EXHIBIT 2.1
PURCHASE AGREEMENT
THIS AGREEMENT is made this 10th day of August, 2004, by and between
Xxxxxxx X. Xxxxx, Xx. and Associates, a Limited Partnership (the "Seller") and
Government Properties Trust, Inc., a corporation organized under the laws of the
State of Maryland, (the "Purchaser" or "GPT").
RECITALS:
A. Seller is the owner of 100% of the equity membership interest in the
Indiana limited liability company known as VA Venture Baton Rouge, LLC ("VAV").
VAV is the fee owner of that certain parcel of land legally described on Exhibit
A attached hereto and delineated on the site plan attached hereto as Exhibit B,
located in the City of Baton Rouge, East Baton Parish, Louisiana, containing
approximately 3.162 acres.
B. Seller desires to sell and Purchaser desires to purchase the equity
membership interest of VAV upon and subject to the terms and conditions
contained in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the terms and conditions contained in
this Agreement, and for the sum of Ten and no/100 ($10.00) Dollars and other
good and valuable consideration paid by Purchaser to Seller, the receipt and
sufficiency of which is hereby acknowledged by Seller, Seller and Purchaser
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. When used herein, the following terms shall have the
respective meanings set forth opposite each such term:
AGREEMENT: This Agreement, including the following exhibits, each of which
are incorporated herein by this reference:
Exhibit A: Legal Description of the Property
Exhibit B: Delineation of the Property on Site Plan
Exhibit C: Permitted Title Exceptions
Exhibit D: Foreign Transferor Affidavit
Exhibit E: Deliveries by Seller regarding VA Venture Baton Rouge, L.L.C.
Exhibit F: Deliveries of Property Inspection Materials
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CLOSING DATE: Closing shall occur on or before but no later than September
10, 2004. and upon satisfaction or waiver by Purchaser of all conditions
precedent set forth in Article 12 or such earlier date as Purchaser may
designate by at least five (5) days' prior written notice to Seller. To the
extent that Purchaser has not in good faith approved the satisfaction of all
conditions precedent or the waiver thereof by September 10, 2004, then this
agreement is null and void and Purchaser shall receive a return of the deposit
DEPOSIT: A deposit in the amount of One Hundred Thousand and No/00 Dollars
($100,000.00) placed with the Escrowee.
EFFECTIVE DATE: As defined in Article 28.1.
ENVIRONMENTAL LAWS: As defined in Article 10.1.
ESCROWEE: Lawyers Title Company.
HAZARDOUS MATERIALS: As defined in Article 10.1.
LEASE: Lease number V101-183R-629-006-01 between VA Ventures Baton Rouge,
L.L.C. and the United States of America occupied by the Department of Veterans
Affairs, dated August 2, 2003 and recorded in Original 893, Bundle 11402 of the
official records of East Baton Rouge Parish, Louisiana.
PERMITTED TITLE EXCEPTIONS: Those matters listed on Exhibit C attached
hereto.
PROPERTY: The land located in the City of Baton Rouge, East Baton Rouge
Parish, Louisiana, legally described on Exhibit A, containing approximately
3.162 acres, together with all improvements thereon or therein; and all
privileges, rights, easements, hereditaments, and appurtenances thereto
belonging; and all right, title and interest of the titleholder thereof in and
to any streets, alleys, passages and other rights-of-way included therein or
adjacent thereto (before or after the vacation thereof) and including all split
rights of Seller.
PURCHASE PRICE: The consideration payable by Purchaser to Seller for
Seller's interest in VAV and all other covenants and warranties contained
herein, as provided in Article 3.1.
PURCHASER: Government Properties Trust, Inc, a Maryland corporation, it
successors or assigns.
SELLER: Xxxxxxx X. Xxxxx, Xx and Associates, a Limited Partnership
(collectively the "Seller"). For purposes hereof, all actions required to be
taken by Seller shall be deemed to be requirements of Seller and VAV. For
example, by way of illustration and not limitation, information and materials in
possession of Seller shall be deemed to include information and materials in
possession of Seller and/or VAV. Where a reference is made herein to Seller's
knowledge, such knowledge shall be deemed to include the knowledge of VAV. A
response by Seller shall in all cases be deemed to be a response by Seller and
VAV.
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SURVEY: Current survey of the Property prepared by a Surveyor licensed by
the State of Louisiana and certified to Purchaser, the Title Insurer and such
other parties as Purchaser shall designate, which survey is to be prepared in
accordance with the standards for Land Title Surveys of the American Land Title
Association and the American Congress on Surveying and Mapping promulgated in
1988, meeting the accuracy requirement of a Class "A" survey, as defined
therein, including items 1 through 5, 9 and 11 of Table 3 thereof, and setting
forth the legal description and street address (if any) of the Property and
showing all improvements (including fences), easements (visible or recorded),
building lines, curb cuts, sewage, water, electricity, gas and other utility
facilities, together with points of connection (including recording information
concerning the documents creating any such easements and building lines), roads
and means of physical and record ingress and egress to and from the Property by
public roads (including the dimensions of abutting street), vicinity map
(showing location to major streets or highways), areas located within flood
plans or conservation areas or designated as wetlands and the Net Square Footage
and gross square footage of the land included in the Property, and spotting
improvements on adjoining real property which are within five (5) feet of the
property lines of the Property. Purchaser shall have the option to waive any of
the survey criteria. This survey shall hereinafter be referred to as the
"Survey".
TITLE COMMITMENT: A commitment for a 1992 ALTA Form B Owner's Title
Insurance Policy for the Property issued by the Title Insurer in the full amount
of the Purchase Price, covering title to the Property on or after the date
hereof, showing VAV as owner of the Property in fee simple, subject only to the
Permitted Title Exceptions, and other exceptions, pertaining to liens or
encumbrances of a definite or ascertainable amount which may be removed by the
payment of money at closing and which Seller shall so remove, and providing for
full extended coverage overall general title exceptions contained in such
policies. The title commitment shall hereinafter be referred to as the "Title
Commitment".
TITLE INSURER: Lawyers Title Insurance Company.
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE AND SALE. Subject to the conditions and on the terms
contained in this Agreement, on or before the Closing Date, Seller shall convey
100% of the equity membership interest in VAV to Purchaser or any assignee or
designee or Purchaser by good, sufficient and assignment and conveyance of the
membership interests.
ARTICLE 3
PURCHASE PRICE
3.1 PURCHASE PRICE. The Purchase Price shall be the sum of SIX MILLION
AND NO/00 DOLLARS ($6,000,000.00), plus or minus prorations, and any other
credits or debits defined herein payable as follows (Subject to adjustment as
provided in Article 4.2 below):
(a) On the Closing Date, Purchaser shall pay the Purchase Price to
Escrowee, plus or minus prorations by wire transfer pursuant to instructions
from Seller. As a part of the Purchase Price, the Purchaser shall receive full
credit for the Deposit.
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ARTICLE 4
THE ENTITY
4.1 ENTITY PURCHASE. This transaction is an entity purchase of VAV.
Seller is making and Purchaser is relying upon warranties and representations of
Seller regarding the entity.
4.2 ADJUSTMENT OF THE PURCHASE PRICE. It is the intent of the parties
that VAV be free from liabilities of any kind as of the date of Closing except
those liabilities arising after Closing under the Lease. In no event shall
Purchaser assume any liabilities of VAV existing as of the the Closing date
whether known or unknown except the responsibility to perform all duties and
obligations of Landlord under the Lease. The Purchase Price was calculated on
the basis that VAV would have no accrued but unpaid liabilities at Closing. To
the extent that in accepting conveyance of the 100% equity interest in VAV
results in the assumption of accrued but unpaid and unfunded liabilities of VAV,
the Purchase Price shall be reduced at Closing by the amount of any liabilities
including contingent liabilities of VAV assumed by Purchaser. Within 30 days
following Closing, Seller shall provide an unaudited balance sheet. To the
extent that Purchaser desires an audited balance sheet (prepared pursuant to
Generally Accepted Accounting Principles consistently applied) for VAV
reflecting the assets and liabilities of VAV as of the date of Closing, then
Seller will co-operate with Purchaser and Purchaser's Accountants who may
prepare an audited balance sheet at the expense of Purchaser. The Purchase price
shall be reduced by the amount of any liabilities of VAV as of the date of
Closing (the "Adjusted Purchase Price"). Purchaser reserves the right to conduct
an independent audit of the balance sheet provided pursuant hereto prior to
determination of the Adjusted Purchase Price.
