Seller
has made available to Purchaser relevant information relating to
the operations and maintenance of the Property. Seller or its
property manager will continue to make such information available
to Purchaser, during business hours and after reasonable prior
notice from Purchaser (with the exception of information that is
confidential, proprietary or within the purview of the
attorney-client privilege or the attorney work-product doctrine)
(collectively, the “Property Information” ). The
Seller has not made and does not make any representation or
warranty, either express or implied, with respect to the
completeness or accuracy of the Property Information furnished to
the Purchaser.
3.2.2
Modifications and New Leases and Contracts . During the
period beginning on the date hereof and ending at the Closing (or
earlier termination of this Agreement), except as contemplated or
permitted under any Lease, the Seller will not modify, renew,
extend, replace or otherwise change any of the terms, covenants or
conditions of any Leases, and will not enter into any new Leases
(except for those Leases subject to the letters of intent listed on
Exhibit C attached hereto), without the written consent of
the Purchaser, which consent shall not be unreasonably withheld or
delayed. In the event that Seller proposes to modify, renew,
extend, replace or otherwise change any of the terms, covenants or
conditions of any Leases, or enter into any new Leases, Seller
shall give the Purchaser written notice of Seller’s intent to
do so together with all information reasonably requested by
Purchaser in order for Purchaser to evaluate Seller’s
proposal and Purchaser shall have three (3) business days
after receipt of such notice within which to grant or withhold its
approval. If Purchaser fails to respond to Seller’s request
within said three (3) business day period or if Purchaser
agrees to Seller’s request, Seller shall be free to enter
into such modification, renewal, replacement, change or new Lease.
Any such modification, renewal, replacement, change or new Lease
entered into with the written consent of the Purchaser, or as
otherwise expressly allowed hereunder, shall be deemed a
Lease.
4
3.2.3
Continued Operation . From the Effective Date until the
Closing, Seller shall continue to operate, maintain and repair the
Property in the ordinary course of business but shall not take any
of the following actions after the Effective Date hereof without
the prior written consent of Purchaser: (a) reduce the level
of maintenance to the Property, or reduce the number of employees
currently employed to service, maintain and secure the Property, or
(b) grant, create or assume any mortgage, lien, encumbrance,
easement, option, covenant, condition, right of way or restriction
upon the Property other than the Permitted Exceptions.
3.2.4
Receipt of Governmental Notices . Prior to Closing, Seller
shall provide Purchaser with copies of any written notices that
Seller receives from any governmental or regulatory agency with
respect to (i) any special assessments or proposed increases
in the valuation of the Property, (ii) any condemnation or
eminent domain proceedings affecting the Property, or
(iii) any violation of any Environmental Law or any zoning,
health, fire, safety or other law, regulation or code applicable to
the Property.
3.2.5
Insurance . Prior to Closing, Seller will maintain
Seller’s existing insurance coverage with respect to the
Property.
3.2.6
Estoppel Certificates . As of the date hereof, Seller has
submitted to Purchaser copies of all estoppel certificates received
by Seller from the tenants of the Property (the “ Estoppel
Certificates ”), which Estoppel Certificates are in
substantially the form attached hereto as
Exhibit D or such other form as is prescribed in
a particular Lease and which Estoppel Certificates represent
Estoppel Certificates from tenants leasing in excess of 75% of the
leasable area of the Property. Seller agrees to deliver to
Purchaser executed estoppel certificates promptly after receipt
from tenants.
3.2.7
Waiver of Right of First Refusal . As of the date hereof,
Seller has provided to Purchaser evidence from each of Verdugo
Hills Hospital and Memorial Regional Medical Center, Inc. that each
such party has waived their respective rights of first refusal to
purchase the Verdugo Property and Richmond Property, as applicable,
prior to the date hereof.
4.
