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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or
15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 15, 1996
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Healthcare Realty Trust Incorporated
(Exact Name of Registrant as Specified in Its Charter)
Maryland 1-11852 62-1507028
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification
Incorporation) Number)
3310 West End Avenue
Fourth Floor
Nashville, Tennessee 37203
(Address of Principal Executive Offices) (Zip Code)
(615) 269-8175
(Registrant's Telephone Number, including Area Code)
Not Applicable
(Former Name)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Merge with Lewis-Gale Building Corporation (the Merger). On November 15,
1996, HRT ofRoanoke, Inc., a Virginia corporation (HRR) and wholly owned
subsidiary of Healthcare Realty Trust Incorporated, a Maryland corporation (the
Registrant), completed its merger of Lewis-Gale Building Corporation, a Virginia
corporation (LGBC), with and into HRR. The Merger is accounted for as a tax-free
reorganization for federal income tax purposes and as a purchase for financial
reporting purposes.
LGBC was formed in late 1970 to own the real estate and improvements leased
to and operated by Lewis-Gale Clinic (the Clinic), a private, multi-specialty
group practice founded in 1909 that has grown to serve a four-county market in
the Roanoke/ Salem, Virginia area, employing 130 physicians and approximately
1,100 healthcare professionals. Its principal asset was a medical office
building complex located in Salem, Virginia adjacent to the 400-bed Lewis-Gale
Medical Center operated by Columbia/HCA Healthcare Corporation. The complex,
which was constructed between 1972 and 1994, consists of 11 buildings on an
eight-acre parcel of land, aggregating approximately 261,400 square feet.
In addition to the main Lewis-Gale Clinic complex, LGBC owned satellite
clinics leased primarily to the Clinic in Valley View Mall (62,000 square feet),
Salem (8,200 square feet), Fincastle (4,200 square feet), New Castle (2,200
square feet), Bonsack (7,000 square feet) and Back Creek (3,300 square feet), as
well as the Business Center tract of approximately 20 acres on Apperson Drive
(improvements of 136,000 square feet), at which a satellite clinic and certain
LGBC operations have been conducted.
In its most recent fiscal year, LGBC received approximately 82% of its
rental revenues from the Clinic. The remaining 18% was paid by a variety of
unaffiliated parties leasing space at Valley View and the Business Center,
including Lewis-Gale Hospital, National Diabetic, the U.S. Postal Service,
Allstate Insurance Company, a pharmacy, dental practices, an oral surgeon, a
home health company, a lawn service, a book store and a dry cleaner.
Approximately 113,000 square feet are presently being leased to these tenants on
various terms.
The consideration delivered by the Registrant in the Merger was determined
in an arms length negotiation between the Registrant and LGBC, and was supported
by an independent appraisal of the value of the assets of LGBC and a replacement
cost analysis of the assets. The parties agreed that the total value of the
assets was $43,225,000, reduced by LGBC liabilities and reserves of $27,150,000,
resulting in net shareholders' equity of $16,075,000.
The conversion of LGBC common stock into the Registrant's common stock was
then determined according to a ratio of the value of LGBC common stock as of the
closing date divided by the average closing sale price of the Registrant's
common stock for the seven trading days immediately preceding the closing date.
Based upon this formula, the Registrant issued 687,692 shares of common stock. A
portion of such shares will be retained by the Registrant pending resolution of
certain tax matters and contingent liabilities. The Registrant has also agreed
that, in addition to the Merger consideration described in the foregoing, it may
be obligated to deliver additional shares in an aggregate value estimated not to
exceed $500,000, upon the resolution of certain contingent obligations.
The remainder of the purchase price consisted of assumed liabilities of
LGBC, including approximately $20,580,000 of bank debt and $4,071,000 of
industrial revenue bonds. The bank debt is anticipated to be paid in full prior
to December 31, 1996, by a borrowing under the Registrant's existing credit
lines. In addition to the Merger consideration, the Registrant incurred certain
capitalized and closing costs.
Simultaneously with the completion of the Merger, the Clinic reorganized as
a Virginia limited liability company (the LLC). All of the real property
formerly occupied by the Clinic and subsidiary/affiliates of the Clinic (the
Clinic Leases) are being leased to the LLC by HRR as landlord. The leased space
is being managed for the LLC by the Registrant's property management subsidiary.
The leases for each of the LLC spaces provide for rent including an agreed stop
for operating expenses. All operating expenses in excess of the stop will be
billed to the LLC. Approximately 17% of the rents received by LGBC were from
tenants unaffiliated with the Clinic (the Non-Clinic Leases). The Non-Clinic
Leases were assigned to HRR and are also being managed by the Registrant's
property management subsidiary. In addition, the LLC has guaranteed to HRR a
minimum net cash flow from the operation of the Non-Clinic Leases. Concurrently
with the Merger, PhyCor, Inc. (PhyCor), a physician practice management company
based in Nashville, Tennessee, purchased the assets of the Clinic and has also
executed a guaranty of the obligations of the LLC to HRR with respect to the
Clinic Leases. In addition, PhyCor of Roanoke, Inc., a subsidiary of PhyCor, has
entered into a long-term service agreement with the LLC whereby it will provide
the physician group with the equipment and facilities used in their medical
practice, manage clinic operations, employ most of the Clinic's non-physician
personnel, other than certain diagnostic technicians, and receive a service fee
therefor. Pursuant to the service agreement, PhyCor of Roanoke, Inc. has
obtained a license to enter the properties governed by the Clinic Leases in
order to perform its duties thereunder.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
The required financial statements for the acquisition of assets reported on
in Item 2 of this Current Report are not available on the date of filing of this
Report. It is anticipated that such financial statements will be filed on or
before January 15, 1997. When such statements are available, they will be
filed under cover of Form 8-K/A.
(c) Exhibits
Exhibit Index
Exhibit Number Document
2 Agreement and Plan of Merger,
dated October 1, 1996, among
Healthcare Realty Trust Incorporated,
HRT of Roanoke, Inc., and Lewis-Gale
Building Corporation.
99(a) Lease Agreement,dated November 14, 1996,
between HRT of Roanoke,Inc.and Lewis-Gale
Clinic, LLC.
99(b) Guaranty of Obligations Pursuant to Lease
Administration Agreement, dated November 14, 1996,
executed by PhyCor,Inc.in favor of HRT of Roanoke,Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEALTHCARE REALTY TRUST INCORPORATED By:
/s/ ROGER O. WEST Roger O.West
Executive Vice President and General Counsel
Date: December 2, 1996
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (Agreement) is entered into effective as
of October 1, 1996, by and among HEALTHCARE REALTY TRUST INCORPORATED, a
Maryland corporation (HRT), HRT OF ROANOKE, INC., a Virginia corporation
(Acquisition Sub), and LEWIS-GALE BUILDING CORPORATION, a Virginia corporation
(the Company).
RECITALS
A. The Boards of Directors of HRT, Acquisition Sub and the Company have
approved the merger of the Company into Acquisition Sub, in accordance with
the Virginia Stock Corporation Act and applicable provisions of the statutes
of the Commonwealth of Virginia which permit the Merger, and the transactions
contemplated by this Agreement.
B. For federal income tax purposes, it is intended that the Merger qualify
as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended.
In order to consummate the Merger, HRT, Acquisition Sub and the Company, in
consideration of the mutual covenants and on the basis of the representations
and warranties set forth below, agree as follows:
DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings
indicated below:
ARTICLES OF MERGER shall mean the Articles of Merger set forth as Exhibit A
hereto to be filed with the Virginia State Corporation Commission in
accordance with the Virginia Stock Corporation Act.
BUSINESS AGREEMENT(S) shall mean any management agreement, service
contract,insurance contract, loan agreement, mortgage, easement, covenant,
restriction or other agreement or instrument affecting all or a portion
of the Property.
CLINIC SPACE shall mean the Phase I, Phase II, and Phase III Main Clinic
Building at the intersection of Braeburn Drive and Route 419, Roanoke, Virginia
and any other space occupied or leased, or to be occupied or leased, on the
Property by Lewis-Gale Clinic, LLC, a Virginia limited liability company,
from Acquisition Sub.
CLOSING shall have the meaning set forth in Section 1.2.
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CLOSING DATE shall have the meaning set forth in Section 1.2.
CLOSING PRICE shall mean the average closing sale price of a share of HRT
Common Stock on the New York Stock Exchange for the seven trading days
immediately preceding the Closing Date.
Code shall mean the Internal Revenue Code of 1986, as amended.
COMPANY CERTIFICATES shall mean a certificate or certificates that
immediately prior to the Effective Time represented outstanding shares of
Company Stock.
COMPANY DISSENTING SHARES shall mean shares of Company Stock with respect
to which dissenters' rights, if any, are granted by reason of the Merger under
the Virginia Stock Corporation Act and which are not voted in favor of the
Merger and otherwise comply with the dissenters' rights provisions of the
Virginia Stock Corporation Act.
COMPANY DISCLOSURE SCHEDULE shall mean that certain disclosure document
referred to in Section 2.1 hereof.
COMPANY FINANCIAL STATEMENTS shall have the meaning set forth in Section
2.9.
COMPANY STOCK shall mean each share of Common Stock, par value $15 per
share, of the Company.
CONTROL AND SUPPORT AGREEMENT shall mean that certain Control and Support
Agreement to be entered into between Acquisition Sub and Lewis-Gale Clinic,
LLC, with respect to the Lease Agreements pertaining to Non-Clinic Space.
CONVERSION RATIO shall mean a fraction, the numerator of which is equal to
(i) the Value of the Company divided by (ii) the Closing Price; and the
denominator is equal to the number of shares of the Company Stock issued and
outstanding as of the Closing Date. Credit Enhancements shall mean all security
deposits, security interests, letters of credit, pledges, prepaid rent or other
sums, deposits or interests, if any, held by the Company with respect to the
Property, the Tenant Leases or the Tenants.
CUSTODY AGREEMENT shall mean the Custody Agreement set forth as
Exhibit D hereto and described in Section 1.5.
CUSTODY SHARES shall mean the HRT Merger Shares to be deposited in
custody pursuant to the Custody Agreement.
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DISPOSITION shall have the meaning set forth in the Custody Agreement.
DUE DILIGENCE MATERIALS shall mean the information to be provided by the
Company to HRT pursuant to the provisions of Section 3.1 hereof.
EFFECTIVE TIME shall have the meaning set forth in Section 1.2.
ENGINEERING DOCUMENTS shall mean 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 Personal Property.
ENVIRONMENTAL CLAIM shall mean any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from, in part or in whole, (a) the presence, or
release into the environment, of any Hazardous Materials at any location,
whether or not owned or operated by the Company or (b) circumstances forming the
basis of any violation, or alleged violation, of the Hazardous Materials Laws.
EXCEPTION DOCUMENTS shall mean true, correct and legible copies of each
document listed as an exception to title on the Title Commitment.
EXCHANGE AGENT shall mean Boston EquiServe, L.P.
FIXTURES shall mean 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, and
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 all items included
within the category of the Company's Personal Property.
GUARANTY AGREEMENT shall mean a Guaranty Agreement, between
Acquisition Sub and PhyCor, Inc., a Tennessee corporation, pursuant to which
PhyCor, Inc. will guarantee the obligations of Lewis-Gale Clinic, LLC under the
Lease Administration Agreement.
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HAZARDOUS MATERIALS shall mean any toxic or hazardous waste,
pollutants or substances, including, without limitations, asbestos,
polychlorinated biphenyls, petroleum products and byproducts, substances defined
or listed as hazardous substance, toxic substance, toxic pollutant, medical
waste, or similarly identified substance or mixture, in or pursuant to the
Hazardous Materials Laws.
HAZARDOUS MATERIALS LAWS shall mean the federal, state
(including specifically, but not by way of limitation, the Commonwealth of
Virginia), and local environmental, health or safety laws, regulations,
ordinances, rules and policies and the common law relating to the use,
refinement, handling, treatment, removal, storage, production, manufacture,
transportation or disposal, emissions, discharges, releases or threatened
releases of Hazardous Materials, or otherwise relating to protection of the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), as the same may be amended or
modified, including, without limitation, the statutes listed below:
Federal Resources Conservation and Recovery Act of 1976, 42 U.S.C.ss. 6901,
et seq.
Federal Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. ss. 9601, et seq.
Federal Clean Air Act, 42 U.S.C. ss. 7401, et seq.
Federal Water Pollution Control Act, Federal Clean
Water Act of 1977, 33 U.S.C. ss. 1251, et seq.
Federal Insecticide, Fungicide, and Rodenticide Act, Federal Pesticide
Act of 1978, 7 U.S.C.ss. 136, et seq.
Federal Hazardous Materials Transportation Act, 48 U.S.C. ss. 1801,
et seq.
Federal Toxic Substances Control Act, 15 U.S.C. ss. 2601, et seq.
Federal Safe Drinking Water Act, 42 U.S.C. ss. 300f, et seq.
HRT COMMON STOCK shall mean the
shares of common stock, $.01 par value per share, of HRT. HRT Disclosure
Schedule shall mean that certain disclosure document referred to in Section 4.1
hereof.
HRT MERGER SHARES shall mean the shares of HRT Common Stock to be delivered
to the stockholders of the Company pursuant to this Agreement, including the
Custody Shares.
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HRT SEC DOCUMENTS shall mean each report, schedule, registration statement
and definitive proxy statement filed by HRT with the SEC since January 1, 1996,
as such documents have, since the time of their filing, been amended.
IMPROVEMENTS shall mean all buildings, improvements,
structures and Fixtures now or on the Closing Date (as defined below) located on
the Land, including, without limitation, landscaping, parking lots and
structures, roads, drainage and all above ground and underground utility
structures, equipment systems and other so-called infrastructure improvements.
INTANGIBLE PROPERTY shall mean all Permits and other
intangible property or any interest therein now or on the Closing Date owned or
held by the Company in connection with the Land, the Improvements or the
Fixtures, or any business or businesses now or hereafter conducted by the
Company 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.
INTELLECTUAL PROPERTY ASSETS shall mean the following to the
extent they are owned, used, or licensed (as licensee or licensor) by the
Company:
(i) The Company's name, all fictional business
names, registered and unregistered trade names, registered and
unregistered trademarks, service marks, d/b/a names,
applications, and notices of allowance;
(ii) All patents and patent applications;
(iii) All copyrights, and copyright registrations
and applications, in both published works and unpublished
works that are material to the Company's business;
(iv) All rights in mask works; and
(v) All know-how, trade secrets, confidential
information, software, technical information, process
technology, inventions, processes, formulae, plans, drawings,
and blue prints.
INTERIM BALANCE SHEEt shall have the meaning set forth in Section 2.9.
KNOWLEDGE shall mean the actual knowledge of a party including
(i) receipt of written notice by such party or (ii) knowledged learned after
inquiry of the directors, officers and employees of such party, but not of the
stockholders of such party in their respective capacity as stockholders.
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LAND shall mean the real property more particularly described on Exhibit C,
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 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
LEASE AGREEMENTS shall mean those certain lease agreements
with respect to the Clinic Space to be entered into between Acquisition Sub, as
lessor, and Lewis-Gale Clinic, LLC, as lessee, which lease agreements shall
contain terms of at least 15 years, CPI adjustments, and expense stops, and
rents as set forth on Exhibit F attached hereto, and such other usual and
customary terms found in commercial leases of this nature.
LEASE ADMINISTRATION AGREEMENT shall mean that certain Lease
Administration Agreement to be entered into between Acquisition Sub and
Lewis-Gale Clinic, LLC with respect to the Lease Agreements pertaining to the
Clinic Space.
LEGAL REQUIREMENT shall have the meaning set forth in Section 2.5.
MERGER shall mean the merger of the Company with and into
Acquisition Sub in accordance with the Virginia Stock Corporation Act as
provided in this Agreement and the Articles of Merger.
MERGER CONSIDERATION shall mean the HRT Merger Shares together with any
cash payments in lieu of fractional shares as provided in Section
1.6(d) hereof.
NON-CLINIC SPACE shall mean any portion of the Property other than Clinic
Space.
PERMITS shall mean all permits, licenses, approvals, entitlements and other
governmental and quasi-governmental authorizations including, without
limitation, certificates of occupancy or need, required in connection with the
ownership, planning, development, construction, use, operation or maintenance of
the Property (but excluding the Company's operating permits, licenses and
certificates of need). As used herein, quasi-governmental shall include the
providers of all utilities services to the Property.
PERMITTED EXCEPTIONS shall mean the title exceptions or defects which
have been approved in writing by HRT.
PERSONAL PROPERTY shall mean all Intangible Property, Warranties, and
Engineering Documents, all machinery, furnishings, equipment, tools, machinery,
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fixtures, computers, appliances and all other tangible personal property, other
than the Fixtures, now or on the Closing Date located on or about the Land or
Improvements or used in connection with the Company's business or the Property,
which is owned by the Company (specifically excluding computer equipment, food,
linens, clothing, medical records, vehicles and other personal property owned by
Tenants and personal property owned by patients and employees of Tenants).
PROPERTY shall mean, collectively, the Land and all rights, titles, and
appurtenant interests, the Credit Enhancements, the Business Agreements, the
Improvements, the Fixtures, the Personal Property, the Intangible Property, 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.
REAL PROPERTY shall mean the Land, the Improvements and the Fixtures.
REVIEW PERIOD shall mean a period commencing on the date of this Agreement
and ending 30 days from the date of HRT's receipt of the last of the following
documents: Due Diligence Materials, Title Commitment, Exception Documents,
Search Reports and Survey.
S-4 REGISTRATION STATEMENT shall have the meaning set forth in
Section 10.1.
SEARCH REPORTS shall mean reports of searches made of the Uniform
Commercial Code Records of the jurisdiction in which the Property is located,
and of the State Corporation Commission of Virginia, which searches shall
reflect that none of the Property is encumbered by liens other than liens
disclosed to HRT herein. The Search Reports shall be updated, at the Company's
expense, at or within one week prior to the Closing Date.
SEC shall mean the United States Securities and Exchange Commission.
SECURITIES ACT shall mean the Securities Act of 1933, as amended.
SURVEY shall mean 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 HRT, which shall: (a) include a legal
description of the Land by metes and bounds (which shall include a 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-thousandth
of said respective measurement); (b) accurately show the location on the Land of
all Improvements, building and setback 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 HRT, the Title Company, and any
third-party lender designated by HRT; (d) legibly identify any and all recorded
matters shown on said survey by appropriate volume and page recording references
with dates of recording noted and the survey shall show the location of all
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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.
TAXES shall mean all taxes, assessments and charges imposed by any federal,
state, local or foreign taxing authority, including interest, penalties and
additions thereto.
TENANT shall mean the lessees or tenants under the Tenant Leases, if any.
TENANT LEASES shall mean all subleases, if any, under the
Lease Agreements for the Clinic Space, and all other leases or rental
agreements, if any (written or verbal, now or hereafter in effect) that grant a
possessory interest in and to any space, including the Clinic Space and the
Non-Clinic Space, in the Improvements or that otherwise have rights with regard
to the use of the Land or Improvements, and all security deposits or Credit
Enhancements, if any, held in connection therewith.
TITLE COMMITMENt shall mean a current commitment issued by the Title
Company to the HRT pursuant to the terms of which the Title Company shall commit
to issue the Title Policy to HRT 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 shall mean a title insurance company, licensed in the
Commonwealth of Virginia, acceptable to HRT.
TITLE POLICY shall mean an ALTA Extended Coverage Owner's Policy of
Title Insurance (1970 Form B - 1987 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 Value of the Company, dated as of the Closing Date, issued by the
Title Company, insuring title to the fee interest in the Real Property in HRT,
subject only to the Permitted Exceptions (as hereinafter defined) 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 each Lease Agreement 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 acceptable to HRT.
TRANSACTION DOCUMENTS shall mean this Agreement and all other documents
and agreements to be executed and delivered by a party hereunder.
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VALUE OF THE COMPANY shall mean the value determined in accordance with
Exhibit B attached hereto; provided, however, that immediately preceding the
Closing, Exhibit B shall be adjusted to reflect the Company's financial status
as of the Effective Time.
VIOLATION shall have the meaning set forth in Section 2.4.
WARRANTIES shall mean all warranties, representations and guaranties with
respect to the Property, whether express or implied, which Company now holds or
under which Company is the beneficiary, including, without limitation, all of
the representations, warranties and guaranties given and/or assigned to the
Company under the Guaranty Agreement or the Tenant Leases.
ARTICLE I
THE MERGER
1.1. THE MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined below) the Company shall be merged with and into
Acquisition Sub and the separate existence of the Company shall thereupon cease,
in accordance with the applicable provisions of the Virginia Stock Corporation
Act of the Commonwealth of Virginia. Acquisition Sub will be the surviving
corporation in the Merger and will continue to be governed by the laws of the
Commonwealth of Virginia, and the separate corporate existence of Acquisition
Sub and all of its rights and liabilities as a corporation organized under the
laws of the Commonwealth of Virginia will continue unaffected by the Merger.
1.2. THE CLOSING. The delivery by HRT, Acquisition Sub, and the Company of
the various instruments and documents which this Agreement contemplates shall be
so delivered immediately prior to the Effective Time of the Merger shall
constitute the Closing. The Closing shall take place at the offices of HRT, 3310
West End Avenue, Nashville, Tennessee, at 10:00 a.m., local time, on the next
business day (or as soon thereafter as practicable) after the meeting of the
Company's stockholders referred to in Section 10.3, or at such other place and
date as the parties fix by mutual consent (the Closing Date). Contemporaneously
with the Closing, a fully executed copy of the Articles of Merger shall be filed
with the Virginia State Corporation Commission. Subject to and in accordance
with the laws of the Commonwealth of Virginia, the Merger will become effective
at the date and time the Articles of Merger are filed with the Virginia State
Corporation Commission or such later time or date as may be specified in the
Articles of Merger (the Effective Time).
1.3. THE SURVIVING CORPORATION. The Articles of Incorporation of
Acquisition Sub as in effect immediately prior to the Effective Time shall be
the Articles of Incorporation of Acquisition Sub, as the surviving corporation
of the Merger, on and after the Effective Time. The Bylaws of Acquisition Sub as
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in effect immediately prior to the Effective Time shall be the Bylaws of
Acquisition Sub, as the surviving corporation of the Merger, on and after the
Effective Time. From and after the Effective Time, the Board of Directors of
Acquisition Sub as in effect immediately prior to the Effective Time shall be
the Board of Directors of Acquisition Sub, as the surviving corporation of the
Merger, on and after the Effective Time.
1.4. CONVERSION OF SHARES.
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of any holder of any capital stock of Acquisition Sub, each issued
and outstanding share of common stock of Acquisition Sub shall continue
unchanged and remain outstanding as a share of common stock of Acquisition Sub
as the surviving corporation.
(b) At the Effective Time, by virtue of the Merger and without any action
on the part of any holder of any capital stock of the Company, each share of
Company Stock, other than Company Dissenting Shares, shall, subject to Section
1.6(d) below, be converted into, and become exchangeable for, the number of
shares of HRT Common Stock determined by the Conversion Ratio.
1.5. TAX CUSTODY. At the Closing, HRT shall issue and retain, in custody,
the Custody Shares pursuant to a Custody Agreement in the form attached hereto
as Exhibit D.
1.6. EXCHANGE OF STOCK CERTIFICATES.
(a) On or prior to the Closing Date, HRT shall direct the Exchange Agent to
issue the certificates representing the HRT Merger Shares required to effect the
exchange referred to in Section 1.4. HRT shall also deposit with the Exchange
Agent the cash required to make the cash payments in lieu of fractional shares
referred to in Section 1.6(d) below. The HRT Merger Shares into which shares of
Company Stock shall be converted in the Merger shall be deemed to have been
issued at the Effective Time.
(b) From and after the Effective Time, each holder of a Company
Certificate, other than Company Dissenting Shares, shall be entitled to receive
in exchange therefor, upon surrender thereof to the Exchange Agent (together
with representations reasonably required by HRT that the party surrendering such
shares has good and marketable title to such shares free of all restrictions on
transfers (other than those imposed by the Securities Act and applicable blue
sky laws), liens, encumbrances and security interests, and claims whatsoever) a
certificate or certificates representing the number of whole shares of HRT
Common Stock into which such holder's shares of Company Stock were converted
pursuant to Section 1.4 and cash in lieu of any fractional shares of such HRT
Common Stock pursuant to Section 1.6(d). From and after the Effective Time, HRT
shall be entitled to treat the Company Certificates which have not yet been
surrendered for exchange as evidencing the ownership of the number of full
shares of HRT Common Stock into which the shares of the Company Stock
represented by such certificates shall have been converted pursuant to Section
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1.4, notwithstanding the failure to surrender such certificates. However,
notwithstanding any other provision of this Agreement, until holders or
transferees of Company certificates have surrendered them for exchange as
provided herein, no dividends shall be paid with respect to any shares
represented by such Company Certificates and no payment for fractional shares
shall be made. Upon surrender of a Company Certificate, there shall be paid to
the holder of such certificate the amount of any dividends which theretofore
became payable, but which were not paid by reason of the foregoing, with respect
to the number of whole shares of HRT Common Stock represented by the certificate
issued upon such surrender. If any certificate for shares of HRT Common Stock is
to be issued in a name other than that in which the Company Certificate
surrendered in exchange therefor is registered, it shall be a condition of such
exchange that the person requesting such exchange shall pay any transfer or
other taxes required by reason of the issuance of certificates for such shares
of HRT Common Stock in a name other than that of the registered holder of any
such Company Certificate surrendered.
(c) As soon as practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of a Company Certificate (i) a form letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Company Certificate shall pass, only upon actual delivery
of the Company Certificate to the Exchange Agent), (ii) instructions for use in
effecting the surrender of the Company Certificate in exchange for a certificate
representing shares of HRT Common Stock, and (iii) the form of letter to make
the required representations as to title of the Company Certificate. Upon
surrender of the Company Certificate for cancellation to the Exchange Agent,
together with a duly executed letter of transmittal and such other documents as
the Exchange Agent shall require, the holder of such Company Certificate shall
be entitled to receive in exchange therefor a certificate representing that
number of whole shares of HRT Common Stock into which the shares of Company
Stock represented by the Company Certificate so surrendered shall have been
converted pursuant to the provisions of Section 1.4, and the Company Certificate
so surrendered shall be cancelled. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a holder of shares of
Company Stock for any shares of HRT Common Stock or dividends or distributions
thereon delivered to a public official pursuant to applicable escheat laws.
