AGREEMENT OF SALE AND PURCHASE
BY AND BETWEEN
HEALTHSOUTH of Virginia, Inc.,
a Delaware corporation
('SELLER')
AND
CRESCENT CAPITAL TRUST, INC.,
a Maryland corporation
('PURCHASER')
May 23, 1994
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II AGREEMENTS TO SELL, PURCHASE AND LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 AGREEMENT TO SELL AND PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 AGREEMENT TO LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 PAYMENT OF PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 INDEPENDENT CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV ITEMS TO BE FURNISHED TO PURCHASER BY SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 DUE DILIGENCE MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 DUE DILIGENCE REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V TITLE AND SURVEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 TITLE COMMITMENT, EXCEPTION DOCUMENTS AND SURVEY . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 REVIEW PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3 ADDITIONAL EXCEPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE VI REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . 8
6.1 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.2 INDEMNITY OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 COVENANTS OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VII CONDITIONS TO THE PURCHASER'S AND SELLER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . 14
7.1 CONDITIONS TO THE PURCHASER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 FAILURE OF CONDITIONS TO PURCHASER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . 16
7.3 CONDITIONS TO SELLER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.4 FAILURE OF CONDITIONS TO SELLER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII PROVISIONS WITH RESPECT TO THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.1 SELLER'S CLOSING OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.2 PURCHASER'S CLOSING OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.3 TITLE COMPANY'S CLOSING OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IX EXPENSES OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.1 ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.2 CLOSING COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE X DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.1 SELLER'S DEFAULT; PURCHASER'S REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.2 PURCHASER'S DEFAULT; SELLER'S REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.1 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.2 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.3 ENTIRE AGREEMENT; MODIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.4 APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.5 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.6 BINDING EFFECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.7 EXTENSION OF DATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.8 TIME IS OF THE ESSENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.9 WAIVER OF CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.10 OFFER AND ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.11 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.12 RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.13 NO ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.14 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
AGREEMENT OF SALE AND PURCHASE
THIS AGREEMENT OF SALE AND PURCHASE (the 'Agreement') is made and
entered into by and between HEALTHSOUTH OF VIRGINIA, INC., a Delaware
corporation (hereinafter referred to as 'Seller'), and CRESCENT CAPITAL TRUST,
INC., a Maryland corporation (hereinafter referred to as 'Purchaser'). Seller
and Purchaser are sometimes collectively referred to herein as the 'Parties'
and each of the Parties is sometimes singularly referred to herein as a
'Party'.
WHEREAS, Seller is the owner of the Property (as hereinafter defined),
consisting of certain real property and improvements thereon located in Henrico
County, Virginia, consisting of two medical office buildings containing 23,206
and 62,369 square feet, respectively, more or less, as more particularly
described on Exhibit A attached hereto and made a part hereof for all purposes
by this reference; and
WHEREAS, Seller desires to sell and Purchaser desires to purchase the
Property, and simultaneously therewith, to enter into a lease transaction
pursuant to which Purchaser shall lease to Seller, and Seller shall lease from
Purchaser, the Property.
NOW, THEREFORE, in consideration of the sum of $10.00, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows:
ARTICLE I
DEFINITIONS
As used herein (including any Exhibits attached hereto), the following
terms shall have the meanings indicated:
'Bill of Sale' means a bill or bills of sale in the form attached as
Exhibit B hereto, and sufficient to transfer to Purchaser all of the items set
forth therein.
'Business Agreement' means any management agreement, service contract,
easement, covenant, restriction or other agreement relating to the operation or
maintenance of the Property.
'Business Day(s)' means calendar days other than Saturdays, Sundays
and legal holidays.
'Certificate of Non-Foreign Status' means a certificate dated as of
the Closing Date, addressed to Purchaser and duly executed by Seller, in the
form of Exhibit C attached hereto.
'Claim' means any obligation, liability, lien, encumbrance, loss,
damage, cost, expense or claim, including, without limitation, any claim for
damage to property or injury to or death of any person or persons.
'Closing' means the consummation of the sale and purchase provided for
herein, to be held at the offices of Sirote & Permutt, P.C., 2222 Arlington
Avenue South, Birmingham, Alabama or such other place as the Parties may
mutually agree.
'Closing Certificate' means a certificate in the form of Exhibit D
wherein Seller shall represent that the representations and warranties of
Seller contained in this Agreement are true and correct as of
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the Closing Date as if made on and as of the Closing Date, except with respect
to those matters that may be disclosed in writing to and accepted by Purchaser
prior to the Closing Date.
'Closing Date' means the closing date in the Escrow Agreement but no
later than June 30, 1994 or such earlier or later date as shall be hereafter
agreed upon by the Parties.
'Credit Enhancements' means all security deposits, security interests,
letters of credit, pledges, prepaid rent or other sums, deposits or interests,
if any, held by Seller with respect to the Property, the Tenant Leases or the
Tenants.
'Deed' means a special (limited) warranty deed substantially in the
form of Exhibit E attached hereto (as the same may be modified to comply with
local law and custom), executed by Seller, as grantor, in favor of Purchaser,
as grantee, conveying the Land and Improvements to Purchaser, subject only to
the Permitted Exceptions.
'Disclosure Schedule' has the meaning set forth in Section 6.1(u).
'Due Diligence Materials' means the information to be provided by
Seller to Purchaser pursuant to the provisions of Section 4.1 hereof.
'Effective Date' means the later of the two dates on which this
Agreement is signed and all changes initialed by Seller and Purchaser, as
indicated by their signatures below; provided that in the event only one Party
dates its signature, then the date of its signature shall be the Effective
Date.
'Engineering Documents' means all site plans, surveys, soil and
substrata studies, architectural drawings, plans and specifications,
engineering plans and studies, floor plans, landscape plans, and other plans
and studies that relate to the Land, the Improvements or the Fixtures and are
in Seller's possession or control.
'Escrow Agreement' has the meaning set forth in Section 8.1 hereof.
'Exception Documents' means true, correct and legible copies of each
document listed as an exception to title on the Title Commitment.
'Fixtures' means all permanently affixed equipment, machinery,
fixtures, and other items of real and/or personal property, including all
components thereof, now and hereafter located in, on or used in connection
with, and permanently affixed to or incorporated into the Improvements,
including, without limitation, all furnaces, boilers, heaters, electrical
equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and theft
protection equipment, built-in vacuum, cable transmission, oxygen and similar
systems, all of which, to the greatest extent permitted by law, are hereby
deemed by the Parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto, but
specifically excluding any Tenant's trade fixtures or other fixtures or
equipment that a Tenant is permitted to remove pursuant to the applicable
Tenant Lease.
'Guaranty' means a guaranty of performance of the Lease substantially
in the form attached hereto asExhibit F to be executed by HEALTHSOUTH.
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'Hazardous Materials' means any substance, including without
limitation, asbestos or any substance containing asbestos and deemed hazardous
under any Hazardous Materials Law, the group of organic compounds known as
polychlorinated biphenyls, flammable explosives, radioactive materials, medical
waste, chemicals, pollutants, effluents, contaminants, emissions or related
materials and items included in the definition of hazardous or toxic wastes,
materials or substances under any Hazardous Materials Law.
'Hazardous Materials Law' means any law, regulation or ordinance
relating to environmental conditions, medical waste and industrial hygiene,
including, without limitation, the Resource Conservation and Recovery Act of
1976 ('RCRA'), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ('CERCLA'), as amended by the Superfund Amendments and
Reauthorization Act of 1986 ('SARA'), the Hazardous Materials Transportation
Act, the Federal Water Pollution Control Act, the Clean Air Act, the Clean
Water Act, the Toxic Substances Control Act, the Safe Drinking Water Act, and
all similar federal, state and local environmental statutes, ordinances and the
regulations, orders, or decrees now or hereafter promulgated thereunder.