Conditions Precedent to Purchaser’s Obligations to
Close . Purchaser’s obligation to purchase the Property
is subject to satisfaction, on or before the Closing Date (or
earlier date if expressly set forth below) of the following
conditions, any of which may be waived in writing by Purchaser in
Purchaser’s sole and absolute discretion:
4.1.1
Study Period . The Purchaser shall have a period of time
beginning on the Effective Date and ending at 5:00 p.m. eastern
standard time on March 16, 2006, TIME BEING OF THE ESSENCE
(the “Study Period” ) within which to conduct
engineering and/or architectural studies of the Property, to
conduct seismic studies of the Property, to review those certain
Phase I Environmental Site Assessments (the “Phase I
ESA’s” ) prepared by EMG ( “EMG”
) and delivered to Purchaser on or before the Effective Date, to
review plans and specifications and similar materials with respect
to the Property, zoning and land use status of the Property, and
such other matters as Purchaser may desire. All of the costs
associated with Purchaser’s Study Period activities (as
specified in the previous sentence) shall be borne by Purchaser.
During the Study Period, Purchaser shall have reasonable access to
the Property, at all reasonable times, at Purchaser’s sole
risk, for the purpose of performing the foregoing inspections and
investigations, subject at all times to the rights of any existing
tenants. All
5
inspections and
investigations shall be performed at reasonable times and the
Seller shall have the opportunity to accompany Purchaser if Seller
so desires. Seller shall not be obligated to correct, remedy or
cure any condition or characteristic of the Property revealed by
such inspections or investigations, including, but not limited to,
any physical condition issue, title defects or environmental
contamination. If the results of any such inspection or
investigation performed by Purchaser pursuant to this
Section 4.1.1 are deemed unsatisfactory in
Purchaser’s sole discretion, Purchaser may terminate this
Agreement by providing written notice thereof to Seller prior to
the expiration of the Study Period, in which event the Deposit
shall be returned to Purchaser and neither party shall have any
further rights or obligations hereunder, except as expressly
provided herein. If Purchaser fails to so terminate this Agreement,
Purchaser shall be deemed to have waived such right, and shall
proceed to Closing without any reduction in the Purchase
Price.
4.1.2
Title Examination .
(A) Seller
shall provide to Purchaser, at Purchaser’s expense,
(collectively, the “Title Documents” ):
(a) current commitments for title insurance for: (i) the
Richmond Property and (ii) the Verdugo Property, each in the amount
of the Purchase Price allocated to each Individual Property
(collectively, the “Commitment” ) from Chicago
Title Insurance Company (the “Title Company” ),
together with copies of the exception documents, and (b) a
copy of a survey for each Individual Property (collectively or
individually as the context may require, the “ Survey
”). On or before March 10, 2006 (the “Notice
Date” ), Purchaser shall notify Seller in writing of any
title or survey matters listed in the Title Documents of which
Purchaser disapproves (the “ Title Objections
”), except that Purchaser shall not object to liens for real
estate taxes not yet due and payable. Any matters to which
Purchaser does not object as provided above shall be deemed to be
“Permitted Exceptions” . Seller shall notify
Purchaser on or before the expiration of the Study Period (the
“ Seller Notice Date ”) whether it will take all
action necessary to eliminate or cure such Title Objections or to
make arrangements to have such Title Objections eliminated, cured,
or removed from title in a manner reasonably acceptable to
Purchaser at or prior to the Closing at no cost or expense to
Purchaser. If Seller fails to notify Purchaser that it is willing
to eliminate or cure such Title Objections, then Seller shall be
deemed to have elected not to take such action, and Purchaser shall
have right to terminate this Agreement by written notice from
Purchaser to Seller given within two (2) days after the Seller
Notice Date. If Purchaser fails to terminate this Agreement within
such two (2) day period, then such matters shall be deemed to
be Permitted Exceptions and Purchaser shall have waived its right
to terminate this Agreement.