(d) Notwithstanding any other provision of this Agreement or the Articles
of Merger, no certificates or scrip for fractional shares of HRT Common Stock
shall be issued upon the surrender for exchange of any Company Certificate
pursuant to this Article I in the Merger and no HRT Common Stock dividend, stock
split or interest shall relate to any fractional security, and such fractional
interests shall not entitle the owner thereof to vote or to any other rights of
a security holder. In lieu of any such fractional shares, each holder of Company
Stock who would otherwise have been entitled to a fraction of a share of HRT
Common Stock upon surrender of the Company Certificate for exchange pursuant to
this Article I hereof, shall be entitled to receive from the Exchange Agent a
cash payment in lieu of such fractional share equal to such fraction multiplied
by the Closing Price.
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1.7. DISSENTING SHARES. Notwithstanding anything to the contrary contained
in this Agreement or the Articles of Merger, holders of Company Dissenting
Shares shall not be entitled to shares of HRT Common Stock pursuant to Section
1.4, unless and until the holder thereof shall have failed to perfect or shall
have effectively withdrawn or lost such holder's right to dissent from the
Merger under the Virginia Stock Corporation Act, and shall be entitled to
receive only the payment provided for pursuant to the Virginia Stock Corporation
Act. If any such holder shall have failed to perfect or shall have effectively
withdrawn or lost such holder's dissenters' rights under the Virginia Stock
Corporation Act, such holder's Company Dissenting Shares shall thereupon be
deemed to have been converted into and to have become exchangeable for, as of
the Effective Time, the right to receive the Merger Consideration.
1.8. CLOSING OF TRANSFER BOOKS. From and after the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of shares of
the Company Stock shall thereafter be made. If, after the Effective Time, any
Company Certificates are presented to HRT, they shall be cancelled and exchanged
for Merger Consideration in accordance with the procedures set forth in this
Article I.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. GENERAL STATEMENT. The Company represents and warrants to HRT and
Acquisition Sub that to the Knowledge of the Company the statements contained in
this Article II are correct and complete as of the date of this Agreement and
will be correct and complete on and as of the Closing (as though made then and
as though the Closing Date were substituted for the date of this Agreement
throughout this Article II), except as set forth in the Company Disclosure
Schedule delivered by the Company to HRT. The survival of all such
representations and warranties shall be in accordance with Section 9.1 hereof.
2.2. ORGANIZATION AND STANDING OF THE COMPANY. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
Commonwealth of Virginia, with corporate power to own property and carry on its
business as it is now being conducted. Copies of the Articles of Incorporation
of the Company, certified as of a recent date by the State Corporation
Commission of Virginia and delivered to HRT, are complete and accurate. The
Company is not required to be qualified to transact business as a foreign
corporation in any jurisdiction other than the Commonwealth of Virginia. The
Company has no subsidiaries nor any interest in any other corporation, firm, or
partnership.
2.3. AUTHORIZATION OF THE TRANSACTION. The Company has all requisite
corporate power and authority to enter into the Transaction Documents and,
subject to approval of this Agreement by the stockholders of the Company, to
consummate the transactions contemplated thereby. The Board of Directors of the
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Company, by the unanimous vote of all directors present, has approved the Merger
and the Transaction Documents and determined that the Merger is fair to and in
the best interests of the Company's stockholders and has adopted resolutions
recommending approval and adoption of the Merger and the Transaction Documents
by the stockholders of the Company. No other corporate or legal proceedings on
the part of the Company, other than the approval of the Company's stockholders,
are necessary to approve and authorize the execution and delivery of the
Transaction Documents and the consummation of the transactions contemplated
thereby.
2.4. VALID AND BINDING AGREEMENT.This Agreement has been and,on the Closing
Date, the Transaction Documents will have been, duly and validly executed and
delivered by the Company and, subject to such approval of the Transaction
Documents by the stockholders of the Company, this Agreement is and, on the
Closing Date, each Transaction Document will be, a valid and binding obligation
of the Company enforceable in accordance with its terms.
2.5. NO CONFLICT. Neither the execution and delivery by the Company of the
Transaction Documents nor the consummation of the transactions contemplated
thereby nor compliance with any of the provisions of the Transaction Documents
will (i) conflict with or result in a breach of any provision of the Articles of
Incorporation or By-Laws of the Company, (ii), except as described in Schedule
2.5, violate, or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both
would constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or accelerate the performance required by, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties of the Company or result in being declared void,
voidable, without further binding effect, or subject to amendment or
modification any of the terms, conditions or provisions of, any material note,
bond, mortgage, indenture, deed of trust, or any material license, franchise,
permit, lease, contract, agreement or other material instrument or commitment or
obligation pertaining to the business conducted by the Company to which the
Company or any of its properties may be bound or affected, (iii) violate any
law, statute, order, writ, injunction, decree, judgment, ruling, rule,
regulation, policy, treaty, directive, convention, interpretation, guideline, or
judgment of any federal, state, local or foreign court or governmental authority
(a Legal Requirement) applicable to the Company or any of its properties, or
(iv) except as described in Schedule 2.5, require any consent, approval or
authorization of, or notice to, or declaration, filing or registration with, any
governmental or regulatory authority.
2.6. REQUIRED CONSENTS. Except as described in Schedule 2.6, neither the
Company nor any of its stockholders is a party to or bound by any mortgage,
lien, deed of trust, or any material lease, agreement or instrument, or any
statute, order, judgment or decree pertaining to the business conducted by the
Company which would require the consent of another to the execution of this
Agreement or prohibit or require the consent of another to, any of the
transactions referred to in or contemplated by the Transaction Documents.
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2.7. CAPITALIZATION. The Company has an authorized capitalization of 50,000
shares of common stock, all of one class of the par value of $15 per share, and
as of the date of this Agreement, 18,510 shares are issued and outstanding,
fully paid, and nonassessable. There are no outstanding subscriptions, options,
contracts, commitments, preemptive rights, securities convertible into or
exchangeable for shares of Common Stock, agreements, or demands of any character
relating to the authorized but unissued stock of the Company under which the
Company would be obligated to issue or purchase, reacquire or redeem shares of
its capital stock.
2.8. NO VIOLATION OR DEFAULT. (a) Neither the Company nor any of its
officers, directors or employees (because of any such person's activities on
behalf of the Company) is in violation of, or under investigation with respect
to, or has been charged with or given notice of any violation of, any applicable
Legal Requirement which could have a material adverse effect on the business
conducted by the Company, nor is there any basis therefor. The Company has filed
with the proper authorities all statements and reports required by the laws,
regulations, licensing requirements, and orders to which it or any of its
officers, directors or employees (because of any such person's activities on
behalf of the Company) is subject, the failure to file which could have a
material adverse effect on the business conducted by the Company.
(b) Except as described in chedule 2.8, the ompany has performed all
material obligations required to be performed by it, and the Company is not in
default (and no event has occurred which, with the passage of time or the giving
of notice, or both, would constitute a default) with respect to any obligation
to be performed under any material agreement or arrangement to which the assets
of the Company are subject, nor is there any claim of such default, which
default or its consequences might materially adversely affect the business
conducted by the Company or financial condition of the Company.
2.9. FINANCIAL STATEMENTS. Set forth as Schedule 2.9 are true, correct and
complete copies of the following: (i) the audited balance sheets of the Company,
including the notes thereto, as of June 30, 1993 through 1995, respectively,
(ii) the audited statements of income, changes in stockholders' equity and cash
flow of the Company, including in each case the notes thereto and the report of
the Company's independent certified public accountants thereon, for the years
ended June 30, 1993 through 1995, respectively, and (ii) the unaudited balance
sheet of the Company as of June 30, 1996 (the Interim Balance Sheet), including
the related statements of income and changes in stockholders' equity and cash
flow of the Company for the 12 months ended June 30, 1996, including in each
case the notes thereto. (All of the financial statements referred to above in
this Section 2.9 are hereinafter collectively referred to as the Company
Financial Statements.) The Company Financial Statements have been prepared from
and are in accordance with the books and records of the Company, are true,
complete and accurate, and fairly present the financial position, results of
operations and changes in financial position as of the dates and for the periods
indicated, in each case in accordance with generally accepted accounting
principles consistently applied, subject, in the case of interim financial
statements, to normal recurring year-end adjustments (the effect of which will
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not, individually or in the aggregate, be materially adverse). The Company
Financial Statements do not contain any statement which is false or misleading
with respect to any material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading. Schedule 2.9 contains a true and correct schedule which describes
all of the prepaid items and deposits of the Company as of the date of the
Interim Balance Sheet.
2.10. BOOKS AND RECORDS. The books of account, minute books, stock record
books and other records of the Company, all of which have been made available to
HRT, are complete and correct and have been maintained in accordance with the
sound business practices and the requirements of Section 13(b)(2) of the
Securities Exchange Act of 1934 (regardless of whether or not the Company is
subject to that Section), including, but not limited to, the maintenance of an
adequate system of internal controls. The minute books of the Company contain
accurate and complete records of all meetings held of, and corporate action
taken by, the stockholders, the board of directors and committees of the board
of directors of the Company and no meetings of any such stockholders, board of
directors or committees has been held for which minutes have not been prepared
and are not contained in such minute books. At the Closing, all of those books
and records will be in the possession of HRT. The Company has furnished HRT with
any annual management letters from the Company's independent certified public
accountants for each of the last three years to the extent such letters address
the business conducted by the Company.
2.11. CONTRACTS; NO DEFAULTS.(a) Schedule 2.11 lists, and the Company has
delivered to HRT copies of, all material contracts to which the Company is a
party or by which the Company is bound. Schedule 2.11 also sets forth reasonably
complete details concerning such contracts, including, among other things, the
parties to the contracts, the amount of the remaining commitment of the Company
thereunder.
(b) Except as described in Schedule 2.11, all of the contracts listed in
pursuant to paragraph (a) hereof are in full force and effect, are valid and
enforceable in accordance with their terms, and no condition exists or event has
occurred which, with notice or lapse of time or both, would constitute a default
or a basis for force majeure or other claim of excusable delay or
non-performance thereunder. All parties with which the Company has material
contractual arrangements in respect of the business conducted by the Company
are, to the Knowledge of the Company, in substantial compliance therewith and
are not in default (and no event has occurred which, with the passage of time or
the giving of notice, or both would constitute a default) thereunder. To the
best knowledge of the Company, the terms and conditions of all such contracts
are reasonable and customary in the industries and trades in which the Company
operates, and there are no extraordinary terms contained therein.
(c) There are no renegotiations of, or attempts to renegotiate, or
outstanding rights to renegotiate, any material amounts paid or payable to the
Company under current or completed contracts with any person having the
contractual or statutory right to demand or require such renegotiation. To the
Knowledge of the Company, no such person has made written demand for such
renegotiation.
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2.12. The Property.
(a) The Company, at the Closing, has and following the Merger, Acquisition
Sub will have, good, marketable and insurable title to all of its assets,
including the Property, free and clear of any deeds of trust, mortgages, liens
(other than the lien for ad valorem taxes for the current year, not yet due and
payable), 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 all of its assets, including the Property,
except Permitted Exceptions.
(b) There are no adverse or other parties in possession of the Property or
of any part thereof except the Company and Tenants, if any, under valid and
effective Tenant Leases. 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.
(c) Each Tenant Lease is in full force and effect and has not been amended,
modified, supplemented or terminated in any way that has not been disclosed to
HRT in writing. The Tenant Leases constitute all written and oral agreements of
any kind for the leasing, rental or occupancy of any portion of the Property. No
default or breach on the part of the landlord or Tenant, if any, exists under
any of the Tenant Leases nor will any exist as of the Closing. All rents due
under the leases have not been reduced, modified or forgiven in any way and have
been timely paid. All 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. The Company has not accepted the payment of rent or other sums due
under any of the Tenant Leases for more than one month in advance.
(d) As of the Closing, none of the Tenant Leases and none of the rents or
other charges payable thereunder, if any, will have been assigned, pledged or
encumbered.
(e) As of the Closing, 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.
(f) No notice has been received 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 and as of the Closing no such notice will have been
received which shall not have been cured. No notice has been received by the
Company 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.
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(g) No pending condemnation, eminent domain, assessment or similar
proceeding or charge affecting the Property or any portion thereof exists and
none will exist as of the Closing Date. The Company has not heretofore received
any notice, and has no Knowledge, that any such proceeding or charge is
contemplated. The Company has not received any notice of a proposed increase in
the assessed valuation of the Property.
(h) All Improvements (including all utilities) have been substantially
completed and installed in accordance with 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, and, as of
the Closing Date, all of the same will be in full force and effect. The
Improvements, as designed and constructed, comply with all statutes,
restrictions, regulations and ordinances applicable thereto.
(i) To the best knowledge of the Company, the existing water, sewer, gas
and electricity lines, storm sewer and other utility systems on the Property are
adequate to serve the utility needs of the Property. All utilities required for
the operation of the Improvements enter the Property through adjoining public
streets or through adjoining private land in accordance with valid public or
private easements that will inure to the benefit of Acquisition Sub. All
approvals, licenses and permits required for said utilities have been obtained
and are, and will be as of the Closing Date, 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 Acquisition Sub.
(j) The location, construction, occupancy, operation and use of the
Property (including the Improvements) do not violate any applicable law,
statute, ordinance, rule, regulation, order or determination of any governmental
authority or any board of fire underwriters (or other body exercising similar
functions), judicial precedent or any restrictive covenant or deed restriction
(recorded or otherwise) affecting the Property or the location, construction,
occupancy, operation or use thereof, including, without limitation, all
applicable zoning ordinances and building codes, flood disaster laws and health
and environmental laws and regulations.
(k) To the best knowledge of the Company, there are no 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, and as of
the Closing will be, in 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 person, entity or authority, including but not limited to any
Tenant, lender, insurance provider or governmental authority.
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(l) Except as described in Schedule 2.12(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 provide the basis for a mechanic's, materialman's or other
lien against the Property or any portion thereof.
(m) There exist no service contracts, management or other agreements
applicable to the Property other than those furnished to HRT pursuant to Article
III. There are no agreements or understandings (whether oral or written) with
respect to the Property or any portion thereof, to which the Company is a party,
other than those delivered to HRT pursuant to Article III.
(n) No default or breach exists, or as of the Closing will exist, 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 Company, 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 HRT
pursuant to Article III. All judicial proceedings concerning the Property will
be finally dismissed and terminated prior to the Closing Date.
(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 obtained, and are and will be as of
the Closing Date 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 the
Company, the Property or any Tenant.
2.13. ENVIRONMENTAL. Except as described in Schedule 2.13: (a) the Company
is currently in full compliance with all Hazardous Materials Laws which
compliance includes, but is not limited to, the possession by the Company of all
permits and other governmental authorization required under the Hazardous
Materials Laws, and compliance in all respects with the terms and conditions
thereof;
(b) The Company has not stored, disposed of or arranged for disposal of any
Hazardous Materials on any of the Real Property (consisting of owned Real
Property and leased Real Property), except in full compliance with the Hazardous
Materials Laws;
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(c) The Company has not received any communication whatsoever (written or
oral), whether from a governmental authority, citizens group, employee or
otherwise, that alleges that the Company is not in full compliance with the
Hazardous Materials Laws, and there are no circumstances that may prevent,
interfere with, or make more expensive the Company's full compliance in the
future. There is no Environmental Claim pending or threatened against, or which
has been made known to, the Company.
(d) Except as described in Schedule 2.13, during the period the Real
Property has been held by the Company, its affiliates or its predecessors in
interest, there have been no actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the generation, handling,
transportation, treatment, storage, release, emission, discharge, presence or
disposal of any Hazardous Materials, that could form the basis of any
Environmental Claim against the Company.
(e) Without in any way limiting the generality of the foregoing, (i) all
underground storage tanks, and the capacity, uses, date of installation, and
contents of such tanks, located on the Real Property are identified in Schedule
2.13, (ii) all underground storage tanks are in full compliance with the
Hazardous Materials Laws; (iii) there is no asbestos contained in or forming
part of any building, building component, structure or office space of the Real
Property, and (iv) no polychlorinated biphenyls have been used or stored on the
Real Property.
2.14. INSURANCE. (a) Schedule 2.14 contains an accurate and complete
description of all policies of property, fire and casualty, product liability,
workers' compensation, and other forms of insurance owned or held by the Company
relating to the Property and the business conducted by the Company. Such
description provides reasonably material details concerning such policies.
Copies of such policies have been delivered to HRT.
(b) All policies described in paragraph (a) hereof (i) are issued by
insurance companies reasonably believed by the Company to be financially sound
and reputable, (ii) are sufficient for material compliance with all Legal
Requirements and contracts to which the Company is a party or by which it is
bound, (iii) are valid, outstanding, and enforceable policies, (iv) provide
adequate insurance coverage for the assets and the operations of the Company for
all material risks normally insured against by a person carrying on the same
business or businesses as the Company, and (v) will not in any way be affected
by, terminate, or lapse by reason of, the transactions contemplated by the
Transaction Documents.
(c) The Company has not received, (i) any notice of cancellation of any
policy referred to in paragraph (a) hereof or refusal of coverage thereunder,
(ii) any notice that any issuer of such policy has filed for protection under
applicable bankruptcy laws or is otherwise in the process of liquidating or has
been liquidated, or (iii) any other indication that such policies are no longer
in full force or effect or that the issuer or any such policy is no longer
willing or able to perform its obligations hereunder.
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2.15. ABSENCE OF UNDISCLOSED LIABILITIES. (a) Except as and to the extent
reflected or specifically reserved against (which reserves are adequate in
amount) in the Company Financial Statements, or in the notes to the Company
Financial Statements for the periods then ended, the Company did not have at the
respective dates of the Company Financial Statements any material liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise
and whether due or to become due), except for liabilities which were incurred in
the ordinary course of business consistent with past practice and have been
discharged or paid in full prior to the date hereof. Except for expenses
incurred in connection with the transactions contemplated by the Transaction
Documents, since the date of the Interim Balance Sheet, the Company has not
incurred any liabilities or obligations (whether accrued, absolute, contingent
or otherwise) which (i) were not incurred in the ordinary course of business and
were in excess of $5,000 individually (counting liabilities and obligations
arising from one transaction or a series of transactions between the same or
related parties, and all periodic payments under any agreement providing for
periodic payments, as a single liability or obligation) or (ii) were not
incurred in the ordinary course of business and were taken together with all
other such liabilities and obligations of the Company in excess of $10,000 in
the aggregate, or (iii) have a reasonable probability of resulting in any change
in or effect on the business of the Company that is, or with reasonable
certainty might be, materially adverse to the business conducted by the Company.
(b) Except as and to the extent reflected or disclosed in the Company
Financial Statements or incurred subsequent to the date of the Interim Balance
Sheet, in the ordinary course of business, or liabilities incurred in connection
with the transactions contemplated by the Transaction Documents, the Company
will not have at the date of the Closing any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise and whether due or to
become due) which might have a material adverse effect on the business conducted
by the Company.
2.16. ABSENCE OF CERTAIN CHANGES. (a) Except as described in Schedule 2.16,
since the date of the Interim Balance Sheet, there has not been any change in or
effect on the business operations, prospects, assets, or condition of the
Company that is, or might be, materially adverse to the business conducted by
the Company, and, to the Knowledge of the Company, no fact or condition exists
or is reasonably contemplated or threatened which the Company believes has a
reasonable probability of resulting in any change in or effect on the business
conducted by the Company that is, or might be, materially adverse.
(b) Except as described in Schedule 2.16, since the date of the Interim
Balance Sheet, the Company has conducted its businesses only in the ordinary
course of business and there has not been any:
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(i) Change in its authorized or issued capital stock; grant
of any stock option or right to purchase of its shares of capital stock;
issuance of any security conv into such capital stock; grant of any registration
rights; purchase, redemption, retirement or other acquisition by the Company of
any shares of any such capital stock; or declaration or payment of any dividend
or other distribution or payment in respect of shares of capital stock;
(ii) Amendment to the Company's Articles of Incorporation or
By-Laws;
(iii) Payment or increase by the Company of any bonuses,
salaries, or other compensation to any director, officer, employee, or
stockholder (except to directors, officers, or employees in the ordinary course
of business consistent with past practice) or entry into any employment,
severance, or similar contract with any director, officer, or employee;
(iv) Adoption of, or increase in, any profit sharing,
bonus, deferred compensation, savings, insurance, pension, retirement, or
other employee benefit plan for or with any employees of the Company;
(v) Damage, destruction, or loss to any asset or property of
the Company, whether or not covered by insurance, affecting materially and a
dversely the properties, assets,business, financial condition, or prospects of
the Company,taken as a whole;
(vi) Entry into, termination, or receipt of notice of termination
of (i) any joint venture, credit, or similar agreement, or (ii) any contract or
transaction involving a total remaining commitment by the Company of at least
$5,000;
(vii) Sale (other than sales of inventory in the ordinary
course of business), lease, or other disposition of any asset or property of
the Company or mortgage, pledge, or imposition of any lien or other encumbrance
on any material asset or property of the Company,including, without limitation,
the sale, lease, or other disposition of any Intellectual Property Assets;
(viii) Cancellation or waiver of any claims or rights with a
value to the Company in excess of $5,000;
(xi) Conduct of business or entering into any transaction, other
than in the ordinary course of business of the Company
(x) Material change in the accounting methods followed by the
Company; and
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(xi) Agreement or understanding, whether or not in writing, to do
any of the foregoing by the Company.
2.17. LEGAL PROCEEDINGS, ETC. Except as described on Schedule 2.17, there
are not now, and within the past three years there have not been any material
claims, actions or proceedings pending, or, to the Knowledge of the Company,
threatened, relating to the Property or the business conducted by the Company
(or any of the Company's officers, directors, employees or representatives in
connection with the business conducted by or any such person's activities on
behalf of the Company), before any court or governmental body, United States or
foreign. To the Knowledge of the Company, within the past three years, the
Company has not been the subject of any material investigation by any
governmental body or agency thereof in respect of the Property or the business
conducted by the Company. Schedule 2.17 contains complete descriptions of all
complaints against the Company in pending litigation related to the Property or
the business conducted by the Company. There are no such claims, actions,
proceedings or investigations pending or, to the Company's Knowledge, threatened
challenging the validity of the transactions contemplated by the Transaction
Documents. The Company is not now, and has not been, a party to any injunction,
order, or decree restricting the method of the conduct of the business conducted
by the Company.
2.18. INTELLECTUAL PROPERTY. The Company has no Intellectual Property
Assets which are material to the Company's operations.
2.19.TAXES. The Company has timely filed all returns,declarations,reports,
information returns and statements required to be filed by it in respect of any
Taxes and has paid all Taxes currently due and payable by it. No notice of any
imposed tax deficiency, assessment or levy has been received by the Company, and
there exists no basis for the assertion or imposition of any such deficiency,
assessment or levy. The Company has duly withheld from each payment from which
such withholding is required by law, the amount of all Taxes required to be
withheld therefrom and has paid the same (to the extent due), or otherwise set
aside, together with the employer's share of the same, if any, to the proper tax
receiving officers. There are no tax liens on any of the assets of the Company,
and no basis exists for the imposition of any such liens. The Company has not
filed a consent under Code Section 341(f) concerning collapsible corporations.
The Company has made no payments, is not obligated to make any payments nor is
it a party to any agreement that under certain circumstances could obligate it
to make any payments that will not be deductible under Code Section 280G. The
Company has no liability for the Taxes of any person under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise. Except as described in
Schedule 2.19, no Internal Revenue Service audit of the Company is pending or
threatened, and the results of any completed audit are reflected in the Company
Financial Statements.
2.20. NO BROKERS OR FINDERS. All negotiations on the part of the Company
related to this Agreement have been accomplished solely by the Company without
the assistance of any person employed as a broker or finder. The Company has not
retained, nor otherwise utilized, the services of any broker or finder in
connection with the transaction contemplated by this Agreement. The Company has
not done anything to give rise to any valid claims against HRT, Acquisition Sub
or the Company for a brokerage commission, finder's fee, or any similar charge.
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2.21. EMPLOYEE MATTERS. The Company has no employees or any employment,
bonus, profit-sharing, percentage compensation, deferred compensation, pension
contracts and agreements,or any consulting agreements to which the Company is a
party.
2.22. LABOR MATTERS. The Company has no collective bargaining agreements
with any labor union and there are no current negotiations with a labor union.
The Company is in substantial compliance with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor practice. The Company
will advise HRT and Acquisition Sub of any such labor dispute which shall arise
before the Closing.
2.23. EMPLOYEE BENEFIT PLANS; ERISA. The Company does not have any bonus,
deferred compensation, hospitalization or other medical, stock purchase,
pension, life or other insurance, profit-sharing or retirement plan or
arrangement, and each other employee benefit plan or arrangement, of the Company
for or on behalf of employees of the Company employed in connection with the
business conducted by the Company.
2.24. FULL DISCLOSURE. As of the Closing Date, the Company will have
disclosed all events, conditions, and facts materially affecting the business
and prospects of the Company. The Company has not withheld knowledge of any
events, conditions, and facts that it has reasonable ground to know may
materially affect the business and prospects of the Company. None of the
representations and warranties made by the Company in this Agreement or set
forth in any other instrument furnished to HRT and/or Acquisition Sub contain
any untrue statement of a material fact, or fails to state a material fact.
ARTICLE III
ITEMS TO BE FURNISHED TO HRT BY THE COMPANY
3.1. DOCUMENTS TO BE DELIVERED. Within 15 days after the date of this
Agreement, the Company shall deliver to HRT for its review the following items:
(a) True, correct, complete and legible copies of all Tenant Leases if
any, Business Agreements, Warranties, Permits, reports,and Engineering Documents
if any, in the Company's possession or control;
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(b) A true,complete and correct 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 the Tenant Lease and all amendments
and modifications thereto; (iii) the name of the Tenant, licensee or occupant;
(iv) the term; (v) the rents and other charges payable thereunder; (vi) the
rents or other charges in arrears or prepaid thereunder, if any, and the period
for which any such rents and other charges are in arrears or have been
prepaid; (vii) the nature and amount of the security deposits thereunder; if any
(viii) options to renew or extend contained in the Tenant Lease; (ix) any free
rent, concessions, allowances, rebates or refunds to which the Tenant, licensee
or occupant may have been or be entitled; (x) certification that no disputes
exist or claims of breach on the part of the Company; (xi) the status of Tenant
improvements to be performed by the Company; and (xii) the nature and amount of
any commissions payable with respect thereto;
(c) True, correct, complete and legible copies of tax statements or
assessments for all real estate and personal property taxes assessed against the
Property for the current and three prior calendar years;
(d) True, correct, complete and legible copies of all Business
Agreements to which the Company or the Property are subject;
(e) True, correct, complete and legible copies of all existing fire
and extended coverage insurance policies and any other insurance policies
pertaining to the Property;
(f) A complete, itemized and detailed inventory of the Personal
Property;
(g) True, correct, complete and legible copies of all instruments
evidencing, governing or securing the payment of any loans secured by the
Property or related thereto;
(h) A complete and detailed description of all machinery, tools and
equipment, in which the Company has a leasehold interest, with a description of
each interest;
(i) List of all employees of the Company as of the date of this
Agreement, their job titles, annual rates of compensation, accrued
vacation, holiday pay and sick leave as of the Closing Date, and other fringe
benefits, if any, and a description of any severance pay arrangements, if any,
and the amounts payable with respect to such accrued vacation, holiday pay or
sick leave and the rate at which such accrued vacation, holiday pay and sick
leave accrues;
(j) A list of all bank accounts of the Company;
(k) A Phase I Environmental Assessment dated no earlier than
January 1, 1996, together with true, correct, complete and legible copies of any
and all other environmental studies or impact reports relating to the Property,
if any, in the Company's possession or control, 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;
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(l) True, correct, complete and legible copies of any and all
litigation files with respect to any pending litigation and claim files for any
claims made or threatened, the outcome of which might have an adverse effect on
the Property or the use and operation of the Property. The Company may make such
files available for inspection and copying by HRT at the Property;
(m) Legible copies of any survey and title policy relating to the
Property existing in the possession of the Company as of the date of execution
of this Agreement; and
(n) The Company Disclosure Schedule, which shall be attached hereto
as an exhibit and incorporated herein by reference.