'HEALTHSOUTH' means HEALTHSOUTH Rehabilitation Corporation, a Delaware
corporation, which is the corporate parent company of Seller.
'Independent Consideration' means the sum of $100.00.
'Improvements' means all buildings, structures, Fixtures and other
improvements of every kind now or on the Closing Date located on the Land,
including, without limitation, all alleyways, connecting tunnels, crosswalks,
sidewalks, landscaping, parking lots and structures, roads, drainage and all
above ground and underground utility structures, equipment systems that
constitute Fixtures and other so-called 'infrastructure' improvements.
'Intangible Property' means all intangible property or any interest
therein now or on the Closing Date owned or held by Seller in connection with
the Land, the Improvements or the Fixtures, or any business or businesses now
or hereafter conducted by Seller or any Tenant thereon or with the use thereof,
including all leases, contract rights, agreements, trade names, water rights
and reservations, zoning rights, business licenses and warranties (including
those relating to construction or fabrication) related to the Land, the
Improvements or the Fixtures, or any part thereof, provided 'Intangible
Property' shall not include the general corporate trademarks, service marks,
logos or insignia or books and records of Seller or the Tenant Leases, the
Business Agreements or the Credit Enhancements.
'IPO' has the meaning set forth in Section 7.1(k) hereof.
'Land' means the real property more particularly described on Exhibit A
attached hereto and made a part hereof, together with all covenants, licenses,
privileges and benefits thereto belonging, and any easements, rights-of-way,
rights of ingress or egress or other interests of Seller in, on, or to any
land, highway, street, road or avenue, open or proposed, in, on, across, in
front of, abutting or adjoining such real property including, without
limitation, any strips and gores adjacent to or lying between such real
property and any adjacent real property.
'Laws' means all federal, state and local laws, moratoria,
initiatives, referenda, ordinances, rules, regulations, standards, orders and
other governmental requirements, including, without limitation, those relating
to the environment, health and safety, disabled or handicapped persons.
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'Lease' means a lease agreement in the form set forth on Exhibit G
attached hereto and made a part hereof, which shall be executed and delivered
by Seller and Purchaser at the Closing, and pursuant to the terms of which
Purchaser shall lease the Property to Seller following the Closing.
'Lease Assignment' means an Assignment of Rents and Leases
substantially in the form of Exhibit H attached hereto, to be executed by
Seller to Purchaser at Closing, pursuant to the terms of which (i) Seller shall
absolutely and unconditionally assign to Purchaser all of its right, title and
interest in and to the Tenant Leases, and (ii) Seller shall assign to Purchaser
the Credit Enhancements, if any, as security for the obligations of Seller
under the Lease, and any other obligation of Seller to Purchaser.
'Party' or 'Parties' have the meanings set forth in the preamble to
this Agreement.
'Permits' means all permits, licenses, approvals, entitlements,
notifications, determinations and other governmental and quasi-governmental
authorizations including, without limitation, certificates of occupancy,
required in connection with the ownership, planning, development, construction,
use, operation or maintenance of the Property. As used herein,
'quasi-governmental' shall include the providers of all utilities services to
the Property.
'Permitted Exceptions' means those title exceptions or defects which
are approved in writing by Purchaser pursuant to Article V of this Agreement.
'Property' means, collectively, the Land and all rights, titles, and
appurtenant interests, the Credit Enhancements, the Improvements, the Fixtures,
the Intangible Property, the Warranties, the Business Agreements, the
Engineering Documents and the Tenant Leases. As used in the foregoing,
'appurtenant interests' shall mean those interests which pass by operation of
law with the conveyance of the fee simple estate in the Land and Improvements.
'Purchase Price' means an amount equal to $12,100,000.00.
'Real Property' means the Land, the Improvements and the Fixtures.
'Review Period' has the meaning set forth in Section 5.2.
'Search Reports' means the initial reports of searches made of the
Uniform Commercial Code Records of the County in which the Property is located,
and of the office of the Secretary of State of the State in which the Property
is located, which searches shall reflect that none of the Property is
encumbered by liens. The Search Reports shall be updated, at Seller's expense,
at or within one week prior to Closing.
'Seller's Personal Property' means all machinery, equipment,
furniture, furnishings, beds, computers, signage, trade fixtures or other
personal property and consumable inventory and supplies used or useful in the
business of the Seller operated on the Property, except for the Property, all
as more fully set forth on Exhibit I attached hereto.
'Survey' means a current 'as-built' ALTA survey, certified to ALTA
requirements, prepared by an engineer or surveyor licensed in the State in
which the Land is located acceptable to Purchaser, which shall: (a) include a
legal description of the Land by metes and bounds (which shall include a
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reference to the recorded plat, if any), and a computation of the area
comprising the Land in both acre, gross square feet and net square feet (to the
nearest one-hundredth of said respective measurement); (b) accurately (upon
Seller's belief, without inquiry) show the location on the Land of all
improvements, building and set-back lines, fences, evidence of abandoned
fences, ponds, creeks, streams, rivers, officially designated 100-year flood
plains and flood prone areas, canals, ditches, easements, roads, rights-of-way
and encroachments; (c) be certified to the Purchaser, the Title Company, and
any third-party lender designated by Purchaser; (d) legibly identify any and
all recorded matters shown on the Title Commitment or on said survey by
appropriate volume and page recording references and the survey shall show the
location of all adjoining streets; and (e) be satisfactory to the Title Company
so as to permit it to amend the standard exception for area and boundaries in
the Title Policy.
'Tenant' means the lessees or tenants under the Tenant Leases, if any.
'Tenant Leases' means all leases, subleases and other rental
agreements, if any, (written or verbal, now or hereafter in effect) that grant
a possessory interest in and to any space in the Improvements or that otherwise
have rights with regard to the use of the Land or Improvements, and all Credit
Enhancements, if any, held in connection therewith.
'Title Commitment' means a current commitment issued by the Title
Company to the Purchaser pursuant to the terms of which the Title Company shall
commit to issue the Title Policy to Purchaser in accordance with the provisions
of this Agreement, and reflecting all matters which would be listed as
exceptions to coverage on the Title Policy.
'Title Company' means First American Title Insurance Company, whose
address is 6065 Roswell Road, N.E., Suite 120, Atlanta, Georgia 30328-4011,
Attention: Mr. Rob Reeder.
'Title Policy' means an ALTA Extended Coverage Owner's Policy of Title
Insurance (1970 Form B -- 1990 revision), together with such endorsements
thereto as are reasonably and customarily required by institutional purchasers
of real property similar to the Property, with liability in the amount of the
Purchase Price, dated as of the Closing Date, issued by the Title Company,
insuring title to the fee interest in the Real Property in Purchaser, subject
only to the Permitted Exceptions and to the standard printed exceptions
included in the ALTA standard form owner's extended coverage policy of title
insurance, with the following modifications: (a) the exception for areas and
boundaries shall be deleted; (b) the exception for ad valorem taxes shall
reflect only taxes for the current and subsequent years; (c) any exception as
to parties in possession shall be limited to rights of tenants in possession,
as tenants only, pursuant to the Lease and the Tenant Leases; (d) there shall
be no general exception for visible and apparent easements or roads and
highways or similar items (with any exception for visible and apparent
easements or roads and highways or similar items to be specifically referenced
to and shown on the Survey and also identified by applicable recording
information); and (e) all other exceptions shall be modified or endorsed in a
manner reasonably acceptable to Purchaser.