4.3 SELLER'S DELIVERY OF MATERIALS REGARDING VAV. Within (10) days
following the Effective Date, Seller shall deliver to Purchaser true, correct
and complete copies of the documents Seller may reasonably request in writing to
assist it in its performance of due diligence with regard to VAV. Such materials
may include but are not limited to the documents listed in Exhibit E attached
hereto and by this reference made a part hereof.
ARTICLE 5
SURVEY
5.1 SURVEY. Seller shall deliver to Purchaser the Survey dated not later
than 30 days prior to the Effective Date as a part of the Inspection Materials
listed in Exhibit F.. No later than ten (10) days following the Effective Date,
Seller shall deliver to Purchaser, any maps, plats and/or surveys in its
possession or control covering the Property. As a condition hereunder, the
Survey shall show no encroachments onto the Property from any adjacent property,
no encroachments by or from the Property onto any adjacent property and no
violation of any recorded building lines, restrictions or easements affecting
the Property. If the Survey discloses any such encroachment or violation or any
exceptions to title or matters indicating possible rights of third parties,
other than the Permitted Title Exceptions, Seller shall have thirty (30) days
from the date of delivery thereof to have all such encroachments, violations and
unpermitted exceptions removed, at Seller's sole cost and expense, from the
Survey and from the Title Commitment by the Title Insurer, if shown on the Title
Commitment, so that a revised Survey and Title Commitment can be provided to
Purchaser
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evidencing removal thereof. If Seller fails to have the same removed from the
Survey and the Title Commitment within such thirty (30) day period, Purchaser
may elect, on or before the Closing Date, to (i) terminate this Agreement, in
which event the Deposit shall forthwith be returned to Purchaser, or (ii) accept
the Property subject only to those encroachments, violations and unpermitted
exceptions as Seller is unable to have removed. If Purchaser fails to make such
election, Purchaser shall be deemed to have elected to terminate this Agreement
in accordance with (i) above. If the survey is dated more than ninety (90) days
prior to the Closing Date, Seller shall cause the preparer of the Survey to
recertify the Survey to Purchaser, the Title Insurer and such other parties as
Purchaser shall designate, dated within ninety (90) days prior to the Closing
Date, disclosing no changes or additions to the Property since the first date of
the Survey.
ARTICLE 6
TITLE COMMITMENT AND SEARCHES
6.1 TITLE COMMITMENT. No later than ten (10) days following the
Effective Date, Seller shall deliver to Purchaser a copy its most recent
previously issued title policy covering the Property. Purchaser shall order the
Title Commitment, at its sole cost and expense. The title insurance policy
issued pursuant to the Title Commitment shall be issuable at the minimum
promulgated rate allowed by applicable state law or if there is not a minimum
promulgated rate at a negotiated rate which is competitive in the applicable
local market. Purchaser shall have Ten (10) days from receipt of the Commitment
to notify Seller in writing of any objections to the title. If the Title
Commitment discloses exceptions to title other than the Permitted Title
Exceptions or if Purchaser notifies Seller of any other objections to title,
Seller shall have thirty (30) days from the date of delivery of the Title
Commitment to Seller by Purchaser to have all unpermitted exceptions removed
from the Title Commitment and to provide evidence of such removal to Purchaser.
If Seller fails to have all unpermitted exceptions removed within such thirty
(30) day period, Purchaser may elect, on or before the Closing Date, to (i)
terminate this Agreement, in which event the Deposit shall be forthwith returned
to Purchaser, or (ii) accept title subject only to those unpermitted exceptions
that the Title Company has not removed with the further right with respect to
each then unremoved unpermitted exception to deduct from the Purchase Price
amounts secured by any unpermitted lien or encumbrance of a definite or
ascertainable amount. If Purchaser fails to make such election, Purchaser shall
be deemed to have elected to accept the property subject to the unpermitted
exceptions. On the Closing Date, Purchaser shall, at Purchaser's sole cost and
expense, cause the Title Insurer to issue an owner's title insurance policy or
prepaid commitment therefore (herein a "Title Policy") pursuant to and in
accordance with the Title Commitment, insuring fee simple title to the Property
in VAV, subject only to the Permitted Title Exceptions and such other exceptions
as Purchaser may approve pursuant to clause (ii) above or be deemed to have
accepted, together with all endorsements required hereby.
ARTICLE 7
POSSESSION, PRORATIONS AND EXPENSES AND OTHER LIABILITIES
7.1 POSSESSION. Subject to the rights of tenants in lawful possession of
any part of the Property, sole and exclusive possession of the Property shall be
with VAV on the Closing Date.
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7.2 PRORATIONS. All delinquent real estate taxes and any special
assessments, charges or fees, whether state or local, including any interest or
penalty which is a lien or charge against the Property on the Closing Date,
whether due in full or in part, shall be charged to Seller and paid in full at
Closing, unless Purchaser has agreed to take subject thereto, in which case the
Purchase Price shall be reduced by a credit for such amount. Current real estate
taxes shall be prorated as of the Closing Date by obtaining the average of a
proration of the current real estate taxes on the due date basis and the fiscal
year basis, it being agreed that such taxes are paid in arrears.
7.3 EXPENSES. Purchaser shall be responsible for the payment of all
transfer taxes, if any, along with any costs required to clear title exceptions
other than permitted title exceptions. Purchaser shall be responsible for the
payment of all other closing costs, including without limitation, all costs of
the Survey, all title insurance premiums and its closing agent. Purchaser shall
be responsible for the payment of all recording fees (other than those incurred
by Seller in removing, releasing or insuring over any unpermitted title
exceptions) and all deed and money escrow fees. Except as otherwise provided
herein, the fees and expenses of Seller's designated representatives,
accountants and attorneys shall be borne by Seller, and the fees and expenses of
Purchaser's designated representatives, accountants and attorneys shall be borne
by Purchaser.
7.4 MAINTENANCE ESCROW. Under the terms of the Lease, VAV as Lessor is
required to maintain a Funded Maintenance Account from which to pay all
operating expenses and replacements for the property. On the closing date any
amounts in such account will be added to the Purchase Price. Any amounts
required to be contributed to such account after the closing date shall be the
sole responsibility of VAV and Seller shall have no responsibility therefor.
7.5 LIABILITIES. All liabilities of VAV shall be fully paid and
discharged as of the date of Closing. Seller shall have fully paid all
construction costs associated with the construction of the building and shall
have obtained lien waivers and indemnities from the General Contractor and all
subcontractors, materialmen, suppliers and any other person or entity with which
VAV contracted during the construction of the OPC. Seller shall have fully
disclosed all contingent liabilities and claims or potential claims that have
been made and to the best of Seller's and VAV's knowledge may be made against
Seller and/or VAV as of the Closing Date. Seller shall indemnify and hold
Purchaser and VAV harmless from and against any and all loss damage or liability
they may sustain as a result of any such contingent liabilities, claims and
potential claims that have been made and to the best of Seller's and VAV's
knowledge may be made against Seller and/or VAV to the extent not disclosed to
Purchaser in writing prior to the closing. Seller, Purchaser and VAV shall
cooperate in the settlement of any such claims relating to the period prior to
Closing regardless of when such claims are made. After closing, Purchaser shall
indemnify and hold Seller harmless from and against any and all loss, damage or
liability it may sustain as a result of claims made against Seller or VAV
following the date of closing to the extent the claims arise after the closing
or arise prior to closing but were disclosed in writing by Seller to Purchaser
prior to closing.
ARTICLE 8
AFFIRMATIVE COVENANTS TO SELLER
8.1 MAINTENANCE OF THE PROPERTY. From and after the Effective Date
through and including the Closing Date, Seller shall insure that VAV, at its
expense, will construct the building
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and improvements to the Property in a good and workmanlike manner in accordance
with plans and specifications and with the terms of the Lease and other
agreement(s) between VAV and the U.S. Veterans Administration for the
construction of a VA Out Patient Clinic upon the property, maintain the Property
free from waste and neglect and shall keep and perform or cause to be kept and
performed all obligations of the Property owner or its agents under the Lease
and all applicable laws and will promptly remedy, at its sole cost and expense,
any violation, notice of which shall have been issued by any governmental
authority having or claiming jurisdiction. Seller shall have until the latter to
occur of (i) thirty (30) days after Seller receives notice of the violation, or
(ii) the Closing Date to remedy such violation, and if necessary, the Closing
Date shall be extended to the end of said thirty (30) day period.