3.2. REVIEW BY HRT. During the Review Period, HRT shall be entitled to
review the Due Diligence Materials delivered by the Company to HRT pursuant to
the provisions of Section 3.1 above. If HRT shall, for any reason in HRT's sole
discretion, judgment and opinion reasonably exercised, disapprove or be
dissatisfied with any aspect of such information, or the Property, then HRT
shall be entitled to terminate this Agreement by giving written notice thereof
to the Company on or before the expiration of the Review Period, whereupon this
Agreement shall automatically be terminated and have no further force and
effect, and thereafter no party to this Agreement shall have any further
obligations or liabilities to the other hereunder, except as set forth in
Section 12.2 hereof. Alternatively, HRT may give written notice setting forth
any defect, deficiency or encumbrance and specify a time within which the
Company may remedy or cure such default (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 HRT, in HRT's sole discretion,
within the time period specified in the written notice, this Agreement shall
automatically terminate as provided in this Section. HRT agrees to maintain the
confidentiality of all Due Diligence Materials; provided, however, that HRT
shall have the right to distribute Due Diligence Materials to any person deemed
a necessary party by HRT to include but not limited to regulatory and
governmental agencies, HRT's counsel, accountants, engineers, underwriters,
underwriters' counsel and such others deemed necessary; and provided, further,
that upon termination of this Agreement or consummation of the Closing, HRT
shall continue to hold all such Due Diligence Materials confidential except to
the extent required by law to disclose such material or in defense of any cause
of action based upon such material.
3.3. DELIVERY OF ADDITIONAL DOCUMENTS. Within 30 days after the date of
this Agreement, the Company shall deliver or cause to be delivered to HRT, the
Title Commitment, Exception Documents, Survey, and Search Reports.
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3.4. REVIEW BY HRT OF ADDITIONAL DOCUMENTS. HRT 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 HRT's receipt of the last of such items. In
the event any matters appear therein that are unacceptable to HRT, HRT shall,
within said 30-day period, notify the Company in writing of such fact. Upon the
expiration of said 30-day period, HRT 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, however, 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 HRT
objects to any such matters within the 30-day Review Period, the Company shall
have 30 days from receipt of such notice within which to eliminate, modify or
insure over any such unacceptable exceptions or items. In the event that the
Company is unable to eliminate, modify or insure over such unacceptable items to
the satisfaction of HRT on or before the expiration of said 30-day period, HRT
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
the Company, whereupon this Agreement shall automatically be terminated and have
no further force and effect, except as set forth in Section 12.2 hereof.
3.5. MODIFICATION OF DOCUMENTS. 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 HRT has made an
objection), HRT shall have the right to review and approve or disapprove any
such modification and to terminate this Agreement in the event that the Company
is unable to eliminate any such matters to the satisfaction of HRT in accordance
with the provisions of Section 3.4 above, except that HRT'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 HRT's receipt of such
modification, and (b) the Closing Date, and all other time periods referred to
in Section 3.4 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 IV
REPRESENTATIONS AND WARRANTIES OF HRT AND ACQUISITION SUB
4.1.GENERAL STATEMENT. HRT and Acquisition Sub represent and warrant to the
Company that to the Knowledge of HRT and Acquisition Sub the statements
contained in this Article IV are correct and complete as of the date of this
Agreement and will be correct and complete on and as of the Closing (as though
made then and as though the date of Closing were substituted for the date of
this Agreement throughout this Article IV), except as set forth in the HRT
Disclosure Schedule delivered by HRT and Acquisition Sub to the Company. The
survival of all such representations and warranties shall be in accordance with
Section 9.1 hereof.
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4.2. ORGANIZATION AND STANDING. HRT is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Maryland,
with corporate power to own its property and carry on its business as it is now
being conducted. Copies of the Articles of Incorporation of HRT, certified as of
a recent date by the Department of Assessments and Taxation of the State of
Maryland and delivered to the Company, are complete and accurate as of the date
of this Agreement. HRT is qualified to transact business as a foreign
corporation and is in good standing in all jurisdictions in which its principal
properties are located.
4.3. SUBSIDIARIES. Acquisition Sub is a corporation duly organized, validly
existing, and in good standing under the laws of the Commonwealth of Virginia,
with corporate power to own its property and carry on its business as it is now
being conducted. Copies of the Articles of Incorporation of Acquisition Sub,
certified as of a recent date by the State Corporation Commission of Virginia
and delivered to the Company, are complete and accurate as of the date of this
Agreement. Acquisition Sub is not required to be qualified to transact business
as a foreign corporation in any jurisdiction other than the Commonwealth of
Virginia. HRT owns all of the issued and outstanding capital stock of
Acquisition Sub.
4.4. AUTHORIZATION OF THE TRANSACTION. HRT and Acquisition Sub have all
requisite corporate power and authority to enter into the Transaction Documents,
to consummate the transactions contemplated thereby, and to carry on the
business of the Company following the Closing. The Board of Directors of HRT,
acting for itself and as the sole stockholder of Acquisition Sub, has approved
the Merger and the Transaction Documents and determined that the Merger is fair
to and in the best interests of HRT and Acquisition Sub. No other corporate or
legal proceedings on the part of HRT or Acquisition Sub are necessary to approve
and authorize the execution and delivery of the Transaction Documents and the
consummation of the transactions contemplated thereby.
4.5.VALID AND BINDING AGREEMENT.This Agreement has been and, on the Closing
Date, the Transaction Documents will have been, duly and validly executed and
delivered by HRT and Acquisition Sub and this Agreement is and, on the Closing
Date, each Transaction Document will be, a valid and binding obligation of HRT
and Acquisition Sub enforceable in accordance with its terms.
4.6. COMPLIANCE WITH LAW. The execution and delivery of the Transaction
Documents, the consummation of the transactions contemplated thereby and the
fulfillment of and compliance with the terms and provisions thereof do not and
will not (a) violate any judicial or administrative order, award, judgment or
decree applicable to HRT or Acquisition Sub or (b) conflict with any of the
terms, conditions or provisions of the Articles of Incorporation or By-laws of
HRT or Acquisition Sub.
4.7. SEC DOCUMENTS. Within 15 days of the date hereof, HRT will make
available to the Company a true and complete copy of each of the HRT SEC
Documents. Such documents are all the documents (other than preliminary
material) that HRT was required to file with the SEC since such date. As of
their respective dates, the HRT SEC Documents complied in all material respects
with the requirements of the Securities Act or the Securities and Exchange Act
of 1934, as amended, as the case may be, and the rules and regulations of the
SEC thereunder applicable to such HRT SEC Documents and none of the HRT SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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4.8. STOCK EXCHANGE LISTING. On the Closing Date, the HRT Merger Shares
will have been approved for listing on the New York Stock Exchange upon
official notice of issuance.
4.9. STATUS OF HRT MERGER SHARES. On and after the Effective Date, upon due
and proper exchange of Company Stock therefor, the HRT Merger Shares will be
validly authorized, duly issued, fully paid and nonassessable.
4.10. BROKERS. HRT has not retained nor otherwise utilized the services of
any broker or finder in connection with the transaction contemplated by this
Agreement. Neither HRT nor Acquisition Sub has done anything to give rise to any
valid claims against the Company for a brokerage commission, finder's fee, or
any similar charge.
ARTICLE V
COVENANTS OF THE COMPANY
5.1. CONDUCT OF BUSINESS IN ITS ORDINARY COURSE. The Company covenants
and agrees with HRT and/or Acquisition Sub, from the date of this Agreement
until the Closing Date or earlier termination of this Agreement:
(a) The Company shall:(i) operate the Property in the ordinary course of
business consistent with reasonable and prudent business practices; (ii) enter
into no new Tenant Leases except as shall be approved in writing by HRT;
(iii) grant no rent concessions or special termination terms to any Tenants;
(iv) not collect rents in advance for more than one month; and (v) fully
maintain, repair and replace the Property, all Improvements, landscaping and
other appurtenances in good condition and repair.
(b) HRT shall be entitled to make all inspections or investigations
desired by HRT with respect to the Property or any portion thereof,and 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.
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(c) The Company shall cause to be maintained in full force fire and
extended coverage insurance upon the its assets, including 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 at least
such amounts as are maintained by the Company on the date of this Agreement.
(d) The Company shall pay when due all bills and expenses of the Company
and the Property. The Company shall not voluntarily enter into or assume any
new contracts or obligations which are in addition to or different from those
furnished and disclosed to HRT and reviewed and approved pursuant to
Article III.
(e) The Company shall not create or voluntarily permit to be created any
liens, easements or other conditions affecting any portion of its assets,
including the Property, or the uses thereof without the prior written consent
of HRT.
(f) The Company will pay,as and when due, all interest and principal and
all other charges payable under any indebtedness of the Company from the date
hereof until Closing and will not suffer or permit any default or amend or
modify the documents evidencing or securing any such indebtedness without the
prior written consent of HRT.
(g) The Company will: (i) give to HRT, 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
relating to the Company and the Property; (ii) furnish to HRT all information
concerning the Property which HRT, its attorneys, accountants or other
representatives will reasonably request; (iii) to extent in the Company's
possession or control, furnish to HRT, its attorneys, accountants and other
representatives, if HRT deems necessary, all information necessary for an audit
to be conducted with respect to the operations of the Company and 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; (iv) cooperate with HRT, its
attorneys, accountants and other representatives, if HRT deems necessary, in the
conducting of such audit and will execute and deliver to the accountants
conducting such audit such statement 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; and (v) consult with
HRT at all times until the Closing Date with respect to the operation and
conduct of the Company's business.
(h) The Company shall not remove any Personal Property from the
Property or Improvements without replacing same with substantially similar
items of equal or greater value.
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(i) The Company shall not, directly or indirectly, solicit or encourage
(including by way of furnishing any nonpublic information concerning
the business, properties or assets of the Company), or enter into any
negotiations or discussions concerning, any Acquisition Proposal (as defined
below). The Company will notify HRT promptly by telephone, and thereafter
promptly confirm in writing, if any such information is requested from, or any
Acquisition Proposal is received by, the Company. In the event the Company
receives an Acquisition Proposal, the Company shall promptly inform the maker
thereof of the existence of the provisions of this Section 5.1(i) and the
Company or its board of directors shall reject such Acquisition Proposal. As
used in this Agreement, Acquisition Proposal shall mean any proposal received by
the Company (or any of its affiliates, officers or directors), prior to the
Closing for the acquisition, by sale, merger or otherwise, of any of the assets,
or any portion thereof, or of the business conducted by the Company.
5.2. SATISFY CONDITIONS PRECEDENT. The Company will use its best efforts
to perform and fulfill all obligations on its part to be performed and fulfilled
under this Agreement and to satisfy all conditions precedent contained in this
Agreement.
5.3. ACCESS TO INFORMATION AND DOCUMENTS.DOCUMENTS
(a) The Company will afford the officers and representatives of HRT, from
the date of this Agreement until consummation of the Merger, full access
during normal business hours to all properties, books, accounts, contracts,
commitments, and any other records of any kind of the Company. Sufficient access
shall be allowed to provide HRT with full opportunity to make any investigation
it desires to make of the Company, and to keep itself fully informed of the
affairs of the Company.
(b) In addition, the Company will permit HRT to make extracts or copies
of all such books, accounts, contracts, commitments, and records, and to
furnish to HRT within five days after demand, any further financial and
operating data of the Company as HRT reasonably requests.
(c) HRT will use any information obtained under this Section only for its
own purposes in connection with the consummation of the transaction
contemplated by this Agreement, and will not divulge the information to any
other person.
5.4.DISSENTERS. The Company shall promptly notify HRT of the receipt by the
Company of each written notice from any stockholder of the Company to dissent
from the Merger. The Company shall comply with all provisions of the Virginia
Stock Corporation Act relating to stockholders of the Company entitled to
dissent from the Merger, including appropriate notice in the Proxy Statement of
the right to dissent as provided in Section 13.1-732 of the Virginia Stock
Corporation Act.
5.5. EARNINGS AND PROFITS ANALYSIS. The Company shall make an analysis of
the Company's books and records to determine the amount, if any, of
accumulated and/or current earnings and profits, within the meaning of Sections
312 and/or 316(a) of the Code. Prior to the Closing Date, the Company will make
one or more special distributions or dividends of the amount of any such
earnings and profits. Such distributions or dividends shall reduce the Value of
the Company, determined in accordance with Exhibit B.
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5.6. TAXES. Lewis-Gale Clinic, LLC shall be responsible for and shall
indemnify and hold the Company and HRT harmless from and against any
liability for federal, state or local income taxes (including, without
limitation, interest and penalties imposed thereon) as well as legal, accounting
and other expenses; provided, however, that the Company and HRT shall be paid
their legal, accounting and other expenses only if Lewis-Gale Clinic, LLC shall
not have paid such liabilities within 30 days of being notified in writing of
the same sustained by HRT or the Company to the extent that such liability
relates to any tax period ending prior to or on the Closing Date.
5.7. NEGATIVE COVENANTS. Except with the prior written consent of HRT,
the Company, its agents, employees, and directors will not:
(a) Incur any liabilities other than current liabilities incurred in the
ordinary course of business;
(b) Incur any mortgage, lien, pledge, hypothecation, charge, encumbrance,
or restriction of any kind, except liens for taxes not due;
(c) Become a party to any contract,or renew, extend, or modify any existing
contract, except in the ordinary course of business;
(d) Make any capital expenditures,except for ordinary repairs,maintenance,
and replacement;
(e) Declare or pay any dividend on or make any other distribution to
stockholders, except for payment of any special distributions or dividends of
earnings and profits pursuant to Section 5.5;
(f) Purchase, retire, or redeem any shares of its capital stock;
(g) Issue or sell additional shares of its capital stock, whether or not
such shares have been previously authorized or issued;
(h) Issue or sell any warrants, rights, or options to acquire any shares
of its capital stock;
(i) Amend its Articles of Incorporation or Bylaws;
(j) Pay or agree to pay any bonus, increase in compensation, pension, or
severance pay to any director, stockholder, officer, consultant, agent, or
employee;
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(k) Discharge or satisfy any lien or encumbrance, nor pay any
obligation or liability, except current liabilities shown on the Interim Balance
Sheet, or incurred in the ordinary course of business since the date of the
Interim Balance Sheet;
(l) Merge or consolidate with any other entity;
(m) Enter into any transactions or take any acts that would constitute
a breach of the representations, and warranties contained in this Agreement;
and
(n) Institute, settle, or agree to settle any action or proceeding
before any court or governmental body.
ARTICLE VI
COVENANTS OF HRT
6.1. CONDUCT OF BUSINESS IN ITS ORDINARY COURSE. HRT will carry on its
business in substantially the same manner as before the date of execution of
this Agreement.
6.2. SATISFY CONDITIONS PRECEDENT. HRT will use its best efforts to
perform and fulfill all obligations on its part to be performed and fulfilled
under this Agreement and to satisfy all conditions precedent contained in this
Agreement.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
7.1. CONDITIONS PRECEDENT TO CLOSING. The obligations of the Company to
consummate the Merger and the other transactions contemplated by the
Transaction Documents shall be subject to the conditions precedent specified
in this Article VII, unless waived by the Company.
7.2.TRUTH OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH COVENANTS
The representations and warranties of HRT contained in this Agreement shall
be true and correct as of the Closing Date with the same effect as though made
on and as of the Closing Date. HRT shall have performed all obligations and
complied with all covenants required by this Agreement to be performed or
complied with by it prior to the Closing Date. HRT shall deliver to the Company
a certificate dated as of the Closing Date and signed by an officer of HRT,
certifying the truth and correctness of the representations and warranties.
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7.3. REGISTRATION STATEMENT. The S-4 Registration Statement described
in Article X covering the issuance of the HRT Merger Shares shall have been
declared effective by the SEC and no stop order suspending its effectiveness
shall have been issued by the SEC.
7.4.NO RESTRICTIONS.No action, suit, or proceeding shall be pending before
any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (i) prevent consummation of any of the
transactions contemplated by the Transaction Documents or (ii) cause any of the
transactions contemplated by the Transaction Documents to be rescinded following
consummation.
7.5. TAX OPINION. The Company shall have received an opinion from Gentry,
Locke, Rakes & Moore, the Company's counsel, to the effect that for federal
income tax purposes: (i) the Merger will constitute a reorganization under
Section 368(a)(1)(A) of the Code; (ii) no gain or loss will be recognized by the
Company on (a) the transfer of its assets in constructive exchange for the HRT
Merger Shares and the assumption of the Company's liabilities or (b) the
constructive distribution of the HRT Merger Shares to the Company's
stockholders; (iii) no gain or loss will be recognized by any stockholder of the
Company on the exchange of shares of Company Stock solely for HRT Merger Shares
(including, without limitation, the stockholder's Custody Shares and any
fractional share interest); (iv) a stockholder's basis in the stockholder's HRT
Merger Shares (including, without limitation, Custody Shares and any fractional
share interest) will be the same as the stockholder's basis in the shares of
Company Stock exchanged therefor; (v) a stockholder's holding period for such
HRT Merger Shares will include the stockholder's holding period for such shares
of Company Stock if they are held as a capital asset at the Effective Time; and
(vi) a stockholder's receipt of cash in lieu of a fractional share of HRT Common
Stock pursuant to Section 1.6(d) hereof will be treated as received as full
payment in exchange for such fractional share pursuant to Section 302(a) of the
Code.
7.6. OPINION FROM COUNSEL TO HRT. HRT shall deliver to the Company an
opinion of counsel to HRT, dated the Closing Date, in form and substance
acceptable to the Company.
7.7. STOCKHOLDER APPROVAL. The stockholders of the Company, at a
meeting of the stockholders properly held, shall have approved the Merger and
adopted this Agreement and the other Transaction Documents by the vote of not
less than 66 2/3% of the votes entitled to be cast.
7.8. LENDER CONSENT. Each of the holders of any indebtedness which is
secured by a lien against the Property shall have, in form acceptable to
the Company, consented in writing to the consummation of the transactions
contemplated by this Agreement and agreed (i) that the consummation of the
transactions contemplated by this Agreement will not constitute a default under
the documents evidencing or securing such indebtedness; (ii) to permit HRT to
prepay the outstanding balance of the indebtedness secured by such liens at a
point in time substantially contemporaneous with the Closing, without the
payment of any prepayment fee or penalty in connection therewith and, (iii) to
deliver a recordable release of all such liens to HRT upon receipt of such
prepayment.
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7.9. LEASE AND GUARANTY AGREEMENT EFFECTIVE. Acquisition Sub shall have
entered into the Lease Agreements, the Lease Administration Agreement and
the Control and Support Agreement, each with Lewis-Gale Clinic, LLC, and shall
have entered into the Guaranty Agreement with PhyCor, Inc.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF HRT
8.1. CONDITIONS PRECEDENT TO CLOSING. The obligations of HRT to consummate
the Merger and the other transactions contemplated by the Transaction Documents
shall be subject to the conditions precedent specified in this Article VIII,
unless waived by HRT.
8.2.TRUTH OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH COVENANTS
The representations and warranties of the Company contained in this
Agreement shall be true and correct as of the Closing Date, with the same effect
as though made on and as of the Closing Date. The Company shall have performed
all obligations and complied with all covenants required by this Agreement to be
performed or complied with by it prior to the Closing Date. The Company shall
deliver to HRT a certificate dated the Closing Date and signed by an officer of
the Company, certifying the truth and correctness of the representations and
warranties.
8.3. STOCKHOLDER APPROVAL.The stockholders of the Company, at a meeting of
the stockholders properly held, shall have approved the Merger and adopted this
Agreement and the other Transaction Documents by the vote of not less than
66 2/3% of the votes entitled to be cast. No more than five percent of the
stockholders of the Company shall have dissented pursuant to the applicable
provisions of the Virginia Stock Corporation Act and elected to receive cash in
lieu of the Merger Shares.
8.4.REGISTRATION STATEMENT EFFECTIVE. The S-4 Registration Statement
covering the issuance of the HRT Merger Shares shall be effective under the
Securities Act and no stop order suspending its effectiveness shall have been
issued by the SEC.
8.5. LEASE AND GUARANTY AGREEMENT EFFECTIVE. Acquisition Sub shall have
entered into the Lease Agreements, the Lease Administration Agreement and
the Control and Support Agreement, each with Lewis-Gale Clinic, LLC, and shall
have entered into the Guaranty Agreement with PhyCor, Inc.
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8.6. ACCEPTABILITY OF PAPERS AND PROCEEDINGS. To the extent requested
by HRT,the form and substance of all papers and proceedings under this
Agreement shall be acceptable to counsel to HRT.
8.7. OPINION FROM COUNSEL TO THE COMPANY. The Company shall deliver to HRT
an opinion, dated the Closing Date, of Gentry, Locke, Rakes & Moore, counsel to
the Company, in form and substance acceptable to HRT.
8.8. TITLE INSURANCE POLICIES AND CONFIRMATION. The Company shall deliver
to HRT title insurance policies and supplemental confirmation from the issuing
company that the Land described in the policies and owned by the Company is
covered by the policies.
8.9. RESIGNATIONS OF OFFICERS AND DIRECTORS. The Company shall deliver
to HRT the written resignations of all officers and directors of the Company.
8.10. AGREEMENT OF AFFILIATES. The Company shall deliver to HRT, no later
than ten days after the date of this Agreement, a letter identifying each
person whom the Company reasonably believes is an affiliate of the Company for
purposes of Rule 145 under the Securities Act. The Company shall use its best
efforts to cause each person who is identified as an affiliate in such letter to
deliver to HRT, not later than the date on which the Merger is approved by the
stockholders of the Company, a written agreement, substantially in the form of
Exhibit E hereto, providing that such person will not sell, pledge, transfer, or
otherwise dispose of the shares of Company Common Stock held by such person
except as contemplated by this Agreement and will not sell, pledge, transfer, or
otherwise dispose of the shares of HRT Common Stock to be received by such
person upon consummation of the Merger except in compliance with applicable
provisions of the Securities Act and the rules and regulations thereunder. The
Surviving Corporation shall not be required to maintain the effectiveness of the
S-4 Registration Statement under the Securities Act for the purposes of resale
of the HRT Common Stock by such affiliates.
8.11. NO RESTRICTIONS. No action, suit, or proceeding shall be pending
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent consummation of any
of the transactions contemplated by the Transaction Documents, (ii) cause any of
the transactions contemplated by the Transaction Documents to be rescinded
following consummation, (iii) affect adversely the right of HRT to own
Acquisition Sub following the consummation of the transactions contemplated by
the Transaction Documents, or (iv) affect adversely the right of Acquisition Sub
to own its assets and to operate its businesses following the Merger.
8.12. NO MATERIAL CHANGES TO PROPERTY.
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(a) No material or substantial change shall have occurred with respect to
the condition, financial or otherwise, of the Property.
(b) Neither the Property nor any material part thereof or interest
therein shall have been taken by execution or other process of law in any action
prior to the Closing Date.
(c) The Company shall have obtained nd delivered to HRT a current report,
dated no more than ten days prior to this Agreement, from a licensed pest
control company reasonably acceptable to HRT, 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.
(d) HRT shall have satisfactorily completed an inspection of the Property
with respect to the physical condition thereof by agents or contractors selected
by HRT.
(e) HRT shall have received, in form acceptable to HRT, evidence of
compliance by the Property with all building codes, zoning ordinances and
other governmental entitlements materially necessary for the operation of the
Property for the current and intended use, including without limitation,
certificates of occupancy, healthcare provider permits and agreements, Medicare
and Medicaid approvals, licenses and such other permits, licenses, approvals,
agreements and authorizations as are required for the operation of the Property
for the current and intended use.
(f) All necessary approvals, consents, estoppel certificates and the like
of third parties to the validity and effectiveness of the transactions
contemplated hereby have been obtained.
(g) HRT is reasonably satisfied that the Property is sufficient and
adequate for the Company to carry on the business now being conducted thereon
and 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.
(h) HRT shall have received from the Company written evidence reasonably
satisfactory to HRT's counsel from which it may be essentially concluded
that the Property and the buildings and Improvements located thereon and the
current use thereof are in compliance with applicable zoning ordinances and
bylaws and that the same does not violate any other land use control laws,
ordinances, bylaws, rules and regulations applicable thereto.
(i) HRT shall have received, at the Company's expense,a Phase I
environmental site assessment report covering the Property in form and content
reasonably acceptable to HRT.
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(j) No material portion of the Property shall have been destroyed by fire
or casualty.
(k) No condemnation, eminent domain or similar proceedings shall have been
commenced or threatened with respect to any material portion of the Property.
(l) HRT shall have received from the Company certification that the
Company has purchased the Property and has all right, title and interest in
such Property necessary to complete the transactions contemplated by this
Agreement.
8.13. EARNINGS AND PROFITS. HRT shall have received a certificate, dated
the Closing Date, from the chief accounting officer of the Company to the
effect that immediately prior to the Effective Time, the Company did not have
accumulated and/or current earnings and profits within the meaning of Sections
312 and/or 316(a) of the Code.
8.14. LENDER CONSENT. Each of the holders of any indebtedness which is
secured by a lien against the Property shall have, in form acceptable to
HRT, consented in writing to the consummation of the transactions contemplated
by this Agreement and agreed (i) that the consummation of the transactions
contemplated by this Agreement will not constitute a default under the documents
evidencing or securing such indebtedness; (ii) to permit HRT to prepay the
outstanding balance of the indebtedness secured by such liens at a point in time
substantially contemporaneous with the Closing, without the payment of any
prepayment fee or penalty in connection therewith and, (iii) to deliver a
recordable release of all such liens to HRT upon receipt of such prepayment.