'Warranties' means all warranties, representations and guaranties with
respect to the Property, whether express or implied, which Seller now holds or
under which Seller is the beneficiary, including, without limitation, all of
the representations, warranties and guaranties given and/or assigned to Seller
under the Tenant Leases.
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ARTICLE II
AGREEMENTS TO SELL, PURCHASE AND LEASE
2.1 AGREEMENT TO SELL AND PURCHASE. On the Closing Date, Seller
shall sell, convey, assign, transfer and deliver to Purchaser and Purchaser
shall purchase, acquire and accept from Seller, the Property, for the Purchase
Price and subject to the terms and conditions of this Agreement. To the extent
permitted or required by law, Seller shall assign to Purchaser all of Seller's
right, title and interest in and to the Permits.
2.2 AGREEMENT TO LEASE. On the Closing Date, and subject to
performance by the Parties of the terms and provisions of this Agreement,
Purchaser shall lease to Seller and Seller shall lease from Purchaser, the
Property at the rental and upon the terms and conditions set forth in the
Lease.
ARTICLE III
PURCHASE PRICE
3.1 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid
by Purchaser delivering to the Title Company at the Closing a wire transfer or
other immediately available funds payable to the order of the Title Company in
the amount of the Purchase Price, subject to adjustment as provided in Article
IX hereof.
3.2 INDEPENDENT CONSIDERATION. Within three Business Days
following the Effective Date, Purchaser shall deliver to the Title Company, in
funds immediately forfeitable to Seller, the Independent Consideration, as
independent consideration for any option granted to Purchaser by Seller herein,
and based upon such consideration and the mutual covenants of Seller and
Purchaser contained herein, Seller hereby agrees that any such option granted
Purchaser is irrevocable and Seller shall not terminate said option without the
prior written consent of Purchaser, except as may be expressly provided for
herein.
ARTICLE IV
ITEMS TO BE FURNISHED TO PURCHASER BY SELLER
4.1 DUE DILIGENCE MATERIALS. Within 15 days after the Effective
Date, Seller shall deliver to Purchaser or make available to Purchaser at the
Property for its review the following items:
(a) True, correct, complete and legible copies of all Tenant
Leases, Business Agreements, Warranties, Permits, and Engineering Documents;
(b) A true, correct, complete and legible rent roll of all
existing Tenant Leases, if any, setting forth with respect to each of the
Tenant Leases: (i) the premises covered; (ii) the date of such Tenant Lease and
all amendments and modifications thereto; (iii) the name of the Tenant,
licensee or occupant; (iv) the term, including specification of the
commencement date and the termination date; (v) the rents; (vi) the nature and
amount of the security deposits thereunder; if any (vii) options to renew or
extend contained in any of the Tenant Leases; (viii) the status of Tenant
improvements to be performed by Seller; and
(c) An inventory of the Seller's Personal Property;
(d) True, correct, complete and legible copies of the following
items:
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(i) tax statements or assessments for all real estate and
personal property taxes assessed against the Property for the current
and the prior two calendar years;
(ii) all existing fire and extended coverage insurance
policies and any other insurance policies pertaining to the Property;
(iii) all instruments evidencing, governing or securing the
payment of any loans secured by the Property or related thereto;
(iv) unaudited balance sheets and income statements of the
Seller for 1991, 1992 and 1993, certified as correct to the best
knowledge of an officer or managing general partner of Seller, as the
case may be;
(v) all environmental studies or impact reports relating
to the Property in possession or control of Seller, if any, and any
approvals, conditions, orders or declarations issued by any
governmental authority relating thereto (such studies and reports
shall include, but not be limited to, reports indicating whether the
Property is or has been contaminated by Hazardous Materials); and
(vi) all litigation files, if any, with respect to any
pending litigation and claim files for any claims made or threatened,
the outcome of which might have a material adverse effect on the
Property or the use and operation of the Property.
4.2 DUE DILIGENCE REVIEW. During the Review Period Purchaser
shall be entitled to review the Due Diligence Materials delivered or made
available by Seller to Purchaser pursuant to the provisions of Section 4.1
above. If Purchaser shall, for any reason in Purchaser's sole discretion,
disapprove or be dissatisfied with any aspect of such information, or the
Property, then Purchaser shall be entitled to terminate this Agreement by
giving written notice thereof to Seller on or before the expiration of the
Review Period, whereupon this Agreement shall automatically be rendered null
and void, all moneys which have been delivered by Purchaser to Seller or the
Title Company (other than the Independent Consideration) shall be immediately
returned to Purchaser and thereafter neither Party shall have any further
obligations or liabilities to the other hereunder. Alternatively, Purchaser
may give written notice setting forth any defect, deficiency or encumbrance and
specify a time within which Seller may remedy or cure such matter (before or
after the expiration of the Review Period). If any defect, deficiency or
encumbrance, so noticed, is not satisfied or resolved to the satisfaction of
Purchaser, in Purchaser's sole discretion, within the time period specified in
such written notice, this Agreement shall automatically terminate as provided
in this section. If no such notice is timely given, then Purchaser shall be
deemed to have waived its right to so terminate. Also, Purchaser shall treat
the Due Diligence Materials as confidential and shall use them solely for the
purpose of evaluating the Property. If this Agreement is terminated, Purchaser
shall promptly redeliver to Seller all Due Diligence Materials and shall not
retain any copies, extracts or other reproductions in whole or in part of the
Due Diligence Materials.
ARTICLE V
TITLE AND SURVEY
5.1 TITLE COMMITMENT, EXCEPTION DOCUMENTS AND SURVEY. Within 15
days after the Effective Date, Seller shall deliver or cause to be delivered to
Purchaser, the Title Commitment, Exception Documents, Survey, and Search
Reports.
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5.2 REVIEW PERIOD. Purchaser shall have the right to review the
Title Commitment, Exception Documents, Search Reports and Survey for a period
of 30 days from the date of Purchaser's receipt of the last of such items (the
'Review Period'). In the event any matters appear therein that are unacceptable
to Purchaser, Purchaser shall, within the Review Period notify Seller in
writing of such fact. Upon the expiration of said Review Period, Purchaser
shall be deemed to have accepted all exceptions to title referenced in the
Title Commitment and all matters shown on the Survey except for matters which
are the subject of a notification made under the preceding sentence, and such
accepted exceptions shall be included in the term 'Permitted Exceptions' as
used herein; provided that in no event shall any of the items listed on
Schedule B-1 or C of the Title Commitment constitute Permitted Exceptions for
purposes hereof. In the event that Purchaser objects to any such matters
within the Review Period, Seller shall have 30 days from receipt of such notice
within which to eliminate or modify any such unacceptable exceptions or items.
In the event that Seller is unable or unwilling to eliminate or modify such
unacceptable items to the satisfaction of Purchaser on or before the expiration
of said 30-day period, Purchaser may either (a) waive such objections and
accept title to the Property subject to such unacceptable items (which items
shall then be deemed to constitute part of the 'Permitted Exceptions'), or (b)
terminate this Agreement by written notice to Seller, whereupon this Agreement
shall automatically be rendered null and void, all moneys which have been
delivered by Purchaser to Seller or the Title Company (other than the
Independent Consideration) shall be immediately returned to Purchaser, and
thereafter neither Party shall have any further obligations or liabilities to
the other hereunder.