(B)
If Purchaser becomes aware of any changes in the Title Documents
disclosed after the Notice Date (the “Stub Period Title
Matters” ) which are not acceptable to Purchaser,
Purchaser shall give written notice to Seller that it disapproves
such Stub Period Title Matters (the “Stub Period Title
Objections” ) on or before the sooner to occur of five
(5) days after receipt of written notice thereof or the
Closing Date. If Purchaser does not deliver a notice of Stub Period
Title Objections, then Purchaser shall be deemed to approve the
applicable Stub Period Title Matter. If Purchaser delivers a notice
of Stub Period Title Objections, Seller shall have five (5) days
after receipt thereof to notify Purchaser that either
(a) Seller will take all action necessary to eliminate or cure
such Stub Period Title Objections or make arrangements to have such
Stub Period Title Objections eliminated, cured or removed from
title, or (b) Seller elects not to cause such Stub Period
Title Objections to be removed, provided
6
that Seller
shall be obligated to cause the removal of such Stub Period Title
Objections as can be cured, eliminated or removed solely with the
payment of money by Seller not to exceed Twenty-Five Thousand and
No/100 Dollars ($25,000.00) in the aggregate (the “Stub
Period Must Removes” ), it being agreed that Seller shall
not in any event be obligated to cause the removal of any Stub
Period Title Objection except for the Stub Period Must Removes. If
Seller gives Purchaser notice under clause (b) above or fails
to respond to Purchaser’s notice of Stub Period Title
Objections within said five (5) day period, Purchaser shall
have five (5) business days in which to notify Seller that
Purchaser will either proceed with the purchase and take title to
the Property subject to such Stub Period Title Objections, in which
event the Stub Period Title Objections shall constitute Permitted
Exceptions hereunder, or that Purchaser will terminate this
Agreement. If this Agreement is terminated pursuant to the
foregoing provisions of this paragraph, then neither party will
have any further rights or obligations hereunder (except for any
obligations which are expressly stated to survive the termination
hereof), and the Deposit shall be returned to Purchaser. If
Purchaser fails to notify Seller of its election within said five
(5) day period, Purchaser shall be deemed to have waived its
right to terminate this Agreement and shall proceed to
Closing.
4.1.3
Performance of Covenants . Seller shall have performed and
observed in all material respects, all covenants of Seller in this
Agreement.
4.1.4
Title . The Title Company shall issue to Purchaser a 1992
ALTA Owners Policy of Title Insurance covering each Individual
Property in the full amount of the Purchase Price allocated toward
such Individual Property subject only to the Permitted Exceptions,
dated not earlier than the date of the recording of the
Deed.
4.1.5
Verdugo Estoppels . On or before the Closing, Purchaser
shall receive (i) an estoppel from Verdugo Hills Hospital with
respect to that certain Amended and Restated Parking and Easement
Agreement dated as of June 4, 2004, recorded June 4, 2004
as Document No. 04-1433410 in the Los Angeles County,
California Recorder’s Office in substantially the form
attached hereto as Exhibit L , and
(ii) tenant estoppel certificates from from tenants leasing
not less than seventy-five percent (75%) of the total rentable
square feet leased in the Improvements at the Verdugo Property in
substantially the form attached hereto as
Exhibit D ((i) and (ii) are together, the
“ Verdugo Estoppel Contingency ”). If Seller has
not satisfied the Verdugo Estoppel Contingency on or before the
Closing, Seller shall provide a Seller’s Estoppel Certificate
in the form attached hereto as Exhibit D for the
tenant estoppels required pursuant to subsection (ii) above,
delivery of which shall be deemed to satisfy subsection
(ii) of the Verdugo Estoppel Contingency. The representations
and warranties set forth in any and all Seller’s Estoppel
Certificates shall survive for a period of ninety (90) days
after the date of such Seller’s Estoppel Certificates and
shall be subject to the limitations on liability set forth in
Section 14.5 hereof. The parties agree that if at any time
after Seller delivers to Purchaser a Seller’s Estoppel
Certificate, Seller obtains and delivers to Purchaser a tenant
Estoppel Certificate for such tenant that is acceptable to
Purchaser, the applicable Seller’s Estoppel Certificate shall
be of no further force and effect and Seller shall have no further
liability thereunder. Should Seller be unable to satisfy the
Verdugo Estoppel Contingency on or prior to the Closing Date,
Purchaser may elect (i) to extend the Closing Date for an
additional five (5) business days to allow additional time to
receive the estoppels necessary to satisfy the Verdugo Estoppel
Contingency, reserving the continued right to terminate as provided
in the following clause (ii), (ii) to terminate this Agreement
and receive a return of the Deposit and all
7
accrued
interest thereon, or (iii) to waive the Verdugo Estoppel
Contingency and proceed to Closing on the terms and conditions set
forth herein.