ARTICLE IX
SURVIVAL OF WARRANTIES AND LIABILITY
9.1. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
of fact contained in this Agreement, or in any memorandum, certificate,
letter, document, or other instrument delivered by or on behalf of the Company,
HRT, or Acquisition Sub pursuant to this Agreement shall be deemed
representations and warranties made by any such party, respectively, to each
other party under this Agreement. The covenants, representations, and warranties
of the parties and the stockholders shall survive the Closing Date, and all
inspections, examinations, or audits on behalf of the parties and the
stockholders for a period of two years following the Closing Date.
9.2. INDEMNIFICATION.(a) Lewis-Gale Clinic, LLC hereby agrees to indemnify
and defend, at its sole cost and expense, and hold HRT and/or Acquisition
Sub, their representatives, agents, successors and assigns, harmless from and
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against and to reimburse (and, upon request, advance funds for expenses) HRT
and/or Acquisition Sub, their representatives, agents, successors, and assigns
from and against any and all claims, demands, actions, causes of action, losses,
damages, liabilities, costs and expenses (including, without limitation,
reasonable costs of investigation, attorney's fees and court costs) of any and
every kind or character, known or unknown, fixed or contingent, asserted against
or incurred by HRT and/or Acquisition Sub at any time and from time to time by
reason of or arising out of (a) the breach of any representation or warranty of
the Company set forth in Article II, (b) the failure of the Company, in whole or
in part, to perform any obligation required to be performed by the Company
pursuant to this Agreement or (c) the ownership, construction, occupancy,
operation, use and maintenance of the Property prior to the Closing Date. This
indemnity applies, without limitation, to the violation on or before the Closing
Date of any Hazardous Materials 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), 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 9.2 as to covenants,
agreements and indemnities of the Company and a cause of action as to the
Company's representation and warranties shall survive the consummation of the
Merger and shall continue thereafter in full force and effect for the benefit of
HRT and/or Acquisition Sub, their representatives, agents, successors and
assigns. Notwithstanding any provision of this Agreement to the contrary, HRT
and/or Acquisition Sub may exercise any right or remedy HRT and/or Acquisition
Sub may have at law or in equity should Lewis-Gale Clinic, LLC fail to meet,
comply with or perform its indemnity obligations required by this Section 9.2.
b) Whenever any claim shall arise for indemnification hereunder,
each party seeking indemnification (each an Indemnified Party) shall send
Lewis-Gale Clinic, LLC a written notice (an Indemnity Notice) promptly after
such Indemnified Party has actual knowledge of the facts constituting the basis
for such claim. Any Indemnity Notice shall state the amount of indemnification
sought and all material facts constituting the basis for such claim. A copy of
any documentation or other information in the possession of such Indemnified
Party which supports such claim shall be sent with the Indemnity Notice. Failure
to send an Indemnity Notice promptly shall not release Lewis-Gale Clinic, LLC
from liability hereunder, unless such failure has a material adverse effect on
Lewis-Gale Clinic, LLC's defense of the claims which are the subject of the
Indemnity Notice.
(c) Any Indemnified Party in respect of any claim, action, suit or
proceeding brought by a third party (a Third Party Claim) shall,
promptly after receipt of notice of commencement of such claim, action, suit or
proceeding in respect of which claim is to be made against Lewis-Gale Clinic,
LLC, send an Indemnity Notice to Lewis-Gale Clinic, LLC together with copies of
all papers served on such Indemnified Party in connection with such Third Party
Claim. Upon receipt of such an Indemnity Notice, Lewis-Gale Clinic, LLC shall be
entitled to participate in such Third Party Claim and, if it so elects, and upon
acknowledgment of such Indemnified Party's right to indemnification in the event
such claim or proceeding is successful, to assume the defense thereof, with
counsel satisfactory to such Indemnified Party.
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(d) Lewis-Gale Clinic,LLC shall defend, and shall have the right to settle,
claims or suits by third parties that are payable or that are to be
indemnified by Lewis-Gale Clinic, LLC under this Agreement. Each Indemnified
Party shall reasonably cooperate with Lewis-Gale Clinic, LLC in the defense of
claims and suits that Lewis-Gale Clinic, LLC defends, and Lewis-Gale Clinic, LLC
shall reimburse each Indemnified Party for out-of-pocket expenses incurred in
cooperating at Lewis-Gale Clinic, LLC's request. The Indemnified Party shall not
settle such claims or suits defended by Lewis-Gale Clinic, LLC without
Lewis-Gale Clinic, LLC's prior consent, which shall not be unreasonably
withheld. An Indemnified Party shall have the right to approve defense counsel
selected by Lewis-Gale Clinic, LLC, which approval shall not be unreasonably
withheld, and the right fully to participate in the defense of such claims and
suits at the Indemnified Party's sole cost and expense. An Indemnified Party
shall have the right to defend and settle claims or suits without prejudice to
any of their rights against Lewis-Gale Clinic, LLC under this Agreement if
Lewis-Gale Clinic, LLC declines or is unable to undertake the defense of a claim
or suit within a reasonable time after Lewis-Gale Clinic, LLC's receipt of
notice thereof.
(e) Payment of any amounts due an Indemnified Party hereunder shall be made
by Lewis-Gale Clinic, LLC by periodic payments during the course of the
investigation or defense (subject to repayment in the event indemnification was
not required by this Section) in cash no later than the 30th day after the date
an Indemnity Notice in respect of such amounts is received by Lewis-Gale
Clinic, LLC.
ARTICLE X
REGISTRATION OF HRT MERGER SHARES
10.1.REGISTRATION STATEMENT. HRT shall promptly prepare and file with the
SEC a registration statement on Form S-4 (the S-4 Registration Statement)
relating to the issuance of the HRT Merger Shares. HRT shall use its best
efforts to have the S-4 Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing. HRT shall also
take any action (other than qualifying to do business in any jurisdiction in
which it is now not so qualified) required to be taken under any applicable
state securities laws in connection with the issuance of HRT Merger Shares, and
the Company shall furnish all information concerning the Company and the holders
of the Company Stock as may be reasonably requested in connection with any such
action.
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10.2. INFORMATION SUPPLIED. The Company shall cooperate with HRT in
preparing the S-4 Registration Statement and shall furnish to HRT all
information concerning the Company required to be set forth therein
pursuant to the Securities Act, and the applicable rules and regulations
thereunder in connection with the transactions contemplated by this Agreement;
comply with any reasonable comments or requests for changes of the SEC with
respect thereto; distribute the final Proxy Statement included in the S-4
Registration Statement to its stockholders in accordance with applicable law;
and take all such other action necessary or appropriate to obtain the lawful
approval by the stockholders of the Company of the Merger and the Transaction
Documents. The management of the Company shall recommend in the Proxy Statement
approval by the stockholders of the Merger and the Transaction Documents.
Immediately prior to the initial mailing of the Proxy Statement, the Chairman of
the Board and President and Treasurer of the Company shall certify to HRT that,
to the best of their Knowledge, the information as to the Company contained in
the Proxy Statement is true and complete in all material respects, does not
contain an untrue statement of a material fact and does not omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
10.3. STOCKHOLDER MEETING. The Company shall call a meeting of its
stockholders to be held as promptly as practicable following the date the
S-4 Registration Statement is declared effective by the SEC for the purpose of
voting upon the Merger and the Transaction Documents, and related matters.
ARTICLE XI
TAX STATUS OF MERGER
11.1. REORGANIZATION. The parties acknowledge that the Merger is intended
to qualify as a reorganization under Section 368(a)(1)(A) of the Code, and each
party agrees to report the Merger as such a reorganization for income tax
purposes.
11.2. ELECTION. Acquisition Sub and HRT agree to elect, pursuant to IRS
Notice 88-19 and any applicable regulations, to be subject to rules similar
to the rules of Section 1374 of the Code with respect to all property acquired
from the Company in the Merger. The stockholders of the Company shall not be
liable in any way for any tax or other liability incurred by the Company, HRT,
or Acquisition Sub as a result of the failure to make such election, nor shall
any Custody Shares be distributed to HRT or otherwise used to compensate HRT,
Acquisition Sub, or the Company for any tax or other liability resulting from
such failure.
11.3. ACTIONS FOLLOWING CLOSING. HRT and Acquisition Sub represent and
warrant that they have no plan or intention to, and agree that for at least
three years after the Effective Time they shall use their reasonable best
efforts not to, take any action that would cause the Merger to fail to qualify
as a reorganization under Section 368(a)(1)(A) of the Code, including (without
limitation) causing or permitting: (i) HRT to own less than 100% of the issued
and outstanding shares of capital stock of Acquisition Sub, (ii) Acquisition Sub
to liquidate or to merge into another corporation, and (iii) Acquisition Sub to
voluntarily sell or otherwise dispose of the Property or to cease using the
Property in its business.
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11.4.REAL ESTATE INVESTMENT TRUST. HRT represents and warrants that it is a
real estate investment trust under Section 856 of the Code and that Acquisition
Sub is a qualified REIT subsidiary under Section 856(i)(2) of the Code. HRT
covenants that it shall use its reasonable best efforts to continue to qualify
as a real estate investment trust and to have Acquisition Sub continue to
qualify as a qualified REIT subsidiary for federal income tax purposes.
ARTICLE XII
TERMINATION
12.1. OPTIONAL TERMINATION. Subject to the provisions of Section 12.2,
this Agreement may, by written notice given at or prior to the Closing in the
manner hereinafter provided, be terminated:
(i) By the mutual consent of HRT and the Company;
(ii) By either party at any time after December 31, 1996, if, by that date,
any of the conditions to that party's obligations to close contained herein
shall not have been satisfied or waived;
(iii) By either HRT or the Company, if a material default or breach shall
be made by the other party hereto with respect to the due and timely
performance of any of its covenants and agreements contained herein, or with
respect to the accuracy of any of its representations and warranties contained
herein; or
(iv) By either HRT or the Company, if any court of competent jurisdiction
in the United States or other United States governmental body shall have issued
an order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by the Transaction
Documents and such order, decree, ruling or other action shall have become final
and non-appealable.
(v) By HRT, if the Company has suffered any damage, destruction, or loss,
whether or not covered by insurance, that materially and adversely affects the
Property, business, or financial condition of the Company.
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(vi) By HRT pursuant to Sections 3.2 or 3.4 hereof.
12.2. EFFECT OF TERMINATION. In the event this Agreement is terminated
pursuant to Section 12.1, all further obligations of the parties hereunder
(other than the obligations set forth in Sections 3.2 and 13.1 which shall
survive) shall terminate; provided, however, that, if this Agreement is so
terminated by a party because one or more of the conditions to such party's
obligations hereunder is not satisfied as a result of the other party's willful
failure to comply with its obligations under this Agreement, the terminating
party's right to pursue all legal remedies for breach of contract or otherwise,
including, without limitation, damages relating thereto, shall also survive such
termination unimpaired.
ARTICLE XIII
MISCELLANEOUS
13.1. EXPENSES. HRT, Acquisition, Sub, and the Company will each bear
its own costs and expenses incurred by it arising out of the Transaction
Documents and the transactions contemplated thereby, including but not limited
to all fees and expenses of its counsel and accountants.
13.2. AMENDMENT. This Agreement may be amended or modified at any time
and in any manner only by an instrument in writing executed by HRT, Acquisition
Sub and the Company.
13.3. MODIFICATIONS, AMENDMENTS AND WAIVERS. At any time prior to the
Closing, to the extent permitted by law, (i) the parties hereto may, by
written agreement, modify, amend or supplement any term or provision of this
Agreement and (ii) any term or provision of this Agreement may be waived by
the party which is entitled to the benefits thereof.
13.4. ASSIGNMENT.
(a) Neither this entire Agreement nor any right created by this Agreement
shall be assignable by any party hereto without the prior written consent of the
other, except by the laws of succession.
(b) Except as limited by the provisions of (a) above, this Agreement shall
be binding on and inure to the benefit of the respective successors and assigns
of the parties, as well as the parties.
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(c) Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties and their successors, any rights or
remedies under this Agreement.
13.5. NOTICES. Except as otherwise provided in this Agreement, any notice,
payment, demand or communication required or permitted to be given by any
provision of this Agreement shall be duly given if delivered in writing
personally to the person to whom it is authorized to be given, or if sent by
mail or overnight delivery service, telecopy, telex or telegraph, as follows:
(a) In the case of HRT or Acquisition Sub, to:
Healthcare Realty Trust Incorporated
Attn: Roger O. West
3310 West End Avenue, Fourth Floor
Nashville, Tennessee 37203
Telecopier No.: (615) 269-8122
with a copy to:
Theodore W. Lenz
Waller Lansden Dortch & Davis
511 Union Street, Suite 2100
Nashville, Tennessee 37219
Telecopier No.: (615) 244-6804
with a copy to:
Richard D. Bird
Baker, Donelson, Bearman & Caldwell
511 Union Street, Suite 1700
Nashville, Tennessee 37219
Telecopier No.: (615) 726-0464
(b) In the case of the Company, to:
Lewis-Gale Building Corporation
Attn: L. B. Brooks, FACMPE
President and Chief Executive Officer
1802 Braeburn Drive
Salem, Virginia 24153
Telecopier No.: (540) 989-0879
with a copy to:
Bruce C. Stockburger, Esq.
Gentry, Locke, Rakes & Moore
10 Franklin Road, S.E.
P.O. Box 1018
Roanoke, Virginia 24005
Telecopier No.: (540) 983-9400
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Any such notice shall be deemed to be given as of the date so delivered, if
delivered personally, by telecopy, telex or telegraph, or as of the date on
which the same was deposited in the United States mail or overnight delivery
service, charges prepaid or provided for, addressed and sent as aforesaid.
13.6. HEADINGS. Section, Article, paragraph and other headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
13.7. ENTIRE AGREEMENT. This Agreement and the exhibits to this instrument
contain the entire agreement between the parties with respect to the transaction
contemplated by this Agreement. It may be executed in any number of counterparts
but the aggregate of the counterparts together constitute only one and the same
instrument.
13.8. SCHEDULES. All schedules, appendices and exhibits referred to in or
attached to this Agreement are integral parts of this Agreement as if fully set
forth herein and all statements appearing therein shall be deemed to be
disclosed only in connection with the specific representation to which they are
explicitly referenced.
13.9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
13.10. PRESS RELEASES. No announcement to the press concerning this
Agreement and the transactions contemplated by the Transaction Documents
shall be made by HRT or the Company unless the same shall be approved in advance
by HRT. Nothing contained in this Agreement shall prevent any party to this
Agreement at any time from furnishing any information to any governmental body
or agency.
13.11. RISK OF LOSS. The Company shall bear all risks of ownership in
respect of the Property, including all risk of condemnation, destruction,
loss or damage due to fire, hazard, or other casualty, through the Closing.
13.12. EFFECT OF PARTIAL INVALIDITY. In the event that any one or more of
the provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be constructed as if it never contained any such invalid,
illegal, or unenforceable provisions.
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13.13. CONTROLLING LAW. The validity, interpretation, and performance
of this Agreement shall be controlled by and construed under the laws of the
Commonwealth of Virginia.
HEALTHCARE REALTY TRUST INCORPORATED
By:
Name:
Title:
HRT OF ROANOKE, INC.
By:
Name:
Title:
LEWIS-GALE BUILDING CORPORATION
By:
Name:
Title:
As a material inducement to the execution of this Agreement by HRT and
Acquisition Sub, Lewis-Gale Clinic, LLC, by its duly authorized representatives,
hereby agrees to be bound by the provisions of Sections 5.6 and 9.2 of this
Agreement.
LEWIS-GALE CLINIC, LLC
By:
Name:
Title:
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AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
PAGE
DEFINITIONS 1
ARTICLE I
1.1. The Merger..........................................................9
1.2. The Closing.........................................................9
1.3. The Surviving Corporation...........................................9
1.4. Conversion of Shares...............................................10
1.5. Tax Custody........................................................10
1.6. Exchange of Stock Certificates.....................................10
1.7. Dissenting Shares..................................................12
1.8. Closing of Transfer Books..........................................12
ARTICLE II 12
2.1. General Statement..................................................12
2.2. Organization and Standing of the Company...........................12
2.3. Authorization of the Transaction...................................12
2.4. Valid and Binding Agreement........................................13
2.5. No Conflict........................................................13
2.6. Required Consents..................................................13
2.7. Capitalization.....................................................14
2.8. No Violation or Default............................................14
2.9. Financial Statements...............................................14
2.10. Books and Records.................................................15
2.11. Contracts; No Defaults............................................15
2.12. The Property......................................................16
2.13. Environmental.....................................................18
2.14. Insurance.........................................................19
2.15. Absence of Undisclosed Liabilities................................20
2.16. Absence of Certain Changes........................................20
2.17. Legal Proceedings, etc............................................22
2.18. Intellectual Property.............................................22
2.19. Taxes.............................................................22
2.20. No Brokers or Finders.............................................22
2.21. Employee Matters..................................................23
2.22. Labor Matters.....................................................23
2.23. Employee Benefit Plans; ERISA.....................................23
2.24. Full Disclosure...................................................23
ARTICLE III 23
3.1. Documents to be Delivered..........................................23
3.2. Review by HRT......................................................25
3.3. Delivery of Additional Documents...................................25
3.4. Review by HRT of Additional Documents..............................25
3.5. Modification of Documents..........................................26
(i)
ARTICLE IV 26
4.1. General Statement..................................................26
4.2. Organization and Standing..........................................27
4.3. Subsidiaries.......................................................27
4.4. Authorization of the Transaction...................................27
4.5. Valid and Binding Agreement........................................27
4.6. Compliance with Law................................................27
4.7. SEC Documents......................................................27
4.8. Stock Exchange Listing.............................................28
4.9. Status of HRT Merger Shares........................................28
4.10. Brokers...........................................................28
ARTICLE V 28
5.1. Conduct of Business in Its Ordinary Course.........................28
5.2. Satisfy Conditions Precedent.......................................30
5.3. Access to Information and Documents................................30
5.4. Dissenters.........................................................30
5.5. Earnings and Profits Analysis......................................30
5.6. Taxes..............................................................31
5.7. Negative Covenants.................................................31
ARTICLE VI 32
6.1. Conduct of Business in Its Ordinary Course.........................32
6.2. Satisfy Conditions Precedent.......................................32
ARTICLE VII 32
7.1. Conditions Precedent to Closing....................................32
7.2. Truth of Representations and Warranties and Compliance with
Covenants..........................................................32
7.3. Registration Statement.............................................33
7.4. No Restrictions....................................................33
7.5. Tax Opinion........................................................33
7.6. Opinion from Counsel to HRT........................................33
7.7. Stockholder Approval...............................................33
7.8. Lender Consent.....................................................33
7.9. Lease and Guaranty Agreement Effective.............................34
ARTICLE VIII 34
8.1. Conditions Precedent to Closing....................................34
8.2. Truth of Representations and Warranties and Compliance with
Covenants...............................................................34
8.3. Stockholder Approval...............................................34
8.4. Registration Statement Effective...................................34
8.5. Lease and Guaranty Agreement Effective.............................34
8.6. Acceptability of Papers and Proceedings............................35
8.7. Opinion from Counsel to the Company................................35
8.8. Title Insurance Policies and Confirmation..........................35
8.9. Resignations of Officers and Directors.............................35
8.10. Agreement of Affiliates...........................................35
8.11. No Restrictions...................................................35
8.12. No Material Changes to Property...................................35
8.13. Earnings and Profits..............................................37
8.14. Lender Consent....................................................37
(ii)
ARTICLE IX 37
9.1. Nature and Survival of Representations and Warranties..............37
9.2. Indemnification....................................................37
ARTICLE X 39
10.1. Registration Statement............................................39
10.2. Information Supplied..............................................40
10.3. Stockholder Meeting...............................................40
ARTICLE XI 40
11.1. Reorganization....................................................40
11.2. Election..........................................................40
11.3. Actions Following Closing.........................................40
11.4. Real Estate Investment Trust......................................41
ARTICLE XII 41
12.1. Optional Termination..............................................41
12.2. Effect of Termination.............................................42
ARTICLE XIII 42
13.1. Expenses..........................................................42
13.2. Amendment.........................................................42
13.3. Modifications, Amendments and Waivers.............................42
13.4. Assignment........................................................42
13.5. Notices...........................................................43
13.6. Headings..........................................................44
13.7. Entire Agreement..................................................44
13.8. Schedules.........................................................44
13.9. Counterparts......................................................44
13.10. Press Releases...................................................44
13.11. Risk of Loss.....................................................44
13.12. Effect of Partial Invalidity.....................................44
13.13. Controlling Law..................................................45
(iii)
EXHIBITS:
A - Articles of Merger
B - Value of the Company
C - Description of the Property
D - Custody Agreement
E - Affiliate Letter
F - Agreed Rents
(iv)
<PAGE>
LEASE AGREEMENT
HRT OF ROANOKE, INC.
a Virginia corporation
(Landlord)
AND
LEWIS-GALE CLINIC, L.L.C.
a Virginia limited liability company
(Tenant)
Property:
Lewis-Gale Clinic
1802 Braeburn Drive
Salem, Virginia
November 14, 1996
<PAGE>
TABLE OF CONTENTS
SEC. 1. DEFINITIONS...................................................1
SEC. 2. BASE RENT AND CPI INCREASE....................................2
SEC. 3. ADDITIONAL RENT...............................................2
SEC. 4. RENT PAYMENT..................................................4
SEC. 5. PAYMENT FOR OTHER SERVICES....................................4
SEC. 6. TENANT'S OCCUPANCY AND USE....................................4
SEC. 7. LANDLORD'S RIGHT OF ACCESS....................................4
SEC. 8. QUIET POSSESSION..............................................4
SEC. 9. SERVICES AND UTILITIES........................................5
SEC. 10. REPAIRS AND MAINTENANCE.......................................5
SEC. 11. TENANT'S ALTERATIONS, FIXTURES AND PERSONAL PROPERTY..........5
SEC. 12. CONDITION OF THE PREMISES.....................................6
SEC. 13. LIENS BY TENANT...............................................6
SEC. 14. SUBLETTING AND ASSIGNING......................................6
SEC. 15. FIRE AND CASUALTY.............................................7
SEC. 16. WAIVER OF SUBROGATION.........................................7
<PAGE>
SEC. 17. DEFAULT BY TENANT.............................................7
SEC. 18. DEFAULT BY LANDLORD...........................................7
SEC. 19. INSURANCE.....................................................8
SEC. 20. ATTORNEY'S FEES...............................................9
SEC. 21. CONDEMNATION..................................................9
SEC. 22. PAYMENT OF IMPOSITIONS.......................................10
SEC. 23. TAXES ON TENANT'S PROPERTY...................................10
SEC. 24. SIGNS........................................................10
SEC. 25. RULES AND REGULATIONS........................................10
SEC. 26. HOLDING OVER.................................................10
SEC. 27. NON-WAIVER...................................................10
SEC. 28. SUBORDINATION AND ATTORNMENT ................................10
SEC. 29. TRANSFER OF LICENSES.........................................11
SEC. 30. SUCCESSORS AND ASSIGNS.......................................11
SEC. 31. TIME.........................................................11
SEC. 32. APPLICABLE LAW...............................................11
SEC. 33. SEVERABILITY.................................................11
SEC. 34. AUTHORITY OF TENANT..........................................11
<PAGE>
SEC. 35. BROKERS......................................................11
SEC. 36. NOTICES......................................................12
SEC. 37. RELATIONSHIP OF LEASE TO LEASE ADMINISTRATION AGREEMENT......12
SEC. 38. ENTIRE AGREEMENT.............................................12
SEC. 39. COUNTERPARTS.................................................13
EXHIBIT A\............................................................14
<PAGE>
LEASE AGREEMENT
Medical Office Facility
This Lease Agreement (the Lease) made and entered into as of the 14th day
of November, 1996, between HRT OF ROANOKE, INC., a Virginia corporation (the
Landlord), and LEWIS-GALE CLINIC, L.L.C., a Virginia limited liability company
(the Tenant).
W I T N E S S E T H :
In consideration of the rents, mutual covenants and agreements set forth
herein, the Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord those certain premises located in Salem, Virginia and being known as
the Lewis-Gale Clinic (herein called the Building), located at 1802 Braeburn
Drive which premises consist of approximately 225,227 rentable square feet
(herein called the Premises) and being all of the improvements located on the
real property more particularly described in Exhibit A attached hereto and
incorporated herein. The total rentable area of the Building is 237,244 square
feet and the Premises (Tenant's pro rata share for Additional Rent purposes) is
agreed to be 95% thereof. The rentable square footage area shall be used in the
calculation of rent and other sums as appropriate under this Lease.
SEC. 1. DEFINITIONS: For purposes of this Lease, the following terms
shall have the meanings hereinafter ascribed thereto:
a. ANNUAL BASE RENT (BASE RENT): Initial Lease Year: $164,865.00 per year
($15.00/Rentable SF) for the 10,991 rentable square feet located in the Phase I
basement; $3,856,248.00 per year ($18.00/Rentable SF) for the remaining 214,236
rentable square feet for a total annual rental of $4,021,113.00 payable monthly.
Base Rent for each Lease Year after Initial Lease Year (the Initial Lease Year
begins on November 1, 1996 and ends on October 31, 1997) to be determined in
accordance with Section 2(b).
b. COMMERCIALLY REASONABLE: The term Commercially Reasonable shall mean
that which is the fair market cost for comparable goods and services provided in
a first class manner in the area of the Property (as defined hereinafter) as
evidenced by objective third party criteria, including without limitation that
certain Market Value Appraisal Update, dated as of July 1, 1995, prepared by
Linwood M. Aron, MAI, SREA, and provided to Landlord by Lewis-Gale Building
Corporation in connection with the Property, as adjusted by increases in the CPI
(as defined hereinafter).
c. IMPOSITIONS: Collectively, all taxes (including, without limitation, all
capital stock and franchise taxes of Landlord, all ad valorem, sales and use,
single business, gross receipts, transaction privilege, rent or similar taxes),
assessments (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not to be completed within the Lease Term), ground
rents, water, sewer or other rents and charges, excises, tax levies, fees
(including, without limitation, license, permit, inspection, authorization and
similar fees), and all governmental charges, in each case whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property (as defined hereinafter) and/or the rent
(including all interest and penalties thereon due to any failure in payment by
Tenant), which at any time prior to, during or in respect of the Lease Term may
be assessed or imposed on or in respect of or be a lien upon (a) Landlord or
Landlord's interest in the Property, (b) the Property or any part thereof or any
rent therefrom or any estate, right, title or interest therein, or (c) any
occupancy, operation, use or possession of, sales from, or activity conducted
on, or in connection with, the Property or the leasing or use of the Property or
any part thereof; provided, however, nothing contained in this Agreement shall
be construed to require Tenant to pay (1) any interest and penalties relating to
failure of the Landlord to timely pay any such Imposition; provided that Tenant
shall have timely paid its rents, (2) any tax based on net income (whether
denominated as a franchise or capital stock, financial institutions or other
tax) imposed on Landlord, (3) any transfer or net revenue tax of Landlord, (4)
any tax imposed with respect to inheritance, estate, succession, transfer or
gift taxes or the sale, exchange or other disposition by Landlord of any portion
of the Property or the proceeds thereof, or (5) except as expressly provided
elsewhere in this Lease, any principal or interest on any encumbrance on the
Property, except to the extent that any tax, assessment, tax levy or charge
which Tenant is obligated to pay pursuant to the first sentence of this
definition and which is in effect at any time during the Lease Term is totally
or partially repealed, and a tax, assessment, tax levy or charge set forth in
clause (2) or (3) is levied, assessed or imposed expressly in lieu thereof, in
which case Tenant shall pay.