5.3 ADDITIONAL EXCEPTIONS. In the event that at any time the
Title Commitment, Exception Documents, Survey or Search Reports are modified
(other than the deletion or elimination of any item as to which Purchaser has
made an objection), Purchaser shall have the right to review and approve or
disapprove any such modification and to terminate this Agreement in the event
that Seller is unable or unwilling to eliminate any such matters to the
satisfaction of Purchaser in accordance with the provisions of Section 5.2
above, except that Purchaser's Review Period as to such additional items shall
be for a period expiring on the date that is the earlier to occur of (a) 15
days following the date of Purchaser's receipt of such modification, and (b)
the Closing Date, and all other time periods referred to in Section 5.2 shall
expire on the date that is the earlier of (i) the final day of the specified
time period as set forth therein, and (ii) the Closing Date.
ARTICLE VI
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
6.1 REPRESENTATIONS AND WARRANTIES OF SELLER. To induce Purchaser
to enter into this Agreement and to purchase the Property, Seller represents
and warrants to Purchaser, to the best of its knowledge, as follows:
(a) Pursuant to Section 5.2 hereof, Seller has and at the Closing
Seller will have, and will convey, transfer and assign to Purchaser, good,
marketable, fee simple and insurable title to the Land, free and clear of any
deeds of mortgages, liens, encumbrances, leases, tenancies, licenses, chattel
mortgages, conditional sales agreements, security interests, covenants,
conditions, restrictions, judgments, rights-of-way, easements, encroachments
and any other matters affecting title or use of the Property.
(b) Seller has duly and validly authorized and executed this
Agreement, and has right, title, power and authority to enter into this
Agreement and, at Closing, to consummate the actions provided for herein, and
the joinder of no person or entity will be necessary to convey the Property
fully and completely to Purchaser at Closing and to lease the Property from
Purchaser following Closing. The
8
execution by Seller of this Agreement and the consummation by Seller of the
transactions contemplated hereby do not, and at the Closing will not, result in
a breach of any of the terms or provisions of, or constitute a default or a
condition which upon notice or lapse of time or both would ripen into a default
under any indenture, agreement, instrument or obligation to which Seller is a
party or by which the Property or any portion thereof is bound; and does not
and at the Closing will not, constitute a violation of any order, rule or
regulation applicable to Seller or any portion of the Property of any court or
of any federal or state or municipal regulatory body or administrative agency
or other governmental body having jurisdiction over Seller or any portion of
the Property.
(c) Without the benefit of any independent investigation or
estoppel certificates from any of the Tenants, there are no adverse or other
parties in possession of the Property or of any part thereof except the
property manager, Seller and Tenants, if any, under valid and effective Tenant
Leases delivered to Purchaser pursuant to this Agreement. No party has been
granted any license, lease or other right relating to the use or possession of
the Property, except Tenants under Tenant Leases which have been delivered to
Purchaser pursuant to this Agreement.
(d) Each Tenant Lease, if any, furnished to Purchaser pursuant to
this Agreement is in full force and effect and has not been materially amended,
modified or supplemented in any way that has not been disclosed to Purchaser in
writing. The Tenant Leases, if any, furnished to Purchaser pursuant to this
Agreement constitute all material written and oral agreements of any kind for
the leasing, rental or occupancy of any portion of the Property. No material
default or breach on the part of the Seller as landlord or Tenant exists under
any of the Tenant Leases. All material Tenant improvements, repairs and other
work and obligations, if any, then required to be performed by the landlord
under each of the Tenant Leases will be fully performed and paid for in full on
or prior to the Closing. Seller has not, except as disclosed to Purchaser in
writing, accepted the payment of rent or other sums due under any of the Tenant
Leases for more than one month in advance.
(e) None of the Tenant Leases and none of the rents or other
charges payable thereunder, if any, have been assigned, pledged or encumbered
by Seller.
(f) No brokerage or leasing commissions or other compensation will
be due or payable to any person, firm, corporation or other entity with respect
to, or on account of, any Tenant Lease or any extensions or renewals thereof,
if any, excepting those agreements entered into or accepted in writing by
Purchaser.
(g) No notice has been received by Seller and Seller is not aware
of any person having received notice from any insurance company that has issued
a policy with respect to any portion of the Property or from any board of fire
underwriters (or other body exercising similar functions), claiming any defects
or deficiencies or requiring the performance of any repairs, replacements,
alterations or other work. No notice has been received by Seller from any
issuing insurance company that any of such policies will not be renewed, or
will be renewed only at a higher premium rate than is presently payable
therefor, except as disclosed to and accepted by Purchaser in writing.
(h) No pending condemnation, eminent domain, assessment or similar
proceeding or charge affecting the Property or any portion thereof exists.
Seller has not received any notice of a proposed increase in the assessed
valuation of the Property.
9
(i) All of the Improvements (including all utilities) have been
substantially completed and installed and are being used in substantial
accordance with all applicable Laws, including the plans and specifications
approved by the governmental authorities having jurisdiction to the extent
applicable. Permanent certificates of occupancy, all licenses, permits,
authorizations and approvals required by all governmental authorities having
jurisdiction, and the requisite certificates of the local board of fire
underwriters (or other body, exercising similar functions) have been issued for
the Improvements, all of the same will be in full force and effect. The
Improvements, as designed and constructed, comply materially with all statutes,
restrictions, regulations and ordinances applicable thereto.
(j) The existing water, sewer, gas and electricity lines, storm
sewer and other utility systems on the Land are adequate to serve the utility
needs of the Property. All utilities required for the operation of the
Improvements will enter the Land through adjoining public streets or through
adjoining private land in accordance with valid public or private easements
that will inure to the benefit of Purchaser. All approvals, licenses and
permits required for said utilities have been obtained and are in force and
effect. All of said utilities are installed and operating, all installation and
connection charges have been paid in full, and the right to the return of any
deposit or contribution in connection therewith shall inure to Purchaser.
(k) There are no material structural defects in any of the
buildings or other Improvements constituting the Property. The Improvements,
all heating, electrical, plumbing and drainage at, or servicing, the Property
and all facilities and equipment relating thereto are in reasonably good
condition and working order and adequate in quantity and quality for the normal
operation of the Property. No part of the Property has been destroyed or
damaged by fire or other casualty. There are no unsatisfied requests for
repairs, restorations or alterations with regard to the Property from any
Tenant, lender, insurance provider or governmental authority.
(l) No work has been performed or is in progress at the Property,
and no materials will have been delivered to the Property that might reasonably
be expected to provide the basis for a mechanic's, materialmen's or other lien
against the Property or any portion thereof.
(m) There will exist no material service contracts, management or
other agreements applicable to the Property other than the Business Agreements
furnished to Purchaser pursuant to Section 4.1. There are no material
agreements or understandings (whether oral or written) with respect to the
Property or any portion thereof, to which Seller is a party, other than those
delivered to Purchaser pursuant to Section 4.1
(n) No default or breach exists under any of the Business
Agreements, or any of the covenants, conditions, restrictions, rights-of-way or
easements affecting the Property or any portion thereof.
(o) There are no actions, suits or proceedings pending or
threatened against or affecting the Property or any portion thereof, any of the
Tenant Leases or relating to or arising out of the ownership, or by any
federal, state, county or municipal department, commission, board, bureau or
agency or other governmental instrumentality, other than those disclosed to
Purchaser pursuant to Section 4.1. All judicial proceedings concerning the
Property will be finally dismissed and terminated prior to Closing.
(p) The Property has free and unimpeded access to presently
existing public highways and/or roads (either directly or by way of perpetual
easements), and all approvals necessary therefor have been
10
obtained and in full force and effect. No fact or condition exists which would
result in the termination of the current access from the Property to any
presently existing public highways and/or roads adjoining or situated on the
Property.