4.1.6
Condominium Documents Estoppel . On or before the Closing,
Purchaser shall receive an estoppel from the appropriate party
under the Condominium Documents in substantially the form attached
hereto as Exhibit M , and as more particularly
described in Section 5.7 herein below.
4.1.7
Seller’s Representations and Warranties . The
representations and warranties set forth in Section 3.1
being true and accurate in all material respects as of the Closing;
provided that (i) the representations contained in
Section 3.1.4 shall be updated or modified at Closing
to reflect any modifications, renewals, extensions or other changes
to Leases that may have occurred on or prior to Closing pursuant to
the terms of Section 3.2.2 hereof, and (ii) with
respect to the representations contained in
Sections 3.1.3 and 3.1.5 , any change in such
representations resulting from notice of a non-material action or
suit (with respect to 3.1.3 ) or notice of a non-material
violation of any law, ordinance or requirement affecting the
Property (with respect to 3.1.5 ), shall not constitute a
failure of the condition precedent set forth in this
Section 4.1.6 . For purposes hereof, litigation shall
be considered “non-material” if such litigation is
covered by Seller’s insurance and a violation of any law,
ordinance or requirement affecting the Property shall be considered
“non-material” if the cost to cure such violation (as
reasonably estimated by Purchaser) does not exceed $100,000.00. In
the event of the existence of any such “non-material”
violation of any law, ordinance or requirement affecting the
Property at the time of the Closing, Seller shall, at its election,
cause the same to be cured prior to Closing or provide Purchaser
with a credit against the Purchase Price at Closing in the amount
of the cost to cure such violation as reasonably estimated by
Purchaser.
4.1.8
Hanover Hospital Estoppels . On or before the Closing,
Purchaser shall receive tenant estoppel certificates from Memorial
Regional Medical Center or its affiliates with respect to all of
the space at the Richmond Property leased by Memorial Regional
Medical Center and by its affiliates in substantially the form
attached hereto as Exhibit D (the “
Hanover Estoppel Contingency ”). Should Seller be
unable to satisfy the Hanover Estoppel Contingency on or prior to
the Closing Date, Purchaser may elect (i) to extend the
Closing Date for an additional five (5) business days to allow
additional time to receive the estoppels necessary to satisfy the
Hanover Estoppel Contingency, reserving the continued right to
terminate as provided in the following clause (ii), (ii) to
terminate this Agreement and receive a return of the Deposit and
all accrued interest thereon, or (iii) to waive the Hanover
Estoppel Contingency and proceed to Closing on the terms and
conditions set forth herein.
4.2 Conditions
Precedent to Seller’s Obligation to Close .
Seller’s obligation to sell the Property is subject to
satisfaction, on or before the Closing Date of the following
conditions, any of which may be waived in writing by Seller in
Seller’s sole and absolute discretion.
4.2.1
Covenants . Purchaser shall have performed and observed, in
all material respects, all covenants of Purchaser under this
Agreement.
4.3
Failure of a Condition .
8
4.3.1
In the event that any condition precedent to Closing has not been
satisfied on or before the Closing Date, then the party whose
conditions to Closing have not been satisfied (the “
Unsatisfied Party ”) shall give notice to the other of
the condition or conditions which the Unsatisfied Party asserts are
not satisfied. In such notice the Unsatisfied Party shall also
elect either (i) to terminate this Agreement, whereupon
neither party shall have any further rights or obligations
hereunder (other than any obligations of either party that
expressly survive termination), and Purchaser shall be entitled to
the return of the Deposits, except if such failure of a condition
is due to a default by one of the parties, in which event the
non-defaulting party shall have those rights and remedies set forth
in Article 12 herein, or (ii) to waive such failed
condition and proceed to Closing as contemplated
hereunder.