8.2 TRANSACTIONS AND ENCUMBRANCES AFFECTING THE PROPERTY. From and after
the Effective Date through and including the Closing Date, Seller will direct
that VAV shall not do, suffer or permit, or agree to do, any of the following:
(a) enter into any transaction out of the ordinary course of business
which will diminish or otherwise affect Purchaser's interest under this
Agreement or in or to the Property or which will prevent Seller's full
performance of its obligations hereunder; or
(b) sell, lease, encumber or grant any interest in the Property or in
any other asset owned by it or any part thereof in any form or manner whatsoever
or otherwise perform or permit any act which will diminish or otherwise affect
Purchaser's interest under this Agreement or in or to the Property or which will
prevent Seller's full performance of its obligations hereunder. Provided,
however, nothing contained herein shall be deemed to prohibit Seller from taking
any action with regard to the property that does not involve a sale, lease or
other transfer or encumbrance of the Property.
8.3 PURCHASER'S ACCESS TO THE PROPERTY. Upon consent of the Tenant
obtained by Seller shall permit representatives, agents, employees, contractors,
appraisers, architects and engineers designated by Purchaser reasonable access
to, and entry upon, the Property to examine, inspect, measure and test the
Property for the purposes set forth in Article 12.1(a) hereof and for all other
reasonable purposes. Purchaser shall indemnify and hold Seller harmless from any
loss, cost, damage (including crop damage, if any), liability or expense
(including reasonable attorneys fees and litigation expenses) caused by the
activities of Purchaser or Purchaser's agents or employees under this Article
8.3. Seller shall promptly notify Purchaser in writing of any occurrence, after
discovery by Seller, which Seller believes would give rise to a claim under this
indemnity. If Purchaser fails to close this transaction through no fault of
Seller, Purchaser shall repair, in a commercially reasonable manner, any damage
to the Property caused by the activities of Purchaser, Purchaser's agents or
employees under this Article 8.3.
8.4 SELLER'S DELIVERY OF MATERIALS. Within (10) days following the
Effective Date, Seller shall deliver to Purchaser true, correct and complete
copies of the documents Seller may reasonably request in writing to assist it in
its inspection of the property which may include but are not limited to the
documents listed in Exhibit E and F attached hereto and by this reference made a
part hereof.
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8.5 INSURANCE. Seller will insure that VAV shall keep in full force and
effect through the Closing Date all insurance currently in effect with respect
to the Property.
8.6 VAV. Seller will take no action which will adversely affect the
legal existence or good standing of VAV under the laws of the state of Indiana
or its authorization to do business in Louisiana.
ARTICLE 9
REPRESENTATIONS AND
WARRANTIES OF AND INDEMNITY BY SELLER
9.1 REPRESENTATIONS AND WARRANTIES OF SELLER. To induce Purchaser to
execute, deliver and perform this Agreement and without regard to any
independent investigations made by Purchaser, Seller represents and warrants to
Purchaser on and as of the Effective Date and as of the Closing Date as follows.
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Seller appearing in the other Articles and Sections of this
Agreement are, to the best of Seller's knowledge, true and correct as of the
date hereof and shall be true and correct as of the date of closing.
(b) TITLE. VAV owns the Property in fee simple, free of any liens,
claims or encumbrances other than the Permitted Title Exceptions.
(c) DOCUMENT. The information included in the documents to be delivered
to Purchaser pursuant to Articles 4.3 and 8.4 shall, to the best of Seller's
knowledge, be true, correct and complete in all material respects, and the same
shall not, to the best of Seller's knowledge, omit any material information
require to make the submission thereof fair and complete.
(d) RECAPTURE AGREEMENTS. There are no obligations in connection with
the Property or any so called "recapture agreement" involving refund for sewer
extension, over sizing utility lines, lighting or like expense or charge for
work or services done upon or relating to the Property which will bind Purchaser
or the Property from and after the Closing Date.
(e) ROADWORK. There is no agreement or undertaking or bond with any
governmental agency respecting construction or any roadway improvements,
including any acceleration or deceleration lanes, access or street lightings.
(f) DONATIONS. There are no donations or payments to or for schools,
parks, fire departments or any other public entity or facilities which are
required to be made by any owner of the Property.
(g) PRORATIONS. The information to be furnished by Seller on which the
computation of prorations is based shall be true, correct and complete in all
respects.
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(h) POSSESSION. Except for VAV and its Tenants, there are no persons in
possession or occupancy of the Property or any part thereof, nor are there any
persons who have possessory rights in respect to the Property or any part
thereof.
(i) AUTHORIZATION. Seller has full capacity, right, power and authority
to execute, deliver and perform this Agreement and all documents to be executed
by Seller pursuant hereto, and all required action and approvals therefor have
been duly taken and obtained. The individuals signing this Agreement and all
other documents executed or to be executed pursuant hereto on behalf of Seller
are and shall be duly authorized to sign the same on Seller's behalf and to bind
Seller thereto. This Agreement and all documents to be executed pursuant hereto
by Seller are and shall be binding upon and enforceable against Seller in
accordance with their respective terms, and the transaction contemplated hereby
will not result in a breach of, or constitute a default or permit acceleration
of maturity under, any indenture, mortgage, deed of trust, loan agreement or
other agreement to which Seller or the Property is subject or by which Seller or
the Property is bound.
(j) LITIGATION . There are no known claims, causes of action or other
litigation or proceedings pending or, to the best of Seller's knowledge,
threatened in respect to the ownership, operation or environmental condition of
the Property or any part thereof (including disputes with mortgagees,
governmental authorities, utility companies, contractors, adjoining land owners
or suppliers of goods or services), or against VAV or Seller except for claims
which are fully insured and as to which the insurer has accepted defense without
reservation.
(k) VIOLATIONS . There are no known violations of any health, safety,
pollution, environmental, zoning or other laws, ordinances, rules or regulations
with respect to the Property or any other activities of VAV, which have not been
heretofore entirely corrected.
(l) CONDEMNATION/ZONING. There is no known existing, pending or, to the
best of Seller's knowledge, contemplated, threatened or anticipated (i)
condemnation of any part of the Property, (ii) widening, change of grade or
limitation on use of streets, road or highways abutting the Property, (iii)
special tax or assessment or back tax due to abatement, exemption deferment or
special classification to be levied against the Property, (iv) change in the
zoning classification of the Property, or (v) change in the tax assessment of
the Property.
(m) ACCESS. The Property has legal access to and from all adjoining
public streets, roads and highways, and there is not pending or threatened
action which would impair such access.
(n) MATERIAL CHANGES. There are no facts or circumstances not disclosed
to Purchaser of which Seller has knowledge and which have or could have a
material adverse effect upon the Property or VAV or which will diminish or
otherwise affect Purchaser's interest under this Agreement or in or to the
Property or which will prevent Seller's full performance of its obligations
hereunder. Seller agrees to notify Purchaser immediately of such facts or
circumstances if Seller becomes aware of the same.
(o) OPERATION. VAV will continue to operate the Property until closing
in an efficient and businesslike manner and will not increase rent, terminate
any leases, accept any surrenders of
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lease, or enter into any new agreements or leases in respect of the real estate
without prior written consent of the Purchaser, which shall not be unreasonably
withheld.
(p) CANCELLABILITY OF CONTRACTS. All contracts other than the Lease
affecting the Property including, but not being limited to, employment
contracts, maintenance and service contracts, superintendent's contracts and
property management contracts can be cancelled on not more than ninety (90) days
notice, without penalty, except those which have been disclosed in writing to
Purchaser.
(q) SECURITY DEPOSITS. VAV holds no security deposits other than those
set forth on the Rent Schedules provided to the Purchaser by the Seller.
(r) LEASES. That as of this date, there is one (1) valid, executed lease
dated August 7, 2002 (the "Lease") by and between VAV, as landlord, and United
States of America (Department of Veterans Affairs (U.S. Government), as tenant
("Tenant") on the subject Property; that the Lease has not been modified except
as disclosed herein; that neither VAV nor Tenant is in default under the terms
and conditions of the Lease; and that there are no parties in possession of any
part of said Property as lessees, tenants at sufferance, or trespassers, except
those parties identified in one of the valid leases hereinabove referenced.
(s) LIEN FREE TRANSFER. That Seller's membership interest in VAV to be
sold hereunder shall be transferred to Purchaser at the time of closing free and
clear of all liens, encumbrances, charges and adverse claims, contractual or
otherwise. Furthermore, the mortgages liens or other encumbrances affecting the
property shall be satisfied at closing from the purchase price.