(q) There are no attachments, executions, assignments for the
benefit of creditors, or voluntary or involuntary proceedings in bankruptcy or
under any other debtor relief laws contemplated by or pending or, threatened
against Seller or the Property.
(r) Other than with respect to activities in connection with or
conditions arising strictly from customary and ordinary use or maintenance of
the Property by Seller and Tenants in full compliance with any or all Hazardous
Materials Law, Seller is unaware of (i) any Hazardous Materials installed,
used, generated, manufactured, treated, handled, refined, produced, processed,
stored or disposed of, or otherwise on or under the Property; (ii) any activity
being undertaken on the Property which could cause (a) the Property to become a
hazardous waste treatment, storage or disposal facility within the meaning of
any Hazardous Materials Law, (b) a release or threatened release of Hazardous
Materials from the Property within the meaning of any Hazardous Materials Law
or (c) the discharge of Hazardous Materials into any watercourse, body of
surface or subsurface water or wetland, or the discharge into the atmosphere of
any Hazardous Materials which would require a permit under any Hazardous
Materials Law; (iii) any activity undertaken with respect to the Property which
would cause a violation or support a claim under any Hazardous Materials Law;
(iv) any investigation, administrative order, litigation or settlement with
respect to any Hazardous Materials, being threatened or in existence with
respect to the Property; (v) any notice being served on Seller from any entity,
governmental body or individual claiming any violation of any Hazardous
Materials Law, or requiring compliance with any Hazardous Materials Law, or
demanding payment or contribution for the environmental damage or injury to
natural resources. Seller has not obtained and is not required to obtain, and
Seller has no knowledge of any reason Purchaser will be required to obtain, any
permits, licenses, or similar authorizations to occupy, operate or use the
Improvements or any part of the Property by reason of any Hazardous Materials
Law.
(s) The Purchase Price is being allocated to the Real Property and
the portion of the Property which is considered to be personal property as set
forth on Exhibit J attached hereto.
(t) No certificate of need or approval or consent from any
governmental authority is necessary or appropriate for Seller's use of the
property.
(u) All documents and information delivered by Seller to Purchaser
pursuant to the provisions of this Agreement are materially true, correct and
complete as of the date hereof and will be correct and complete as of the
Closing Date, except as set forth in this Agreement and in the disclosure
schedule accompanying this Agreement and initialled by the Parties (the
'Disclosure Schedule'). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered paragraphs in this Section 6.1 and Section 6.3.
From time to time after the execution of this Agreement until the Closing,
Seller shall deliver to Purchaser one or more supplemental schedules setting
forth all changes in the schedules, and in previously delivered supplemental
schedules, if any, and in any of the representations and warranties made herein
whether or not previously modified by a schedule, arising out of matters
discovered or occurring prior to the Closing. Purchaser and its counsel shall
have 30 days to object in writing to any material information in any
supplemental schedule; failure by Purchaser to notify Seller within such 30-day
period of any objection to information provided in the supplemental schedule
prior to the Closing shall be deemed to be approval thereof.
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6.2 INDEMNITY OF SELLER. Subject to the provisions provided
hereafter limiting the liability of Seller, Seller hereby agrees to indemnify
and defend, at its sole cost and expense, and hold Purchaser, its successors
and assigns, harmless from and against and to reimburse Purchaser with respect
to any and all claims, demands, actions, causes of action, losses, damages,
liabilities, costs and expenses (including, without limitation, reasonable
attorneys' fees and court costs) of any and every kind or character, known or
unknown, fixed or contingent, asserted against or incurred by Purchaser at any
time and from time to time by reason of or arising out of (a) the breach of any
representation or warranty of Seller set forth in this Agreement, (b) the
failure of Seller, in whole or in part, to perform any obligation required to
be performed by Seller pursuant to Section 6.1 or (c) except for the matters
disclosed herein or in the Disclosure Schedule the ownership, construction,
occupancy, operation, use and maintenance of the Property prior to the Closing
Date. This obligation of indemnity shall remain in effect only for the term of
the Lease, but notwithstanding such limitation, otherwise it shall be without
limitation with respect to the violation on or before the Closing Date of any
Hazardous Material Law in effect on or before the Closing Date and any and all
matters arising out of any act, omission, event or circumstance existing or
occurring on or prior to the Closing Date (including, without limitation, the
presence on the Property or release from the Property of Hazardous Materials
disposed of or otherwise released prior to the Closing Date) which results in a
violation of a Hazardous Materials Law, regardless of whether the act,
omission, event or circumstance constituted a violation of any Hazardous
Materials Law at the time of its existence or occurrence. The provisions of
this Section 6.2 shall survive the Closing of the transaction contemplated by
this Agreement and shall continue thereafter in full force and effect for the
benefit of Purchaser, its successors and assigns. However, notwithstanding any
provision of this Agreement to the contrary, Purchaser may exercise any right
or remedy Purchaser may have at law or in equity should Seller fail to meet,
comply with or perform its indemnity obligations required by this Section 6.2.
6.3 COVENANTS OF SELLER. Seller covenants and agrees with
Purchaser, from the Effective Date until the Closing or earlier termination of
this Agreement:
(a) Seller shall not collect rents in advance for more than one
month.
(b) Upon reasonable notice as to time by Purchaser to Seller or
any Tenant affected thereby, subject to the provisions of any of the Tenant
Leases, Purchaser shall be entitled to make all inspections or investigations
desired by Purchaser with respect to the Property or any portion thereof, and,
subject to the Tenant Leases and any security requirements, shall have complete
physical access to the Property and each of the leased premises located
thereon, which access shall not unreasonably interfere with Tenants in
possession. Seller and any Tenant affected thereby shall have the right to have
one or more representatives present at any such inspection or investigation.
Purchaser agrees to (i) repair any damages to the Property resulting from its
inspection, (ii) prevent any liens from being filed against the Property
resulting from such inspections, and (iii) indemnify Seller from any and all
Claims by Purchaser arising out of such inspections.
(c) Seller shall cause to be maintained in full force fire and
extended coverage insurance upon the Property and public liability insurance
with respect to damage or injury to persons or property occurring on or
relating to operation of the Property in substantially the amounts as are
maintained by Seller on the date of this Agreement.
(d) Seller shall pay when due all bills and expenses of the
Property. Seller shall not voluntarily enter into or assume any new contracts
or obligations with regard to the Property which are in addition to or
different from those furnished and disclosed to Purchaser and reviewed and
approved
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pursuant to Section 4.1 other than any which may be terminated upon not more
than 30 days prior notice or any providing for a term of 12 months or less and
an annual payment of not more than $10,000.00.
(e) Seller shall not create or voluntarily permit to be created
any liens, easements or other encumbrances affecting any portion of the
Property or the uses thereof without the prior written consent of Purchaser.
(f) Seller will pay, as and when due, all interest and principal
and all other charges payable under any indebtedness secured by the Property of
Seller from the date hereof until Closing and will not knowingly suffer or
permit any material default or amend or modify the documents evidencing or
securing any such indebtedness of Seller to institutional lenders without the
prior consent of Purchaser.