1
<PAGE>
d. LEASE ADMINISTRATION AGREEMENT: That certain Lease Administration
Agreement, executed of even date herewith, by and between Landlord and Tenant,
pursuant to which Landlord (i) granted to Tenant certain rights to use and
control certain aspects of the Building and (ii) Tenant agreed to pay the
Property Rents (as defined in the Lease Administration Agreement) and to ensure
the performance of the obligations of the tenants under the Property Leases (as
defined in the Lease Administration Agreement).
e. LEASE TERM: 15 years from the Lease Term Commencement Date, with five
(5) five-year renewal options to be exercised in accordance with the provisions
of Section 13.5 of the Lease Administration Agreement.
f. LEASE TERM COMMENCEMENT DATE: November 14, 1996.
g. LEASE YEAR: The twelve (12) month period from November 1 to October 31.
h. PERMITTED USE OF PREMISES: Use only as a medical facility or for
general commercial purposes ancillary to the care and treatment of human beings
or the practice of medicine.
i. TENANT'S PROPORTIONATE SHARE OF OPERATING COSTS: 95% of the amount by
which the Operating Costs (as defined in Section 3(a)) exceed $6.00 per
rentable square foot.
SEC. 2. BASE RENT AND CPI INCREASE:
a. As part of the consideration for the execution of this Lease, Tenant
agrees to pay the Base Rent, payable at the office of Landlord in monthly
installments of $335,092.75 each in legal tender of the United States of
America, in advance, without demand and without deduction, on the first day of
each calendar month during the term hereof; provided, however, that if the Lease
Term Commencement Date is on a date other than the first day of a calendar
month, the first rental payment to be made on execution of this Lease shall be
the rental pro rated for the remainder of the calendar month in which the Lease
Term commences. Such Base Rent shall be subject to adjustments as hereinafter
provided.
b. After the Initial Lease Year,
the amount of Base Rent due for such Lease Year and each Lease Year thereafter
shall be increased by the percentage increase in the CPI (as defined
hereinafter) last published prior to the first day of the then applicable Lease
Year and the CPI last published prior to the first day of the prior Lease Year;
provided, however, in no event will the Base Rent increase at a rate greater
than four percent (4%) each Lease Year. The percentage increase in the CPI shall
be calculated and due from the first day of each Lease Year. For purposes of
this Lease, the term CPI shall mean the Consumer Price Index published by the
Bureau of Labor Statistics of the United States Department of Labor, U.S. City
Average, All Items and Major Group Figures for Urban Wage Earners and Clerical
Workers (1982-84 = 100), or if such index is not available, a comparable index
selected by Landlord which is published by a governmental institution or a
nationally recognized publisher of statistical information.
SEC. 3. ADDITIONAL RENT:
In addition to the Base Rent as specified in this Lease, Tenant agrees to
pay to Landlord as additional rent (Additional Rent) Tenant's Proportionate
Share of Operating Costs.
2
<PAGE>
a. OPERATING COSTS: For the purposes of determining Additional Rent,
Operating Costs shall include, without limitation, all costs, expenses and
disbursements of every kind, nature and description paid or incurred by Landlord
relating to (i) the management, operation, maintenance and repair of the
Building and the land upon which the Building is located (the Building and land
being collectively referred to hereinafter as the Property) and any personal
property used in connection therewith, fixtures, machinery, equipment, systems
and apparatus located therein or used in connection therewith, that are
reasonably allocated by Landlord and which in accordance with generally accepted
accounting principles, are considered as an expense of the Property, (ii)
charges for electricity, power, gas, oil, water and other utilities used during
the Lease Term which are paid by Landlord to the utility service provider, (iii)
premiums for insurance coverage, (iv) all Impositions, (v) ordinary and
necessary repairs and maintenance of the Property and (vi) reasonable legal and
accounting expenses, all for a particular calendar year or portion thereof as
determined by Landlord and including all additional costs and expenses of
operation and maintenance of the Property which Landlord determines that it
would have paid or incurred during such year if the Building had been one
hundred percent (100%) occupied. For purposes of determining Tenant's
Proportionate Share, the denominator shall be the Operating Costs for the
Property which shall be calculated in the aggregate and shall include all of the
parcels comprising the Property. For purposes of this Section, the following
shall not be included as Operating Costs: (i) payments made by tenants of the
Building, either to third parties or to Landlord, under agreements for direct
reimbursement for services (e.g., separately metered utilities, separate
contracted janitorial services, property taxes directly reimbursed to Landlord,
etc.); (ii) costs of improvements to or alterations of space leased to tenants
other than Tenant or PhyCor, Inc. or their affiliates and the cost or expense of
any insurance covering such improvements or alterations in excess of the All
Risk casualty insurance carried by Landlord pursuant to Section 19 hereof; (iii)
depreciation or amortization of any improvements to the Property (provided,
however, that Landlord shall be permitted to create as an Operating Cost
reasonable reserves for major capital repairs so as to maintain the Property in
a first class manner); (iv) costs of repairing or restoring any portion of the
Building damaged by fire or other casualty for which Landlord recovers insurance
proceeds sufficient to effect such repairs and restoration; (v) costs of
repairs, alterations or replacements required as a result of the exercise of any
right of eminent domain to the extent Landlord actually recovers from the
condemning authority condemnation proceeds as a result of such condemnation;
(vi) the cost of any special services rendered to other tenants of the Property
which are not rendered to Tenant; (vii) costs of selling, syndicating,
financing, mortgaging or hypothecating any part of or interest in the Property;
(viii) Landlord's overhead costs, including salaries, equipment, supplies, rent
and other occupancy costs or any other costs associated with the operation and
internal organization and function of Landlord as a business entity; (ix) costs
incurred as a result of Landlord's violation of any lease, contract, law or
ordinance, including fines and fees unless such violations are caused by a
default of Tenant hereunder; (x) costs related to any building or land other
than the Property, including any allocation of costs incurred on a shared basis,
such as centralized accounting costs, unless the allocation is made on a
reasonable and consistent basis that fairly reflects the share of such costs
actually attributable to the Property and unless such sharing of costs actually
reduces Operating Costs; and (xi) the part of any cost or other sum paid to any
affiliate of HR or to any other party that exceeds a Commercially Reasonable
price or cost.
b. MONTHLY PAYMENT OF ESTIMATED ADDITIONAL RENT: Tenant's Proportionate
Share of Operating Costs for the remainder of the calendar year after the Lease
Term Commencement Date and for each subsequent calendar year shall be estimated
by Landlord based on the preceding year and any anticipated increases in the
services and expenses deemed a part of Operating Costs, and written notice
thereof shall be given to Tenant. Upon receipt of said written notice from
Landlord, the estimated Additional Rent shall be due and payable as herein
provided. For any such remainder of the calendar year after the Lease Term
Commencement Date, Tenant agrees to pay Landlord each month, at the same time
the Base Rent is due, an amount equal to the amount of such estimated monthly
Additional Rent for the remainder of such calendar year; and during each
calendar year thereafter Tenant agrees to pay Landlord each month, at the same
time the Base Rent is due, an amount equal to one-twelfth (1/12) of the
estimated annual Additional Rent due.
c. ANNUAL ADJUSTMENT TO ADDITIONAL RENT: After the end of each calendar
year, Landlord shall prepare and deliver to Tenant a statement showing Tenant's
total amount of Additional Rent together with a statement showing Tenant's
Proportionate Share of Operating Costs for such year. Within thirty (30) days
after receipt of the aforementioned statement, Tenant agrees to pay Landlord, or
if Tenant has overpaid, Landlord shall, at Tenant's election either refund the
overpayment to Tenant or credit against the next Additional Rent payment or
payments due from Tenant, as the case may be, the difference between Tenant's
actual Additional Rent due for the preceding calendar year and the estimated
Additional Rent paid by Tenant during such year; provided, however, that at the
end of the Lease Term or any renewal period, any overpayment by Tenant will be
refunded to Tenant within thirty (30) days of Landlord's determination of such
overpayment.
Anything herein to the contrary notwithstanding, in no event will the Base
Rent provided for in this Lease ever be reduced.
3
<PAGE>
SEC. 4. RENT PAYMENT: The Base Rent, Additional Rent, and all other sums
required to be paid by Tenant hereunder, are sometimes collectively referred to
as, and shall constitute, Rent.
Rent shall be paid by Tenant when due, without prior demand therefor and
without deduction or set off unless otherwise specifically provided herein, at
Landlord's address in Article XIII of the Lease Administration Agreement or at
such other place as Landlord may designated from time to time.
In the event any installment of Base Rent, Additional Rent or other amount
due from Tenant to Landlord under this Lease shall not be paid when due, a late
charge computed at the Overdue Rate (as defined in the Lease Administration
Agreement) or the maximum rate permitted by law, whichever is less, may be
charged by Landlord, as Additional Rent, for the purpose of defraying Landlord's
administrative expenses incident to the handling of such overdue payments, and
Tenant agrees to pay such Rent to Landlord upon demand.
SEC. 5. PAYMENT FOR OTHER SERVICES: Tenant agrees to pay to Landlord as
Rent all charges for any services, goods, or materials furnished by Landlord at
Tenant's request which are not required to be furnished by Landlord under this
Lease, immediately upon receipt of Landlord's request for payment.
SEC. 6. TENANT'S OCCUPANCY AND USE: The Premises shall be used solely for
the purpose of the Permitted Use in accordance with all applicable local, state
and federal laws, rules and regulations. Tenant shall not permit any activity in
the Premises or take any action which would materially diminish the value of the
Property. Tenant covenants that it will obtain and maintain all approvals needed
to use and operate the Premises for the Permitted Use under applicable local,
state and federal law. Tenant shall not commit or suffer to be committed any
waste on the Premises or the Property.
SEC. 7. LANDLORD'S RIGHT OF ACCESS: Landlord or its authorized agents shall
at any and all reasonable times have the right to enter the Premises to inspect
the same, to supply janitorial service or any other service Landlord deems
necessary to provide hereunder, to show the Premises to prospective purchasers
or tenants, to alter, improve or repair the Premises or any other portion of the
Property all without being deemed guilty of an eviction of Tenant and without
abatement of Rent, and may for that purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed, provided such activities of Landlord do not materially interfere
with Tenant's business in the Premises. Subject to the foregoing, Tenant hereby
waives any claim for damages for any injury or inconveniences to or interference
with Tenant's business, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby. For each of the aforesaid
purposes, Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises, excluding Tenant's secured
medical storage areas, vaults and safes. Landlord shall have the right to use
any and all means which Landlord may deem proper to open any door(s) in an
emergency without liability therefor.
SEC. 8. QUIET POSSESSION: So long as Tenant pays the Rent reserved
hereunder and observes and performs all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant shall
have the quiet possession of the Premises for the entire Lease Term hereof,
subject to all of the provisions of this Lease.
4
<PAGE>
SEC. 9. SERVICES AND UTILITIES: Provided Tenant is not in default of any
term, condition or covenant of the Lease, Landlord will cause to be available in
the Premises gas (to the extent such is accessible to the Property from an
adjacent public right-of-way), water (for drinking, cleaning and lavatory
purposes only), and electricity during the Lease Term. Tenant will contract for,
in its own name, and will pay or cause to be paid all charges for electricity,
power, oil, water, telephone and other utilities used in the Premises during the
Lease Term. Landlord shall furnish janitorial service in a first class manner
during the periods and hours as may be agreed upon between Landlord and Tenant;
provided, however, that Tenant recognizes that there will be a transition
period, not to exceed forty-five (45) days, after the Lease Term Commencement
Date during which Landlord and Tenant will mutually work toward the assumption
of these services by Landlord. Landlord shall furnish, as an Operating Cost,
routine maintenance, painting and lighting service for all public areas and
special service areas of the Building in a first class manner; provided,
however, that Tenant recognizes that there will be a transition period, not to
exceed forty-five (45) days, after the Lease Term Commencement Date during which
Landlord and Tenant will mutually work toward the assumption of these services
by Landlord. Landlord shall not be liable in damages, direct or consequential,
or otherwise for failure, stoppage or interruption of any such service, so long
as such failure, stoppage or interruption is not caused by the gross negligence
or willful misconduct of Landlord, its agents or employees; provided, however,
that any such failure, stoppage or interruption shall not be construed as an
eviction of Tenant, work an abatement of rent, or relieve Tenant from the
operation of any covenant or agreement. In the event of any such failure,
stoppage or interruption thereof, Landlord shall use reasonable diligence to
resume service promptly.
SEC. 10. REPAIRS AND MAINTENANCE: Landlord shall provide or cause to be
provided cleaning and maintenance of the public portions of the Building,
including painting and landscaping surrounding the Building in a first class
manner; provided, however, that Tenant recognizes that there will be a
transition period, not to exceed forty-five (45) days, after the Lease Term
Commencement Date during which Landlord and Tenant will mutually work toward the
assumption of these services by Landlord. Unless otherwise expressly stated
herein, Landlord shall not be required to make any improvements or repairs of
any kind or character in the Premises during the Lease Term, except such repairs
as may be required by normal maintenance operations, which shall include
structural repairs to the outside exterior walls, corridors, windows, roof and
other structural elements and equipment of the Building, and such additional
maintenance as may be necessary because of damages by persons other than Tenant,
its agents, employees, invitees or visitors.
Landlord may at its option and at the sole cost and expense of Tenant,
repair or replace any damage or injury done to the Building or any part thereof,
solely caused by Tenant, Tenant's agents, employees, licensees, invitees or
visitors, reasonable wear and tear excepted. Tenant shall pay the cost of such
repairs plus a fifteen percent (15%) administrative fee to Landlord on demand.
Tenant further agrees to maintain and keep the interior of the Premises in good
repair and condition at Tenant's expense. Tenant agrees not to commit or allow
any waste or damage to be committed on any portion of the Premises, and at the
termination of this Lease, by lapse of time or otherwise, to deliver up the
Premises to Landlord in as good condition as they existed on the date of
possession by Tenant, ordinary wear and tear alone excepted, and Landlord shall
have the right to re-enter and resume possession of the Premises whether or not
the Premises are vacated by Tenant.
All requests for repairs and maintenance that are the responsibility of
Landlord pursuant to any provision of this Lease must be made in writing to
Landlord at the address set forth herein, or as subsequently changed from time
to time by Landlord in writing. Landlord shall provide sufficient staff so as to
be responsive to Tenant's requests for normal and routine repairs and
maintenance. All normal and routine repairs requested by Tenant shall be made by
Landlord promptly and in any event within twenty-four (24) hours after receiving
such request; provided, however, that Tenant recognizes that there will be a
transition period, not to exceed forty-five (45) days, after the Lease Term
Commencement Date during which Landlord and Tenant will mutually work toward the
assumption of these services by Landlord.
SEC. 11. TENANT'S ALTERATIONS, FIXTURES AND PERSONAL PROPERTY: Tenant
covenants and agrees that it will make no structural change, interior
alterations or additions that will in the reasonable determination of Tenant
materially change the general design or structural integrity of the Building
without Landlord's written consent in advance, which consent shall not be
unreasonably withheld, and without first furnishing the Landlord fifteen (15)
days advance notice outlining in detail the proposed changes or alterations.
Landlord shall grant or withhold its consent within seven (7) business days of
receipt of such a request from Tenant.
Any such changes, interior alterations or additions (including but not
limited to wall-to-wall carpeting, paneling and other wall coverings) approved
in writing by Landlord shall be surrendered to Landlord upon termination of this
Lease, Tenant hereby waiving all rights to any payment or compensation therefor.
All costs and expenses of any approved changes, interior alterations or
additions shall be borne solely by Tenant which payment shall be made in cash,
unless Landlord and Tenant mutually agree, that such changes, alterations or
additions shall be treated as a Capital Addition (as defined in the Lease
Administration Agreement) and treated in accordance with the Article V of the
Lease Administration Agreement. Any contractor or person making such
improvements for Tenant must first be approved in writing by Landlord.
Tenant may remove its trade fixtures, office supplies, movable office
furniture or equipment and other personal property not attached to the Building
during the Lease Term or within thirty (30) days following the expiration or
earlier termination of the Lease provided that Tenant is not in default of any
obligation or covenant under this Lease at the time of such removal and that
Tenant promptly repairs all damage caused by such removal.
5
<PAGE>
SEC. 12. CONDITION OF THE PREMISES: Tenant acknowledges receipt and
delivery of possession of the Premises and that Tenant has examined and
otherwise has a acquired knowledge of the condition of the Premises prior to
execution and delivery of this Lease and has found the same to be in good order
and repair and satisfactory for its purpose hereunder. Tenant is leasing the
Premises as is in its present condition. Tenant waives any claim or action
against Landlord in respect of the condition of the Premises. LANDLORD MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE PROPERTY, THE
PREMISES OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, SUITABILITY,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING
AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT
THE PREMISES HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT.
SEC. 13. LIENS BY TENANT: Tenant shall keep the Premises free from any
liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. In the event that Tenant shall not, within fifteen
(15) days following the imposition of any such lien, cause the same to be
released of record by payment or posting of a proper bond, Landlord shall have,
in addition to all other remedies provided herein and by law, the right but not
the obligation, to cause the same to be released by such means as it shall deem
proper, including payment of or defense against the claim giving rise to such
lien. All sums paid by Landlord and all expenses incurred by it in connection
therewith shall create automatically an obligation of Tenant to pay, on demand,
an equivalent amount together with interest at a rate of the Prime Rate (as
defined in the Lease Administration Agreement) plus two percent (2%) per annum
as Rent. No work which Landlord permits Tenant to perform in the Premises shall
be deemed to be for the immediate use and benefit of Landlord so that no
mechanics or other lien shall be allowed against the estate of Landlord by
reason of its consent to such work.
SEC. 14. SUBLETTING AND ASSIGNING: Tenant shall not sublet the Premises or
any part thereof. Tenant shall not assign this Lease in whole or in part, by
operation of law or otherwise, or mortgage or pledge the same without the prior
written consent of Landlord and in no event shall any such assignment ever
release Tenant from any obligation or liability hereunder. No assignee of the
Premises or any portion thereof may assign the Premises or any portion thereof.
Landlord shall not be required to collect any rents or other payments from any
party on behalf of Tenant's account; provided, however, that Landlord's
collection and acceptance of such payments shall not be construed to constitute
a novation or a release of Tenant from further performance of its obligations
under this Lease. Notwithstanding the foregoing, Landlord shall not unreasonably
withhold or delay its consent to Tenant's merger or consolidation with
affiliates of Tenant or affiliates of PhyCor, Inc. or other entities provided
that the use of the Premises remains in conformity with the Permitted Use and
the creditworthiness of the proposed assignee is equal to or better than that of
Tenant, in Landlord's sole reasonable discretion. In the event Tenant desires to
assign the Lease to PhyCor, Inc. or an affiliate of PhyCor, Inc., Landlord
agrees to execute a direct lease with PhyCor, Inc. or its affiliate upon the
same terms and conditions of this Lease; provided, however, that any space
leased to PhyCor, Inc. or its affiliates shall at all times be deemed Clinic
Space (as defined in the Lease Administration Agreement).
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SEC. 15. FIRE AND CASUALTY: In the event the Premises or the Building is
partially or totally destroyed or damaged by fire or other casualty, the terms
and provisions of Article VII of the Lease Administration Agreement shall govern
this Lease. Notwithstanding anything herein to the contrary, Landlord shall not
be obligated in any way or manner to insure any personal property (including,
but not limited to, any fixtures, furniture, machinery, goods, supplies or
improvements) of Tenant or which Tenant may have upon or within the Premises or
any fixtures installed by or paid for by Tenant upon or within the Premises.
SEC. 16. WAIVER OF SUBROGATION: Provided their respective insurance
carriers will consent and agree, Landlord and Tenant hereby waive any rights
each may have against the other, on account of any loss or damage occasioned to
Landlord or Tenant, as the case may be, their respective property, the Premises,
its contents or to the other portion of the Property arising from any risk
covered by valid and enforceable fire and extended coverage insurance, to the
extent of such coverage. Landlord and Tenant each agree to cause an endorsement
to be furnished to their respective insurance policies recognizing this waiver
of subrogation.
SEC. 17. DEFAULT BY TENANT:
a. The occurrence of any of the following shall constitute a material
default and breach of this Lease by Tenant (hereinafter referred to as an Event
of Default):
i. Any failure by Tenant to pay Rent or to make any other payment
required to be made by Tenant hereunder when due;
ii. Any failure by Tenant to observe and perform any other provision
of this Lease to be observed or performed by Tenant, where such
failure continues for thirty (30) days after written notice to
Tenant (unless such failure cannot be cured within thirty (30)
days and Tenant shall have commenced to cure said failure within
said thirty (30) days and continues diligently to pursue the curing
of the same);
iii. An event of default shall occur under the Lease Administration
Agreement or any of the Property Leases (as defined in the Lease
Administration Agreement).
b. If an Event of Default shall have occurred, Landlord shall have at its
election, then or at any time thereafter, the right to pursue any one or more of
the remedies available to Landlord under Article IX of the Lease Administration
Agreement.
c. Landlord shall give Tenant and PhyCor, Inc. written notice of any Event
of Default within fifteen (15) business days of the occurrence of the same, at
the addresses set forth in Section 36.
SEC. 18. DEFAULT BY LANDLORD: Except as otherwise provided in this Lease,
Landlord shall be in default under this Lease if Landlord fails to perform any
of its obligations hereunder and said failure continues for a period of thirty
(30) days after written notice thereof from Tenant to Landlord (unless such
failure cannot reasonably be cured within thirty (30) days and Landlord shall
have commenced to cure said failure within said thirty (30) days and continues
diligently to pursue the curing of the same). In no event shall Tenant have the
right to levy execution against any property of Landlord other than its interest
in the Building.
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SEC. 19. INSURANCE:
a. GENERAL INSURANCE REQUIREMENTS. During the Lease Term, Landlord, as an
Operating Cost, shall at all times keep the Property and the Premises, insured
with the kinds and amounts of insurance described below. All such policies shall
be issued by insurance companies licensed to do business in the state in which
the Property is located, with a rating of A-IX or better as established by
Best's Rating Guide (or an equivalent rating approved by Landlord). The policies
on the Property and the Premises shall insure against the following risks:
i. Loss or damage by fire, vandalism and malicious mischief, extended
coverage perils commonly known as All Risk and all physical loss perils,
including but not limited to sprinkler leakage, windstorm, hail, flood,
earthquake (when the Property is located in whole or in part within a zone
designated at risk for earthquakes), tornado, hurricane and similar damage,
in an amount not less than one hundred percent (100%) of the then Full
Replacement Cost thereof (as defined below) with a replacement cost
endorsement sufficient to prevent Landlord from becoming a co-insurer
together with an agreed value endorsement;
ii. Loss or damage by explosion of steam boilers, pressure vessels or
similar apparatus,now or hereafter installed in the Property,in such limits
with respect to any one accident as may be reasonably desired by Landlord
from time to time;
iii. Business interruption or loss of rental under a rental value
insurance policy covering risk of loss during the first twenty-four (24)
months of reconstruction necessitated by the occurrence of any of the
hazards described in Sections 19(a)(i)or 19(a)(ii), in an amount sufficient
to prevent Landlord from becoming a co-insurer;
iv. Claims for personal injury or property damage under a policy of
comprehensive general public liability insurance, including but not limited
to, insurance against assumed or contractual liability including any
indemnities under this Lease with an amount not less than Five Million
Dollars ($5,000,000) per occurrence for injury to or death of persons
and/or property damage; and
v. Flood (when the Property is located in whole or in part within a zone
designated at risk for floods) and such other hazards and in such amounts
as may be customary for comparable properties in the area and if available
from insurance companies authorized to do business in the state in which
the Property is located at rates which are economically practicable in
relation to the risks covered.
b. REPLACEMENT COST. The term Full Replacement Cost as used herein, shall
mean the greater of (i) actual replacement cost thereof from time to time,
including increased cost of construction endorsement, or (ii) the purchase price
paid by Landlord for the Property at the time of such acquisition (together with
all capitalized costs related to such acquisition) plus capital addition costs,
less exclusions provided in the normal fire insurance policy. In the event
either Landlord or Tenant believes that the Full Replacement Cost has increased
or decreased at any time during the Lease Term, it shall have the right to have
such Full Replacement Cost redetermined by the fire insurance company which is
then providing the largest amount of fire insurance carried on the Property,
hereinafter referred to as the impartial appraiser. The party desiring to have
the Full Replacement Cost so redetermined shall forthwith, on receipt of such
determination by such impartial appraiser, give written notice thereof to the
other party hereto. The determination of such impartial appraiser shall be final
and binding on the parties hereto, and Landlord shall forthwith, as an Operating
Cost, increase, or may decrease, the amount of the insurance carried pursuant to
this Section, as the case may be, to the amount so determined by the impartial
appraiser. Landlord, as an Operating Cost, shall pay the fee, if any, of the
impartial appraiser.