(t) BOOKS AND RECORDS. That all books, records and documents, and any
and all other documents examined and to be examined by Purchaser or its
representatives related to VAV, the Property or any other aspect of this
transaction are to the knowledge of Seller true, accurate, genuine and in all
respects what they purport to be and that to the knowledge of the Seller such
books, records, and documents have not omitted any material facts, the absence
of which would constitute a material omission or misrepresentation.
(u) RENTALS. That no rentals have been paid by any Tenant for periods of
more than thirty (30) days in advance; that there presently exists no default by
Landlord or any Tenant under the terms of any tenancy or lease; and that no
Tenant has any claims or offsets against any rentals due under the terms of any
tenancy or lease.
(v) IMPROVEMENTS. That all improvements, repairs, soil borings, tests or
other construction ("Improvements") will be completed in a good and workmanlike
manner in accordance with the plans and specifications and that VAV shall have
paid for all of the Improvements prior to the time of closing. At the closing,
Seller shall obtain from the Contractor Full Unconditional Waivers of Lien with
respect to the improvements and shall provide them to Purchaser.
(w) COMPLETION OF BUILDING. The building (the "Out Patient Clinic") has
or will as of the date of Closing be completed, a Certificate of Occupancy and
all other permits required for occupancy shall have been issued and the building
shall be occupied by Tenant.
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(x) INSURANCE. That VAV currently maintains adequate and sufficient
insurance coverage for loss and damage to the real and personal property to be
purchased and sold under this Agreement. Seller shall require that VAV continue
to maintain all such insurance coverage during the interim period between the
date of Seller's acceptance of this Agreement and the date of closing.
(y) SINGLE PURPOSE ENTITY. Seller is a single purpose entity formed for
the purpose of the constructions, ownership, leasing and management of the OPC.
Seller owns no other assets and has no liabilities except as disclosed to
Purchaser during the Inspection Period.
(z) CONTRACTS. Seller has not entered into any contracts or agreements
except as disclosed to Purchaser.
(aa) FINANCIAL. Seller's financial statements accurately reflect the
financial condition of VAV.
(bb) PAYMENT OF FINANCIAL OBLIGATIONS. All financial obligations between
Seller and VAV will be fully settled and discharged as of the date of Closing.
(cc) NO CLAIMS. There are no claims of any kind pending against Seller
which could have a material adverse effect on the operations of or become a lien
upon the membership interests in VAV or on the Property.
(dd) NO OTHER PROPERTY. VAV owns no property except the Property and
personal property used in connection with the Property.
(ee) OBLIGATIONS DUE TO VAV. There are no obligations due from third
parties to VAV except as related to the Property and disclosed to Purchaser as a
part of the Inspection Materials.
(ff) TAXES. All federal state and local taxes payable by or chargeable to
VAV have been paid. As of the date of Closing there will be no accrued but
unpaid tax liability of VAV. VAV has filed all returns required by law to be
filed through date of Closing
9.2 SELLER'S COVENANT. Seller shall notify Purchaser immediately if
Seller becomes aware of any transaction or occurrence prior to the Closing Date
which would make any of the representations or warranties of Seller contained in
Article 8.2(a)(b) untrue in any material respect.
ARTICLE 10
ENVIRONMENTAL MATTERS
10.1 ENVIRONMENTAL DEFINITIONS. The term "Hazardous Materials" shall mean
any substance, material, waste, gas or particular matter which is regulated by
any local governmental authority, the State of Louisiana, or the United States
Government, including, but not limited to, any material or substance which is
(i) defined as a "hazardous waste", "hazardous material", "hazardous substance",
"extremely hazardous waste", or "restricted hazardous waste" under any provision
of Louisiana law, (ii) petroleum, (iii) asbestos, (iv) polychlorinated biphenyl,
(v) radioactive material, (vi) designated as a "hazardous substance" pursuant to
311 of the Federal Pollution Control Act (the
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Clean Water Act), 33 U.S.C. 1251 et seq. (33 U.S.C. 1321), (vii)defined as a
"hazardous waste" pursuant to 1004 of the Resource Conservation and Recovery
Act, 42 U.S.C. 6901 et seq. (42 U.S.C. 6903), or (viii) defined as a "hazardous
substance" pursuant to Article of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq. (42 U.S.C. 9601). The
term "Environmental Laws" shall mean all statutes specifically described in the
foregoing sentence and all federal, state, and local environmental health and
safety statutes, ordinances, codes, rules, regulations, orders and decrees
regulating, relating to or imposing liability or standards concerning or in
connection with Hazardous Materials.
10.2 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Seller and VAV
represent and warrants that, to the best of their knowledge: (i) neither the
Property nor any part thereof is in breach of any Environmental Laws; (ii) no
part of the Property has ever been used as a landfill, dump, toxic or waste
disposal site or storage area; (iii) there are no underground storage tanks at
the Property, or, with respect to removed tanks, at the time of removal, any
contaminated soil was removed; and (iv) the Property is free of any Hazardous
Materials that would trigger response or remedial action under any Environmental
Laws or any existing common law theory based on nuisance or strict liability. If
any such representation is in any manner inaccurate or any such Warranty is in
any manner breached (collectively, a "Breach"), and if such Breach gives rise to
or results in liability (including, but not limited to, a response action,
remedial action or removal action) under any Environmental Laws or any existing
common law theory based on nuisance or strict liability, or causes a significant
effect on public health, Seller shall direct VAV to promptly take, at its sole
cost and expense, any and all remedial and removal action as required by law to
clean up the Property, mitigate exposure to liability arising from, and keep the
Property free of any lien imposed pursuant to, any Environmental Laws as a
result of such Breach.
10.3 NO NOTICES. Except as otherwise disclosed to Purchaser in writing,
Neither Seller nor VAV has received no notice that the Property or any part
thereof is located within an area that has been designated by the Federal
Emergency Management Agency, the Army Corps of Engineers or any other
governmental body as located in a "wetlands" area or a conservation area.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES OF PURCHASER
11.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. To induce Seller to
execute, deliver and perform this Agreement, Purchaser hereby represents and
warrants to Seller on and as of the Effective Date and on and as of the Closing
Date as follows:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Purchaser appearing in the other Articles and Sections of this
Agreement are true and correct.
(b) AUTHORIZATION. Purchaser has full capacity, right, power, and
authority to execute, deliver and perform this Agreement and all documents to be
executed by Purchaser pursuant hereto, and all required actions and approvals
therefor have been duly taken and obtained. The individuals signing this
Agreement and all other documents executed or to be executed pursuant hereto on
behalf of Purchaser are and shall be duly authorized to sign the same on
Purchaser's behalf and to bind Purchaser thereto. This Agreement and all
documents to be executed pursuant hereto by
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Purchaser are and shall be binding upon and enforceable against Purchaser in
accordance with their respective terms.
(c) Purchaser has a commitment from a lending institution or sufficient
funds on hand to pay the purchase price and all costs associated with its
inspection of the property and closing of the sale.
ARTICLE 12
CONDITIONS PRECEDENT AND TERMINATION
12.1 CONDITIONS PRECEDENT. Purchaser contemplates that upon acquiring the
entire equity interest of VAV, VAV will continue to operate the Property and
improvements as a V.A. Outpatient Clinic as constructed by VAV together with
parking and other appurtenant facilities. Seller acknowledges that the Property
may be of no use to Purchaser unless certain conditions precedent to such uses
are fulfilled. Consequently, Purchaser's obligations under this Agreement are
subject to Purchaser being satisfied, that all of the following Conditions have
been fulfilled within the respective time periods set forth below:
(a) INSPECTION PERIOD.