(g) Seller will: (i) give to Purchaser, its attorneys, accountants
and other representatives, during normal business hours and as often as may be
requested, full access to the Property and to all books, records and files (but
excluding information which may be protected by the attorney-client privilege)
relating to the Property; provided that Purchaser will not interfere with the
business operations of any of the Tenants or subject Seller to unreasonable
expense not expressly contemplated by this Agreement; (ii) furnish to Purchaser
all information concerning the Property which the Purchaser, its attorneys,
accountants or other representatives will reasonably request; and (iii) furnish
to Purchaser, to the extent readily available to Seller, all information
necessary for an audit to be conducted with respect to the operations of the
Property for the 36-month period preceding the Closing, including, without
limitation, the general ledger, check register, cash receipts and disbursement
journals, bank statements, rent rolls, Tenant Leases, invoices relating to
direct operating expenses, ad valorem tax statements, payroll records, schedule
of accounts payable, schedule of accounts receivable; and (iv) cooperate with
Purchaser in the conducting of such audit to the extent that it does not
materially interfere with Seller's business or require any substantial
out-of-pocket expense and will deliver to the accountants conducting such audit
such information known to Seller as may be reasonably required addressing,
among other things, any irregularities or undisclosed claims or liabilities
that could have a material effect on the results of the audit. Any information
furnished to Purchaser hereunder shall be subject to the confidentiality
provisions contained in Section 4.2.
(h) Seller shall not remove any of the Seller's Personal Property
from the Land or Improvements which is necessary for the operation of the
Property as it is currently being used without replacing same with
substantially similar items of equal or greater value.
6.4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
Purchaser represents and warrants to Seller that:
(a) Purchaser has duly and validly authorized and executed this
Agreement, and has full right, power and authority to enter into this Agreement
and to consummate the actions provided for herein, and the joinder of no person
or entity will be necessary to purchase the Property from Seller at Closing,
and to lease the Property to Seller following Closing.
(b) The execution by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated herein do not, and
at the Closing will not, result in any breach of any of the terms or provisions
of or constitute a default or a condition which upon notice or lapse of time or
both would ripen into a default under any indenture, agreement, instrument or
obligation to which Purchaser is a party; and does not constitute a violation
of any order, rule or regulation applicable to
13
Purchaser or any portion of the Property of any court or of any federal or
state or municipal regulatory body or administrative agency or other
governmental body having jurisdiction over Purchaser.
(c) Purchaser shall have made its own investigation regarding
anticipated future Property performance, revenues, profits and expenses and
shall not rely on any performance, revenue, profit or expense projections,
forecasts or predictions relating to the Property provided by or on behalf of
Seller; provided that the foregoing provision shall in no way lessen or
diminish the obligation of Seller to furnish true and correct copies of the Due
Diligence Materials to Purchaser as provided under Article IV hereof.
(d) Purchaser shall indemnify and hold Seller harmless from and
against any claims for any brokerage fee or commission, finder's fee or
financial advisory fee arising from or related to the transactions contemplated
by this Agreement and which is asserted by any person or entity claiming to
have acted as agent or a representative of Purchaser.
(e) All documents and information delivered by Purchaser to Seller
pursuant to the provisions of this Agreement are true, correct and complete as
of the date hereof and will be correct and complete as of the Closing Date,
except as set forth in this Agreement and in the Disclosure Schedule. From
time to time after the execution of this Agreement until the Closing, Purchaser
shall deliver to Seller one or more supplemental schedules setting forth all
changes in the schedules, and in previously delivered supplemental schedules,
if any, and in any of the representations and warranties made herein whether or
not previously modified by a schedule, arising out of matters discovered or
occurring prior to the Closing. Seller and its counsel shall have 30 days to
object in writing to any material information in any supplemental schedule;
failure by Seller to notify Purchaser within such 30-day period of any
objection to information provided in the supplemental schedule prior to the
Closing shall be deemed to be approval thereof.
ARTICLE VII
CONDITIONS TO THE PURCHASER'S AND SELLER'S OBLIGATIONS
7.1 CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligations of
Purchaser to purchase the Property from Seller and to consummate the
transactions contemplated by this Agreement are subject to the satisfaction, as
of the Closing, of each of the following conditions:
(a) All of the representations and warranties of Seller set forth
in this Agreement shall be true as of the Closing in all material respects
except for changes expressly permitted or contemplated by the terms of this
Agreement.
(b) Seller shall have delivered, performed, observed and complied
in all material respects with, all of the items, instruments, documents,
covenants, agreements and conditions required by this Agreement to be
delivered, performed, observed and complied with by Seller prior to, or as of,
the Closing.
(c) Neither Seller nor any Tenant shall be in receivership or
dissolution proceedings or have made any assignment for the benefit of
creditors, or admitted in writing its inability to pay its debts as they
mature, or have been adjudicated as bankrupt, or have filed a petition in
voluntary bankruptcy, a petition or answer seeking reorganization or an
arrangement with creditors under the federal bankruptcy law or any other
similar law or statute of the United States or any state and no such petition
shall have been filed against it.
14
(d) No material or substantial change shall have occurred with
respect to the condition, financial or otherwise, of the Property or the
Seller.
(e) Neither the Property nor any part thereof or interest therein
shall have been taken by execution or other process of law in any action prior
to Closing.
(f) Seller shall have obtained and delivered to Purchaser a
current report, dated no more than ten days prior to this Agreement, from a
licensed pest control company reasonably acceptable to Purchaser, and which
must show the Property to be free of all termite, or other destructive insect
and pest infestation, dry rot, fungus or other destructive agency infestation.
(g) Purchaser shall be reasonably satisfied with its inspection of
the Property with respect to the physical condition thereof by agents or
contractors selected by Purchaser.
(h) Purchaser shall have received, in form acceptable to
Purchaser, evidence of compliance by the Property with all Permits required as
of the Effective Date hereof and such other Permits as may be necessary or
appropriate for the operation of the Property for the current and intended use
and for the transactions contemplated by this Agreement and the Lease.
(i) All necessary approvals, consents, estoppel certificates and
the like of third parties to the validity and effectiveness of the transactions
contemplated hereby shall have been obtained.
(j) Purchaser shall be reasonably satisfied that the Property is
sufficient and adequate for Seller to carry on the business now being conducted
thereon and that the Property is in good condition and repair as reasonably
required for the proper operation and use thereof in compliance with applicable
Laws and the requirements of applicable accreditation and licensing
authorities.
(k) Purchaser (or Purchaser's corporate parent company) shall have
been successful in causing the formation of a real estate investment trust
whose interests have been sold to the public and in connection therewith has
raised capital in an amount not less than $100,000,000.00 (the 'IPO').
(l) Purchaser shall be satisfied with all matters regarding title
and survey pursuant to Article V hereof.
(m) The Purchaser shall have obtained an environmental site
assessment report covering the Property in form and content acceptable to
Purchaser.
(n) No portion of the Property shall have been destroyed by fire
or casualty.
(o) No condemnation, eminent domain or similar proceedings shall
have been commenced or threatened with respect to any portion of the Property.
(p) Purchaser shall have received an appraisal satisfactory to
Purchaser in all respects, including without limitation, a fair market value
substantially equivalent to the Purchase Price.
(q) Seller shall have provided such representations, warranties
and consents as may be reasonably required by the United States Securities and
Exchange Commission in connection with the IPO, including but not limited to
inclusion of financial statements, financial information and other
15
required information concerning Seller, or any affiliate in any United States
Securities and Exchange Commission filings.
7.2 FAILURE OF CONDITIONS TO PURCHASER'S OBLIGATIONS. In the
event any one or more of the conditions to Purchaser's obligations are not
satisfied in whole or in part as of the Closing, Purchaser, at Purchaser's
option, shall be entitled to: (a) terminate this Agreement by giving written
notice thereto to Seller, whereupon all moneys which have been delivered by
Purchaser to Seller or the Title Company (other than the Independent
Consideration) shall be immediately refunded to Purchaser and neither Purchaser
nor Seller shall have any further obligations or liabilities hereunder; (b)
waive such failure of condition and proceed to Closing hereunder; or (c) pursue
such other remedies as may be available to Purchaser.