4.3.2
If the transaction contemplated by this Agreement closes, the
parties shall be deemed to have waived any and all unmet or
unsatisfied conditions, other than any unmet or unsatisfied
conditions arising out of a breach by either party of any of its
representations and warranties hereunder of which the other party
has no actual knowledge as of Closing.
5.
Purchaser’s Representations, Warranties and Covenants
. The Purchaser hereby makes the following representations,
warranties and covenants to Seller:
5.1.
Authorization, Execution and Delivery and ERISA . Purchaser
has been duly organized and is validly existing as a limited
partnership in good standing in the State of Delaware and prior to
closing will be qualified to do business in each state in which the
Property is located. Purchaser has the full right and authority and
has obtained any and all consents required to enter into this
Agreement and to consummate or cause to be consummated the
transactions contemplated hereby. This Agreement has been, and all
of the documents to be delivered by Purchaser at the Closing will
be, authorized and properly executed and constitute, or will
constitute, as appropriate, the valid and binding obligation of
Purchaser, enforceable in accordance with their terms. As of the
date hereof, Purchaser is (a) not an “employee benefit
plan” as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), whether or not subject to Title I of ERISA,
or a “plan” as defined in Section 4975 of the
Code, or a “party in interest” as defined in
Section 3(14) of ERISA, with respect to any employee benefit
plan and (b) none of the assets of Purchaser constitutes or
will constitute “plan assets” of one or more such plans
within the meaning of U.S. Department of Labor Regulation 29
C.F.R. Section 2510-3-101.
5.2.
Conflicts and Pending Action . There is no agreement to
which Purchaser is a party or to Purchaser’s knowledge
binding on Purchaser which is in conflict with this Agreement.
There is no action or proceeding pending or, to Purchaser’s
knowledge, threatened against Purchaser which challenges or impairs
Purchaser’s ability to execute or perform its obligations
under this Agreement.
5.3.
Prohibited Persons and Transactions . Neither Purchaser nor
any of its affiliates, nor any of their respective partners,
members, shareholders or other equity owners, and none of their
respective employees, officers, directors, representatives or
agents is, nor will they become, a person or entity with whom U.S.
persons or entities are restricted from doing business under
regulations of the Office of Foreign Asset Control (“
OFAC ”) of the Department of the Treasury (including
those named on OFAC’s Specially Designated and Blocked
Persons List) or
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under any
statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism), or
other governmental action and is not and will not engage in any
dealings or transactions or be otherwise associated with such
persons or entities.
5.4.
Acceptance of Property .
5.4.1
Notwithstanding anything contained in this Agreement to the
contrary, the Purchaser acknowledges that, except as specifically
set forth in this Agreement, the Seller has not made and is not now
making, and it specifically disclaims, any warranties,
representations or guaranties of any kind or character, express or
implied, oral or written, past, present or future, with respect to
the Property, including, but not limited to, warranties,
representations or guaranties as to (i) matters of title;
(ii) environmental matters relating to the Property or any
portion thereof, (iii) geological conditions, including, without
limitation, subsidence, subsurface conditions, water table,
underground water reservoirs, limitations regarding the withdrawal
of water and earthquake faults and the resulting damage of past
and/or future earthquakes, (iv) whether, and to the extent to
which the Property or any portion thereof is affected by any stream
(surface or underground), body of water, flood prone area, flood
plain, floodway or special flood hazard, (v) drainage, (vi)
soil conditions, including the existence of instability, past soil
repairs, soil additions or conditions of soil fill, or
susceptibility to landslides, or the sufficiency of any
undershoring, (vii) zoning to which the Property or any
portion thereof may be subject, (viii) the availability of any
utilities to the Property or any portion thereof including, without
limitation, water, sewage, gas and electric, (ix) usages of
adjoining Property, (x) access to the Property or any portion
thereof, (xi) the value, compliance with the plans and
specifications, size, location, age, use, design, quality,
description, suitability, structural integrity, operation, title
to, or physical or financial condition of the Property or any
portion thereof, or any income, expenses, charges, liens,
encumbrances, rights or claims on or affecting or pertaining to the
Property or any part thereof, (xii) the presence of Hazardous
Substances (hereinafter defined) in or on, under or in the vicinity
of the Property, (xiii) the condition or use of the Property
or compliance of the Property with any or all past, present or
future federal, state or local ordinances, rules, regulations or
laws, building, fire or zoning ordinances, codes or other similar
laws, (xiv) the existence or non-existence of underground
storage tanks, (xv) any other matter affecting the stability
or integrity of the Property, (xvi) the potential for further
development of the Property, (xvii) the existence of vested
land use, zoning or building entitlements affecting the Property,
(xviii) the merchantability of the Property or fitness of the
Property for any particular purpose (the Purchaser affirming that
the Purchaser has not relied on the Seller’s skill or
judgment to select or furnish the Property for any particular
purpose, and that the Seller makes no warranty that the Property is
fit for any particular purpose), (xix) the truth, accuracy or
completeness of the Property Information, or (xx) tax
consequences.