(i) REAL ESTATE. Unless extended by written agreement of Seller
and Purchaser, Purchaser shall have a period of thirty (30) days from the
Effective Date, unless such date is extended as herein provided, to
conduct an inspection of the Property. Provided, however, that in no event
shall the Inspection period extend beyond September 5, 2004. Such period
shall hereinafter be referred to as the "Inspection Period". During the
Inspection Period during normal business hours and after 48 hours notice
to Seller or its designated agents, and whatever advanced notice as
required under the Lease, Purchaser, or its engineers, architects,
building consultants, environmental investigators, or other
representatives, at Purchaser's sole cost and expense, may, subject to
Tenant's rights under the Lease, inspect and test the Property for the
purpose of satisfying Purchaser in its sole and absolute discretion, that
the Property and the Leases thereon is acceptable and satisfactory to
Purchaser and Tenant, that the Property is suitable for Purchaser's
purposes and that the Property meets or exceeds all underwriting, legal
and regulatory standards and requirements of Purchaser. Such tests (A)
shall be noninvasive, (B) shall be conducted subject to the rights of
tenant, (C) insurance acceptable to Seller shall be carried by Purchaser
and its agents, (D) shall be conducted during normal business hours, (v)
shall be conducted subject to indemnity of Seller by Purchaser acceptable
to Seller, and (vi) shall be subject to delivery of copies of all tests
conducted during the inspection period to Seller. Purchaser shall comply
with all laws, rules and regulations of any governmental authority and
obtain all licenses and permits required in connection with such
activities. Purchaser agrees to indemnify and hold Seller harmless from
and against any property damage or personal injury or claim or lien
against the Property resulting from any such access or inspection by
Purchaser or its representatives. Such indemnification shall survive the
Closing or earlier termination of this Agreement. Purchaser shall also
have the right during such Inspection Period to examine and review
environmental conditions of the Property, zoning and land use regulations,
governmental
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entitlements, governmental approvals and any restrictions, agreements,
obligations and liabilities affecting the Property. If Seller fails to
provide any of the documentation in its possession identified in Exhibits
E and F hereof on or before the end of the prescribed ten (10) -day
period, the Inspection Period will be extended one (1) day for each day or
partial day delay in the delivery of such documentation.
(ii) ENTITY. Unless extended by written agreement of Seller and
Purchaser, Purchaser shall have the Inspection Period , unless such date
is extended as herein provided, to conduct an investigation of VAV. Such
investigation may include but shall not be limited to a review of the
materials provided by Seller pursuant to Exhibit E and such other and
further investigation and inquiry as Purchaser may deem appropriate. VAV
and Seller shall fully cooperate with Purchaser to facilitate the
investigation into VAV
(iii) RIGHT TO TERMINATE. Purchaser shall have the right to
terminate this Agreement at any time during the Inspection Period in its
sole and absolute discretion for any reason or no reason by giving written
notice to Seller on or before the last day of the Inspection Period as
extended. If Purchaser timely gives notice of termination under this
Section, all obligations of the parties hereunder shall cease and neither
party shall have any claim against the other by reason of this Agreement,
except with respect to any provision hereof that expressly survives the
termination of this Agreement. In the event of such termination, the
Deposit shall be returned to the Purchaser. If Purchaser fails to give
such written notice of termination on or before the last day of the
Inspection Period as extended, Purchaser shall be deemed to have waived
its right to terminate this Agreement pursuant to this Section.
(iv) RETURN OF INSPECTION MATERIALS. If Purchaser terminates this
Agreement in accordance with Article 12.1 (iii) above, Purchaser shall
return to Seller all documents provided to Purchaser by Seller, and any
copies thereof made by Purchaser and shall provide Seller with copies of
all reports, surveys, plans, studies and analysis prepared for Purchaser
with respect to the Property. Purchaser agrees that any and all
information obtained by it or its agents and representatives with respect
to the Property, including without limitation all reports, surveys, plans,
studies and analysis prepared for Purchaser with respect to the Property,
shall be held by Purchaser in confidence and not released or shared with
anyone other than Seller, except for such employees, lenders and
professional advisors as are reasonably necessary to allow Purchaser to
evaluate the Property. The provisions of this Article 12.1(iv) shall
survive the termination of this Agreement.
(b) COMPLETION OF CONSTRUCTION, OCCUPANCY BY TENANT AND COMMENCEMENT OF
RENTAL PAYMENTS. On or before August 1, 2004 (the "Construction Period") Seller
shall complete the construction of the Improvements as required under the Lease,
in accordance with the plans and specifications and all applicable laws rules
and regulations including without limitation all applicable building codes,
zoning and land use regulations and the premises shall be occupied by Tenant and
the obligations to commence full payment of rent without set off or reduction
shall have begun.
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12.2 PURCHASER'S INVESTIGATION AND INSPECTIONS. Any investigation or
inspection conducted by Purchaser or any agent or representative of Purchaser
pursuant to this Agreement, in order to verify independently Seller's
satisfaction of any conditions precedent to Purchaser's obligations hereunder or
to determine whether Seller's representations and warranties are true and
accurate, shall not affect (or constitute a waiver by Purchaser of) any of
Seller's obligations hereunder or Purchaser's reliance thereon.
ARTICLE 13
ESCROW
13.1 ESCROW. Within three business (3) days after the Effective Date,
Purchaser shall place in escrow with Escrowee the Deposit, which shall be
retained by Escrowee for the benefit of Seller and Purchaser in accordance with
the provisions of this Agreement. Seller and Purchaser further agree to execute
any and all directions in a timely fashion that are necessary to cause Escrowee
to disburse the Deposit and any and all interest earned on the Deposit as
required by any provision of this Agreement and in the following circumstances:
(a) If Purchaser defaults in its obligations hereunder, after notice and
expiration of all applicable cure periods, the Deposit shall be disbursed to
Seller;
(b) If Seller defaults in its obligations hereunder, after notice and
expiration of all applicable cure periods, the Deposit shall be disbursed to
Purchaser; and
(c) If Purchaser closes, the Deposit shall be disbursed to Seller at
closing as partial payment of the Purchase Price.
The escrow instructions shall be in the form customarily used by the Escrowee
with such special provisions added thereto as may be required to conform to the
provisions of this Agreement. Said escrow shall be auxiliary to this Agreement,
and this Agreement shall not be merged into or in any manner superseded by said
escrow.
ARTICLE 14
BROKERAGE
14.1 BROKERAGE. Seller hereby represents and warrants to Purchaser that
Seller has not dealt with any broker or finder with respect to the transaction
contemplated hereby except for Xxxxxx Xxxxx Xxxxxxx of Xxxxxxx Commercial Real
Estate and Xxxxxxx Xxxxx of Xxxxx Companies (jointly "Broker") who shall receive
a commission paid by Seller on the Closing Date, provided the transaction
contemplated hereby closes. Purchaser hereby represents and warrants to Seller
that Purchaser has not dealt with any broker or finder with respect to the
transaction contemplated hereby except for Xxxxxx Xxxxx Xxxxxxx of Xxxxxxx
Commercial Real Estate (Purchaser's Broker") who shall receive a fee paid by
Seller as set forth above and Purchaser hereby agrees to indemnify, defend and
hold Seller harmless from and against any claim for brokerage commission or
finder's fee asserted by any person, firm or corporation claiming to have been
engaged by Purchaser.
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ARTICLE 15
CONDEMNATION
15.1 CONDEMNATION. If any portion of the Property is condemned or access
thereto is taken prior to the Closing Date and Purchaser reasonably concludes
that such taking renders the land remaining unsuitable for the economic
development contemplated and Purchaser notifies Seller in writing of such
conclusion (stating its reasons) within thirty (30) days after learning of such
condemnation action, then this Agreement shall terminate and the Deposit shall
be returned to Purchaser. If the Agreement is not terminated pursuant to the
preceding sentence, the Purchase Price shall not be affected, it being agreed
that if the award is paid prior to the Closing Date of this transaction, such
amount shall be held in escrow and delivered to Purchaser at the time of
closing; and if the award has not been paid prior to the Closing Date, then at
the closing Seller shall assign to Purchaser all of Seller's right, title and
interest with respect to such award and shall further execute any other
instrument requested by Purchaser to assure that such award is paid to
Purchaser.
ARTICLE 16
CLOSING
16.1 CLOSING. Unless otherwise agreed by the parties, the transaction
contemplated hereby shall close at 1:00 p.m. on the Closing Date at the offices
of the Escrowee at Baton Rouge, Louisiana. The Closing Date shall be not later
than September 10, 2004 subject to prior l satisfaction of the conditions
precedent set forth hereon or on such other date, time and place as the parties
may mutually agree. Seller and Purchaser agree they each shall not be required
to be physically present at closing and that closing may be accomplished by
means of an escrow of documents and funds.
16.2 CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE. If any of
the conditions set forth in this Article 16.2 are not satisfied, Purchaser, by
written notice delivered to Seller on or before the Closing may elect to (a)
waive such condition and proceed with the Closing, or (b) terminate this
Agreement and have the Deposit, together with accrued interest, if any, returned
to it.