7.3 CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of Seller
to sell the Property to Purchaser and to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, as of the
Closing Date, of each of the following conditions:
(a) The representations and warranties of Purchaser contained
herein shall be in all material respects true and accurate as of the Closing
Date.
(b) Purchaser shall have delivered, performed, observed and
complied in all material respects with all of the items, instruments,
documents, covenants, agreements and conditions required by this Agreement to
be delivered, performed, observed and complied with by Purchaser as of the
Closing Date.
(c) No statute, rule, regulation, order, decree or injunction
shall have been enacted, entered, promulgated or enforced by any court of
competent jurisdiction or United States governmental authority which prohibits
the consummation of the transactions contemplated by this Agreement.
(d) All action required to be taken by the Purchaser to authorize
the execution, delivery, and performance of this Agreement and the other
agreements or documents related hereto, and the consummation of the
transactions contemplated hereby, shall have been duly and validly taken.
(e) Seller shall have received duly executed copies of all
required Permits and/or necessary consents and approvals in form and substance
satisfactory to Seller of third parties to the validity and effectiveness of
the transactions contemplated by this Agreement.
7.4 FAILURE OF CONDITIONS TO SELLER'S OBLIGATIONS. In the event
any one or more of the conditions to Seller's obligations are not satisfied in
whole or in part as of the Closing, Seller, at Seller's option, shall be
entitled to: (a) terminate this Agreement by giving written notice thereto to
Purchaser, whereupon all moneys which have been delivered by Purchaser to
Seller or the Title Company (other than the Independent Consideration) shall be
immediately refunded to Purchaser and neither Purchaser nor Seller shall have
any further obligations or liabilities hereunder; or (b) waive such failure of
conditions and proceed to Closing hereunder.
ARTICLE VIII
PROVISIONS WITH RESPECT TO THE CLOSING
8.1 SELLER'S CLOSING OBLIGATIONS. Seller and Purchaser shall
enter into a mutually acceptable escrow agreement (the 'Escrow Agreement') with
the Title Company prior to the Closing. The Escrow
16
Agreement will require the Title Company to close the transaction contemplated
hereby in escrow pending closing of and funding under the IPO; provided that
the Closing shall occur no later than June 30, 1994. Upon execution of the
Escrow Agreement, Seller shall furnish and deliver to the Title Company for
delivery to Purchaser, pursuant to instructions to be set forth in the Escrow
Agreement, the following:
(a) The Deed, Title Commitment obligating the Title Company to
issue the Title Policy subject only to the Permitted Exceptions, Bill of Sale,
Certificate of Non-Foreign Status, Closing Certificate, the Guaranty, the Lease
Assignment and the Lease, each duly executed and acknowledged by Seller, or
HEALTHSOUTH, as the case may be.
(b) An affidavit, agreement and indemnity executed by Seller and
dated as of the Closing Date, stating that there are no unpaid debts for any
work that has been done or materials furnished to the Property prior to and as
of Closing and stating that Seller shall indemnify, save and protect Purchaser
and its assigns harmless from and against any and all Claims, including courts
costs and reasonable attorneys' fees related thereto, arising out of, in
connection with, or resulting from the same, up to and including the Closing
Date, in form and substance mutually acceptable to Seller and Purchaser.
(c) Certificates of casualty and fire insurance for the Property
as required pursuant to the Lease showing Purchaser as additional insured and
loss payee thereunder, with appropriate provisions for prior notice to
Purchaser in the event of cancellation or termination of such policies.
(d) Updated Search Reports, dated not more than ten days prior to
Closing, evidencing no UCC-l Financing Statements or other filings in the name
of Seller with respect to the Property.
(e) Such affidavits, certificates or letters of indemnity as the
Title Company shall reasonably require in order to omit from its insurance
policy all exceptions for unfiled mechanic's, materialman's or similar liens.
(f) Any and all transfer declarations or disclosure documents,
duly executed by the appropriate parties, required in connection with the Deed
by any state, county or municipal agency having jurisdiction over the Property
or the transactions contemplated hereby.
(g) Such instruments or documents as are necessary, or reasonably
required by Purchaser or the Title Company, to evidence the status and capacity
of Seller or HEALTHSOUTH and the authority of the person or persons who are
executing the various documents on behalf of Seller or HEALTHSOUTH in
connection with the purchase and sale transaction contemplated hereby.
(h) Such other documents as are reasonably required by the Title
Company to carry out the provisions of the Escrow Agreement.
8.2 PURCHASER'S CLOSING OBLIGATIONS. Upon the execution of the
Escrow Agreement, Purchaser shall deliver to the Title Company for delivery to
Seller, pursuant to the terms of the Escrow Agreement, the following:
(a) The Lease, duly executed and acknowledged by Purchaser.
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(b) Such instruments as are necessary, or reasonably required by
Seller or the Title Company to evidence the authority of Purchaser to
consummate the transactions contemplated hereby and to execute and deliver the
closing documents on the Purchaser's part to be delivered.
(c) Such other documents as are reasonably required by the Title
Company to carry out the provisions of the Escrow Agreement.
8.3 TITLE COMPANY'S CLOSING OBLIGATIONS. Upon the closing of the
IPO and disbursement of funds thereunder, the Title Company shall deliver to
Seller the Purchase Price together with the items and documents specified in
Section 8.2 and to Purchaser the items and documents specified in Section 8.1.
In the event the IPO does not close prior to June 30, 1994, the Title Company
will return the items specified in Section 8.1 to Seller and the items
specified in Section 8.2 to Purchaser, unless otherwise agreed to by the
parties in writing.
ARTICLE IX
EXPENSES OF CLOSING
9.1 ADJUSTMENTS. There shall be no adjustment of taxes,
assessments, water or sewer charges, gas, electric, telephone or other
utilities, operating expenses, employment charges, premiums on insurance
policies, rents or other normally proratable items, it being agreed and
understood by the Parties that the Seller shall be obligated to pay such items
under the terms of the Lease.
9.2 CLOSING COSTS. Purchaser shall pay its own attorneys' fees.
Seller shall pay all other costs of closing, including without limitation all
title examination fees and premiums for the Title Policy, the Search Reports,
the Survey, any environmental reports, any appraisals, any and all state,
municipal or other documentary or transfer taxes payable in connection with the
delivery of any instrument or document provided in or contemplated by this
Agreement or any agreement or commitment described or referred to herein, and
the charges for or in connection with the recording and/or filing of any
instrument or document provided herein or contemplated by this Agreement or any
agreement or document described or referred to herein.
ARTICLE X
DEFAULT AND REMEDIES
10.1 SELLER'S DEFAULT; PURCHASER'S REMEDIES.
(a) Seller's Default. Seller shall be deemed to be in default
hereunder upon the occurrence of any one or more of the following events: (i)
any of Seller's warranties or representations set forth herein shall be untrue
in any material aspect when made or at Closing; or (ii) Seller shall fail in
any material respect to meet, comply with, or perform any covenant, agreement
or obligation on its part required within the time limits and in the manner
required in this Agreement.
(b) Purchaser's Remedies. In the event Seller shall be deemed to
be in default hereunder Purchaser may, as its sole remedies: (i) terminate this
Agreement by written notice delivered to Seller on or before the Closing; or
(ii) in the event that Seller shall willfully refuse to close the sale and only
in such event, enforce specific performance of this Agreement against Seller
including Purchaser's reasonable costs and attorneys fees in connection
therewith. It is understood and agreed that termination or specific
performance as provided in (i) and (ii) above constitute Purchaser's sole
remedy against Seller,
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and that Purchaser shall not be entitled to seek monetary damages from Seller
or assert any other remedy against Seller.