5.4.2
The Purchaser has not relied upon and will not rely upon, either
directly or indirectly, any representation or warranty of the
Seller or any of its respective agents, except those specifically
set forth in this Agreement or as set forth in the documents
delivered by Seller to Purchaser at Closing, and acknowledges that
no such representations have been made, except those specifically
set forth in this Agreement. The Purchaser represents that it is a
knowledgeable, experienced and sophisticated purchaser of real
estate and that it is relying solely on its own expertise and that
of the Purchaser’s consultants in purchasing the Property.
The Purchaser will conduct such inspections and investigations of
the Property as the Purchaser
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deems
necessary, including, but not limited to, the physical and
environmental conditions thereof, and shall rely upon same. The
Purchaser acknowledges that adverse matters, including, but not
limited to, adverse physical and environmental conditions, may not
be revealed by the Purchaser’s inspections and
investigations. The Purchaser acknowledges and agrees that upon
Closing, the Seller shall sell and convey to the Purchaser and the
Purchaser shall accept the Property “AS IS, WHERE IS,”
with all faults. The Purchaser further acknowledges and agrees that
there are no oral agreements, warranties or representations,
collateral to or affecting the Property by the Seller, any agent of
the Seller or any third party. The terms and conditions of this
Section 5.4.2 shall expressly survive Closing, shall
not merge with the provisions of the Deed and shall be incorporated
into the other closing documents. The Seller is not liable or bound
in any manner by any oral or written statements, representations,
or information pertaining to the Property furnished by any real
estate broker, agent, employee, servant or other person. Purchaser
acknowledges that Seller has afforded Purchaser a full opportunity
to conduct such investigations of the Property as Purchaser deemed
necessary to satisfy itself as to the condition of the Property and
the existence or non-existence or curative action to be taken with
respect to any Hazardous Substances on or discharged from the
Property, and will rely solely upon same and not upon any
information provided by or on behalf of Seller or its agents or
employees with respect thereto, other than such representations,
warranties and covenants of Seller as are expressly set forth in
this Agreement. Upon Closing, Purchaser shall assume the risk that
adverse matters, including, but not limited to, adverse physical or
construction defects or adverse environmental, health or safety
conditions, may not have been revealed by Purchaser’s
inspections and investigations. Purchaser hereby represents and
warrants to Seller that: (a) Purchaser is represented by legal
counsel in connection with the transaction contemplated by this
Agreement; and (b) Purchaser is purchasing the Property for
business, commercial, investment or other similar purpose and not
for use as Purchaser’s residence. Purchaser waives any and
all rights or remedies it may have or be entitled to, deriving from
disparity in size or from any significant disparate bargaining
position in relation to Seller. The Purchaser has fully reviewed
the disclaimers and waivers set forth in this Agreement with its
counsel and understands the significance and effect
thereof.