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c. WORKMANS COMPENSATION INSURANCE. In addition to the insurance described
above, Landlord, as an Operating Cost, shall maintain adequate worker's
compensation insurance coverage for all persons employed by Landlord on the
Property, if any, in accordance with the requirements of applicable local, state
and federal law.
d. INCREASE IN LIMITS. In the event that Landlord shall at any time
reasonably deem the limits of the personal injury, property damage or general
public liability insurance then carried to be insufficient based on commercial
insurance standards for similar properties or the advice of independent
insurance advisers, such insurance shall thereafter be increased and carried
with the new limits until further changed pursuant to the provisions of this
Section.
e. BLANKET POLICY. Notwithstanding anything to the contrary contained in
this Section, obligations of the Landlord and Tenant to carry the insurance
provided for herein may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Landlord or Tenant, as
the case may be, provided, that any such blanket policy or policies shall
otherwise satisfy the insurance requirements of this Section.
f. LIABILITIES. Notwithstanding the foregoing, and without regard to the
policy limits of any such insurance or self insurance, all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses),
imposed upon or incurred by or asserted against Landlord by reason of any
accident, injury to or death of persons occurring on or about the Property or
adjoining sidewalks but excluding any claims arising from the gross negligence
or willful misconduct of Landlord, its employees or agents, shall be deemed to
be an Operating Cost.
g. TENANT'S INSURANCE OBLIGATIONS. During the Lease Term, Tenant shall
maintain (i) adequate worker's compensation insurance coverage for all persons
employed by Tenant on the Property, in accordance with the requirements of
applicable local, state and federal law; (ii) insurance against claims arising
out of malpractice in an amount not less than Five Million Dollars ($5,000,000)
for each person and Ten Million Dollars ($10,000,000) for each occurrence; and
(iii) claims for personal injury or property damage under a policy of
comprehensive general public liability insurance, including but not limited to,
insurance against assumed or contractual liability including any indemnities
under this Lease with an amount not less than Five Million Dollars ($5,000,000)
per occurrence for injury to or death of persons and/or property damage. If
Tenant shall engage or cause to be engaged any contractor to perform work on the
Premises, Tenant shall require such contractor to carry and maintain, at no
expense to Landlord, non-deductible comprehensive general liability insurance,
including but not limited to contractor's liability coverage, completed
operations coverage, broad form property damage endorsement and contractor's
protection liability coverage in such amounts and with such companies as
Landlord shall approve. Tenant shall, upon request by Landlord, furnish to
Landlord policies or certificates evidencing such coverage, which certificates
shall state that such insurance coverage may not be changed or cancelled without
at least thirty (30) days prior written notice to Landlord and Tenant. All of
the policies of insurance referred to in this Section 19(g) shall be written in
form satisfactory to Landlord and by insurance companies authorized to do
insurance business in the state in which the Property is located and by
insurance companies satisfactory to Landlord. The insurance policies must name
Landlord as an additional insured. In the event Tenant shall fail to procure
such insurance, Landlord may at its option procure the same for the account of
Tenant, and the cost thereof shall be paid to Landlord as Additional Rent upon
receipt by Tenant of bills therefor.
SEC. 20. ATTORNEY'S FEES: In the event of any legal action or proceeding
brought by either party against the other arising out of this Lease, the
prevailing party shall be entitled to recover reasonable attorney's fees and
costs incurred in such action and such amount shall be included in any judgment
rendered in such proceeding.
SEC. 21. CONDEMNATION: In the event the Property or the Building or any
portion thereof shall be taken or condemned in whole or in part for public
purposes, or sold to a condemning authority to prevent taking, then the terms
and provisions of Article VIII of the Lease Administration Agreement shall
govern and control.
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SEC. 22. PAYMENT OF IMPOSITIONS: Landlord will pay, or cause to be paid,
all Impositions.
SEC. 23. TAXES ON TENANT'S PROPERTY: Tenant shall be liable for and shall
pay, prior to their becoming delinquent, any and all taxes and assessments
levied against any personal property or trade or other fixtures placed by
Tenant in or about the Premises.
SEC. 24. SIGNS: No signs of any kind or nature, symbol or identifying mark
shall be put on the Building, the Property, in the halls, elevators, staircases,
entrances, parking areas or upon the doors or walls, whether plate glass or
otherwise, of the Premises nor within the Premises so as to be visible from the
public areas or exterior of the Building, without prior written approval of
Landlord. All signs of lettering shall conform in all respects to the sign
and/or lettering criteria established by Landlord.
SEC. 25. RULES AND REGULATIONS: Such reasonable rules and regulations
applying to all Tenants in the Building as may be adopted by Landlord and
approved by Tenant, for safety, care, cleanliness, preservation of good order,
or operation of the Premises, the Building and the Property, are hereby made a
part hereof and Tenant agrees to comply with all such rules and regulations.
Such rules and regulations adopted by Landlord and approved by Tenant shall be
thereafter carried out and observed by Tenant.
SEC. 26. HOLDING OVER: In the event Tenant, or any party claiming under
Tenant, retains possession of the Premises after the expiration or earlier
termination of this Lease, such possession shall be a tenancy at will under
applicable law. Tenant shall be subject to immediate eviction and removal, and
Landlord, in addition to all other remedies available to it hereunder, shall
have the right to receive as liquidated damages for all the time Tenant shall so
retain possession of the Premises or any part thereof, an amount equal to twice
the Base Rent specified in the Lease, as applied to such period together with
all other payments required hereunder as Additional Rent.
Tenant shall also pay any and all damages, including but not limited to,
consequential damages sustained by Landlord as a result of such hold-over.
Tenant will vacate the Premises and deliver same to Landlord immediately upon
Tenant's receipt of notice to do so from Landlord. The Rent during such
hold-over period shall be payable to Landlord on demand. No holding over by
Tenant, whether with or without consent of Landlord, shall operate to extend the
Lease Term.
SEC. 27. NON-WAIVER: No waiver by Landlord of any provision of this Lease
or of any breach by Tenant hereunder shall be deemed to be a waiver of any other
provision hereof, or of any subsequent breach by Tenant of the same or any other
provision. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to render unnecessary the
obtaining of Landlord's consent to or approval of any subsequent act of Tenant.
No act or thing done by Landlord or Landlord's agents during the term of this
Lease shall be deemed an acceptance of a surrender of the Premises, unless done
in writing signed by Landlord. The acceptance of any Rent by Landlord following
a breach of this Lease by Tenant shall not constitute a waiver by Landlord of
such breach or any other breach unless such waiver is expressly stated in
writing signed by Landlord.
SEC. 28. SUBORDINATION AND ATTORNMENT:
a. This Lease shall be subject to and subordinate to any lease (including
ground lease) wherein Landlord is the tenant and to the lien of any and all
mortgages or deeds of trust, regardless of whether such lease, mortgages or
deeds of trust now exist or may hereafter be created with regard to all or any
part of the Building or the Property, or both, and to any and all advances to be
made thereunder, and to the interest thereon, and all modifications,
consolidations, renewals, replacements, and extensions thereof. Tenant also
agrees that any lessor or mortgagee may elect to have this Lease prior to any
lease or lien of its mortgage or deed of trust, and in the event of such
election and upon notification by such lessor or mortgagee to Tenant to that
effect, this Lease shall be deemed prior to the said lease or lien of its
mortgage or deed of trust, whether this Lease is dated prior to or subsequent to
the date of said lease, mortgage or deed of trust.
b. In the event of the sale or assignment of Landlord's interest in the
Premises (except in a sale - leaseback financing transaction), Tenant shall
attorn to and recognize such purchaser or assignee or mortgagee as Landlord
under this Lease, provided that the transferee or assignee assumes all of
Landlord's obligations hereunder and provided further that Tenant shall not be
disturbed in its possession so long as it is not in default hereunder.
c. In the event of any proceedings brought for the foreclosure of any
mortgage or deed of trust covering the Property, or in the event of the exercise
of a power of sale pursuant thereto and upon the written request of a purchaser
at such foreclosure proceedings, Tenant shall, at the request of such purchaser,
attorn to and recognize such purchaser as Landlord under this Lease, provided
that the transferee or mortgagee assumes all of Landlord's obligations hereunder
and provided further that Tenant shall not be disturbed in its possession so
long as it is not in default hereunder.
d. Tenant agrees that, upon the request of Landlord, or any such lessor or
mortgagee, Tenant shall execute and deliver whatever instruments may reasonably
be required for such purposes in order to carry out the intent of this Section.
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SEC. 29. TRANSFER OF LICENSES: Upon the expiration or earlier termination
of the Lease Term, Tenant shall use its best efforts to transfer (to the extent
legally transferable) to Landlord or Landlord's nominee, without additional
consideration to Tenant, all licenses (except Tenant's operating licenses),
operating permits and other governmental authorizations and all contracts,
including contracts with governmental or quasi-governmental entities which may
be necessary or useful in the operation of the Property.
SEC. 30. SUCCESSORS AND ASSIGNS: Except as otherwise provided in this
Lease, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
SEC. 31. TIME: Time is of the essence.
SEC. 32. APPLICABLE LAW: This Lease shall be governed by and construed
pursuant to the laws of the Commonwealth of Virginia.
SEC. 33. SEVERABILITY: If any provision of this Lease or the application
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
SEC. 34. AUTHORITY OF TENANT: If Tenant or Landlord, as the case may be,
executes this Lease in other than an individual capacity, each of the persons
executing this Lease on behalf of Tenant or Landlord, as the case may be, does
hereby personally covenant and warrant that Tenant or Landlord, as the case may
be, is a duly authorized and existing legal entity as herein represented, that
Tenant or Landlord, as the case may be, has and is qualified to do business in
the State in which the Building is located, that the Tenant or Landlord, as the
case may be, has full right and authority to enter into this Lease, and that
each person signing on behalf of the Tenant or Landlord, as the case may be, is
authorized to do so. Upon request the signatories hereto will furnish
satisfactory evidence of their authority to execute this Lease on behalf of the
respective parties.
SEC. 35. BROKERS: Tenant and Landlord warrant to the other that it has had
no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, and that it knows of no real estate broker or agent
who might be entitled to a commission in connection with this Lease. Tenant and
Landlord agree to indemnify and hold harmless the other party from and against
any liability from all other claims for commissions arising from the negotiation
of this Lease.
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SEC. 36. NOTICES: All notices which Landlord or Tenant may be required, or
may desire, to serve on the other shall be in writing and shall be served or
delivered in accordance with the provisions and to the addresses specified in
Article XIII of the Lease Administration Agreement. All notices which Landlord
or Tenant may be required, or may desire, to serve on PhyCor, Inc. shall be in
writing and shall be either (a) delivered in person, (b) sent by certified mail,
return receipt requested, (c) delivered by a recognized delivery service which
takes a receipt on delivery or (d) sent by facsimile transmission and addressed
as follows:
PhyCor, Inc.: PhyCor, Inc.
30 Burton Hills Boulevard, Suite 500
Nashville, Tennessee 37215
Attn: President
Phone: (615) 665-9066
Fax: (615) 665-9088
With a copy to: William E. Shofner, Esq.
Waller, Lansden, Dortch & Davis
511 Union Street, Suite 2100
Nashville, Tennessee 37219-1760
Phone: (615) 244-6380
Fax: (615) 244-6804
SEC. 37. RELATIONSHIP OF LEASE TO LEASE ADMINISTRATION AGREEMENT:
Notwithstanding any provision herein to the contrary, no provision in this Lease
shall be construed or interpreted to limit or abrogate any of the terms and
provisions of the Lease Administration Agreement. In the event any term or
provision of this Lease shall contradict any term or provision in the Lease
Administration Agreement, the Lease Administration Agreement shall govern and
control.
SEC. 38. ENTIRE AGREEMENT: Except for the terms and provisions of the Lease
Administration Agreement, this Lease contains all of the agreements of the
parties hereto with respect to this Lease, and no prior agreement, understanding
or representation pertaining to any such matter shall be effective for any
purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective successors
in interest.
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SEC. 39. COUNTERPARTS: This Agreement may be signed in one or more
counterparts, duplicate signature pages or facsimile signature pages, with the
same force and effect as if all required signatures were contained in a single
original instrument. Any one or more of such counterparts, duplicate signature
pages or facsimile signature pages may be removed from any one or more original
copies of this Agreement and annexed to other counterparts, duplicate signature
pages or facsimile signature pages to form a completely executed original
instrument.
IN WITNESS WHEREOF, the parties have caused this Lease to be executed by
their respective duly authorized officers.
TENANT: LANDLORD:
LEWIS-GALE CLINIC, L.L.C. HRT OF ROANOKE, INC.
By:________________________________ By:________________________________
Print Name: _______________________ Print Name:________________________
Its________________________________ Its:_______________________________
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EXHIBIT "A"
PROPERTY DESCRIPTION
LEWIS-GALE CLINIC
PARCEL I TRACT I (0.432 AC)
Being a tract of land situated in Salem, Virginia and designated as Tract I,
containing 0.432 acre of land and designated as tax #303-1-2.
COMMENCING at corner #1, said corner #1
being the intersection of the property of Lewis Gale Hospital as recorded in
Deed Book 4, Page 176 (Tax #283-2-1) and Tract IIB, said corner #1 lying on the
northerly right-of-way line of Keagy Road (50' R/W);
Thence along the line common to said property of Lewis Gale Hospital and
Tract IIB, the following courses and distances, N 22(Degree) 56' 30 E. 212.01
feet to a point;
Thence S 67(Degree) 03' 30 E. 5.66 feet to the Actual Point of BEGINNING;
Thence S 67(Degree) 03' 30 E. 37.84 feet along the line common to said property
of Lewis Gale Hospital, Inc. and property herein described to a point;
Thence N 22(Degree) 56' 30 E. 88.58 feet along said common line to a point;
Thence S 67(Degree) 03' 30 E. 7.65 feet along the line common to aforesaid Tract
IIB and the property herein described to a point;
Thence N 22(Degree) 56' 30 E. 35.20 feet along said common line to a point;
Thence S 67(Degree) 03' 30 E. 79.00 feet along said common line to a point;
Thence S 22(Degree) 56' 30 W. 35.20 feet along the line common to Tract IIA
(tax parcel #303-1-2.1) and the herein described tract;
Thence along said common line the following courses and distances, S 67(Degree)
03' 30 E. 17.05 feet to a point;
Thence S 22(Degree) 56' 30 W. 73.80 feet to a point;
Thence N 67(Degree) 03' 30 W. 16.97 feet to a point;
Thence S 22(Degree) 56' 30 W. 33.20 feet to a point;
Thence S 67(Degree) 03' 30 E. 16.97 feet to a point;
Thence S 22(Degree) 56' 30 W. 55.02 feet to a point;
Thence N 67(Degree) 03' 30 W. 54.35 feet along the line common to property of
Lewis Gale Medical Foundation as recorded in Deed Book 26, Page 77
(tax #303-1-1) and the herein described property;
Thence N 22(Degree) 56' 30 E.13.02 feet along the line common to the
aforementioned Tract IIB and the herein described property;
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Thence along said common line for the following courses and distances,
N 67(Degree) 03' 30 W. 51.00 feet to a point;
Thence N 22(Degree) 56' 30 E. 45.44 feet to a point;
Thence N 67(Degree) 03' 30 W. 7.07 feet to a point;
Thence N 22(Degree) 56' 30 E. 6.51 feet to a point;
Thence N 67(Degree) 03' 30 W. 29.12 feet to a point;
Thence N 22(Degree) 56'30 E. 8.47 feet to the Point of BEGINNING and containing
a computed acreage of 0.432 acre (18.829 sq. ft.)
Together with appropriate non-exclusive easements of ingress and egress over and
along private roads (now existing or as may hereafter be constructed and/or
relocated) of Lewis-Gale Hospital, Incorporated, running across its remaining
lands connecting the subject property to Keagy Road and Braeburn Drive.
Together also with easements for general utility purposes over, across and
under remaining properties of Lewis-Gale Hospital, Incorporated, including
water, sewer, drainage, electricity, gas and telephone, such easements to be
reasonable and to be exactly located as might be mutually agreed upon by
Lewis-Gale Hospital, Incorporated, and Industrial Development Authority of the
City of Salem, Virginia, their successors and assigns.
PARCEL I - continued TRACT II-B (3.032 AC)
Being a tract of land situated in Salem, Virginia, and designated as Tract
IIB and containing 3.032 acres of land.
BEGINNING at corner #1, a point located on the northerly right-of-way line
of Keagy Road (50' R/W) and being the corner common to property of Lewis Gale
Hospital, Inc. as recorded in Deed Book 4, Page 176 (tax number 283-2-1) and the
herein described parcel;
Thence along the line common to said property of Lewis Gale Hospital and the
herein described parcel, N 22(Degree) 56' 30 E. 212.01 feet to a point;
Thence S 67(Degree) 03' 30 E. 5.66 feet along said common line to a point;
Thence along the line common to Tract I (tax #303-1-2) and the herein described
parcel, the following courses and distances, S 22(Degree) 56' 30 W. 8.47 feet
to a point;
Thence S 67(Degree) 03' 30 E. 29.12 feet to a point;
Thence S 22(Degree) 56' 30 W. 6.51 feet to a point;
Thence S 67(Degree) 03' 30 E. 7.07 feet to a point;
Thence S 22(Degree) 56' 30 W. 45.44 feet to a point;
Thence S 67(Degree) 03' 30 E. 51.00 feet to a point;
Thence S 22(Degree) 56' 30 W. 13.02 feet to a point;
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Thence along the line common to property of Lewis Gale Medical Foundation as
recorded in Deed Book 26, Page 77 (tax parcel #303-1-1) and the herein
described parcel the following courses and distances, N 67(Degree) 03' 30 W
48.35 feet to a point;
Thence S 22(Degree) 56' 30 W. 110.58 feet to a point;
Thence S 71(Degree) 03' 15 E. 137.51 feet to a point;
Thence N 22(Degree) 56' 30 E. 78.40 feet to a point;
Thence along the line common to Tract IIA (tax #303-1-2.1) and the herein
described tract the following courses and distances, N 67(Degree) 56' 30 E.
79.65 feet to a point;
Thence S 67(Degree) 03' 30 E. 67.51 feet to a point;
Thence along the line common to Tract IIC (tax # 303-1-2.3) and the herein
described parcel, S 23(Degree) 00' 34 W. 32.79 feet to a point;
Thence S 21(Degree) 59' 26 E. 40.22 feet to a point;
Thence S 66(Degree) 59' 26 E. 130.79 feet to a point;
Thence N 23(Degree) 00' 34 E. 83.09 feet to a point;
Thence N 21(Degree) 59' 26 W. 121.21 feet to a point;
Thence S 68(Degree) 00' 34 W. 21.36 feet to a point;
Thence N 36(Degree) 59' 26 W. 37.78 feet to a point;
Thence N 45(Degree) 30' 34 E. 41.22 feet to a point;
Thence N 44(Degree) 29' 26 W. 26.00 feet to a point;
Thence S 45(Degree) 30' 34 W. 20.71 feet to a point;
Thence along the line common to the aforementioned Tract IIA (tax #303-1-2.1)
and the herein described parcel the following courses and distances,N 22 Degree)
56' 30 E. 32.09 feet to a point;
Thence N 67(Degree) 03' 30 W. 185.05 feet to a point;
Thence S 22(Degree) 56' 30 W. 8.83 feet to a point;
Thence along the line common to the aforementioned Tract I (tax #303-1-2) and
the herein described parcel for the following courses and distances,
N 67(Degree) 03' 30 W. 79.00 feet to a point;
Thence S 22(Degree) 56' 30 W. 35.20 feet to a point;
Thence N 67(Degree) 03' 30 W. 7.65 feet to a point;
Thence along the line common to said property of Lewis Gale Hospital, Inc.
(tax #283-2-1) and the herein described parcel the following courses and
distances, N 22(Degree) 56' 30 E. 89.44 feet to a point;
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Thence S 70(Degree) 20' 51 E. 274.71 feet to a point;
Thence N 52(Degree) 19' 29 E. 14.21 feet to a point;
Thence S 67(Degree) 03' 30 E. 199.58 feet to a point;
Thence along the line common to property of Lewis Gale Building Corporation as
recorded in Deed Book 81, Page 298 (tax #303.1-3) and the herein described
parcel the following courses and distances, S 04(Degree) 00' 00 W. 350.42 feet
to a point, said point lying on the northerly right-of-way line of Keagy Road;
Thence along the line common to the northerly right-of-way of Keagy Road and the
herein described parcel the following courses and distances, N 86(Degree) 00' 00
W. 103.70 feet to a point of curvature to the right;
Thence 323.98 feet along the arc of the curve to the right, whose radius is
980.00 feet, tangent 163.48 feet, delta angle 18(Degree) 56' 30 and chord
bearing and distance N 76(Degree) 31' 45 W. 322.51 feet to a point;
Thence N 67(Degree) 03' 30 W. 221.86 feet to the Point of BEGINNING containing
a computed acreage of 3.032 acres (132,062 SQ. FT.).
Together with appropriate non-exclusive easements of ingress and egress
over and along private roads (now existing or as may hereafter be constructed
and/or relocated) of Lewis-Gale Hospital, Incorporated, running across its
remaining lands connecting the subject property to Keagy Road and Braeburn
Drive.
Together also with easements for general utility purposes over, across
and under remaining properties of Lewis-Gale Hospital, Incorporated, including
water, sewer, drainage, electricity, gas and telephone, such easements to be
reasonable and to be exactly located as might be mutually agreed upon by
Lewis-Gale Hospital, Incorporated, and Industrial Development Authority of the
City of Salem, Virginia, their successors and assigns.
PARCEL II TRACT II-A (0.758 AC)
Being a tract of land situated in Salem, Virginia, designated as Tract IIA,
containing 0.758 acre of land and designated at tax #303-1-2.1.
BEGINNING at a northeasterly corner of Tract 1 (tax #303-1-2), a southerly
corner of Tract IIB and a northwesterly corner of the herein described tract;
Thence along the line common to said Tract IIB and the herein described tract
the following courses and distance, N 22(Degree) 56' 30 E. 8.83 feet to a point;
Thence S 67(Degree) 03' 30 E. 185.05 feet to a point; Thence S 22(Degree) 56' 30
W. 172.33 feet along the aforesaid common line and along the line common to
Tract IIC (tax #303-1-2.3) and the herein described tract;
Thence N 67(Degree) 03' 30 W. 77.20 feet along said common line and along the
line common to the aforementioned Tract IIB and herein described tract;
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Thence S 67(Degree) 56' 30 W. 79.65 feet to a point;
Thence N 22(Degree) 56' 30 E. 22.60 feet along the line common to property
of Lewis Gale Medical Foundation as recorded in Deed Book 26, Page 77
(tax #303-1-1) and the aforementioned tract to a point;
Thence N 67(Degree) 03' 30 W. 34.48 feet along said common line to a point;
Thence N 22(Degree) 56' 30 E. 55.02 feet along the line common to the
aforementioned Tract I (tax #303-1-2) and the herein described tract;
Thence N 67(Degree) 03' 30 W. 16.97 feet along said common line to a point;
Thence N 22(Degree) 56' 30 E. 33.20 feet along said common line to a point;
Thence S 67(Degree) 03' 30 E. 16.97 feet along said common line to a point;
Thence N 22(Degree) 56' 30 E. 73.80 feet along said common line to a point;
Thence N 67(Degree) 03' 30 W. 17.05 feet along said common line to a point;
Thence N 22(Degree) 56' 30 E. 35.20 feet to the Point of BEGINNING and
containing a computed acreage of 0.758 acre (33,014 SQ FT).
Together with the following easements:
(1) A non-exclusive easement for ingress, egress and parking on, over,along
and through all roads, driveways and parking areas no existing and as hereafter
constructed or located on the remaining property of the Industrial Development
Authority of the City of Salem, Virginia, its successors and assigns, located
between Keagy Road and Braeburn Drive.
(2) Such easements as are reasonably necessary for the location,
construction, installation, maintenance, repair, removal, reinstallation and
reconstruction of utilities and utility lines, including without limitation
water, sewer, drainage, electricity, gas and telephone, over, across, under and
through thr remaining property of the Industrial Development Authority of the
City of Salem, Virginia, located between Keagy Road and Braeburn Drive, said
easements to be specifically located by the mutual agreement of Lewis-Gale
Building Corporation and the Industrial Development Authority of the City of
Salem, Virginia, their successors and assigns.
(3) An easement for the lateral support, by the eastern wall of the
Lewis-Gale Clinic building now located on the land of the Industrial Development
Authority of the City of Salem, Virginia, of the building constructed by
Lewis-Gale Building corporation on the above-described land, including the right
to insert into and attached to said wall such beams and other structural
materials as shall be reasonably necessary for the benefit and support of the
building constructed by Lewis-Gale Building Corporation; provided, however, that
such use shall not render unstable or unsafe or otherwise materially adversely
affect the structural integrity of the building not located on Tract I (0.432
Ac.) as hereinabove described.
(4) The easements for ingress and egress over and along existing and future
private roads connecting the hereinabove described property with Keagy Road and
Braeburn Drive and for general utility purposes over, across and under the
property of Lewis-Gale Hospital, Incorporated, which were conveyed to the
Industrial Development Authority of the City of Salem, Virginia, by Lewis-Gale
Hospital, Incorporated, by deed dated July 1, 1971, recorded in the Clerk's
office of the Circuit Court of the City of Salem, Virginia, in Deed Book 17,
page 363, to which deed reference is hereby made for a more particular
description of said easements, said easements to be used in common with the
Industrial Development Authority of the City of Salem, Virginia, and its
assigns.
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PARCEL III TRACT II-C (0.518 AC)
Being a tract of land situated in Salem, Virginia, and designated as Tract
IIC containing 0.518 acre of land and designated as tax #303-1-2.3.
BEGINNING at a point lying in the easterly property line of Tract IIA,
being a southerly point of Tract IIB and being a northwesterly corner of the
herein described parcel, said point also lying S 22(Degree) 56' 30 W. 32.09 feet
from the northeast property corner of the aforementioned Tract IIA;
Thence along the line common to the aforesaid Tract IIB and the herein described
parcel the following courses and distances, N 45(Degree) 30' 34 E. 20.71 feet
to a point;
Thence S 44(Degree) 29' 26 E. 26.00 feet to a point;
Thence S 45(Degree) 30' 34 W. 41.22 feet to a point;
Thence S 36(Degree) 59' 26 E. 37.78 feet to a point;
Thence N 68(Degree) 00' 34 E. 21.36 feet to a point;
Thence S 21(Degree) 59' 26 E. 121.21 feet to a point;
Thence S 23(Degree) 00' 34 W. 83.09 feet to a point;
Thence N 66(Degree) 59' 26 W. 130.79 feet to a point;
Thence N 21(Degree) 59' 26 W. 40.22 feet to a point;
Thence N 23(Degree) 00' 34 E. 32.79 feet to a point;
Thence along the line common to said Tract IIA and the herein described parcel
the following courses and distances, S 67(Degree) 03' 30 E. 9.69 feet to a
point;
Thence N 22(Degree) 56' 30 E. 140.24 feet to the Point of BEGINNING and
containing a computed acreage of 0.518 acre (22,563 SQ FT).acre (22,563 SQ FT).
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TO: HRT OF ROANOKE, INC.
FROM: PHYCOR, INC.