(a) The representations and warranties made by Seller in this Agreement
being true and correct in all material respects on and as of the Closing Date
with the same force and effect as though such representations and warranties had
been made as of the Closing Date;
(b) Seller having performed in all material respects all covenants and
obligations required by this Agreement to be performed by Seller on or prior to
the Closing Date;
(c) Construction of the VA Out Patient Clinic and all ancillary
improvements having been completed in accordance with the Plans and
Specifications submitted to Purchaser during the Condition Approval Period and a
certificate of Occupancy and all other permits necessary for occupation of the
building have been obtained.
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(d) Seller having paid all costs for construction of the OPC and
receiving lien waivers and acknowledgment of payment from the general contractor
and all subcontractors and materialmen, suppliers and other parties with lien
rights.
(e) Purchaser receiving from Seller and VAV's general contractor an
indemnity acceptable to Purchaser's counsel indemnifying Purchaser and VAV from
and against any and all claims of third parties including without limitation all
subcontractors, materialmen, suppliers, laborers relating to construction of the
OPC.
(f) The Lease has commenced and Tenant's obligations to commence payment
of rent without setoff, abatement or reduction has been acknowledged by Tenant
and rent has commenced.
(g) Purchaser receiving at Purchaser's expense, at Closing, an ALTA
Owners Extended Coverage Policy of Title Insurance insuring good, clear, record,
marketable and fee simple title to the Property in VAV, subject only to the
Permitted Exceptions;
(h) Seller delivering possession of the Property free and clear of all
tenants, other than the Tenant.
(i) Between the expiration of the Inspection Period and the Closing
Date, there shall have occurred no material adverse change in the environmental
conditions of the Property or to the physical condition of the Property,
reasonable wear and tear excepted; provided, however, that the parties
acknowledge and agree that certain adverse changes to the physical condition of
the Property will be governed by Article 15 and with respect to those changes,
Article 15 will determine whether or not they are grounds for termination of
this Agreement.
(j) The Property shall be subject to the Lease with the Tenant with a
term ending not earlier than June 3, 2019 except as otherwise provided in the
Lease, including Paragraph 3.20 thereof, and with no right of early termination
claim except as provided in Paragraph 3.20 of the Lease ("Solicitation For
Offer"), which Lease shall be in effect with rents and other charges being paid
by Tenant without reservation.
(k) Delivery to Purchaser of the following documents and records that
are reasonably required and necessary for Purchaser to meet its disclosure
obligations as a public company (i) a Letter of Representation and (ii)
financial information on the Property for as long as owned or operated by Seller
sufficient for Purchaser's auditors, at its expense, to be able to prepare AICPA
standard audited financial statements, provided that Purchaser shall promptly
notify the Seller in writing prior to the expiration of the Initial Inspection
Period of any shortcoming in said reasonably required materials and provided
further that the Seller shall not be required to produce any materials that do
not already exist; should the financial records prove to be not auditable under
the reasonable application of AICPA Standards and Seller fails to furnish the
appropriate material, Purchaser shall have the right during the Initial
Inspection Period to terminate the Agreement without penalty or liability and
the Deposit, together with interest accrued thereon, if any, shall be returned
to Purchaser.
(l) Owner shall deliver to Purchaser at Closing an estoppel certificate,
or lease status
17
letter and subordination agreement from Tenant in a form consistent with the
Tenant's obligations under the Lease to provide such documents.
(m) The Building shall be occupied by Tenant under a valid certificate
of occupancy and fully compliant with the requirements of the Lease.
(n) The Property shall be acceptable to and fully occupied by Tenant at
the date of Closing.
(o) Seller shall have caused VAV to file all state and federal tax
returns and paid all taxes from the date of it's formation to the date of
Closing including without limitation a short year tax return ending as of the
Closing date. Such returns may be filed and taxes, interest and penalties, if
any, paid after Closing as otherwise provided herein.
16.3 SELLER'S DEPOSITS. On the Closing Date, Seller shall deliver to the
Purchaser in exchange for the payment to Seller of the Purchase Price (plus or
minus prorations) the following closing documents:
(a) A warranty deed, assignment or other instrument of transfer
satisfactory to Purchaser and Purchaser's counsel from Seller conveying to
Purchaser title to the 100% equity interest in VAV to Purchaser.
(b) If required by the closing agent, The Foreign Transferor Affidavit
in the form of Exhibit D attached hereto;
(c) ALTA affidavits, if any, as may routinely be required by the title
company that relate to possession of the property, encroachments, over property
lines and indemnity for lien claims.
(d) An Affidavit of a duly authorized representative of the Seller
confirming:
(i) That all contractors subcontractors, mechanics, materialmen
architects, engineers, consultants and other persons in any way connected
with the construction of the VA Out Patient Clinic and all ancillary
structures have been paid in full or will be paid in full prior to the
Closing Date.
(ii) That all accounts for labor and material done or installed
for, or by VAV are or will be paid for by VAV;
(iii) That no notice of non-compliance with any municipal by-law or
agreement has been received by the Seller prior to closing which has not
been corrected except as disclosed by Seller to Buyer during the
Inspection period.
(iv) That as of the date of closing, there are no arrears of rent,
taxes, maintenance and any other obligations under the terms of the leases
on the part of tenants of the Property, except as may be stated herein, or
permitted by the tenant leases or as provided by law.
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(e) An executed copy of the Lease and a notice to the tenants
directing all future rental payments to be made to the Purchaser as the
Purchaser may direct together with a tenant's estoppel certificate of tenant's
statement as Tenant is required to provide pursuant to the Lease and this
Agreement.
(f) Seller's statement that all goods, chattels, fixtures, and
equipment, if any, which are included in the price are or will be, prior to
Closing, fully paid by VAV for and not subject to any claims and that all
tenancies are in good standing without any claim or set-off against VAV.
(g) A schedule updating the rent roll and setting forth all
arrears in rent and prepayments.
(h) To the extent they are in VAV's possession, and not posted on
the premises, certificates, licenses, permits, authorizations and approvals
issued for or with respect to the premises by governmental and
quasi-governmental authorities having jurisdiction.
(i) Seller shall be fully responsible for and shall indemnify and
hold Purchaser harmless with respect to all operations of VAV's business from
the property prior to Closing Date which indemnification shall include, but not
be limited to, all suits, actions, damages and claims which may be asserted or
threatened against the Purchaser from and after the Closing Date, but which
shall have arisen out of operations prior to and including the Closing Date.
Purchaser shall be fully responsible for and shall indemnify and
hold Seller harmless with respect to all operations of VAV's business from the
Property after the Closing Date which indemnification shall include, but not be
limited to, all suits and claims which may be asserted or threatened against the
Seller from and after the Closing Date, but which shall have arisen out of
operations after the Closing Date as well as for Purchaser's conduct or activity
on or with respect to the property prior to the Closing Date.
16.4 PURCHASER'S DEPOSITS. On the Closing Date, Purchaser shall deliver
to the Seller in exchange for Seller's deliveries as aforesaid the following:
(a) A Closing Statement prepared by Purchaser's closing agent or title
company showing the computation of funds payable to Seller;
(b) The payment of the Purchase Price (as provided in Article 3.1 by
Purchaser's check or wire transfer of available funds.
16.5 APPROVAL OF CLOSING DOCUMENTS. All closing documents to be furnished
by Seller or Purchaser pursuant hereto shall be in form, execution and substance
reasonably satisfactory to both Purchaser and Seller.
16.6 CONCURRENT TRANSACTIONS. All documents or other deliveries required
to be made by Purchaser or Seller at closing, and all transactions required to
be consummated concurrently with closing, shall be deemed to have been delivered
and to have been consummated simultaneously with all other transactions and all
other deliveries, and no delivery shall be deemed to have been made and no
transactions shall be deemed to have been consummated until all deliveries
required by
19
Purchaser or its designee and Seller shall have been made, and all concurrent
and other transactions shall have been consummated.
16.7 ESCROW FOR PUNCH LIST ITEMS. The Parties hereto acknowledge that
certain Punch List items may remain to be completed after the Closing Date.