5.4.3
For purposes hereof, “ Hazardous Substances ”
means any hazardous, toxic or dangerous waste, substance or
material, pollutant or contaminant, as defined for purposes of the
Comprehensive Environmental Response, Compensation and Liability
Act Of 1980 (42 U.S.C. Sections 9601 et seq .), as (
“CERCLA” ), or the Resource Conservation and
Recovery Act (42 U. S. C. Sections 6901 et seq. ), as
amended ( “RCRA” ), or any other federal, state
or local law, ordinance, rule or regulation applicable to the
Property, or any substance which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous, including regulated medical waste, or any
substance which contains gasoline, diesel fuel or other petroleum
hydrocarbons, polychlorinated biphenyls (PCBS), radon gas, urea
formaldehyde, asbestos, lead or electromagnetic waves.
5.4.4
Purchaser acknowledges that it has had the opportunity to inspect
the Property, and to observe its physical characteristics and
existing conditions and the opportunity to conduct such
investigation and study on and of the Property and adjacent areas
as Purchaser deems necessary, and Purchaser hereby FOREVER RELEASES
AND DISCHARGES Seller from all responsibility and liability,
including without limitation, liabilities and responsibilities for
the lessor’s obligations under the Leases relating to the
physical, environmental or legal compliance status of the Property,
whether arising before or after the
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Effective Date,
and liabilities under CERCLA, regarding the condition, valuation,
salability or utility of the Property, or its suitability for any
purpose whatsoever (including, but not limited to, with respect to
the presence in the soil, air, structures and surface and
subsurface waters, of Hazardous Substance or other materials or
substances that have been or may in the future be determined to be
toxic, hazardous, undesirable or subject to regulation and that may
need to be specially treated, handled and/or removed from the
Property under current or future federal, state and local laws,
regulations or guidelines, and any structural and geologic
conditions, subsurface soil and water conditions and solid and
hazardous waste and Hazardous Substance on, under, adjacent to or
otherwise affecting the Property). Purchaser further hereby WAIVES
(and by Closing this transaction will be deemed to have WAIVED) any
and all objections and complaints (including, but not limited to,
federal, state and local statutory and common law based actions,
and any private right of action under any federal, state or local
laws, regulations or guidelines to which the Property is or may be
subject, including, but not limited to, CERCLA) concerning the
physical characteristics and any existing conditions of the
Property, including, without limitation, the lessor’s
obligations under the Leases relating to the physical,
environmental or legal compliance status of the Property, whether
arising before or after the Effective Date. Purchaser further
hereby assumes the risk of changes in applicable laws and
regulations relating to past, present and future environmental
conditions on the Property and the risk that adverse physical
characteristics and conditions, including, without limitation, the
presence of Hazardous Substance or other contaminants, may not have
been revealed by its investigation.
5.4.5
Indemnity . Purchaser agrees to indemnify, defend and hold
Seller harmless of and from any and all liabilities, claims,
demands, and expenses of any kind or nature which arise or accrue
after Closing and which are in any way related to the ownership,
maintenance, or operation of the Property by Purchaser and its
successors and assigns, including, without limitation, in
connection with Hazardous Materials.
5.4.6
Survival . The terms and conditions of this
Section 5.4 shall expressly survive the Closing, not
merge with the provisions of any closing documents and shall be
incorporated into the Deed.
5.5.
Indemnity; Restoration . The Purchaser hereby agrees to
(i) indemnify, defend and hold the Seller harmless from and
against any injury, loss, damage or expense (including
attorneys’ fees and expenses) caused by the inspection,
examination, testing and investigation of the Property by the
Purchaser and the Purchaser’s employees, agents and
contractors and other undertakings of the Purchaser and the
Purchaser’s employees, agents and contractors under this
Agreement, and (ii) if Purchaser fails to acquire the Property,
restore the Property to the condition in which it existed
immediately prior to the Purchaser’s entry
thereon.
5.6.