10.2 PURCHASER'S DEFAULT; SELLER'S REMEDIES.
(a) Purchaser's Default. Purchaser shall be deemed to be in
default hereunder upon the occurrence of any one or more of the following
events: (i) any of Purchaser's warranties or representations set forth herein
shall be untrue in any material respect when made or at Closing; or (ii)
Purchaser shall fail in any material respect to meet, comply with, or perform
any covenant, agreement or obligation on its part within the time limits and in
the manner required in this Agreement.
(b) Seller's Remedy. In the event Purchaser shall be deemed to be
in default hereunder, Seller, as Seller's sole and exclusive remedy for such
default, shall be entitled to terminate this Agreement and all rights of
Purchaser hereunder and to receive the Independent Consideration, it being
agreed between Purchaser and Seller that such sum shall be liquidated damages
for a default of Purchaser hereunder because of the difficulty, inconvenience,
and uncertainty of ascertaining actual damages for such default. If Seller
shall be entitled to the Independent Consideration in accordance with this
Section 10.2, Purchaser agrees to deliver, on written request of Seller, such
instructions as may be reasonably necessary to cause the Title Company to
deliver the Independent Consideration to Seller. In such event, Purchaser will
pay the costs of the Survey, Title Commitment, Search Reports, appraisals and
any environmental survey, report or study.
ARTICLE XI
MISCELLANEOUS
11.1 SURVIVAL. All of the representations, warranties, covenants,
agreements and indemnities (but not matters or items identified as conditions
for parties' obligation to close) of Seller and Purchaser contained in this
Agreement, to the extent not performed at the Closing, shall survive the
Closing only to the extent provided herein and shall not be deemed to merge
upon the acceptance of the Deed by Purchaser.
11.2 NOTICES. All notices, requests and other communications under
this Agreement shall be in writing and shall be delivered in person or sent by
reputable overnight delivery service, addressed as follows:
If to Purchaser:
Crescent Capital Trust, Inc.
One Perimeter Park South
Suite 335S
Birmingham, Alabama 35243
Attention: John W. McRoberts, President
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With a copy to:
Mr. Thomas A. Ansley
Sirote & Permutt, P.C.
2222 Arlington Avenue South
Birmingham, Alabama 35205
If intended for Seller:
HEALTHSOUTH of Virginia, Inc.
c/o HEALTHSOUTH Rehabilitation Corporation
Two Perimeter Park South
Suite 224W
Birmingham, Alabama 35243
Attention: Gerald P. Scrushy, Group Vice President, Physical Resources
With a copy to:
Mr. C. Drew Demaray
Vice President and Counsel
HEALTHSOUTH Rehabilitation Corporation
Two Perimeter Park South
Suite 224W
Birmingham, Alabama 35243
or at such other address, and to the attention of such other person, as the
parties shall give notice as herein provided. All such notices, requests and
other communications shall be deemed to have been sufficiently given for all
purposes hereof upon delivery in person or one day after deposit with an
overnight delivery service.
11.3 ENTIRE AGREEMENT; MODIFICATIONS. This Agreement embodies and
constitutes the entire understanding between the parties with respect to the
transactions contemplated herein, and all prior or contemporaneous agreements,
understandings, representations and statements (oral or written) are merged
into this Agreement. Neither this Agreement nor any provision hereof may be
waived, modified, amended, discharged or terminated except by an instrument in
writing signed by the Party against whom the enforcement of such waiver,
modification, amendment, discharge or termination is sought, and then only to
the extent set forth in such instrument.
11.4 APPLICABLE LAW. This Agreement and the transactions
contemplated hereby shall be governed by and construed in accordance with the
laws of the state in which the Property is located.
11.5 CAPTIONS. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe, or limit the
scope or intent of this Agreement or any of the provisions hereof.
11.6 BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, legal and personal representatives, successors, and
assigns.
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11.7 EXTENSION OF DATES. Notwithstanding anything to the contrary
contained in this Agreement, if Seller shall fail to deliver any document or
item required pursuant to any of the terms and provisions of Article IV and/or
Article V within the applicable time period required, Purchaser, at its option,
shall have the right to extend the date of expiration of the Review Period, and
correspondingly the date of Closing, by the number of days elapsing from the
date such items were required to be delivered and the date such items were
actually delivered to Purchaser; provided that Purchaser shall give Seller
notice of its intent to extend such dates. Nothing herein shall diminish
Seller's obligation to timely furnish such items.
11.8 TIME IS OF THE ESSENCE. With respect to all provisions of
this Agreement, time is of the essence. However, if the first date of any
period which is set out in any provision of this Agreement falls on a day which
is not a Business Day, then, in such event, the time of such period shall be
extended to the next day which is a Business Day.
11.9 WAIVER OF CONDITIONS. Any Party may at any time or times, at
its election, waive any of the conditions to its obligations hereunder, but any
such waiver shall be effective only if contained in a writing signed by such
Party. No waiver by a Party of any breach of this Agreement or of any warranty
or representation hereunder by the other Party shall be deemed to be a waiver
of any other breach by such other Party (whether preceding or succeeding and
whether or not of the same or similar nature), and no acceptance of payment or
performance by a Party after any breach by the other Party shall be deemed to
be a waiver of any breach of this Agreement or of any representation or
warranty hereunder by such other Party, whether or not the first Party knows of
such breach at the time it accepts such payment or performance. No failure or
delay by a Party to exercise any right it may have by reason of the default of
the other Party shall operate as a waiver of default or modification of this
Agreement or shall prevent the exercise of any right by the first Party while
the other Party continues to be so in default.
11.10 OFFER AND ACCEPTANCE. This Agreement shall automatically
terminate at 5:00 p.m. on May 30, 1994, unless, prior to such time, Purchaser
has returned to Seller, and Seller shall have returned to Purchaser, two
fully-executed copies of this Agreement.
11.11 BROKERS. Seller hereby represents to Purchaser that Seller
has not discussed this Agreement or the subject matter thereof with any real
estate broker or salesman so as to create any legal rights in any such broker
or salesman to claim a real estate commission or similar fee with respect to
the purchase or sale of the Property. Seller agrees to defend, indemnify and
hold Purchaser harmless from any and all claims for any real estate
commissions, leasing fees or similar fees arising out of or in any way relating
to a breach of the foregoing representation.
11.12 RISK OF LOSS. Until the Closing Date, the risk of loss of any
portion of the Property shall be solely that of Seller. Risk of loss shall be
that of Purchaser from and after the Closing Date, at which time Seller shall
deliver to Purchaser possession of the Property.
11.13 NO ASSUMPTION OF LIABILITIES. Purchaser shall not assume any
of the existing liabilities, indebtedness, commitments or obligations of any
nature whatsoever (whether fixed or contingent) of Seller in respect of the
Property or otherwise, except those expressly assumed herein.
11.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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EXECUTED to be effective as of the Effective Date.
PURCHASER:
CRESCENT CAPITAL TRUST, INC.,
a Maryland corporation
/s/ John W. McRoberts
--------------------------------------
John W. McRoberts
President
Date May 23, 1994
---------------------------------
Purchaser's Tax Identification Number:
63-1115479
--------------------------------------
SELLER:
HEALTHSOUTH OF VIRGINIA, INC.,
a Delaware corporation
/s/ Anthony J. Tanner
--------------------------------------
Anthony J. Tanner
Vice President
Date May 23, 1994
---------------------------------
Seller's Tax Identification Number:
63-1053300
--------------------------------------
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Agreement of Sale and Purchase (Richmond, VA) - HealthSouth of Virginia Inc. and Crescent Capital Trust Inc.
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