Guaranty
GUARANTY OF OBLIGATIONS
PURSUANT TO LEASE ADMINISTRATION AGREEMENT
The undersigned, PhyCor, Inc., a Tennessee corporation (Guarantor), as a
material and necessary inducement to HRT of Roanoke, Inc., a Virginia
corporation (HRT), to enter into a Lease Administration Agreement, dated
_______________, (the Agreement) with Lewis-Gale Clinic, L.L.C., a Virginia
limited liability company corporation (Lewis-Gale), affecting ancillary hospital
facilities and physicians' clinics commonly known as Lewis-Gale Clinic on
several properties located and described on Exhibits A (the Properties), hereby
represents, warrants, covenants and agrees as follows:
I. Guarantor hereby irrevocably guarantees to HRT the payment when due of
all rents and all other sums payable by Lewis-Gale under the Agreement and the
faithful and prompt performance when due of each and every one of the terms,
conditions and covenants to be kept and performed by Lewis-Gale under the
Agreement, and any and all amendments, extensions and renewals of the Agreement;
provided, however, Guarantor shall have no liability or any other obligation to
HRT hereunder or otherwise upon (a) the occurrence of an event of default
described in subsection 9.1(k) of the Agreement or (b) the failure by Lewis-Gale
to pay any impositions in respect to real property assessed prior to the date
hereof. In the event of the failure of Lewis-Gale to pay any such rent or other
sums, or to render any other performance required of Lewis-Gale under the
Agreement, if and when due after the expiration of any applicable cure period,
the Guarantor shall upon receiving notice of such failure from HRT pay the rent
and forthwith perform all provisions of the Agreement to be performed by
Lewis-Gale thereunder. It is understood and agreed that the aggregate amount of
the obligations guaranteed hereby may not exceed the amount which accrues under
the Agreement, provided that the Guarantor shall be obligated to pay for all
reasonable costs and expenses that are incurred by HRT in enforcing this
Guaranty.
2. In such manner, upon such terms and at such times as HRT in its
reasonable discretion deems necessary or expedient, but with notice to and
consent by the Guarantor, HRT may alter, compromise, accelerate, extend or
change the time or manner for the payment or the performance of any obligation
hereby guaranteed, release Lewis-Gale by consent to any assignment (or
otherwise) as to all or any portion of the obligations hereby guaranteed,
release, substitute or add any one or more guarantors, accept additional or
substituted security for any obligation secured hereby, release or subordinate
any security for any obligation secured hereby or release or substitute the
Property now or hereafter covered by the Agreement for any other facility.
Subject to the foregoing sentence, no exercise or non-exercise by HRT of any
right hereby given HRT (or neglect or delay in connection therewith), no dealing
by HRT with the Guarantor or any other guarantor or any other person, and no
change, impairment, release or suspension of any right or remedy of HRT against
any person, including Lewis-Gale and any other guarantor, shall in any way
affect any of the obligations of the Guarantor hereunder or any security
furnished by the Guarantor or give the Guarantor any recourse or offset against
HRT. If HRT has exculpated Lewis-Gale from personal liability in whole or in
part, said exculpation shall not affect the obligations of the Guarantor
hereunder, it being understood that the Guarantor's obligations hereunder are
independent of the obligations of Lewis-Gale and are to be construed as if no
such exculpation had been given to Lewis-Gale by HRT. It is further understood
and agreed that if any such exculpation has been or at any time hereafter is
given to Lewis-Gale, HRT has done or will do so in reliance upon the terms
expressed herein.
3. Subject to the provisions of the last sentence of this Section, the
Guarantor hereby waives and relinquishes (a) any right to require HRT to proceed
against Lewis-Gale or any other person or to proceed against or exhaust any
security held by HRT at any time or to pursue any other remedy in HRT's power
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before proceeding against the Guarantor; (b) any defense that may arise by
reason of incapacity, lack of authority, insolvency, bankruptcy, death or
disability of any other person or persons or the failure of HRT to file or
enforce a claim against the estate (in administration, bankruptcy or any other
proceeding) of any other person or persons; (c) any defense arising because of
HRT's election, in any proceeding instituted under the Federal Bankruptcy Code,
together with all amendments and revisions thereto (the Bankruptcy Code), of the
application of Section 1111(b)(2) of the Bankruptcy Code; (d) any defense based
on any borrowing or grant of a security interest under Section 364 of the
Bankruptcy Code; and (e) any duty on the part of HRT to disclose to Guarantor
any facts HRT may now or hereafter know about Lewis-Gale, regardless of whether
HRT has reason to believe that any such facts materially increase the risk
beyond that which Guarantor intends to assume or has reason to believe that such
facts are unknown to Guarantor or has a reasonable opportunity to communicate
such facts to Guarantor, it being understood and agreed that the undersigned is
fully responsible for being and keeping informed of the financial condition of
Lewis-Gale and of all circumstances bearing on the risk of non-payment or
non-performance of any obligations or indebtedness hereby guaranteed. The
Guarantor hereby waives all notices of acceptance of this Guaranty, protest,
notice of intention to accelerate (and notice of such acceleration), demand and
dishonor, presentment, and all other demands of any kind now or hereafter
provided for by any statute or rule of law, other than any notice or demand that
HRT must give Guarantor hereunder, under the Agreement, under any Property Lease
subject to the Agreement or under any other agreement to which HRT or Guarantor
may be a party. Notwithstanding anything to the contrary in this Guaranty, the
Guarantor shall have as a defense to payment or performance hereunder each and
every defense, real and personal, which Lewis-Gale may have to the payment or
performance under the Agreement, it being the intention of the Guarantor and HRT
that the Guarantor's obligations hereunder shall not be greater, more burdensome
or otherwise different from Lewis-Gale's obligations under the Agreement.
4. Notwithstanding any modification or discharge of the obligations
guaranteed hereby (or any part thereof) or any amendment, modification,
rearrangement, stay, or cure of any of HRT's rights, remedies or recourse under
the Agreement which may occur in any bankruptcy or reorganization case or
proceeding concerning Lewis-Gale, whether permanent or temporary, and whether or
not assented to by HRT, the Guarantor hereby agrees that the Guarantor shall be
obligated under this Guaranty to pay and perform all of the obligations
guaranteed hereby in accordance with the respective terms of the Agreement and
of this Guaranty in effect on the date hereof. The Guarantor understands and
acknowledges that, by virtue of this Guaranty, the Guarantor has specifically
assumed any and all risk of a bankruptcy, reorganization, or other case or
proceeding under any of the Debtor Relief Laws (as hereinafter defined) with
respect to Lewis-Gale. The term Debtor Relief Laws, as used in this Guaranty,
shall mean the Bankruptcy Code or any other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, suspension of payments, or similar debtor relief law
from time to time in effect which affects the rights of creditors generally.
5. The amount of the Guarantor's liability and all rights, powers and
remedies of HRT hereunder and under any other agreement now or at any time
hereafter in force between HRT and Guarantor, including any other guaranty
executed by Guarantor relating to any indebtedness or other obligation of any
lessee to HRT, shall be cumulative and not alternative and such rights, powers
and remedies shall be in addition to all rights, powers and remedies given to
HRT by law. This Guaranty is in addition to and exclusive of the guaranty of any
other guarantor of any indebtedness of Lewis-Gale to HRT.
6. The obligations of the Guarantor hereunder are primary, direct and
independent of the obligations of Lewis-Gale and, in the event of any default by
Lewis-Gale under the Agreement (beyond any period of cure provided therein), a
separate action may be brought and prosecuted against the Guarantor whether or
not Lewis-Gale is joined therein or a separate action is brought against
Lewis-Gale. HRT may maintain successive actions for other defaults. HRT's rights
hereunder shall not be exhausted by its exercise of any of its rights or
remedies or by any such action or by any number of successive actions until and
unless all indebtedness and obligations, the payment and performance of which
are hereby guaranteed, have been paid and fully performed.
7. The Guarantor shall pay to HRT all reasonable attorneys' fees and all
costs and expenses which HRT expends or incurs to the extent allowed by
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applicable law in enforcing performance of any indebtedness or other obligation
hereby guaranteed or in enforcing this Guaranty against the Guarantor, whether
or not suit is filed, expressly including but not limited to all costs,
reasonable attorneys' fees and expenses incurred by HRT in connection with any
insolvency, bankruptcy, reorganization, arrangement or other similar proceedings
involving the Guarantor which in any way affects the exercise by HRT of its
rights and remedies hereunder.
8. The most recent audited financial statements of the Guarantor heretofore
delivered to HRT, if any, have been prepared in accordance with generally
accepted accounting principles and fairly present the financial condition of the
Guarantor as of the date thereof and no material adverse change has occurred in
the financial condition of Guarantor since the respective dates thereof.
9. If any provision or portion thereof of this Guaranty is declared or
found by a court of competent jurisdiction to be unenforceable or null and void,
such provision or portion thereof shall be deemed stricken and severed from this
Guaranty, and the remaining provisions and portions thereof shall continue in
full force and effect.
10. This Guaranty shall inure to the benefit of HRT, its successors and
assigns, and any subsequent owners of the Property who succeed to all or any
portion of HRT's obligations and rights under the Agreement, and shall bind the
heirs, executors, administrators, personal representatives, successors and
assigns of the Guarantor; provided that the Guarantor may not, without HRT's
prior written consent, assign or transfer any of its powers, duties or
obligations under this Guaranty which consent will not be unreasonably withheld.
Any assignment by Guarantor of this Guaranty that requires the consent of HRT
but which Guarantor does not obtain from HRT shall be a default only under the
Agreement and only if declared to be such a default by HRT. HRT's remedies
against Guarantor in such event shall be as in the case of any other default
under the Agreement. Notwithstanding the foregoing, Guarantor (i) may assign
this Guaranty to any subsidiary or other entity owned at least 51%, directly or
indirectly, by Guarantor; and (ii) guarantor may assign its interest in this
guaranty to any person, firm or corporation that is the purchaser of all or
substantially all of the assets of Guarantor or that is the successor to the
assets and business of Guarantor by virtue of a corporate merger or
consolidation of, with or into Guarantor. No such assignment as described in
clauses (i) or (ii) above shall be effective unless (a) HRT receives notice of
such assignment and (b) each such assignee assumes and agrees to perform and
observe all of the covenants and agreements of Guarantor under this Guaranty
either by agreement in writing or by operation of law. If each such assignee so
agrees, Guarantor shall then be secondarily liable for the performance of its
covenants and agreements herein; provided, however, in the event of an
assignment of the kind described in clause (ii) above, Guarantor shall be
released from all liability for rent or any other sums or obligations becoming
due and payable or performable after the effective time of the assignment, if
and only if, at the completion of such merger, consolidation, acquisition or
purchase, the successor to Guarantor shall have a net worth no less than the net
worth of Guarantor immediately prior to such merger, consolidation, acquisition
or purchase. such net worth shall be evidenced in a form and calculated in a
manner reasonably satisfactory to HRT.
This Guaranty may be assigned by HRT with respect to all or any portion of
the indebtedness or obligations hereby guaranteed to any subsequent owners or
encumbrances of the Property, and when so assigned the Guarantor shall be liable
to the assignees under this Guaranty without in any manner affecting the
liability of the Guarantor hereunder with respect to any indebtedness or
obligations retained by HRT.
11. Neither any provision of this Guaranty nor any right of either HRT or
the Guarantor hereunder can be waived in whole or in part nor can the Guarantor
be released from the Guarantor's obligations hereunder except by a writing duly
executed by an authorized officer of the waiving or releasing party.
12. When the context and construction so require, all words used in the
singular herein shall be deemed to have been used in the plural and the
masculine shall include the feminine and neuter and vice versa. The word person
as used herein shall include any individual, company, firm, association,
partnership, corporation, trust or other legal entity of any kind whatsoever.
The term Lewis-Gale as used herein shall mean the party herein so named and its
successors including, but not limited to, a debtor in possession under Chapter
11 of the Bankruptcy Code.
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13. EXCEPT WHERE FEDERAL LAW IS APPLICABLE AND UNLESS OTHERWISE EXPRESSLY
PROVIDED HEREIN, THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TENNESSEE. The Guarantor hereby: (a) irrevocably
submits to the non-exclusive jurisdiction of the state and federal courts of the
State of Tennessee in any legal proceeding arising out of, or in connection
with, this Guaranty, the Agreement and the obligations guaranteed hereby as
provided for by Tennessee law; and (b) irrevocably consents to the service of
process upon the Guarantor by the mailing of copies thereof by certified mail,
return receipt requested, postage prepaid, to the Guarantor at 30 Burton Hills
Blvd., Suite 500, Nashville, Tennessee 37215, Attention: General Counsel, or
such other address of which the Guarantor shall notify HRT in writing. Nothing
herein shall affect the rights of HRT to commence legal proceedings or otherwise
proceed against the Guarantor in any jurisdiction or to serve process in any
manner permitted by applicable law, and nothing herein shall constitute a
general consent to jurisdiction or service of process.
14. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
PERTAINING TO THE SUBJECT MATTER ADDRESSED HEREIN AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED as of ______________________, 1996.
PhyCor, Inc.,
a Tennessee corporation
By:___________________________
Title:________________________
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EXHIBIT "A"
PROPERTY DESCRIPTION
LEWIS-GALE CLINIC
PARCEL I TRACT I (0.432 AC)
Being a tract of land situated in Salem, Virginia and designated as Tract I,
containing 0.432 acre of land and designated as tax #303-1-2.
COMMENCING at corner #1, said corner #1 being the intersection of the
property of Lewis Gale Hospital as recorded in Deed Book 4, Page 176 (Tax
#283-2-1) and Tract IIB, said corner #1 lying on the northerly right-of-way line
of Keagy Road (50' R/W);
Thence along the line common to said property of Lewis Gale Hospital and
Tract IIB, the following courses and distances, N 22(Degree) 56' 30 E. 212.01
feet to a point;
Thence S 67(Degree) 03' 30 E. 5.66 feet to the Actual Point of BEGINNING;
Thence S 67(Degree) 03' 30 E. 37.84 feet along the line common to said
property of Lewis Gale Hospital, Inc. and property herein described to a point;
Thence N 22(Degree) 56' 30 E. 88.58 feet along said common line to a point;
Thence S 67(Degree) 03' 30 E. 7.65 feet along the line common to aforesaid
Tract IIB and the property herein described to a point;
Thence N 22(Degree) 56' 30 E. 35.20 feet along said common line to a point;
Thence S 67(Degree) 03' 30 E. 79.00 feet along said common line to a point;
Thence S 22(Degree) 56' 30 W. 35.20 feet along the line common to Tract IIA
(tax parcel #303-1-2.1) and the herein described tract;
Thence along said common line the following ourses and distances, S 67(Degree)
03' 30 E. 17.05 feet to a point;
Thence S 22(Degree) 56' 30 W. 73.80 feet to a point;
Thence N 67(Degree) 03' 30 W. 16.97 feet to a point;
Thence S 22(Degree) 56' 30 W. 33.20 feet to a point;
Thence S 67(Degree) 03' 30 E. 16.97 feet to a point;
Thence S 22(Degree) 56' 30 W. 55.02 feet to a point;
Thence N 67(Degree) 03' 30 W. 54.35 feet along the line common to property
of Lewis Gale Medical Foundation as recorded in Deed Book 26, Page 77 (tax
#303-1-1) and the herein described property;
Thence N 22(Degree) 56' 30 E. 13.02 feet along the line common to the
aforementioned Tract IIB and the herein described property;
Thence along said common line for the following courses and distances,
N 67(Degree) 03' 30 W. 51.00 feet to a point;
Thence N 22(Degree) 56' 30 E. 45.44 feet to a point;
Thence N 67(Degree) 03' 30 W. 7.07 feet to a point;
Thence N 22(Degree) 56' 30 E. 6.51 feet to a point;
Thence N 67(Degree) 03' 30 W. 29.12 feet to a point;
Thence N 22(Degree) 56' 30 E. 8.47 feet to the Point of BEGINNING and
containing a computed acreage of 0.432 acre (18.829 sq. ft.)
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Together with appropriate non-exclusive easements of ingress and egress over and
along private roads (now existing or as may hereafter be constructed and/or
relocated) of Lewis-Gale Hospital, Incorporated, running across its remaining
lands connecting the subject property to Keagy Road and Braeburn Drive.
Together also with easements for general utility purposes over, across and
under remaining properties of Lewis-Gale Hospital, Incorporated, including
water, sewer, drainage, electricity, gas and telephone, such easements to be
reasonable and to be exactly located as might be mutually agreed upon by
Lewis-Gale Hospital, Incorporated, and Industrial Development Authority of the
City of Salem, Virginia, their successors and assigns.
PARCEL I - continued TRACT II-B (3.032 AC)
Being a tract of land situated in Salem, Virginia, and designated as Tract IIB
and containing 3.032 acres of land.
BEGINNING at corner #1, a point located on the northerly right-of-way line
of Keagy Road (50' R/W) and being the corner common to property of Lewis Gale
Hospital, Inc. as recorded in Deed Book 4, Page 176 (tax number 283-2-1) and the
herein described parcel;
Thence along the line common to said property of Lewis Gale Hospital and the
herein described parcel, N 22(Degree) 56' 30 E. 212.01 feet to a point;
Thence S 67(Degree) 03' 30 E. 5.66 feet along said common line to a point;
Thence along the line common to Tract I (tax #303-1-2) and the herein
described parcel, the following courses and distances, S 22(Degree) 56' 30 W.
8.47 feet to a point;
Thence S 67(Degree) 03' 30 E. 29.12 feet to a point;
Thence S 22(Degree) 56' 30 W. 6.51 feet to a point;
Thence S 67(Degree) 03' 30 E. 7.07 feet to a point;
Thence S 22(Degree) 56' 30 W. 45.44 feet to a point;
Thence S 67(Degree) 03' 30 E. 51.00 feet to a point;
Thence S 22(Degree) 56' 30 W. 13.02 feet to a point;
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Thence along the line common to property of Lewis Gale Medical Foundation
as recorded in Deed Book 26, Page 77 (tax parcel #303-1-1) and the herein
described parcel the following courses and distances, N 67(Degree) 03' 30 W
48.35 feet to a point;
Thence S 22(Degree) 56' 30 W. 110.58 feet to a point;
Thence S 71(Degree) 03' 15 E. 137.51 feet to a point;
Thence N 22(Degree) 56' 30 E. 78.40 feet to a point;
Thence along the line common to Tract IIA (tax #303-1-2.1) and the herein
described tract the following courses and distances, N 67(Degree) 56' 30 E.
79.65 feet to a point;
Thence S 67(Degree) 03' 30 E. 67.51 feet to a point;
Thence along the line common to Tract IIC (tax # 303-1-2.3) and the herein
described parcel, S 23(Degree) 00' 34 W. 32.79 feet to a point;
Thence S 21(Degree) 59' 26 E. 40.22 feet to a point;
Thence S 66(Degree) 59' 26 E. 130.79 feet to a point;
Thence N 23(Degree) 00' 34 E. 83.09 feet to a point;
Thence N 21(Degree) 59' 26 W. 121.21 feet to a point;
Thence S 68(Degree) 00' 34 W. 21.36 feet to a point;
Thence N 36(Degree) 59' 26 W. 37.78 feet to a point;
Thence N 45(Degree) 30' 34 E. 41.22 feet to a point;
Thence N 44(Degree) 29' 26 W. 26.00 feet to a point;
Thence S 45(Degree) 30' 34 W. 20.71 feet to a point;
Thence along the line common to the aforementioned Tract IIA (tax
#303-1-2.1) and the herein described parcel the following courses and distances,
N 22(Degree) 56' 30 E. 32.09 feet to a point;
Thence N 67(Degree) 03' 30 W. 185.05 feet to a point;
Thence S 22(Degree) 56' 30 W. 8.83 feet to a point;
Thence along the line common to the aforementioned Tract I (tax #303-1-2)
and the herein described parcel for the following courses and distances, N
67(Degree) 03' 30 W. 79.00 feet to a point;
Thence S 22(Degree) 56' 30 W. 35.20 feet to a point;
Thence N 67(Degree) 03' 30 W. 7.65 feet to a point;
Thence along the line common to said property of Lewis Gale Hospital, Inc.
(tax #283-2-1) and the herein described parcel the following courses and
distances, N 22(Degree) 56' 30 E. 89.44 feet to a point;
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Thence S 70(Degree) 20' 51 E. 274.71 feet to a point;
Thence N 52(Degree) 19' 29 E. 14.21 feet to a point;
Thence S 67(Degree) 03' 30 E. 199.58 feet to a point;
Thence along the line common to property of Lewis Gale Building Corporation
as recorded in Deed Book 81, Page 298 (tax #303.1-3) and the herein described
parcel the following courses and distances, S 04(Degree) 00' 00 W. 350.42 feet
to a point, said point lying on the northerly right-of-way line of Keagy Road;
Thence along the line common to the northerly right-of-way of Keagy Road
and the herein described parcel the following courses and distances, N
86(Degree) 00' 00 W. 103.70 feet to a point of curvature to the right;
Thence 323.98 feet along the arc of the curve to the right, whose radius is
980.00 feet, tangent 163.48 feet, delta angle 18(Degree) 56' 30 and chord
bearing and distance N 76(Degree) 31' 45 W. 322.51 feet to a point;
Thence N 67(Degree) 03' 30 W. 221.86 feet to the Point of BEGINNING
containing a computed acreage of 3.032 acres (132,062 SQ. FT.).
Together with appropriate non-exclusive easements of ingress and egress over and
along private roads (now existing or as may hereafter be constructed and/or
relocated) of Lewis-Gale Hospital, Incorporated, running across its remaining
lands connecting the subject property to Keagy Road and Braeburn Drive.
Together also with easements for general utility purposes over, across and
under remaining properties of Lewis-Gale Hospital, Incorporated, including
water, sewer, drainage, electricity, gas and telephone, such easements to be
reasonable and to be exactly located as might be mutually agreed upon by
Lewis-Gale Hospital, Incorporated, and Industrial Development Authority of the
City of Salem, Virginia, their successors and assigns.
PARCEL II TRACT II-A (0.758 AC)
Being a tract of land situated in Salem, Virginia, designated as Tract IIA,
containing 0.758 acre of land and designated at tax #303-1-2.1.
BEGINNING at a northeasterly corner of Tract 1 (tax #303-1-2), a southerly
corner of Tract IIB and a northwesterly corner of the herein described tract;
Thence along the line common to said Tract IIB and the herein described tract
the following courses and distance, N 22(Degree) 56' 30 E. 8.83 feet to a
point;
Thence S 67(Degree) 03' 30 E. 185.05 feet to a point;
Thence S 22(Degree) 56' 30 W. 172.33 feet along the aforesaid common line
and along the line common to Tract IIC (tax #303-1-2.3) and the herein described
tract;
Thence N 67(Degree) 03' 30 W. 77.20 feet along said common line and along
the line common to the aforementioned Tract IIB and herein described tract;
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Thence S 67(Degree) 56' 30 W. 79.65 feet to a point;
Thence N 22(Degree) 56' 30 E. 22.60 feet along the line common to property
of Lewis Gale Medical Foundation as recorded in Deed Book 26, Page 77 (tax
#303-1-1) and the aforementioned tract to a point;
Thence N 67(Degree) 03' 30 W. 34.48 feet along said common line to a point;
Thence N 22(Degree) 56' 30 E. 55.02 feet along the line common to the
aforementioned Tract I (tax #303-1-2) and the herein described tract;
Thence N 67(Degree) 03' 30 W. 16.97 feet along said common line to a point;
Thence N 22(Degree) 56' 30 E. 33.20 feet along said common line to a point;
Thence S 67(Degree) 03' 30 E. 16.97 feet along said common line to a point;
Thence N 22(Degree) 56' 30 E. 73.80 feet along said common line to a point;
Thence N 67(Degree) 03' 30 W. 17.05 feet along said common line to a point;
Thence N 22(Degree) 56' 30 E. 35.20 feet to the Point of BEGINNING and
containing a computed acreage of 0.758 acre (33,014 SQ FT).
Together with the following easements:
(1) A non-exclusive easement for ingress, egress and parking on, over,
along and through all roads, driveways and parking areas no existing and as
hereafter constructed or located on the remaining property of the Industrial
Development Authority of the City of Salem, Virginia, its successors and
assigns, located between Keagy Road and Braeburn Drive.
(2) Such easements as are reasonably necessary for the location,
construction, installation, maintenance, repair, removal, reinstallation and
reconstruction of utilities and utility lines, including without limitation
water, sewer, drainage, electricity, gas and telephone, over, across, under and
through thr remaining property of the Industrial Development Authority of the
City of Salem, Virginia, located between Keagy Road and Braeburn Drive, said
easements to be specifically located by the mutual agreement of Lewis-Gale
Building Corporation and the Industrial Development Authority of the City of
Salem, Virginia, their successors and assigns.
(3) An easement for the lateral support, by the eastern wall of the
Lewis-Gale Clinic building now located on the land of the Industrial Development
Authority of the City of Salem, Virginia, of the building constructed by
Lewis-Gale Building corporation on the above-described land, including the right
to insert into and attached to said wall such beams and other structural
materials as shall be reasonably necessary for the benefit and support of the
building constructed by Lewis-Gale Building Corporaiton; provided, however, that
such use shall not render unstable or unsafe or otherwise materially adversely
affect the structural integrity of the building not located on Tract I (0.432
Ac.) as hereinabove described.
(4) The easements for ingress and egress over and along existing and future
private roads connecting the hereinabove described property with Keagy Road and
Braeburn Drive and for general utility purposes over, across and under the
property of Lewis-Gale Hospital, Incorporated, which were conveyed to the
Industrial Development Authority of the City of Salem, Virginia, by Lewis-Gale
Hospital, Incorporated, by deed dated July 1, 1971, recorded in the Clerk's
office of the Circuit Court of the City of Salem, Virginia, in Deed Book 17,
page 363, to which deed reference is hereby made for a more particular
description of said easements, said easements to be used in common with the
Industrial Development Authority of the City of Salem, Virginia, and its
assigns.
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PARCEL III TRACT II-C (0.518 AC)
Being a tract of land situated in Salem, Virginia, and designated as Tract
IIC containing 0.518 acre of land and designated as tax #303-1-2.3.
BEGINNING at a point lying in the easterly property line of Tract IIA,
being a southerly point of Tract IIB and being a northwesterly corner of the
herein described parcel, said point also lying S 22(Degree) 56' 30 W. 32.09 feet
from the northeast property corner of the aforementioned Tract IIA;
Thence along the line common to the aforesaid Tract IIB and the herein
described parcel the following courses and distances, N 45(Degree) 30' 34 E.
20.71 feet to a point;
Thence S 44(Degree) 29' 26 E. 26.00 feet to a point;
Thence S 45(Degree) 30' 34 W. 41.22 feet to a point;
Thence S 36(Degree) 59' 26 E. 37.78 feet to a point;
Thence N 68(Degree) 00' 34 E. 21.36 feet to a point;
Thence S 21(Degree) 59' 26 E. 121.21 feet to a point;
Thence S 23(Degree) 00' 34 W. 83.09 feet to a point;
Thence N 66(Degree) 59' 26 W. 130.79 feet to a point;
Thence N 21(Degree) 59' 26 W. 40.22 feet to a point;
Thence N 23(Degree) 00' 34 E. 32.79 feet to a point;
Thence along the line common to said Tract IIA and the herein described
parcel the following courses and distances, S 67(Degree) 03' 30 E. 9.69 feet to
a point;
Thence N 22(Degree) 56' 30 E. 140.24 feet to the Point of BEGINNING and
containing a computed acreage of 0.518 acre (22,563 SQ FT).