Tenant has retained from funds otherwise payable to Seller the sum of $50,000 as
of August 2, 2004 and perhaps other sums arising from work that has been
requested as additional work under the Lease ("Punch List Escrow"). At Closing,
Seller shall provide Purchaser a complete list of all Punch List items that have
not been completed. Such list shall include an estimate of the cost of
completion of such Punch List items. Seller shall be entitled to receive, after
the closing, all sums held in escrow by the Tenant once the Tenant approves the
satisfactory completion of the punch list items. Purchaser shall be bound by the
approval of Tenant under the Lease as evidence of satisfactory completion of
punch list items. If the cost to complete and pay for such Punch List items
exceeds the Punch List Escrow, Seller shall deposit with Escrow Agent an amount
equal to the amount of such deficit (the "Supplemental Escrow"). Upon completion
of the Punch List Items, Seller shall provide to Purchaser proof of completion
of such Punch List items and payment therefore, satisfactory to Purchaser and
shall provide full, final and unconditional lien waivers from the general
contractor and all subcontractors. Upon verification of satisfactory completion
of the Punch List items and payment therefore, Purchaser shall release the funds
held in the Supplemental Escrow. Seller hereby agrees to indemnify and hold
Purchaser harmless from and against and all claims, actions or causes of action
of tenant related to non-completion or unsatisfactory completion of the Punch
List Items and all claims of the general contractor or subcontractors related to
the completion of the Punch List items.
16.8 UNCOLLECTED ITEMS, The Parties acknowledge that Seller is entitled
to payment of certain amounts from Tenant. Such payment may occur after the
Closing Date. The collection of these amounts shall remain the responsibility of
Seller and VAV shall assign all rights to such amounts to Seller. Seller
represents and warrants that all work to which the Uncollected Items relate,
except unpaid rent, have been completed and accepted by Tenant except to the
extent that such items are included in the Punch List items defined above.
Seller shall indemnify and hold Purchaser harmless from and against any and all
claims, demands, actions and causes of action arising from or in any way
connected with the collection of such amounts or the work performed by Seller
and/or VAV for which such payment is due including the Punch List items. Such
amounts are as follows:
(a) Amounts due for validly executed change orders approved by Tenant
and performed by VAV.
(b) Schedule B Items.
(c) Rent due to the Closing Date but unpaid.
16.9 ESCROW FOR POST CLOSING ADJUSTMENTS. The Parties agree and
acknowledge that except as otherwise provided herein, Purchaser is not assuming
any liabilities of VAV as a part of this transaction. Seller has represented
that at Closing, VAV will be the owner of the Department of Veteran's Affairs
Satellite Outpatient Clinic, all construction will be completed, all cost of
construction will have been paid and VAV will have no liabilities or obligations
except the Lease
20
and those liabilities that arise from the ownership of the property except to
the extent those liabilities may have been accepted in this agreement by Seller.
As of the date of this Agreement, Purchaser has not had the opportunity to
verify the assets, liabilities and contingent obligations of VAV. It is hereby
agreed, that if during the Inspection Period, it is determined that there are
liabilities of VAV, either fixed or contingent, that will not be discharged on
or before the date of Closing and have not been accepted by Purchaser herein or
disclosed to Purchaser in writing by Seller, the parties will, in good faith,
agree to withhold from the Purchase Price an amount sufficient to discharge such
liabilities as same become due and payable to the extent those liabilities do
not exceed the sum of $25,000.
16.10 CASH ACCOUNTS. As of the closing date, all cash assets in VAV shall
become the property of Seller and disbursed to Seller on the closing date,
unless withdrawn by Seller prior to the closing date.
ARTICLE 17
DEFAULT
17.1 DEFAULT BY PURCHASER. In the event this transaction fails to close
as a result of a material default by Purchaser of any of Purchaser's obligations
under this Agreement and such failure to close continues for a period of fifteen
(15) days after Seller notifies Purchaser in writing of such event (the
"Purchaser Cure Period"), Seller's sole and exclusive remedy for such failure to
close as a result of such material default shall be the right to cancel and
terminate this Agreement by giving Purchaser written notice of cancellation
within ten (10) days after the expiration of the Purchaser Cure Period and the
right, upon cancellation, to obtain the Deposit, from Escrowee. This Agreement
shall terminate upon such written notice of cancellation unless (i) Purchaser
cures the default within the Purchaser Cure Period or (ii) Seller waives the
default, in which event Seller and Purchaser shall proceed to close this
transaction. Upon such termination, each party shall be released from all duties
or obligations contained herein and Escrowee shall immediately pay the Deposit,
to Seller as liquidated damages, it being understood and agreed that Seller is
hereby releasing and/or waiving any right it might have to either specifically
enforce this Agreement or xxx for damages. This liquidated damage provision has
been agreed to in view of the difficulty in ascertaining Seller's actual damages
because of the uncertainties of the real estate market and fluctuating property
values and the difference of opinion with respect to such matters.
17.2 DEFAULT BY SELLER. In the event this transaction fails to close as a
result of a material default by Seller of any of Seller's obligations under this
Agreement and such failure to close continues for a period of fifteen (15) days
after Purchaser notifies Seller in writing of such event (the "Seller Cure
Period"), Purchaser's sole and exclusive remedy for such failure to close as a
result of such material default shall be the right to cancel and terminate this
Agreement by giving Seller written notice of cancellation within ten (10) days
after the expiration of the Seller Cure Period and the right, upon cancellation,
to obtain the Deposit, from Escrowee. This Agreement shall terminate upon such
written notice of cancellation unless (i) Seller cures the default within the
Seller Cure Period or (ii) Purchaser waives the default, in which event
Purchaser and Seller shall proceed to close this transaction with an appropriate
adjustment of the Purchase Price to reflect the impact of the uncured defect on
the value of the Property. Upon such termination, each party shall be released
from all duties or obligations contained herein and Escrowee shall immediately
pay the Deposit, to
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Purchaser as liquidated damages, it being understood and agreed that Purchaser
is hereby releasing and/or waiving any right it might have to either
specifically enforce this Agreement or xxx for damages. This liquidated damage
provision has been agreed to in view of the difficulty in ascertaining
Purchaser's actual damages because of the uncertainties of the real estate
market and fluctuating property values and the difference of opinion with
respect to such matters.
(b)
ARTICLE 18
NOTICES
18.1 NOTICES. Any notice, request, demand, instruction or other document
to be given or served hereunder or under any document or instrument executed
pursuant hereto shall be in writing and shall be delivered personally with a
receipt requested therefor or sent by a recognized overnight courier service or
by United States registered or certified mail, return receipt requested, postage
prepaid and addressed to the parties at their respective addresses set forth
below, and the same shall be effective (a) upon receipt or refusal if delivered
personally; (b) one (1) business day after depositing with such an overnight
courier service; or (c) two (2) business days after deposit in the mails if
mailed. A party may change its address for receipt of notices by service of a
notice of such change in accordance herewith. Notwithstanding the foregoing,
written notice give by fax shall be effective on transmission so long as such
transmission is followed by delivery by non electronic means as herein provided.
If to Purchaser: Government Properties Trust, Inc.
Attn: Xxxxxx X. Xxxxxxx
00000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000 Ext. 201
Fax (000) 000-0000
xxxxxxxx@xxxxxxx.xxx
With a copy to: Xxxxxx X. Xxxxxxx, Xx.
Lieben, Whitted, Houghton,
Slowiaczek and Xxxxxxxx, P.C., L.L.O
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
xxxxxxxx@xxxxxxxxx.xxx
If to Seller: Attn: Xxxxxxx X. Xxxxx, Xx.
VA Venture Baton Rouge, L.L.C.
0000 Xxxxxxxx Xxx.
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
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Fax: (000) 000-0000
With a copy to: Xxxxx X. Xxxx, Esq.
The Xxxx Law Firm
0000 Xxxxxxxxxx Xxxx., Xxxxx 0
Xxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
ARTICLE 19
ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS
19.1 ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Agreement contains
the entire agreement and understanding of the parties with respect to the
subject matter hereof, and all previous negotiations and understandings between
Seller and Purchaser or their respective agents and employees with respect to
the transaction set forth herein are merged in this Agreement. Further, this
Agreement may not be amended, modified or discharged nor may any of its terms be
waived except by an instrument in writing signed by the party to be bound
thereby.
ARTICLE 20
FURTHER ASSURANCES
20.1 FURTHER ASSURANCES. The parties each agree to do, execute,
acknowledge and deliver all such further acts, instruments and assurances and to
take all such further action before or after the closing as shall be necessary
or desirable to fully carry out this Agreement and to fully consummate and
effect the transactions contemplated hereby.
ARTICLE 21
SURVIVAL AND BENEFIT
21.1 SURVIVAL AND BENEFIT. All representations, warranties, agreements,
indemnifications and obligations of the parties shall, notwithstanding any
investigation made by any party hereto, survive the closing and the same shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties for the full duration of the statute of limitations
applicable thereto. The obligations of the parties to return or deliver or cause
to be returned or delivered the Deposit, shall survive any termination of this
Agreement.