Insurance . Before any entry upon the Property, the
Purchaser shall, at the Purchaser’s expense, provide and
maintain, or cause the Purchaser’s contractors to provide and
maintain, with companies with a Best’s Rating of at least A-
VIII or better authorized to do business in the state of the
subject Individual Property, (i) occurrence based
comprehensive general public liability insurance, against claims
for bodily injury, death or property damage, occurring upon, in or
about the Property, or the adjoining sidewalks, streets or ways
(including, without limitation, personal injury, death or property
damage resulting directly or indirectly from any change,
alteration, improvement or repair thereof) for at least One Million
Dollars ($1,000,000.00) for injury to any one individual, and One
Million Dollars ($1,000,000.00) for any one accident, and One
Million Dollars ($1,000,000.00) for damage to property during
the
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lease term; and
(ii) workers compensation insurance in statutory limits which
affords not less than One Million Dollars ($1,000,000.00) in
coverage. Prior to the commencement of entry by the Purchaser, the
Purchaser shall furnish sufficient certificates of such insurance
to the Seller, which certificates shall name the Seller as an
additional insured thereunder.
5.7.
Richmond Condominium Documents . Purchaser hereby
acknowledges that the Richmond Property is subject to all
covenants, terms, provisions, conditions, requirements, obligations
and reservations set forth in the Declaration of Hanover Medical
Park Condominium (the “Condominium" ), as amended
through the date of this Agreement (the “Declaration"
), and the by-laws of the Condominium (the “By-Laws"
). The Declaration and the By-Laws are hereinafter referred to
collectively as the “Condominium Documents.” The
Condominium Documents have been delivered to the Purchaser and
Purchaser acknowledges and affirms that, before executing this
Agreement, it received copies of all of the Condominium Documents
from Seller and that it read and understood the Condominium
Documents. The Condominium Documents constitute Permitted
Exceptions and shall not be objected to by Purchaser pursuant to
Section 4.1.1 .
5.8.
Verdugo Deed Restrictions . Purchaser acknowledges that the
Verdugo Property is subject to those certain deed restrictions
attached to this Agreement as Exhibit K (the
“ Deed Restrictions ”) and the conveyance of the
Property by Seller to Purchaser is and shall be subject to the Deed
Restrictions. Purchaser acknowledges and affirms that, before
executing this Agreement it has read and understood the Deed
Restrictions. The Deed Restrictions constitute Permitted Exceptions
and shall not be objected to by Purchaser pursuant to
Section 4.1.1 .
5.9.
Loan Assumption . Purchaser acknowledges that the Hanover
Property is subject to a mortgage lien in favor of MONY Life
Insurance Company ( “Lender” ), which mortgage
lien secures a loan in the original principal amount of
$5,530,000.00 (the “Hanover Loan” ). Purchaser
shall use commercially reasonable efforts on or before the Closing
to obtain Lender’s approval of (i) Purchaser’s
assumption of the Hanover Loan in accordance with and on the terms
and conditions contained in those certain documents evidencing and
governing the Hanover Loan (the “Loan Documents”
), copies of which have been provided to Purchaser on or prior to
the date hereof, and (ii) the full release of Hanover and
LaSalle Medical Office Fund, L.L.C. (the “Existing
Guarantor” ) from any and all liability under the Loan
Documents arising from and after the Closing Date (together, the
“Assumption Obligation” ). Seller shall
cooperate with Purchaser in Purchaser’s efforts to satisfy
the Assumption Obligation.
At Closing, if the
Assumption Obligation is satisfied and the Hanover Loan is assumed
by Purchaser, (i) Purchaser shall receive a credit against the
Purchase Price equal to the outstanding principal and accrued
interest due as of the Closing Date under the Hanover Loan,
(ii) Purchaser shall pay to Seller, and Seller shall receive
as a credit to the Purchase Price, an amount equal to any and all
reserves and escrows ( “Loan Escrows” ) held by
Lender under the Hanover Loan which are, in turn, credited to
Purchaser as part of the assumption, and (iii) Seller shall
pay to Lender the assumption fee equal to one percent (1%) of the
then outstanding principal balance of the Hanover Loan (the
“Assumption Fee” ) due and payable in connection
with any assumption of the Hanover Loan pursuant to the terms and
conditions of the Hanover Loan Documents. Purchaser shall pay any
and all other fees and expenses due and payable in connection with
the assumption of the Hanover Loan, including without limitation,
the attorneys’ fees, mortgage taxes, and other closing fees
incurred by Lender.
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