PARCEL IV (6.360 AC)
BEGINNING at an old pin found on the cul-de-sac of Braeburn Circle, said
point beginning designated corner no. 1 on plat entitled Urban Class ALTA/ACSM
Land Title Survey for Healthcare Realty Trust Incorporated by T.P. Parker & Son
and also being on the westerly boundary of G & M LLC property; Thence along the
westerly boundary of G & M LLC property, S 14(Degree)42'00 W. 88.20 feet to an
old pin found being the southwest corner of G & M LLC property, designated
corner no. 2; Thence along the southerly boundary of G & M LLC property, S
86(Degree)00'00 E. passing an old pin found on line at 20.98 feet, in all,
221.02 feet to an old pin found being the southeast corner of G & M LLC property
and on the westerly boundary of Braeburn Medical Park property, designated
corner no. 3; Thence along the boundary of Braeburn Medical Park property, S
04(Degree)00'00 W. 200.00 feet to an old pin found being the southwest corner of
Braeburn Medical Park property and also being on the northerly right-of-way of
Keagy Road, designated corner no. 4; Thence along the northerly right-of-way
line of Keagy Road, N 86(Degree)00'00 W. 800.00 feet to an old pin found being
the southeast corner of Lewis Gale Building Corp. property, designated corner
no. 5; Thence leaving the northerly right-of-way of Keagy Road and along the
easterly boundary of Lewis Gale Building Corp. property and Lewis Gale Hospital,
Inc. property, N 04(Degree)00'00 E. 405.27 feet to an old pin found being the
southwest corner of Ganot Corporation property, designated corner no. 6; Thence
along the southerly boundary of Ganot Corporation property, S 86(Degree)00'00 E.
470.20 feet to a 1/2 rebar with yellow cap set being the southeast corner of
Ganot Corporation property and the southwest corner of HCA Health Services of
Virginia, Inc. property, designated corner no. 7; Thence along the southerly
boundary of HCA Health Services of Virginia, Inc. property, S 75(Degree)18'00 E.
120.00 feet to an old pin found being the southeast corner of HCA Health
Services of Virginia, Inc. property and also being on the westerly right-of-way
of Braeburn Circle, designated corner no. 8; Thence along the cul-de-sac of
Braeburn Circle with a curve to the left whose radius is 50.00 feet an arc
distance of 130.89 feet (ch = S 00(Degree)18'00 E. 96.59 feet) to the POINT OF
BEGINNING and containing 6.360 Ac. being Lots 1 thru 8 & 20, Braeburn Map,
Section 2 recorded in P.B. 1, Pg. 36 and being as shown on the aforesaid plat by
T.P. Parker & Son.
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LEWIS-GALE MEDICAL FOUNDATION
PARCEL V (0.333 AC)
Being a tract of land situated in Salem, Virginia, and designated as tax
#303-1-1, Property of Lewis Gale Medical Foundation as recorded in Deed Book 26,
Page 77 and containing 0.333 acre of land.
COMMENCING at corner #10, a point on the northerly right-of-way line of Keagy
Road and also being a southerly corner of Tract IIB;
Thence along the line common to the aforesaid Keagy Road and Tract IIB, N 67
(Degree) 03' 30 W. 40.18 feet to a point;
Thence with a tie line across the aforementioned Tract IIB, N 22(Degree) 56'
30 E. 37.57 feet to the Actual Place of BEGINNING;
Thence along the line common to said Tract IIB and the herein described tract,
N 71(Degree) 03' 15 W. 137.51 feet to a point;
Thence N 22(Degree) 56' 30 E. 110.58 feet along said common line to a point;
Thence S 67(Degree) 03' 30 E. 137.18 feet along said common line and along the
line common to Tract 1 (tax #303-1-2) and the herein described tract and Tract
IIA (tax #303-1-2.1) and the herein described tract;
Thence S 22(Degree) 56' 30 W.101.00 feet along the line common to said Tract IIA
and the herein described tract and Tract IIB and the herein described tract to
the Point of BEGINNING containing a computed acreage of 0.333 acre (14,511 SQ
FT).
Together with appropriate non-exclusive easements of right-of-way for ingress
and egress over the adjoining property of The Industrial Development Authority
of the City of Salem, Virginia, connecting with private roads (as now or may in
the future exist) of The Medical Foundation of Roanoke Valley (formerly
Lewis-Gale Medical Foundation) extending to Keagy Road and Braeburn Drive.
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LEE-HI BUSINESS CENTER
PARCEL VI APPERSON DRIVE (19.546 AC)
BEGINNING at a point on the northerly right-of-way of Lee Highway, said point
being the southeast corner of NAD Properties and also being designated corner
no. 1 on plat entitled Urban Class ALTA/ACSM Land Title Survey for Healthcare
Realty Trust Incorporated by T.P. Parker & Son dated October 24, 1996; Thence
leaving said right-of-way and along the westerly boundary of NAD Properties, N
24(Degree)09'00 E. 921.61 feet to an old pin found designated corner no. 2;
Thence along the southerly boundary of NAD Properties, S 81(Degree)52'00 E.
869.29 feet to an old pin found at the southeast corner of NAD Properties and
being on the westerly boundary of CSW Associates property designated corner no.
3; Thence along the westerly boundary of CSW Associates property, Jerry L.
Conner, Et Ux property and Alexander P. Fekas, Et Ux property, S 08(Degree)10'30
W. 933.14 feet to a point on the northerly right-of-way of Lee Highway
designated corner no. 4; Thence along the northerly right-of-way of Lee Highway
with a curve to the right whose radius is 676.20 feet an arc distance of 20.81
feet (chord = N 69(Degree)14'34 W. 20.81 feet) to a point designated corner no.
5; Thence continuing with said right-of-way, N 68(Degree)21'40 W. 81.18 feet to
a point designated corner no. 6; Thence continuing with said right-of-way with a
curve to the left whose radius is 1949.86 feet an arc distance of 152.80 feet
(chord = N 70(Degree)36'21 W. 152.76 feet) to a point being the southeast corner
of EMAS, Inc. property designated corner no. 7; Thence leaving said right-of-way
and along the easterly boundary of EMAS, Inc. property, N 08(Degree)08'00 E.
144.80 feet to an old pin found being the northeast corner of EMAS, Inc.
property designated corner no. 8; Thence along the northerly boundary of EMAS,
Inc. property, N 81(Degree)52'00 W. 150.00 feet to an old pin found being the
northwest corner of EMAS, Inc. property designated corner no. 9; Thence along
the westerly boundary of EMAS, Inc. property, S 08(Degree)08'00 W. 126.93 feet
to a point on the northerly right-of-way of Lee Highway and being the southwest
corner of EMAS, Inc. property designated corner no. 10; Thence along the
northerly right-of-way of Lee Highway with a curve to the left whose radius is
1949.86 feet an arc distance of 26.20 feet (chord = N 77(Degree)40'33 W. 26.20
feet) to a point designated corner no. 11; Thence continuing with said
right-of-way with a curve to the left whose radius is 1625.08 feet, an arc
distance of 297.68 feet (chord = N 82(Degree)25'57 W. 297.27 feet) to a point
designated corner no. 12; Thence continuing with said right-of-way with a curve
to the left whose radius is 1949.86 feet, an arc distance of 21.44 feet (chord =
N 87(Degree)07'09 W. 21.44 feet) to a point designated corner no. 13; Thence
continuing with said right-of-way, N 02(Degree)33'57 E. 33.00 feet to a point
designated corner no. 14; Thence continuing with said right-of-way, N
88(Degree)05'10 W. 67.06 feet to a point designated corner no. 15; Thence
continuing with said right-of-way, S 01(Degree)44'12 W. 33.00 feet to a point
designated corner no. 16; Thence continuing with said right-of-way, N
88(Degree)15'48 W. 143.56 feet to a point designated corner no. 17; Thence
continuing with said right-of-way with a curve to the right whose radius is
682.63 feet, an arc distance of 170.73 feet (chord = N 81(Degree)05'55 W. 170.28
feet to the POINT OF BEGINNING and containing 19.546 ac. and being as shown on
the aforesaid plat by T.P. Parker & Son.
VALLEY VIEW MALL
PARCEL VII (2.611 Ac)
BEGINNING at a point being the intersection of the southerly right-of-way of
Valley View Boulevard North, N.W. and the westerly right-of-way of Ring Road,
N.W., Thence along said westerly right-of-way of Ring Road, N.W. with a curve to
the left whose radius is 660.00 feet, an arc distance of 25.00 feet (ch = S
02(Degree)02'51 W. 25.00 feet) to an old pin found, the ACTUAL
POINT-OF-BEGINNING, being designated corner no. 1 on Urban Class, ALTA/ACSM Land
Title Survey for Healthcare Realty Trust Incorporated by T.P. Parker & Son dated
October 8, 1996; Thence continuing with said westerly right-of-way of Ring Road,
N.W. with a curve to the left whose radius is 660.00 feet, an arc distance of
56.51 feet (ch = S 01(Degree)28'27 E. 56.49 feet) to an old pin found designated
corner no. 2; Thence continuing with said westerly right-of-way of Ring Road,
N.W., S 03(Degree)55'38 E. 90.00 feet to an old pin found designated corner no.
3; Thence leaving the westerly right-of-way of Ring Road, N.W. and along the
northerly boundary of the Retention Pond lot, S 86(Degree)04'22 W. 279.34 feet
to an old pin found on the northerly right-of-way of Interstate 581 designated
corner no. 4; Thence along the northerly right-of-way of Interstate 581, N
48(Degree)55'38 W. 173.16 feet to a concrete monument found designated corner
no. 5; Thence continuing with said northerly right-of-way of Interstate 581 with
a curve to the right whose radius is 2739.79 feet, an arc distance of 118.84
feet (ch = N 47(Degree)41'05 W. 118.83 feet) to an old pin found, designated
corner no. 6; Thence leaving the northerly right-of-way of Interstate 581 and
along the easterly boundary of lot 7A-8 of Valley View Mall recorded in M.B. 1,
Pg. 746, N 41(Degree)04'22 E. passing an old pin found on line at 243.74 feet,
in all, 251.11 feet to an old pin found on the southerly right-of-way of Valley
View Boulevard North, N.W., designated corner no. 7; Thence along the southerly
right-of-way of Valley View Boulevard, N.W. with a curve to the left whose
radius is 570.00 feet, an arc distance of 282.08 feet (ch = S 59(Degree)41'18 E.
279.21 feet) to an old pin found, designated corner no. 8; Thence leaving the
southerly right-of-way of Valley View Boulevard North, N.W. and along the
southerly boundary of the Valley View Mall Pylon Sign Tract, S 47(Degree)23'28
E. 113.39 feet to the ACTUAL POINT-OF-BEGINNING and containing 2.611 ac. being
designated Lot 7A-1, Valley View Mall recorded in M.B. 1, Pg. 445 and being as
shown on the aforesaid plat by T.P. Parker & Son.
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WEST SALEM FAMILY PRACTICE AND IMMEDIATE CARE
PARCEL VIII (0.80 AC)
Description of Lot 6 of the Subdivision of Dixie Farms Associates, Et Als (P.B.
2, Page 11).
BEGINNING at the northeasterly corner of Lot A, as recorded in Plat Book 3, page
82, said point also located on the westerly side of a 30 foot roadway (D.B. 76,
Page 585); Thence leaving Lot A and with a tie line bearing N 80(Degree) 55' 16
E. 30.44 feet to the Actual Place of Beginning being corner #1, an existing iron
pin, said point located on the southerly boundary of Property of City of Salem
(Salem High School) as recorded in Deed Book 28, Page 515, said point also being
the northeasterly corner of Lot 2A as recorded in Plat Book 3, Page 78; Thence
leaving Lot 2A and with property of City of Salem (Salem High School), N
80(Degree) 55' 16 E. 225.80 feet to corner #2, an existing iron pin, said point
being the northwesterly corner of Lot 1 as recorded in Plat Book 2, Page 11, of
the Subdivision of Dixie Farms Associates, Et Als; Thence leaving the property
of the City of Salem and with Lot 1, S 07(Degree) 06' 58 E. 155.00 feet to
corner #3, an existing iron pin, said point located on the northerly boundary of
Lot 2A as recorded in Plat Book 3, Page 78; thence leaving Lot 1 and with Lot 2A
for the following 2 courses; S 80(Degree) 55' 16 W. 225.80 feet to corner #4, an
existing iron pin; Thence N 07(Degree) 06' 58 W. 155.00 feet to corner #1, the
Actual Place of Beginning and containing 0.80 acres (34,848 square feet).
Together with a non-exclusive easement for ingress and egress over a strip of
the remaining property of Dixie Farm Associates thirty (30) feet in width
adjacent to and parallel with the westerly boundary of the property described
above and then extending from said westerly boundary in a westerly direction
adjacent to and parallel with the northerly boundary of the remaining property
of Dixie Farm Associates for a distance of 189.54 feet, giving the
above-described property access to Spartan Drive. This easement shall
automatically cease and terminate when a public street has been constructed and
dedicated for public use, and accepted by the City of Salem, Virginia, adjacent
to the westerly boundary of said above-described 0.80 acre parcel and connecting
said property with spartan Drive.
FINCASTLE FAMILY PRACTICE AND FOUR (4) LOTS
PARCEL IX (0.724 AC)
BEGINNING at a 1/2 rebar with yellow cap set on the northerly right-of-way of
Herndon Street, said point being the southwest corner of Lot 14, Fincastle Land
and Improvement Company Map recorded in Plat Book 1, page 4, and also being
designated corner no. 1 on plat entitled Urban Class ALTA/ACSM Land Title Survey
for Healthcare Realty Trust Incorporated by T.P. Parker & Son dated October 28,
1996; Thence along the northerly right-of-way of Herndon Street, N
85(Degree)15'00 W. 31.68 feet to a 1/2 rebar with yellow cap set designated
corner no. 2; Thence continuing with said right-of-way, N 04(Degree)45'00 E.
0.94 feet to a 1/2 rebar with yellow cap set designated corner no. 3; Thence
continuing with said right-of-way, N 40(Degree)29'33 W. 35.66 feet to a 1/2
rebar with yellow cap set on the easterly right-of-way of U.S. Route 220,
designated corner no. 4; Thence along the easterly right-of-way of U.S. Route
220 with a curve to the right whose radius is 1402.39 feet an arc distance of
324.35 feet (chord = N 03(Degree)32'27 W. 323.63 feet) to an old pin found
designated corner no. 5; Thence continuing with said right-of-way, N
03(Degree)05'06 E, 10.67 feet to a 1/2 rebar with yellow cap set being the
southwest corner of the Bank of Fincastle property designated corner no. 6;
Thence along the southerly boundary of the Bank of Fincastle property, N
89(Degree)21'40 E. 87.96 feet to an old flat iron found being the northwest
corner of the Ruby W. Taylor property designated corner no. 7; Thence along the
westerly boundary of the Ruby W. Taylor property, S 04(Degree)50'00 E. passing a
concrete monument found on line at 0.31 feet, in all, 248.69 feet to an old flat
iron found being the southwest corner of the Ruby W. Taylor property and the
northeast corner of Lot 14, Fincastle Land and Improvement Company map,
designated corner no. 8; Thence along the northerly boundary of Lot 14, N
85(Degree)15'00 W. 25.00 feet to a point designated corner no. 9, Thence along
the westerly boundary of Lot 14, S 04(Degree)45'00 W. 120.00 feet to the POINT
OF BEGINNING and containing 0.724 ac. (31,547 sq. ft.) and being as shown on the
aforesaid plat by T.P. Parker & Son.
PARCEL IX - continued
9
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(0.276 AC - Lots 11, 12, 13 & 14, FINCASTLE LAND & IMPROVEMENT CO.)
BEGINNING at a 1/2 rebar with yellow cap set on the northerly right-of-way of
Herndon Street being the southwest corner of Lot 14, Fincastle Land and
Improvement Company map recorded in Plat Book 1, page 4, said point being
designated corner no. 1 on plat entitled Urban Class ALTA/ACSM Land Title Survey
for Healthcare Realty Trust Incorporated by T.P. Parker & Son dated October 28,
1996; Thence leaving the northerly right-of-way of Herndon Street and along the
westerly boundary of Lot 14, Fincastle Land and Improvement Company, N
04(Degree)45'00 E. 120.00 feet to a point designated corner no. 9; Thence along
the northerly boundary of Lots 14, 13, 12 & 11, Fincastle Land and Improvement
Company and the southerly boundary of the Ruby W. Taylor property, S
85(Degree)15'00 E. passing an old flat iron found on line at 25.00 feet, in all,
100.00 feet to a point being the northwest corner of the Charles E. & Greta S.
Stull property and the northeast corner of Lot 11, Fincastle Land and
Improvement Company, designated corner no. 10; Thence along the westerly
boundary of the Charles E. & Greta S. Stull property and the easterly boundary
of Lot 10, Fincastle Land and Improvement Company, S 04(Degree)45'00 W. 120.00
feet to a 1/2 rebar with yellow cap set on the northerly right-of-way of Herndon
Street being the southwest corner of said Stull property and the southeast
corner of Lot 11, Fincastle Land and Improvement Company, designated corner no.
11; Thence along the northerly right-of-way of Herndon Street and the southerly
boundary of Lots 11, 12, 13 & 14, Fincastle Land and Improvement Company, N
85(Degree)15'00 W. 100.00 feet to the POINT OF BEGINNING and containing 0.276
ac. 12,000 sq. ft.) and being as shown on the aforesaid plat by T.P. Parker &
Son.
Together with the right to use of that certain well and water system, situate on
the remaining lands of Charles Edward Stull and Greta S. Stull, or their
successors, together with that certain easement of reasonable access over,
across and through such lands for the purpose of operating and maintaining said
well and water system, all of such rights and easements which were previously
conveyed.
NEW CASTLE FAMILY PRACTICE
PARCEL X 2.079 AC) - NEWCASTLE, VA
BEGINNING at an old pin found, said pin being at the northeast corner of Market
Street and Court Street and being designated corner no. 1 on plat entitled Urban
Class ALTA/ACSM Land Title Survey for Healthcare Realty Trust Incorporated by
T.P. Parker & Son dated October 24, 1996; Thence along the easterly right-of-way
of Court Street (unimproved) and the easterly boundary of the Jimmie B. Layman
property, N 42(Degree)15'00 W. passing a 1/2 rebar with yellow cap set on line
at 400.00 feet, in all, 450.00 feet to a point on the southerly boundary of the
Shirley A. Wade property in the center of John's Creek, designated corner no. 2;
Thence with the southerly boundary of the Shirley A. Wade property and the
center of John's Creek, N 67(Degree)11'27 E. 241.30 feet to a point in the
center of John's Creek and the northwest corner of Ralph A. Thompson property,
designated corner no. 3; Thence leaving said creek and along the westerly
boundary of the Ralph A. Thompson property, S 39(Degree)58'34 E. passing a 1/2
rebar with yellow cap set on line at 69.98 feet, in all, 369.98 feet to a 1/2
rebar with yellow cap set at the southwest corner of the Ralph A. Thompson
property and also being on the northerly right-of-way of Market Street,
designated corner no. 4; Thence along the northerly right-of-way of Market
Street, S 47(Degree)45'00 W. passing an old pin found on line at 2.86 feet, in
all, 212.86 feet to the POINT-OF-BEGINNING and containing 2.079 ac. (90,542 sq.
ft.) and being as shown on the aforesaid plat by T.P. Parker & Son.
Together with a sewer line easement as more particularly set forth in Deed Book
38, page 135.
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BACKCREEK FAMILY PRACTICE
PARCEL XI (1.4144 AC) ROANOKE, VA
BEGINNING at a point on the northerly right-of-way of U.S. Route 221, said point
being in the centerline of Little Back Creek and designated as corner no. 1 on
plat entitled Urban Class ALTA/ACSM Land Title Survey for Healthcare Realty
Trust Incorporated by T.P. Parker & Son dated October 17, 1996; Thence along the
northerly right-of-way of U.S. Route 221, S 87(Degree)36'00 W. 20.03 feet to an
old pin found, designated corner no. 2; Thence continuing along the northerly
right-of-way of U.S. Route 221, S 67(Degree)15'00 W. 103.61 feet to an old pin
found, designated corner no. 3; Thence continuing along the northerly
right-of-way of U.S. Route 221, S 70(Degree)27'30 W. 325.88 feet to an old pin
found, designated corner no. 4; Thence leaving said right-of-way and along the
easterly boundary of the Roanoke County Board of Supervisors property, N
02(Degree)04'00 W. 197.77 feet to an old pin found, designated corner no. 5;
Thence along the southerly boundary of the Roanoke County Board of Supervisors
property, N 70(Degree)06'30 E. 95.05 feet to an old pin found, designated corner
no. 6; Thence continuing along the southerly boundary of the Roanoke County
Board of Supervisors property, S 89(Degree)47'10 E. passing an old pin on line
at 220.90 feet, in all, 264.64 feet to a point in the centerline of Little Back
Creek, designated corner no. 7; Thence with the centerline of Little Back Creek,
S 53(Degree)48'00 E. 18.20 feet to a point in the centerline of Little Back
Creek, designated corner no. 8; Thence continuing with the centerline of Little
Back Creek, S 41(Degree)48'00 E. 91.67 feet to the POINT OF BEGINNING and
containing 1.4144 ac. and being known as New Lot A, Subdivision for the County
of Roanoke, P.B. 10, Pg. 147 and being as shown on the aforesaid plat by T.P.
Parker & Son.
BONSACK FAMILY PRACTICE
PARCEL XII (1.927 AC) HUNTRIDGE ROAD
BEGINNING at an old pin found on the northerly right-of-way of Huntridge Road,
said point being designated corner no. 1 on plat entitled Urban Class ALTA/ACSM
Land Title Survey for Healthcare Realty Trust Incorporated by T.P. Parker & Son
dated October 17, 1996; Thence along the northerly right-of-way of Huntridge
Road, N 41(Degree)27'50 W. 352.29 feet to an old pin found, said pin being the
southeast corner of the Roanoke County Board of Supervisors property, designated
corner no. 2; Thence leaving Huntridge Road and along the easterly boundary of
the Roanoke County Board of Supervisors property, N 48(Degree)32'10 E. 138.26
feet to an old pin found, said pin being the northeast corner of the Roanoke
County Board of Supervisors property and being on the southerly boundary line of
the F & W Community Development Corp. property, designated corner no. 3; Thence
along the southerly boundary of the F & W Community Development Corp. property
the following:
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(1) S 40(Degree)43'05 E. 24.56 feet to an old pin found, corner no. 4
(2) S 68(Degree)43'05 E. 165.00 feet, to an old pin found, corner no. 5
(3) S 80(Degree)13'00 E. 115.00 feet, to an old pin found, corner no. 6,
(4) N 76(Degree)26'30 E. 127.28 feet to an old pin found, said pin
being the southeast corner of the F & W Community Development Corp. property and
also being on the westerly right-of-way of Challenger Avenue, designated corner
no. 7; Thence along the westerly right-of-way of Challenger Avenue, S
42(Degree)07'00 W. 80.00 feet to an old pin found, designated corner no. 8;
Thence continuing with said right-of-way, S 37(Degree)49'00 W. 200.48 feet to an
old pin found, designated corner no. 9; Thence continuing with said right-of-way
S 42(Degree)11'10 W. 94.30 feet to an old pin found, designated corner no. 10;
Thence leaving the right-of-way of Challenger Avenue and along the northerly
right-of-way of Huntridge Road with a curve to the right whose radius is 25.00
feet, an arc distance of 42.04 feet (ch = N 89(Degree)38'20 W. 37.26 feet) to
the POINT OF BEGINNING and containing 1.927 ac. and being as shown on the
aforesaid plat by T.P. Parker & Son.
Together with a perpetual, non-exclusive easement and right of way 15 feet in
width for sanitary sewer lines as shown on Proposed 15' Sanitary Sewer Easement
to be Granted by F & W Community Development Corp. to Lewis Gale Building Corp.
on that plat of survey dated March 9, 1992, prepared by Lumsden Associates,
P.C., of record in the Clerk's Office of the Circuit Court of Roanoke County,
Virginia, in Deed Book 1364, page 24. Said Deed of Easement recorded in the
Clerk's Office of the Circuit Court for the County of Roanoke, Virginia in Deed
Book 1364, page 20.
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HOUSE AND PROPERTY ON KEAGY ROAD
PARCEL XIII (1.489 AC) KEAGY ROAD
Beginning at a 40 white oak on the south side of Keagy Road, S.W., said white
oak being approximately 847 feet southeast of the intersection of Keagy Road,
S.W. and Va. Route 419; Thence leaving said white oak and along the southerly
right-of-way of Keagy Road, S.W., N 72(Degree)45'36 W. 93.09 feet to an old pin
found, the ACTUAL POINT OF BEGINNING, said point being designated corner no. 1
on plat entitled Urban Class ALTA/ACSM Land Title Survey for Healthcare Realty
Trust Incorporated by T.P. Parker & Son dated October 14, 1996; Thence leaving
the southerly right-of-way of Keagy Road, S.W. and along the northerly boundary
of Virginia H. Dunaville and Frank F. Ellis, Jr., Et Ux properties, S
84(Degree)00'00 W. passing an old pin found on line at 64.42 feet, in all,
149.50 feet to an old bolt found, designated corner no. 2; Thence along the
westerly boundary of the Frank F. Ellis, Jr., Et Ux property, S 00(Degree)59'00
W. 158.00 feet to an old pin found on the northerly boundary of an old private
road, designated corner no. 3; Thence along the northerly boundary of said
private road, S 57(Degree)19'32 W. 173.13 feet to an old pin found, said point
being the northerly corner of Lot 7, Block 1, Medmont Lake and the southeast
corner of the Theo D. Wilson property, designated corner no. 4; Thence along the
easterly boundary of the Theo D. Wilson property, N 13(Degree)09'47 W. 215.04
feet to an old pin found, designated corner no. 5; Thence continuing with the
easterly boundary of the Theo D. Wilson property, N 05(Degree)56'38 E. 197.36
feet to an old pin found on the southerly right-of-way of Keagy Road, S.W.,
designated corner no. 6; Thence along the southerly right-of-way of Keagy Road,
S.W., S 66(Degree)56'32 E. 353.93 feet to the ACTUAL POINT OF BEGINNING and
containing 1.489 ac. (64,877 sq. ft.) and being as shown on the aforesaid plat
by T.P. Parker & Son.
END OF EXHIBIT A
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