ARTICLE 22
NO THIRD PARTY BENEFITS AND ASSIGNMENT
22.1 NO THIRD PARTY BENEFITS AND ASSIGNMENT. This Agreement is for the
sole and exclusive benefit of the parties hereto and their respective successors
and assigns, and no third party is intended to or shall have any rights
hereunder. Neither party shall be allowed to assign any right or obligation
hereunder without the written consent of the other.
ARTICLE 23
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INTERPRETATION
23.1 INTERPRETATION.
(a) The headings and captions herein are inserted for convenient
reference only and the same shall not limit or construe the paragraphs or
sections to which they apply or otherwise affect the interpretation hereof.
(b) The terms "hereby," "hereof," "herein," "hereunder" and any similar
terms shall refer to this Agreement, and the term "hereafter" shall mean after,
and the term "heretofore" shall mean before the Effective Date.
(c) Words of the masculine, feminine or neuter gender shall mean and
include the correlative words of other genders, and words importing the singular
number shall mean and include the plural number and vice versa.
(d) Words importing persons shall include firms, associations,
partnerships (including limited partnerships), trusts, corporations and other
legal entities, including public bodies, as well as natural persons.
(e) The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
(f) This Agreement and any document or instrument executed pursuant
hereto may be executed in any number of counterparts each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
(g) Whenever under the terms of this Agreement the time for performance
of a covenant or condition falls on a Saturday, Sunday or legal holiday, such
time for performance shall be extended to the next business day; otherwise all
references herein to "days" shall mean calendar days.
(h) This Agreement shall be governed by and construed in accordance with
the laws of the State of Louisiana.
(i) Time is of the essence of this Agreement.
(j) For the purposes of this Agreement, the phrases "to the best of
Seller's knowledge," "to Seller's knowledge" and similar phrases shall imply a
reasonable investigation by Seller and its agents.
(k) This Agreement shall not be construed more strictly against one
party than against the other merely by virtue of the fact that it may have been
prepared primarily by counsel for one of the parties, it being recognized that
both Purchaser and Seller have contributed substantially and materially to the
preparation of this Agreement.
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ARTICLE 24
STATE AND FEDERAL INCOME TAXES
24.1 FOREIGN SELLER AFFIDAVIT. Pursuant to 1445 of the Internal Revenue
Code of 1986, as amended, and the regulations promulgated thereunder (the
"Code"), and if required by the closing agent, Seller agrees to deliver to
Purchaser, at or prior to the Closing Date, a certification in the form of
Exhibit D attached hereto and made a part hereof, executed by Seller and
otherwise in form and substance reasonably satisfactory to Purchaser and as
required by the Code.
24.2 DISCLOSURE TO INTERNAL REVENUE SERVICE. Each of Seller and Purchaser
agree to cooperate fully with the other in completing of filing any disclosure
documents or in otherwise satisfying any disclosure requirements of the Code.
ARTICLE 25
DISCREPANCY IN LEGAL DESCRIPTION
25.1 DISCREPANCY IN LEGAL DESCRIPTION. The parties intend that the
Property which is owned by VAV includes all of the real property and all
interest held by VAV therein. Accordingly, if prior to the Closing Date, it
appears that the legal description of the Property set forth on Exhibit A does
not include or correctly describe all such real property or interests therein or
appurtenances thereto owned by VAV applicable to the OPC, the legal description
of the Property shall be modified, at the Seller's sole cost and expense, to
correctly describe the same.
ARTICLE 26
CONFIDENTIALITY
26.1 CONFIDENTIALITY. Neither of the parties hereto shall disclose the
existence of this Agreement or any of the terms and provisions hereof without
the prior written approval of the other, and both parties shall use all
reasonable efforts to keep the details of the transaction contemplated hereby
strictly confidential.
ARTICLE 27
EXPENSE OF ENFORCEMENT
27.1 ENFORCEMENT. If either party brings an action at law or in equity to
enforce or interpret this Agreement, the prevailing party in such action shall
be entitled to recover reasonable attorney's fees and court costs and expert
witness fees for all stages of litigation, including, but not limited to,
appellate proceedings, in addition to any other remedy granted.
ARTICLE 28
EFFECTIVE DATE
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28.1 EFFECTIVE DATE. The Effective Date of this Agreement shall be the
date of the last party's execution; provided, however, that if the last party
does not execute this Agreement and deliver a fully executed counterpart of the
same to the first signing party within seven (7) days after the first party's
execution date, then the offer or commitment to be bound hereby by the first
executing party shall automatically be revoked and withdrawn, whereupon neither
party shall be bound hereto.
ARTICLE 29
ASSIGNMENT OF LEASES
29.1 ASSIGNMENT OF LEASES. Since Purchaser is acquiring the entity, there
will be no assignment and assumption of the Lease. Seller hereby indemnifies and
holds Purchaser harmless from any claims, actions or causes of action, including
reasonable attorney fees arising under the Lease which arise prior to the
Closing Date regardless of when the claim therefore is made unless Purchaser was
made aware of the claims by Seller in writing prior to the closing date.
Purchaser hereby indemnifies and holds Seller harmless from and against any and
all claims, actions or causes of action including reasonable attorney fees
arising under the Lease from and after the Closing Date regardless of when such
claim is made.
ARTICLE 30
PERSONAL PROPERTY
30.1 PERSONAL PROPERTY. All equipment, fixtures, furniture, appliances,
and supplies owned by VAV and kept on or used by VAV on the Property for
purposes of maintaining and operating the Property, including but not limited
to, lawn mowers, snow blowers, garden tractors, tools, vacuum cleaners, light
bulbs, and such other supplies and maintenance equipment and other personal
property as is currently used by VAV in the care and maintenance of the
Property, shall remain owned by VAV as part of the consideration for the
Purchase Price set forth in this Agreement. Seller shall provide a list of all
such items, to Purchaser at the time of closing.
ARTICLE 31
ASSIGNMENT OF CONTRACT RIGHTS
31.1 ASSIGNMENT OF CONTRACT RIGHTS. Purchaser shall not be obligated to
assume any existing contracts, policies, or agreements, except as specifically
agreed to by Purchaser in this Agreement. Purchaser agrees to indemnify and hold
harmless Seller from any liability under any such contracts or agreements
assumed after the effective date of such assignment.
To the extent not owned by VAV but owned by Seller, Seller shall
transfer and assign to VAV at the time of closing, any and all claims,
guarantees, warranties, indemnifications, and any other rights which it may have
against any suppliers, tenants, laborers, materialmen or
26
subcontractors, arising out of or in connection with, but not limited to, the
purchase, installation, construction, and maintenance of any improvements,
fixtures and/or personal property on or about the real and personal property to
be purchased and sold pursuant to this Agreement.
ARTICLE 32
ESTOPPEL LETTERS
32.1 Estoppel Letters. Within ten (10) days prior to the time of closing,
Seller shall use its best efforts to obtain and submit to Purchaser, a Tenant's
letter as provided by the Lease. The Tenant's letters shall reveal the absence
of any defaults in any of the leases or tenancies for the Property, either by
VAV or tenant.
ARTICLE 33
ALLOCATION OF PURCHASE PRICE
33.1 ALLOCATION OF PURCHASE PRICE. The allocation of the purchase price
between all of the assets to be purchased and sold hereunder shall be determined
by reasonable and customary accounting methods unless otherwise allocated in
writing between the parties.
ARTICLE 34
TAX COOPERATION
34.1 TAX COOPERATION. The parties acknowledge that there are tax issues
that will require their cooperation to satisfy applicable governmental
requirements. The parties hereby agree to cooperate in compliance with
applicable tax law rule and regulations resulting from the closing of this
transaction.
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IN WITNESS WHEREOF, the Purchaser and Seller have caused this Agreement to
be executed by their duly authorized representatives, intending to be legally
bound by the provisions herein contained.
WITNESSES: "PURCHASER"
GOVERNMENT PROPERTIES TRUST, INC.
/s/ D. Xxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------- --------------------------------
Xxxxxx X. Xxxxxxx
Director - Asset Management Its: President/CEO
Date of Execution: August 10, 2004
"SELLER"
XXXXXXX X. XXXXX, XX. AND
ASSOCIATES, A LIMITED PARTNERSHIP
/s/ Xxxxx X. Xxxxxx By: Edwill, LLC
----------------------------------- Its: General Partner
/s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
Its managing member
Date of Execution: August 10, 2004
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